Market slides on weak global cues

Key benchmark indices edged lower in the early trade, tracking negative leads from Asian market and weak closing in US market on Friday, 11 December 2015. At 9:21 IST, the barometer index, the S&P BSE Sensex, was down 108.55 points or 0.43% at 24,935.88. The Sensex was below the psychologically important 25,000 mark. The Nifty 50 index was down 28.15 points or 0.37% at 7,582.30.

The market breadth indicating the overall health of the market was negative. On BSE, 761 shares fell and 404 shares rose. A total of 63 shares were unchanged. The BSE Mid-Cap index was down 0.34%. The BSE Small-Cap index was down 0.31%. The decline in both these indices was lower than the Sensex's decline in percentage terms.

In overseas markets, Asian equities declined today, 14 December 2015, as investors remain focused on the mid-week decision from the US Federal Reserve. US major stock-market indexes tumbled during the previous trading session on Friday, 11 December 2015, as falling prices in crude oil and worries about junk-bond markets rattled Wall Street. Investors worry the sharp fall in the price of oil and other commodities is a sign of weakness in the global economy, especially China, and that will cut into profits at big energy companies and suppliers of raw materials as well as other companies.

Auto stocks edged lower after the National Green Tribunal said in an order issued on Friday, 11 December 2015, that new diesel vehicles will not be registered in NCT, Delhi and that there will be no renewal of registration of diesel vehicles that are more than 10 year old in the capital city.

Tata Motors (down 2.87%), Eicher Motors (down 2%), Ashok Leyland (down 1.74%), Mahindra & Mahindra (down 1.58%), Escorts (down 0.88%), edged lower. Maruti Suzuki (India) was up 0.30%.

The tribunal's order is an interim measure to curb alarming pollution levels in Delhi. It also directed all the public authorities in NCT, Delhi to prepare an action plan for phasing out of diesel vehicles, particularly the trucks, being used by them.

Among two-wheeler makers, TVS Motor Company (down 0.71%), Bajaj Auto (down 0.47%) and Hero MotoCorp (down 0.01%), edged lower.

Most cement stocks rose after the Competition Appellate Tribunal (COMPAT) on Friday, 11 December 2015, quashed the penalty of Rs 6316 crore imposed on 11 cement firms by the Competition Commission of India (CCI) on charges of cartelisation and other unfair trade practices. ACC (up 0.45%), Ambuja Cements (up 0.66%) and UltraTech Cement (up 0.62%), edged higher.

Grasim Industries was down 0.83%. Grasim has exposure to cement sector through its holding in UltraTech Cement.

COMPAT also directed the CCI to refund the 10% of the penalty amount the companies had to deposit with the fair trade regulator. The judgement follows appeals filed by the cement firms and the industry body Cement Manufacturers Association.

The companies included ACC, Ambuja Cements, Binani Cements, Century Textiles, India Cements, JK Cements, Lafarge India, Madras Cements, UltraTech Cement and Jaiprakash Associates. The commission had passed the order after an investigation into complaints from the Builders Association of India against alleged price cartelisation among cement firms.

As per the penalty imposed earlier, ACC will be refunded Rs 114.75 crore, Ambuja Cements Rs 116.39 crore and UltraTech Cement will be refunded Rs 117.54 crore.

Meanwhile, the tribunal has directed CCI to hear the case again and pass a fresh order within three months.

Among macro economic data, India's Index of Industrial Production (IIP) growth surged to 60-months high of 9.8% in October 2015 over a year ago compared with the revised growth of 3.8% in September 2015. An extremely farvourable base effect with IIP declining 2.7% in October 2014 has mainly fuel the IIP growth for October 2015. Also, the festive season shifting to November this year compared with October in last year, aided IIP growth in October 2015 driven by pre-festive season surge in production. The data was announced by the government after market hours on Friday, 11 December 2015.

Among other macro economic data, the government will unveil the data on wholesale price index (WPI) for November 2015 today, 14 December 2015. The data is scheduled to be announced at 11:00 IST. WPI stood at negative 3.81% for October 2015 compared with a reading of negative 4.54% for September 2015.

The data on inflation based on the consumer price index (CPI) for November 2015, will be announced by the government after market hours today, 14 December 2015. The CPI inflation accelerated to four-month high of 5% in October 2015, compared with 4.4% reading in September 2015.

On the economic front, India and Japan have signed an Memorandum Of Understanding (MoU) on 12 December 2015 on cooperation and assistance in the Mumbai-Ahmedabad High Speed Rail Project (referred by many as Bullet Train project). The two countries have also entered into two comprehensive technological cooperation agreements on 11 December 2015, for modernization and upgradation of Indian Railways. These agreements were signed during the official visit to India of Mr. Shinzo Abe, the Prime Minister of Japan, during 11-13 December 2015.

Meanwhile, the President of India, Pranab Mukherjee on Saturday, 12 December 2015, said political stability and the government's new initiatives like Swachh Bharat, Make in India, Digital India, Skill India, etc. will help India emerge as an attractive investment destination and make an 8% growth rate achievable.

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