Losses for oil and metal sector stocks offset gains for IT sector stocks and state-run banks, resulting in small losses for key benchmark indices. The barometer index, the S&P BSE Sensex, fell 58.09 points or 0.21% to settle at 27,306.83. The 50-unit CNX Nifty fell 13.40 points or 0.16% to settle at 8,261.65. After seeing a range bound movement until afternoon trade, key indices turned volatile later. The Sensex and Nifty, both, reversed direction after hitting their highest level in 8-1/2-weeks in afternoon trade. The two key benchmark indices snapped their 3-day winning streak.
IT shares edged higher as rupee declined against the dollar. Index heavyweights ITC and Reliance Industries (RIL) dropped. Shares of oil exploration firms declined as global crude oil prices fell. Metal shares declined as prices of base metals dropped on the global commodities markets in the wake of recent data showing China's economy growing at its slowest rate in six years in the third quarter.
In overseas stock markets, European stocks edged lower as commodities-related stocks fell in the wake of recent data showing China's economy growing at its slowest rate in six years in the third quarter. Stocks in mainland China led gains in Asian markets on hopes that Beijing will ease monetary policy to address the country's slowest growth in years.
The Sensex fell 58.09 points or 0.21% to settle at 27,306.83, its lowest closing level since 16 October 2015. The index lost 148.52 points or 0.54% at the day's low of 27,216.40. The index rose 67.15 points or 0.24% at the day's high of 27,432.07, its highest level since 21 August 2015.
The Nifty dropped 13.40 points or 0.16% to settle at 8,261.65, its lowest closing level since 16 October 2015. The index lost 45.85 points or 0.55% at the day's low of 8,229.20. The index rose 19 points or 0.22% at the day's high of 8,294.05, its highest level since 21 August 2015.
The market breadth indicating the overall health of the market was positive. On BSE, 1,427 shares rose and 1,326 shares fell. A total of 182 shares were unchanged. The BSE Mid-Cap index rose 0.53%. The BSE Small-Cap index rose 0.18%. Both these indices outperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (down 0.33%), BSE Metal index (down 1.8%), BSE Oil & Gas index (down 0.72%) and BSE Realty index (down 0.66%) underperformed the Sensex. The S&P BSE IT index (up 1%), BSE Auto index (up 0.3%), BSE Bankex index (down 0.09%), BSE Capital Goods index (down 0.05%), BSE Consumer Durables index (up 0.46%), BSE Power index (up 1.36%) and BSE Teck index (up 0.75%) outperformed the Sensex. The S&P BSE FMCG index was down 0.21%, matching Sensex's decline in percentage terms.
Most PSU bank stocks edged higher. IDBI Bank (up 2.22%), United Bank of India (up 0.88%), Bank of Baroda (up 0.54%), Canara Bank (up 0.65%), Bank of India (up 0.49%), Punjab National Bank (up 0.73%) and Syndicate Bank (up 0.16%) edged higher. State Bank of India (down 0.02%), Andhra Bank (down 0.5%), Vijaya Bank (down 0.66%) and UCO Bank (down 1.27%) edged lower.
Oriental Bank of Commerce (OBC) rose 0.21% at Rs 144.70. The state-run bank announced that it intends to raise Tier II capital through private placement of Basel III compliant Tier 2 bonds of Rs 10 lakh each at par aggregating to Rs 1000 crore. The bonds have been rated CARE AA+ and ICRA AA+ (Hyb.) by CARE & ICRA, respectively.
Private sector banks declined. Kotak Mahindra Bank (down 0.75%), IndusInd Bank (down 0.65%), ICICI Bank (down 0.37%) and HDFC Bank (down 0.27%) edged lower. Axis Bank (up 0.39%) and Yes Bank (up 0.01%) gained.
Metal shares declined as prices of base metals dropped on the global commodities markets in the wake of recent data showing China's economy growing at its slowest rate in six years in the third quarter. Vedanta (down 6.42%), Hindalco Industries (down 2.37%), NMDC (down 2.07%), Steel Authority of India (down 0.63%) and National Aluminium Company (down 0.12%) edged lower. Jindal Steel & Power (up 0.33%) and JSW Steel (up 0.37%) edged higher. China is the world's largest consumer of copper, aluminum and steel.
High Grade Copper for December 2015 delivery was currently off 0.3% at $2.3605 per pound on the COMEX.
Tata Steel fell 2.96% at Rs 240.80 after its European unit that makes long steel products announced proposal to stop production of steel plate due to adverse market conditions arising from cheap imports from China, a strong British pound and high electricity costs. Plate mills in Scunthorpe, Dalzell and Clydebridge would be mothballed and one of the two coke ovens at the Scunthorpe steelworks would be closed, the company said. The restructuring will lead to around 1,200 job losses.
