Market breadth turns negative from positive

As global crude oil prices continued to slide after a recent steep decline, key equity benchmark indices drifted lower in mid-morning trade. The barometer index, the S&P BSE Sensex, failed to retain the psychological 27,000 level. The market breadth indicating the overall health of the market turned negative from positive. The Sensex was currently off 67.34 points or 0.25% at 26,920.12. Investors fear that the rout in global crude oil prices signals a weak global economy.

Shares of public sector oil marketing companies advanced on fall in global crude oil prices. Tata Motors dropped after media reports stated that the company's British luxury car unit Jaguar Land Rover is awaiting word on the fate of 1,200 luxury vehicles aboard a 51,000-tonne car transporter ship that has run aground in the English Channel.

Global crude oil prices hovered near 5-1/2-year low amid continuing concerns about a global supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

Earlier, the Sensex had regained the psychological 27,000 level amid initial volatility. The Sensex had hit 3-week low and the 50-unit CNX Nifty had hit its lowest level in almost 3 weeks amid initial volatility.

Foreign portfolio investors sold shares worth a net Rs 1570.76 crore yesterday, 6 January 2015, as per provisional data.

In overseas markets, Asian stocks edged higher. The US stock market endured another day of selling yesterday, 6 January 2015, due to slumping oil prices.

In the foreign exchange market, the rupee edged higher against the dollar.

Brent crude futures extended losses from 5-1/2-year low amid continuing concerns about a global supply glut.

At 11:20 IST, the S&P BSE Sensex was down 67.34 points or 0.25% at 26,920.12. The index dropped 110.88 points at the day's low of 26,876.58 in early trade, its lowest level since 17 December 2014. The index rose 64.14 points at the day's high of 27,051.60 in mid-morning trade.

The CNX Nifty was down 17.75 points or 0.22% at 8,109.60. The index hit a low of 8,098 in intraday trade, its lowest level since 18 December 2014. The index hit a high of 8,151.20 in intraday trade.

The BSE Mid-Cap index was up 5 points or 0.05% at 10,240.74. The BSE Small-Cap index was up 3.66 points or 0.03% at 10,989.88. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market turned negative from positive in mid-morning trade. On BSE, 1,173 shares declined and 1,133 shares advanced. A total of 88 shares were unchanged.

Shares of public sector oil marketing companies (PSU OMCs) advanced on fall in global crude oil prices. BPCL (up 1%), HPCL (up 0.63%), and Indian Oil Corporation (up 0.37%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.

Kotak Mahindra Bank rose 2.28% at Rs 1,280.30. The bank during market hours today, 7 January 2015, in a clarification with regard to news item titled "Regulatory hurdle hits Kotak Group's plan to secure board seat on commodity bourse MCX", said that the said news item itself carries a comment by a Kotak Group spokesperson that the company has not received any communication from MCX or FMC.

Shares of Multi Commodity Exchange of India (MCX) were off 0.03% at Rs 850.15. The stock hit a high of Rs 859.80 and a low of Rs 849.10.

Hero MotoCorp fell 0.34% at Rs 3,001.55. The company after market hours yesterday, 6 January 2015, said that the company has raise two-wheeler prices from 1 January 2015 to offset the increased duty impact. The benefit of lower excise duty on automobiles lapsed on 31 December 2014, with the government preferring not to extend the lower excise duties announced last year.

Hero MotoCorp also said that the transporters' strike has impacted the despatches from Hero MotoCorp's plants in Gurgaon and Dharuhera. The company could despatch only half of its average daily despatches from these two plants on 6 January 2015, it added. Hero MotoCorp said it is trying to make alternative arrangements to minimize further impact. The company said that it expects the authorities and the Automobile Carrier Welfare Association (ACWA) will be able to resolve the issue amicably at the earliest.

Tata Motors dropped after media reports stated that the company's British luxury car unit Jaguar Land Rover is awaiting word on the fate of 1,200 luxury vehicles aboard a 51,000-tonne car transporter ship that has run aground in the English Channel. The stock was off 1.54% at Rs 493.40.

Jaguar Land Rover (JLR) early this week said its US sales rose 2% to 7,437 units in December 2014 over December 2013. US sales of the Jaguar brand rose 9% to 1,683 units in December 2014 over December 2013. US sales of the Land Rover brand declined 0.17% to 5,754 units in December 2014 over December 2013. JLR's US sales rose 0.41% to 67,238 units in calendar year 2014 over the calendar year 2013. The Land Rover brand established an all-time annual high for US sales of 51,465 units in calendar year 2014.

Maruti Suzuki India rose 0.19% at Rs 3,402. According to reports, the company will increase car prices by 4% following the government's decision to halt excise duty benefits to automakers beyond 31 December 2014. Meanwhile, Maruti during market hours today, 7 January 2015, said its total production rose 18.21% to 95,400 units in December 2014 over December 2013.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.4250, compared with its close of 63.58 during the previous trading session.

Brent crude futures extended losses from 5-1/2-year low amid continuing concerns about a global supply glut. Brent for February settlement was off 41 cents at $50.69 a barrel. The contract had lost $2.01 a barrel or 3.78% to settle at $51.10 a barrel during the previous trading session, its lowest settlement since April 2009.

Finance Minister Arun Jaitley yesterday, 6 January 2015, said that ease of doing business is high priority for the government. The Finance Minister made these comments during the Pre Budget Consultative Meeting with the representatives of Trade and Industry. Jaitley said that implementation of nationwide goods and services tax (GST) is expected to improve the tax administration regime and would help in bringing more transparency in the system and ensure smooth flow of goods. It will also help in better implementation and collection of taxes, he said. The Finance Minister said that reforms measures undertaken by the government in coal sector, insurance and amendments in Land Acquisition Act etc will make a major difference in improving the Indian economy's performance.

Asian equity markets edged higher today, 7 January 2015. Key indices in Taiwan, Singapore, South Korea, Japan, Hong Kong and Indonesia were up 0.01% to 0.52%. In mainland China, the Shanghai Composite index was off 0.81%

Trading in US index futures indicated that the Dow could gain 43 points at the opening bell today, 7 January 2015. The US stock market endured another day of selling yesterday, 6 January 2015, due to slumping oil prices. Investors appear to discount positive effect of lower oil prices on broader economy and continue to view the slide in crude as a symptom of slower global growth, which will threaten improving US economy. The US services sector expanded in December at its slowest rate since February as growth in new business and employment declined, an industry report showed yesterday, 6 January 2015.

The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 later in the global day today, 7 January 2015. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".

The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.

Meanwhile, Vietnam devalued its currency by weakening dong's reference rate for the second time since June, according to a statement on the central bank's website posted late yesterday, 6 January 2015. The currency is allowed to trade as much as 1 percent either side of the rate, which was reduced by 1 percent to 21,458 dong per dollar, effective today, 7 January 2015.

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