An initial rally triggered by Reserve Bank of India's (RBI) surprise announcement of a cut in the repo rate could not be sustained. Weakness during the latter part of the trading session pushed key benchmark indices lower. Weakness during the latter part of the trading session came after key indices hovered in positive zone until mid-afternoon trade on the back of a surprise decision by the Reserve Bank of India (RBI) to cut its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours today, 4 March 2015. The 50-unit CNX Nifty failed to retain the psychological 9,000 level after surpassing that mark in intraday trade. The Nifty traded above the psychological 9,000 level until about 14:30 IST. The barometer index, the S&P BSE Sensex, failed to retain the psychological 30,000 level after an initial surge took the index to above that mark for the first time in its history.
The decline on the bourses was broad based. There were more than two losers for every gainer on BSE. The Sensex fell 213 points or 0.72% to settle at 29,380.73. The BSE Small-Cap index declined 1.06%. The BSE Mid-Cap index declined 1.28%. The decline in both these indices was higher than Sensex's decline in percentage terms. In overseas markets, European stock markets reversed initial gains as investors awaited a meeting of the European Central Bank (ECB) for hints as to when the central bank will kick off its quantitative-easing program.
Metal stocks declined. Bank stocks reversed intraday gains triggered by the Reserve Bank of India's (RBI) surprise decision to cut its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Index heavyweight HDFC reversed direction in volatile trade after scaling record high. Interest rate sensitive auto and realty stocks reversed intraday gains triggered the Reserve Bank of India's (RBI) surprise decision to cut its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Cement stocks declined.
In pharma pack, shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories scaled record high.
Meanwhile, the outcome of a survey showed that India's services sector activity expanded at its fastest pace in eight months in February, boosted by a solid rise in new work.
Earlier, the Sensex and the Nifty, both, surged at the onset of the trading session as the RBI surprised financial markets by announcing a cut in its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Both these key benchmark indices struck record high at the onset of the trading session.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 847.84 crore from the secondary equity market yesterday, 3 March 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 303.88 crore yesterday, 3 March 2015, as per provisional data released by the stock exchanges.
In the foreign exchange market, the rupee weakened past 62 against the dollar.
Brent crude oil futures edged lower after previous trading session's gains.
In overseas markets, European stocks reversed initial gains as investors awaited a meeting of the European Central Bank (ECB) for hints as to when the central bank will kick off its quantitative-easing program. Asian stock markets were mixed. US stocks declined yesterday, 3 March 2015, as data showing weaker-than-expected growth in monthly car sales dampened spirits.
The S&P BSE Sensex fell 213 points or 0.72% to settle at 29,380.73, its lowest closing level since 28 February 2015. The index lost 304.68 points at the day's low of 29,289.05 in late trade. The index jumped 431.01 points at the day's high of 30,024.74 at the onset of the trading session, a lifetime high for the index.
The Nifty fell 73.60 points or 0.82% to settle at 8,922.65, its lowest closing level since 28 February 2015. The index hit a low of 8,893.95 in intraday trade. The index hit a high of 9,119.20 in intraday trade, a lifetime high for the index
The BSE Mid-Cap index declined 117.56 points or 1.06% to settle at 10,964.27. The BSE Small-Cap index declined 147.24 points or 1.28% to settle at 11,381.65. The decline in both these indices was higher than Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was quite weak, with more than two losers for every gainer on BSE. 1,928 shares declined and 962 shares rose. A total of 118 shares were unchanged.
The total turnover on BSE amounted to Rs 6860 crore, higher than Rs 4224.06 crore during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Consumer Durables index (down 0.77%), the S&P BSE Auto index (down 0.77%), the S&P BSE IT index (down 1.01%), the S&P BSE Power index (down 1.3%), the S&P BSE Oil & Gas index (down 1.33%), the S&P BSE Bankex (down 1.77%) and the S&P BSE Metal index (down 2.42%) underperformed the Sensex.
The S&P BSE Healthcare index (up 1.25%), the S&P BSE FMCG index (up 0.9%), the S&P BSE Realty index (up 0.02%) and the S&P BSE Capital Goods index (down 0.45%) outperformed the Sensex.
