After holding positive zone within a very narrow range, key benchmark indices suddenly dropped and slipped into the red in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently down 40.42 points or 0.15% at 27,045.51. Weakness in Asian stocks weighed on key indices. The market breadth was positive. Steel stocks on a slide in global iron ore prices. JSW Steel rose on reports the company is considering buying the Ilva steel plant in Italy. Shares of iron ore producers were also up.
Earlier, key benchmark indices gave up almost entire initial gains after opening higher.
Asian stocks fell as shares of material companies slid and as investors awaited the influential US non-farm payroll data for August. Strength in dollar has raised concerns that it could spur capital outflows from emerging markets. 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.
At 11:20 IST, the S&P BSE Sensex was down 40.42 points or 0.15% at 27,045.51. The index fell 43.86 points at the day's low of 27,042.07 in mid-morning trade. 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 CNX Nifty was down 1.40 points or 0.02% at 8,094.55. The index hit a low of 8,089.65 in intraday trade. The index hit a high of 8,122.70 in intraday trade, its highest level since 3 September 2014.
The market breadth indicating the overall health of the market was positive. On BSE, 1,392 shares gained and 1,064 shares fell. A total of 96 shares were unchanged.
The BSE Mid-Cap index was up 25.63 points or 0.27% at 9,640.70. The BSE Small-Cap index was up 77.34 points or 0.74% at 10,572.80. Both these indices outperformed the Sensex.
Steel stocks rose on slide in global iron ore prices. Jindal Steel & Power (up 1.2%), Bhushan Steel (up 5%), Tata Steel (up 0.15%), and Steel Authority of India (Sail) (up 0.12%) gained.
Iron ore producers also gained. NMDC (up 3.94%) and Sesa Sterlite (up 0.16%) rose.
JSW Steel rose 1.34% on reports the company is considering buying the Ilva steel plant in Italy. Ilva, privately-owned by the Riva family, is Europe's largest steel plant by output capacity and is of strategic importance to the southern European steel sector, where it supplies carmakers and other manufacturers.
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 overnight losses as a firmer dollar weighed. Brent for October settlement was off 9 cents at $101.74 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 broad strength. The partially convertible rupee was hovering at 60.4225, compared with its close of 60.36 during the previous trading session.
Asian stocks fell today, 5 September 2014, led by fall in material companies. Key indices in Hong Kong, Japan, South Korea, Taiwan, and Singapore were off 0.03% to 0.53%. Key indices in China and Indonesia were up 0.12% to 0.49%.
Trading in US index futures indicated that the Dow could fall 12 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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