With most Asian stocks in red, initial gains for key benchmark indices in India fizzled out in morning trade. The broad market showed strength, with more than two gainers for every loser on BSE. The barometer index, the S&P BSE Sensex, was currently up 13.33 points or 0.05% at 27,099.26. L&T rose after the company said that it has won a turnkey order for setting up a supercritical thermal power project valued at Rs 5100 crore. Shares of both Sun Pharmaceuticals Industries and Ranbaxy Laboratories both declined in volatile trade after the Competition Commission of India (CCI) said that the merger of the two pharma companies is likely to have an appreciable adverse effect on competition in the Indian pharma sector.
Asian stocks fell as shares of material companies slid. Brent crude oil prices retained overnight losses. Meanwhile, the European Central Bank (ECB) unexpectedly moved to cut its main policy rates and announced additional measures after a monetary policy review yesterday, 4 September 2014, in an attempt to stimulate the flagging economy in the 18-country region. The ECB measures have raised hopes of a gush of liquidity inflow into Asian and emerging markets.
At 10:20 IST, the S&P BSE Sensex was up 13.33 points or 0.05% at 27,099.26. The index gained 92.87 points at the day's high of 27,178.80 in early trade, its highest level since 3 September 2014. The index rose 11.78 points at the day's low of 27,097.71 in morning trade.
The CNX Nifty was up 3.85 points or 0.1% at 8,103.75. The index hit a high of 8,122.70 in intraday trade, its highest level since 3 September 2014. The index hit a low of 8,099.90 in intraday trade.
The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. 1,401 shares gained and 573 shares fell. A total of 72 shares were unchanged.
The BSE Mid-Cap index was up 51.52 points or 0.54% at 9,666.59. The BSE Small-Cap index was up 92.32 points or 0.88% at 10,587.78. Both these indices outperformed the Sensex.
Maruti Suzuki India fell 0.15%. The company announced during market hours that production rose 19.63% to 1.09 lakh units in August 2014 over August 2013. Maruti's total sales surged 26.9% to 1.10 lakh units in August 2014 over August 2013. The sales numbers were announced during market hours on 1 September 2014.
L&T rose 1.26% after the company said during market hours that it has won a turnkey order for setting up a supercritical thermal power project valued at Rs 5100 crore. The order has been won from Madhya Pradesh state utility MP Power Generating Company (MPPGCL). L&T said that this is a repeat order from MPPGCL.
Shares of both Sun Pharmaceuticals Industries and Ranbaxy Laboratories both declined in volatile trade after the Competition Commission of India (CCI) said that the merger of the two pharma companies is likely to have an appreciable adverse effect on competition in the Indian pharma sector. Shares of Sun Pharma were off 0.6% at Rs 859. The stock hit high of Rs 870 and low of Rs 855.20 so far during the day.
Shares of Ranbaxy Laboratories were off 0.89% at Rs 650.10. The stock hit high of Rs 660.40 and low of Rs 648.65 so far during the day.
CCI on Thursday, 4 September 2014, said that it has directed Sun Pharma and Ranbaxy to publish details of the merger within ten working days for bringing the combination to the knowledge or information of the public and persons affected or likely to be affected by such combination. CCI has also invited comments from anyone adversely affected or likely to be affected by the merger of the two pharma majors.
Meanwhile, provisional data released by the stock exchanges after trading hours yesterday, 4 September 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 1697.74 crore on that day.
Brent crude oil futures retained its overnight losses as a firmer dollar weighed. Brent for October settlement was off 7 cents at $101.76 a barrel. The contract fell 94 cents a barrel to settle at $101.83 a barrel yesterday, 4 September 2014, as a surprise cut in interest rates by the European Central Bank led to a spike in the dollar, making it more expensive for holders of other currencies to buy the dollar-denominated commodity.
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.
In the foreign exchange market, the rupee edged lower against the dollar on dollar's strength. The partially convertible rupee was hovering at 60.44, compared with its close of 60.36 during the previous trading session.
Asian stocks fell today, 5 September 2014, led by fall in mineral stocks. Key indices in Hong Kong, South Korea, Taiwan, and Singapore were off 0.26% to 0.56%. Key indices in Japan, China, and Indonesia were up 0.26% to 0.3%.
Trading in US index futures indicated that the Dow could fall 19 points at the opening bell on Friday, 5 September 2014. US stocks edged lower on Thursday, 4 September 2014, as energy producers sank with oil prices to overshadow the ECB announcement.
The influential US non-farm payroll data for August is due later in the global day today, 5 September 2014.
In Europe, the European central Bank (ECB) unexpectedly lowered all its interest rates to all-time low on Thursday, 4 September 2014. ECB President Mario Draghi announced two new programs under which the institution will buy asset-backed securities and covered bonds issued by eurozone banks. In a news conference, Draghi said the aim was to expand the bank's balance sheet back to the heights reached in early 2012, which equates to a rise of around 50% or 1 trillion euros in new assets.
The Bank of England's Monetary Policy Committee at its meeting on Thursday, 4 September 2014, left its Bank Rate at 0.5%, where it has been since the depths of the financial crisis more than five years ago.
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