Losses for state-run companies and oil exploration and production firms offset gains for IT stocks and oil marketing companies to push key benchmark indices lower. The barometer index, the BSE Sensex, and the 50-unit CNX Nifty registered small losses. The Sensex failed to retain the psychological 28,000 level after moving past that mark earlier during the trading session. The Sensex dropped 46.73 points or 0.17% to settle at 27,831.54. The market breadth indicating the overall health of the market was positive.
IT stocks edged higher after strong US housing data released overnight. Cement stocks also edged higher. Shares of oil exploration & production (E&P) firms edged lower and shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices fell. Shares of public sector banks (PSU banks) witnessed a mixed trend. Shares of private sector banks dropped.
Key indices dropped for the second day in a row today, 18 August 2015.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 142.34 crore yesterday, 17 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 183.72 crore yesterday, 17 August 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower after a sharp slide in Chinese stocks. Chinese stocks led decline in Asian stocks after China's central bank took fresh steps to offset capital outflows in the wake of a weaker currency. US stocks edged higher yesterday, 17 August 2015, as investors put more weight on strong housing data than a dismal manufacturing report for the New York region.
The S&P BSE Sensex dropped 46.73 points or 0.17% to settle at 27,831.54, its lowest closing level since 13 August 2015. The index fell 130.87 points at the day's low of 27,747.40 in early afternoon trade. The index jumped 162.46 points at the day's high of 28,040.73 in early trade.
The CNX Nifty shed 10.75 points or 0.13% to settle at 8,466.55, its lowest closing level since 13 August 2015. The index hit a low of 8,433.60 and a high of 8,525.75 in intraday trade.
The BSE Mid-Cap index rose 53.99 points or 0.47% to settle at 11,542.31. The BSE Small-Cap index gained 100.30 points or 0.85% to settle at 11,891.91. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,631 shares gained and 1,239 shares fell. A total of 114 shares were unchanged.
The total turnover on BSE amounted to Rs 3138 crore, higher than turnover of Rs 2928.62 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Auto index (up 0.6%), the S&P BSE Consumer Durables index (up 1.15%), the S&P BSE Teck index (up 0.96%), the S&P BSE Capital Goods index (up 0.88%), the S&P BSE IT index (up 1.61%), the S&P BSE Oil & Gas index (down 0.01%), and the S&P BSE FMCG index (down 0.05%), outperformed the Sensex. The S&P BSE Realty index (down 0.32%), the S&P BSE Bankex (down 0.2%). the S&P BSE Healthcare index (down 0.57%), and the S&P BSE Metal index (down 1.92%) underperformed the Sensex. The S&P BSE Power index fell 0.17%, with the fall in the index matching Sensex's decline in percentage terms.
Shares of public sector oil marketing companies (PSU OMCs) edged higher as global crude oil prices fell. BPCL (up 3.8%), HPCL (up 2.59%) and Indian Oil Corporation (up 3.7%) edged higher. Decline in crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. The government has already decontrolled pricing of petrol and diesel.
Shares of upstream oil exploration & production (E&P) firms edged lower as global crude oil prices fell. Reliance Industries (down 0.6%), ONGC (down 1.25%), Oil India (down 0.07%) and Cairn India (down 2.69%) edged lower. Lower crude oil prices will result in lower realization from crude sales for oil exploration firms.
In the global commodities markets, Brent for October settlement was currently off 25 cents at $48.51 a barrel. The contract had fallen 45 cents or 0.91% to settle at $48.74 a barrel during the previous trading session.
Shares of many state-run companies dropped. GAIL (India) (down 4.43%), NMDC (down 3.73%), Bharat Electronics (down 1.99%), Engineers India (down 0.89%), Power Grid Corporation of India (down 0.21%), NTPC (down 0.59%) and Steel Authority of India (Sail) (down 0.35%) dropped.
Coal India slumped 4.24% at Rs 363.90. The stock hit a high of Rs 383.40 and a low of Rs 360.30 in intraday trade. According to reports, Coal India plans to change its e-auction supply strategy to bump up price realisation, which has dipped on account of abundance of the fossil fuel in the domestic market and availability of cheap imported coal. The company plans to change its supply strategy for e-auctions, which account for the bulk of Coal India's profits, reports suggested.
Shares of public sector banks (PSU banks) were mixed. Corporation Bank (up 2.51%), United Bank of India (up 2.9%), Canara Bank (up 0.69%), State Bank of India (up 1.76%), and Bank of Baroda (up 0.16%) edged higher. Andhra Bank (down 1.25%), IDBI Bank (down 0.78%), Union Bank of India (down 0.39%) Punjab National Bank (down 1.47%) and Bank of India (down 3.13%) edged lower.