Hindustan Zinc rose 0.44% at Rs 159.10. The company's net profit rose 5% to Rs 2285 crore on 4% growth in revenue to Rs 3908 crore in Q2 September 2015 over Q2 September 2014. The result was announced after market hours yesterday, 19 October 2015.
Most IT shares edged higher as rupee declined against the dollar. MindTree (up 1.76%), TCS (up 1.6%), Infosys (up 1.18%) and Tech Mahindra (up 0.94%) edged higher. Wipro (down 0.93%) and Oracle Financial Services Software (down 0.61%) edged lower. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
In the foreign exchange market, the partially convertible rupee was currently hovering at 65.01, compared with its close of 64.80 during the previous trading session.
HCL Technologies rose 0.91% at Rs 864.95 after announcing that it has entered into a Letter of Intent with the Volvo Group for undertaking an outsourcing engagement for its IT infrastructure and operations services. The contract tenure is for five years. The total value of the contract was not disclosed. In addition, HCL Technologies would be acquiring Volvo Group's external IT business relating to provision of IT infrastructure, mainframe services and application operation services for an all cash consideration of SEK 1.1 billion ($138 million). Volvo Group derived revenue of SEK 1.6 billion ($190 million) from external customers during the last twelve months from its external IT business. The deal would be subject to the parties entering into binding agreements and the regulatory approvals.
Shares of oil exploration firms declined as global crude oil prices fell. Reliance Industries (RIL) (down 0.83%), Cairn India (down 3.72%), ONGC (down 1.88%) and Oil India (down 1.29%) dropped. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms.
In global commodities markets, Brent for December settlement was currently off 20 cents at $48.41 a barrel. The contract had lost $1.85 a barrel or 3.66% to settle at $48.61 a barrel during the previous trading session on concerns about weaker demand from China, the world's second-largest oil consumer.
Shares of public sector oil marketing companies also declined. BPCL (down 0.61%) and Indian Oil Corporation (down 0.9%) edged lower. HPCL (up 0.93%) edged higher.
Hero MotoCorp lost 0.33% at Rs 2,605.05. The stock hit a high of Rs 2,625 and a low of Rs 2,589.05 in intraday trade. The company is set to announce its Q2 September 2015 results today, 20 October 2015.
Maruti Suzuki India (MSIL) rose 1.22% at Rs 4,515. The company after market hours yesterday, 19 October 2015, announced the introduction of a new variant of its popular mid-size sedan Ciaz. The petrol version of Ciaz RS is priced Rs 9.20 lakh ex-showroom Delhi and the hybrid diesel version is priced at Rs 10.28 lakh ex-showroom Delhi.
Mahindra & Mahindra (M&M) lost 2.23% at Rs 1,250.95. The company today, 20 October 2015, announced the launch of a technology enabled platform called SmartShift that connects cargo owners and transporters. SmartShift will be gradually rolled out across India.
Bajaj Finance rose 5.84% to Rs 5,306.05 after net profit rose 41.71% to Rs 279.39 crore on 36.94% rise in total income to Rs 1700.57 crore in Q2 September 2015 over Q2 September 2014. The result was announced during market hours today, 20 October 2015.
Key indices snapped their three-day winning streak. The Sensex had gained 585.26 points or 2.18% in the preceding three trading sessions to settle at 27,364.92 yesterday, 19 October 2015, from its close of 26,779.66 on 14 October 2015. The Sensex has risen 1,152 points or 4.4% in this month so far (till 20 October 2015). The Sensex has fallen 192.59 points or 0.7% in this calendar year so far (till 20 October 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 2,473.29 points or 9.95%. The Sensex is off 2,717.91 points or 9.05% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, global credit rating agency Standard & Poor's Ratings Services (S&P) has affirmed its 'BBB-' long-term and 'A-3' short-term sovereign credit rating on India with stable outlook on the rating. S&P said in a statement that its current ratings on India reflect the country's sound external profile and improved monetary credibility. However, India's low per capita income and weak public finances are two major constraints on India's sovereign ratings, S&P said. According to S&P, India has made progress to address long-standing impediments to growth. These include strengthening the business climate, improving labor market flexibility and reforming the energy sector. On the flip side, domestic supply-side constraints will put a lid India's economic growth. S&P expects the Centre's revenue to get a boost in the medium term from the likely introduction of the goods and services tax.
S&P further said that based on its current assessment, the rating agency is unlikely to change its current sovereign ratings on India till at least 2016.
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