Reliance Industries (RIL) fell 1.74% at Rs 886. The stock hit a high of Rs 909 and low of Rs 880.40. In a clarfication with regard to news item titled "Reliance, BP report eight oil finds in Cambay block", RIL after market hours yesterday, 3 March 2015, said that RIL has been awarded the block CB-ONN-2003/1 with the Operatorship under NELP-V with 100% Participating Interest (PI). The Production Sharing Contract (PSC) is effective from 5 June 2006. RIL has assigned 30% PI to BP Exploration (Alpha) (BPEAL) during August 2011 and RIL has 70% PI with Operatorship in the block. RIL made 8 oil discoveries in the block during in the period 9 November 2009 to 3 August 2010 during Phase-I exploration period and the same was notified to the DGH/MOPNG. These oil discoveries were named as D-43, D-45, D-46, D-47, D-48, D-49, D-50 and D-51 and were disclosed in RIL's media release at that time. The significant milestone of such discoveries is the approval of development plan which is yet to take place, RIL said.
ONGC shed 0.28%. In a clarification with regard to news item titled "ONGC to invest over Rs.76,000 cr", ONGC during market hours today, 4 March 2015, said that as per the newspaper report the amount of Rs 76000 crore is for all the oil PSUs including ONGC and not solely by ONGC. The board of directors of ONGC has approved plan expenditure (Capex) of Rs 36249 crore for the Financial Year 2015-16, the company said.
Cairn India dropped 3.58%. In a clarification with regard to media reports on "Corporate Espionage", Cairn India during market hours today, 4 March 2015, said that the matter is under investigation and it would be inappropriate for the company to make any comments at this stage. Cairn India further said that company will continue to extend all necessary cooperation to the authorities. The operations of the company remain unaffected by these developments, Cairn India said.
Index heavyweight HDFC shed 0.3% to Rs 1,360. The stock was volatile. The stock reversed direction after scaling a record high of Rs 1,399.80 in intraday trade today, 4 March 2015. The stock hit a low of Rs 1,355.85 in intraday trade.
Bank stocks reversed intraday gains triggered by the Reserve Bank of India's (RBI) surprise decision to cut its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Among public sector banks, Punjab National Bank (down 1.17%), Bank of Baroda (down 4.02%), Union Bank of India (down 2.24%), Bank of Maharashtra (down 0.87%), State Bank of India (down 3.29%), Allahabad Bank (down 3.66%), Canara Bank (down 3.02%), Bank of India (down 3.25%), Vijaya Bank (down 1.94%), Dena Bank (down 0.27%), Andhra Bank (down 3.39%), Punjab and Sind Bank (down 0.72%), United Bank of India (down 0.95%), Syndicate Bank (down 3.59%), Corporation Bank (down 1.67%), UCO Bank (down 3.78%), and Central Bank of India (down 3.19%) edged lower.
Among private sector banks, ICICI Bank (down 0.11%), Yes Bank (down 2.68%), HDFC Bank (down 1.57%), IndusInd Bank (down 3.23%) and Federal Bank (down 3.02%) edged lower. Kotak Mahindra Bank (up 0.02%) and ING Vysya Bank (up 0.53%) edged higher.
Axis Bank fell 3.56% to Rs 610.30. The stock was volatile. The stock reversed direction after scaling a record high of Rs 655.35 in intraday trade today, 4 March 2015. The stock hit a low of Rs 608.75 in intraday trade.
Interest rate sensitive auto stocks reversed intraday gains reversed intraday gains triggered by the Reserve Bank of India's (RBI) surprise decision to cut its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Mahindra & Mahindra (M&M) (down 1.86%), Ashok Leyland (down 2.71%) and Maruti Suzuki India (down 1.32%) edged lower. Among two-wheeler stocks, Hero MotoCorp (down 0.19%) and TVS Motor Company (down 1.71%) edged lower. Bajaj Auto rose 1.13%.
Tata Motors rose 0.01% at Rs 574.65. The stock hit a high of Rs 592 and a low of Rs 571. Tata Motors yesterday, 3 March 2015, announced the launch of a new small pick-up, the Tata Super ACE Mint. The cargo carrier equipped with 1.4 litre DiCOR (common Rail) BS4 engine will meet requirements of intra and intercity transport, Tata Motors said in a statement. With this launch, Tata Motors is further penetrating into the small pick-up market and plans to grow its market share in this segment, Tata Motors said. The vehicle has been launched at starting price of Rs 5.09 lakh, ex-showroom, Thane, Mumbai.