Shares of private sector banks dropped. Yes Bank (down 0.58%), Axis Bank (down 0.11%), ICICI Bank (down 0.66%), HDFC Bank (down 0.37%) and Kotak Mahindra Bank (down 2.08%) edged lower. IndusInd Bank rose 1.56%.
IT stocks edged higher after strong US housing data released overnight. Oracle Financial Services Software (up 3.51%), TCS (up 1.84%), Tech Mahindra (up 1.88%), MindTree (up 1.08%), HCL Technologies (up 0.01%) and Wipro (up 0.52%) edged higher. The US is the biggest outsourcing market for Indian IT firms.
Infosys rose 1.92% to Rs 1,163.80 after hitting record high of Rs 1,177 in intraday trade.
Cement stocks gained. UltraTech Cement (up 1.66%), ACC (up 1.47%), Ambuja Cements (up 0.75%) and Shree Cement (up 0.58%) edged higher.
Grasim Industries was up 0.94%. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Key indices dropped for the second day in a row today, 18 August 2015. From a recent high of 28,067.31 on 14 August 2015, the Sensex has dropped 235.77 points or 0.84% in the preceding two trading sessions. The Sensex has declined 283.02 points or 1% in this month so far (till 18 August 2015). The Sensex has risen 332.12 points or 1.2% in this calendar year so far (till 18 August 2015). From a 52-week low of 25,910.77 on 17 October 2014, the Sensex has risen 1,920.77 points or 7.41%. The Sensex is off 2,193.20 points or 7.3% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, India and the United Arab Emirates (UAE) yesterday, 17 August 2015, agreed that the investment institutions of UAE will be strive to raise their investments in India by setting up UAE-India Infrastructure Investment Fund. The infrastructure fund aims to finance infrastructure development in India. The infrastructure fund will target a corpus of $75 billion, according to a joint statement issued by India and UAE. Prime Minister Narendra Modi concluded hit two day visit to UAE yesterday, 17 August 2015.
Meanwhile, global credit rating agency Moody's Investors Service has reportedly trimmed its forecast for India's economic expansion for the current fiscal year to 7% from its previous forecast of 7.5% due to drier-than-usual weather conditions. The below-average rainfall has clouded prospects for farm production, which could hurt rural incomes and weigh on consumer demand, Moody's has reportedly said in a report released today, 18 August 2015. Moody's has predicted 7.5% growth in India GDP for the fiscal year starting from 1 April 2016.
India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 17 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 10% below the Long Period Average (LPA) until 17 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 12% below the LPA in East & Northeast India, 9% below the LPA in Central India while rainfall was normal in Northwest India until 17 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, ahead of the upcoming assembly elections in Bihar, the Centre today, 18 August 2015, announced a Rs 1.25 lakh crore development package for Bihar. Speaking at the launch of several development projects at Ara in Bihar, Prime Minister Narendra Modi said an additional Rs 40000 crore was also being invested in the state through various projects under implementation.
In overseas markets, European stocks edged lower today, 18 August 2015, after a sharp slide in Chinese stocks. Key indices in France, Germany and UK were off 0.03% to 0.63%.
Chinese stocks led decline in Asian stocks after China's central bank took fresh steps to offset capital outflows in the wake of a weaker currency. In mainland China, the Shanghai Composite lost 6.15%. In Hong Kong, the Hang Seng index lost 1.43%. In a routine money-market operation, China's central bank injected the large amount of cash into the financial system today, 18 August 2015, signaling Beijing's growing concerns about capital outflows after the yuan's recent weakening. In a routine money-market operation, the People's Bank of China offered 120 billion yuan ($18.77 billion) worth of seven-day reverse repurchase agreements, or reverse repos, which are a short-term loans to commercial lenders in the money market.
Meanwhile, the latest data showed that home prices in China climbed for a third straight month in July. Nationwide new home prices rose 0.3% in July 2015 on a monthly basis, as against 0.4% gain in June and May's 0.2% rise.
In other Asian markets, key benchmark indices in Japan, Singapore, South Korea, Indonesia, and Taiwan were off 0.32% to 1.63%.
US stocks edged higher yesterday, 17 August 2015, as investors put more weight on strong housing data than a dismal manufacturing report for the New York region. US homebuilder sentiment rose in August to its highest level since a matching reading almost a decade ago, the National Association of Home Builders said yesterday, 17 August 2015. The NAHB/Wells Fargo Housing Market index rose to 61 from 60 in July, the group said in a statement. Readings above 50 indicate more builders view market conditions as favorable than poor.
Another report showed a dismal performance of the manufacturing sector in New York. The Empire State general business conditions index nose-dived to a reading of negative 14.9 in August 2015, from positive 3.9 in July 2015.
The Federal Reserve is due to release the minutes of the two-day policy meeting held on 28-29 July 2015 tomorrow, 19 August 2015. The minutes could offer some clues on the timing of the Fed's plans to raise interest rates for the first time in a decade.
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