Metal and mining stocks decline as industrial metal prices drop

An extremely range bound movement was witnessed as key benchmark indices languished in negative terrain in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently hovering below the psychological 27,000 level after falling below that level in early trade. The Sensex was currently down 102.94 points or 0.38% at 26,987.48. Key indices dropped on weak global cues. The market breadth indicating the overall health of the market was positive. Meanwhile, falling global crude oil prices augur well for India as the country imports almost 80% of its crude oil requirements. Shares of most PSU OMCs edged higher as crude oil prices dropped. Metal and mining stocks declined after prices of industrial metals and iron ore declined in global markets today, 22 September 2014.

In overseas markets, Asian stocks and US index futures fell amid speculation China may accept slower growth and after officials from the world's biggest economies warned of rising financial risks. Group of 20 finance chiefs and central bankers said low interest rates could lead to a potential increase in financial-market risk, as major economies rely on monetary stimulus to bolster uneven growth. "We are mindful of the potential for a build-up of excessive risk in financial markets, particularly in an environment of low interest rates and low asset price volatility," the G-20 officials reportedly said yesterday, 21 September 2014 in Cairns, Australia, after a two-day meeting.

Brent crude oil prices edged lower as sluggish demand and abundant supplies outweighed a possible cut in oil output from the Organization of the Petroleum Exporting Countries (OPEC).

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

At 12:16 IST, the S&P BSE Sensex was down 102.94 points or 0.38% at 26,987.48. The index lost 171.49 points at the day's low of 26,918.93 in early trade, its lowest level since 18 September 2014. The index fell 80.20 points at the day's high of 27,010.22 in early trade.

The CNX Nifty was down 38.85 points or 0.48% at 8,082.60. The index hit a low of 8,064.80 in intraday trade, its lowest level since 18 September 2014. The index hit a high of 8,089 in intraday trade.

The market breadth indicating the overall health of the market was positive. On BSE, 1,450 shares gained and 1,223 shares fell. A total of 81 shares were unchanged.

The BSE Mid-Cap index was up 11.10 points or 0.11% at 9,876.36. The BSE Small-Cap index was up 57.95 points or 0.52% at 11,249.13. Both these indices outperformed the Sensex.

Most PSU OMCs edged higher as crude oil prices dropped. BPCL (up 1.04%) and Indian Oil Corporation (IOCL) (up 0.9%) gained. HPCL declined 0.01%. Lower crude oil prices could reduce under-recovery of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

PSU OMCs have over recovery of 35 paise per litre on sale of diesel for the current fortnight, as per data released by the Petroleum Planning & Analysis Cell on 16 September 2014. PSU OMCs are currently incurring daily under-recovery of Rs 190 crore on the sale of Diesel, PDS Kerosene and Domestic LPG.

Metal and mining stocks declined after prices of industrial metals and iron ore declined in global market today, 22 September 2014. Sesa Sterlite (down 1.27%), Hindalco Industries (down 1.31%), JSW Steel (down 2.87%), Tata Steel (down 1.84%), Steel Authority of India (Sail) (down 1.61%), National Aluminum Company (down 2.72%) and NMDC (down 1.89%) declined. Jindal Steel & Power rose 0.85%.

Hindustan Zinc dropped 1.86% as the stock turned ex-dividend today, 22 September 2014, for interim dividend of Rs 1.90 per share for the year ending 31 March 2015 (FY 2015).

Copper for three-month delivery on the London Metal Exchange (LME) fell a fourth day. The metal lost 1.5% to $6,735 a metric ton, headed for its lowest close since 19 June 2014. On the LME, aluminum, zinc, nickel, tin and lead also declined.

Meanwhile, Chinese steel and iron ore futures slid 4% to their lowest on record on Monday, plagued by worries of excess supply at a time when demand in the world's top consumer of the two commodities is growing at a slower pace.

Crompton Greaves rose 0.38%. The company said during market hours that the company was selected by eRDF-ectricitReau Distribution France, the public electricity distribution company managing 95% of the electricity distribution network in continental France, as one of the six suppliers to manufacture the first three milliion of its new generation Linky smart meters. The initial order is the first phase of a 35 million unit rollout by 2021.

JK Tyre & Industries gained 4.28% to Rs 521.10 after the company scheduled a board meeting on 25 September 2014 to consider stock-split proposal. The stock hit a record high of Rs 534.90 in intraday trade.

Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month September 2014 series to October 2014 series. The near-month September 2014 F&O contracts expire on Thursday, 25 September 2014.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.78, compared with its close of 60.83 during the previous trading session.

Brent crude oil prices edged lower as sluggish demand and abundant supplies outweighed a possible cut in oil output from the Organization of the Petroleum Exporting Countries (OPEC). Brent for November settlement was off 49 cents at $97.90 a barrel. The contract had risen 69 cents a barrel or 0.71% to settle at $98.39 a barrel on Friday, 19 September 2014.

Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

Prime Minister Narendra Modi is scheduled to launch the ambitious 'Make in India' campaign on Thursday, 25 September 2014. The initiative is one of the several steps which government has announced in order to improve ease of doing business in India and attract investments to boost manufacturing in the country. In his maiden independence day address, Modi invited the global business community to set up manufacturing facilities in India, giving the slogan 'come, make in India'.

Meanwhile, Finance Minister Arun Jaitley was reportedly admitted to the Max Institute private hospital in New Delhi yesterday, 21 September 2014, for a routine post-operative examination. Jaitely this month underwent gastric bypass surgery to treat weight gain he had suffered because of a long-standing diabetic condition.

Asian stocks fell today, 22 September 2014, amid speculation China may accept slower growth and after officials from the world's biggest economies warned of rising financial risks. Key benchmark indices in Singapore, Hong Kong, Indonesia, Taiwan, Japan and South Korea were off 0.15% to 1.66%.

China's Finance Minister Lou Jiwei said growth in Asia's largest economy faces downward pressure and reiterated that there won't be major changes in policy in response to individual economic indicators. China's economy is growing in a stable way and operating within a reasonable range, Lou said in a statement published on the People's Bank of China website. Macroeconomic policy will focus on comprehensive targets, particularly job growth and price stability, the statement said.

A preliminary reading on the HSBC Holdings Plc/Markit Economics China manufacturing purchasing managers' index is due tomorrow, 23 September 2014.

Trading in US index futures indicated that the Dow could fall 71 points at the opening bell on Monday, 22 September 2014. Most US stocks edged lower on Friday, 19 September 2014, after a three-day rally.

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