Eicher Motors rose 0.89% to Rs 16,032. The company during market hours today, 4 March 2014 said that AB Volvo today, 4 March 2015, divested 12.7 lakh shares or approximately 4.7% of the company's stake. The divestment will have no bearing whatsoever on VE Commercial Vehicles (VECV), which will continue to be governed as an equal partnership venture between Eicher Motors and AB Volvo. Both partners -- Eicher Motors and AB Volvo are equally committed to grow the business together, Eicher Motors said.
Interest rate sensitive realty stocks reversed intraday gains triggered by the Reserve Bank of India's (RBI) surprise decision to cut its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review just before trading hours. Indiabulls Real Estate (down 1.43%), Unitech (down 1.75%), Housing Development and Infrastructure (HDIL) (down 1.64%), Oberoi Realty (down 0.96%), D B Realty (down 4.96%), Parsvnath Developers (down 0.62%) edged lower. Godrej Properties (down 3.76%) declined. DLF rose 1.92%.
Metal and mining stocks declined. Sesa Sterlite (down 4.65%), Hindalco Industries (down 3.19%), NMDC (down 4.3%), Steel Authority of India (down 2.8%), Tata Steel (down 1.95%), Hindustan Zinc (down 3.77%), Jindal Steel & Power (down 1.32%), and JSW Steel (down 1.05%) edged lower. National Aluminium Company (up 2.07%) edged higher.
IT stocks declined. Infosys (down 0.76%), Wipro (down 1.78%), Oracle Financial Services Software (down 0.2%) declined. HCL Technologies rose 0.53%.
Tata Consultancy Services (TCS) fell 1.5%. TCS after market hours today, 4 March 2015, announced the release of a new platform for next generation underwriting for the digital era. TCS said its Underwriting Workbench solution is a multi-faceted platform that combines dynamic case management, intelligent workflow, and decision support systems with robust geospatial functions such as mapping and visualization capabilities to form a solution that augments the efficiency and effectiveness of the entire underwriting process. The solution automates the ability to capture, analyze and make use of data in order to determine risk exposure and risk aggregation, TCS said.
Tech Mahindra fell 1.12%. Tech Mahindra during market hours today, 4 March 2015, announced the launch of best-in-class SDN and NFV based solutions suite to address the ever changing network scenarios and demands in building the smart cities.
Shares of Power Finance Corporation fell 4.33% at Rs 292.60 as the stock ex-dividend today, 4 March 2015 for an interim dividend of Rs 8.50 per share for the year ending 31 March 2015.
Cement stocks declined. Ambuja Cements (down 2.7%), UltraTech Cement (down 1.63%), ACC (down 1.94%) and Shree Cement (down 3.17%) edged lower.
Grasim Industries was off 3.14%. Grasim Industries has exposure to cement sector through its subsidiary UltraTech Cement. Grasim Industries after market hours yesterday, 3 March 2015, said that the company has completed the last phase of its greenfield Viscose Staple Fibre (VSF) plant at Vilayat, Gujarat for production of specialty fibre by commissioning the 4th line. The company's VSF capacity at Vilayat thus stands enhanced at 120K TPA, while its overall VSF capacity stands enhanced at 498K TPA, Grasim Industries said.
Sun Pharmaceutical Industries jumped 6.64% to Rs 1,005. The stock scaled a record high of Rs 1,035 in intraday trade today, 4 March 2015.
Ranbaxy Laboratories surged 7.09% to Rs 783. The stock scaled a record high of Rs 803.10 in intraday trade today, 4 March 2015.
In April 2014, Sun Pharma announced the acquisition of Ranbaxy Laboratories in an all-stock deal.
