Market slumps in early trade on dismal global cues

Key benchmark indices opened on a weak note on dismal global cues. At 9:25 IST, the barometer index, the S&P BSE Sensex was off 247.60 points or 0.96% at 25,619.35. The 50-unit Nifty 50 index was off 78.80 points or 1.01% at 7,746.20.

The market breadth indicating the overall health of the market was weak. On BSE, 910 shares declined and 307 shares advanced. A total of 57 shares were unchanged. The BSE Mid-Cap index was currently down 1.32%. The decline in this index was higher than Sensex's decline in percentage terms. The BSE Small-Cap index was currently down 0.81%. The decline in this index was lower than Sensex's decline in percentage terms.

In overseas markets, Asian markets declined tracking steep overnight losses in US markets. US stocks dropped yesterday, 12 November 2015 as a sharp slide in commodities triggered sell-off in shares of energy and raw-material providers. Several speeches from Fed officials yesterday, 12 November 2015 hinted at an interest-rate hike by the US Federal Reserve at its next monetary policy review in December 2015.

The Fed-funds futures market is now pricing in 70% probability of an increase in US benchmark interest rate in December 2015. Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets. The next monetary policy review from the Fed is scheduled on 15-16 December 2015.

Vedanta (down 2.63%), Hindalco Industries (down 1.93%), Cipla (down 1.66%), Lupin (down 1.87%) and ONGC (down 1.58%) edged lower from the Sensex pack.

Coal India rose 1.03% ahead of its Q2 September 2015 result today, 13 November 2015.

Data released yesterday, 12 November 2015 showed that index of industrial production (IIP) growth moderated to 3.6% in September 2015 over a year ago compared with the revised growth of 6.3% in August 2015. The IIP growth improved from 2.6% growth recorded in September 2014. The output of the manufacturing sector rose 2.6% in September 2015, against 2.6% rise in September 2014. Meanwhile, the mining sector output improved 3% in September 2015, showing acceleration from 0.1% growth in September 2014. The electricity generation also surged 11.4% in September 2015 against 3.9% rise in September 2014.

Another data released yesterday, 12 November 2015 showed that the all-India general CPI inflation increased to four-month high of 5% in October 2015, compared with 4.4% reading in September 2015.

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