Sun Pharma Advanced Research Company (SPARC) rose 4.55% to Rs 430.50 after scaling a record high of Rs 448.80 in intraday trade today, 4 March 2015. SPARC announced during trading hours today, 4 March 2015 that the US Food and Drug Administration (FDA) has approved its New Drug Application (NDA) for Elepsia XR (Levetiracetam extended-release tablets 1000 mg and 1500 mg). Elepsia XR is indicated for adjunctive therapy in the treatment of partial onset seizures in patients 12 years of age and older with epilepsy. The product will be manufactured by Sun Pharmaceutical Industries at its Halol (Gujarat) facility in India, SPARC said.
Construction firm NBCC jumped 7.37% to Rs 1,016 after scaling a record high of Rs 1,087 in intraday trade today, 4 March 2015.
Adani Ports and Special Economic Zone fell 1.58%. Essar Ports jumped 4.89%. With reference to media reports titled, Adani may be eyeing Essar port assets, Adani Ports and Special Economic Zone after market hours today, 4 March 2015, clarified that the company is not aware of any event or development of the nature reported in the article.
Thomas Cook (India) jumped 7.04% after the company said it has created Travel Quest, a dedicated student travel vertical to focus on India's emerging student segment. The company made the announcement during market hours today, 4 March 2014.
Key indices snapped a four-day winning streak today, 4 March 2015. The Sensex had gained 847.08 points or 2.94% in four trading sessions to settle at 29,593.73 yesterday, 3 March 2015, from its recent low of 28,746.65 on 26 February 2015. The Sensex has risen 197.78 points or 0.67% in this month so far (till 4 March 2015). The Sensex has risen 1,881.31 points or 6.84% in this calendar year so far (till 4 March 2015). From a 52-week low of 20,920.98 on 3 March 2014, the Sensex has risen 8,459.75 points or 40.43%.
In the foreign exchange market, the rupee weakened past 62 against the dollar. The partially convertible rupee was hovering at 62.245, compared with its close of 61.92 during the previous trading session.
Brent crude oil futures edged lower after previous trading session's gains. Brent for April settlement was off 25 cents at $60.77 a barrel. The contract had advanced $1.48 a barrel or 2.48% to settle at $61.02 a barrel during the previous trading session.
The Reserve Bank of India (RBI) surprised financial markets today, 4 March 2015, by announcing a reduction in its benchmark lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review. The repo rate has been cut to 7.5% from 7.75%, with immediate effect. RBI Governor Raghuram Rajan cited relatively benign inflation and structural reforms embedded in Union Budget 2015-16 for the decision to cut the repo rate.
The RBI said that further monetary actions will be conditioned by incoming data, especially on the easing of supply constraints, improved availability of key inputs such as power, land, minerals and infrastructure, continuing progress on high-quality fiscal consolidation, the pass through of past rate cuts into lending rates, the monsoon outturn and developments in the international environment.
The RBI said disinflation is evolving at a faster pace than earlier envisaged. RBI Governor Raghuram Rajan said in a statement that softer readings on inflation are expected to come in through the first half of 2015-16 before firming up to below 6% in the second half. The government's fiscal consolidation programme, while delayed, may compensate in quality, especially if state governments are cooperative. Given low capacity utilisation and still-weak indicators of production and credit off-take, it is appropriate for the RBI to be pre-emptive in its policy action to utilise available space for monetary accommodation, Rajan said. The RBI governor also pointed out to disinflationary impulses arising from a firm rupee.
The RBI governor said that there are many important and valuable structural reforms embedded in Union Budget 2015-16 which will help improve supply over the medium term. There is a welcome intent to shift from spending on subsidies to spending on infrastructure, and to better target and further reduce subsidies through direct transfers, Rajan said commenting on the Union Budget 2015-16 tabled by Finance Minister Arun Jaitley in parliament on 28 February 2015. The central government is transferring a significantly larger amount to the states, without entirely devolving responsibility for funding central programmes. To the extent that state budget deficits narrow, the general fiscal deficit will be lower, according to the RBI governor. The realised net fiscal impulse will depend on both central and state government actions going forward. Jaitley announced postponement of fiscal consolidation to the 3% target by one year while presenting Union Budget 2015-16 on 28 February 2015. Jaitley deferred the target of achieving 3% fiscal deficit by a year till FY 2018 from FY 2017 set earlier. Jaitley has set fiscal deficit target of 3.9% for 2015-16, 3.5% for 2016-17 and 3% for 2017-18.
The RBI said that uncertainties surrounding inflation projection are not insignificant. Oil prices have firmed up in recent weeks, and significant further strengthening, perhaps as a result of unanticipated geo-political events, will alter the inflation outlook, the RBI said. Other international commodity prices are expected to remain benign, given still-sluggish global demand conditions. Food prices will be affected by the seasonal upturn that typically occurs ahead of the south-west monsoon and, therefore, steps the government takes on food management will be critical in determining the inflation outlook, the RBI said. The possible spill over of volatility from international financial markets through exchange rate and asset prices channels is also still a significant risk, the RBI said.
The central government, last month, signed a memorandum with the Reserve Bank of India, setting out clear inflation objectives for the RBI. Rajai said this makes explicit what was implicit before. Rajan said that the government and the Reserve Bank of India have common objectives and said that fiscal and monetary policy will work in a complementary way. Going forward, the RBI will seek to bring the inflation rate to the mid-point of the band of 4 +/- 2 per cent provided for in the agreement, i.e., to 4 per cent by the end of a two year period starting fiscal year 2016-17.
Rajan said that the RBI does not target a level for the exchange rate, nor does it have an overall target for foreign exchange reserves. It does intervene on occasion, in both directions, to reduce avoidable volatility in the exchange rate. Any reserve build-up is a residual consequence of such actions rather than a direct objective, Rajan said.
Meanwhile, the outcome of a survey showed that India's services sector activity expanded at its fastest pace in eight months in February, boosted by a solid rise in new work. The HSBC Services Purchasing Managers' Index rose to 53.9 in February from 52.4, its highest since June 2014. Strong new business growth was the primary factor cited by survey respondents for the increase in activity. Rising output was recorded in four of the six broad areas of the service economy, the exceptions being Financial Intermediation and Transport & Storage. Nonetheless, the latest improvement in economic prospects across the services sector is yet to feed through to the labour market, as employment was little-changed over the month. Reflecting lower fuel prices, overall costs faced by services firms rose at a softer rate last month, according to the survey.
In overseas markets, European stocks reversed initial gains today, 4 March 2015, as investors awaited a meeting of the European Central Bank (ECB) for hints as to when the central bank will kick off its quantitative-easing program. Key indices in Germany and UK were off 0.32% to 0.38%. In France, the CAC 40 index was up unchanged.
A monthly monetary policy review from the European Central Bank is scheduled tomorrow, 5 March 2015.
Meanwhile, the growth rate of eurozone economic output accelerated for the third straight month in February, rising to its highest since July of last year, latest data from Markit Economics showed today, 4 March 2015. At 53.3, the final Markit Eurozone PMI Composite Output Index signalled an expansion for the twentieth month in a row, up from January's 52.6, but came in slightly softer than the earlier flash estimate of 53.5.
Asian stock markets were mixed today, 4 March 2015. Key indices in Hong Kong, South Korea, Japan and Indonesia were off 0.15% to 0.96%. Key indices in China, Taiwan and Singapore were up 0.17% to 0.51%.
China's services sector strengthened by a fraction in February, according to HSBC. The monthly purchasing managers' index for the services sector was 52, a slight increase from the six-month low of 51.8 in January, latest data showed today, 4 March 2015. Any level above 50 reflects growth in the survey by HSBC and compiled by Markit.
Japan's services sector shrank last month, halting a three-month trend of meagre growth. Markit's monthly index of the services sector fell from 51.3 in January to 48.5, the lowest reading since April, latest data showed today, 4 March 2015. A score above 50 is needed to indicate growth.
Australia's gross domestic product (GDP) grew at an annual pace of 2.5%, matching estimates, data showed today, 4 March 2015. This is the slowest year-to-year pace in four quarters. Quarterly GDP grew just 0.5%, missing the consensus estimate at 0.6%, though rising from an upwardly revised 0.4% pace in the prior quarter.
Trading in US index futures indicated that the Dow could fall 61 points at the opening bell today, 4 March 2015. US stock markets pulled back from recent highs to close lower yesterday, 3 March 2015, in light volume trade as investors weighed soft auto sales and looked ahead to domestic data.
The US government is scheduled to announce US nonfarm payroll data for February 2015 on Friday, 6 March 2015.
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