Volatility continued in mid-morning trade as key benchmark indices once again slipped into the red from positive terrain. However, losses on bourses were small. The barometer index, the S&P BSE Sensex was currently down 47.04 points or 0.17% at 27,411.34. The market breadth indicating the overall health of the market was strong.
Oil exploration firms declined along with fall in crude oil prices. Shares of public sector oil marketing companies edged higher as global crude oil prices fell.
Key indices staged sharp recovery in morning trade after slipping into the red in early trade.
In overseas markets, most Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures extended losses from the lowest level in more than 5 1/2 years as a foreign investment bank reduced its price forecasts and Venezuela called on Organization of Petroleum Exporting Countries (OPEC) producers to work together to spur a recovery. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
Foreign portfolio investors sold shares worth a net Rs 297.99 crore on Friday, 9 January 2015, as per provisional data.
At 11:20 IST, the S&P BSE Sensex was down 47.04 points or 0.17% at 27,411.34. The index declined 125.30 points at the day's low of 27,333.08 in early trade. The index rose 81.17 points at the day's high of 27,539.55 in early trade, its highest level since 6 January 2015.
The CNX Nifty was down 2.20 points or 0.03% at 8,282.30. The index hit a low of 8,245.60 in intraday trade. The index hit a high of 8,297.65 in intraday trade.
The BSE Mid-Cap index was up 55.60 points or 0.53% at 10,481.61. The BSE Small-Cap index was up 78.61 points or 0.7% at 11,276.95. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,431 shares advanced and 939 shares declined. A total of 99 shares were unchanged.
Oil exploration firms declined along with fall in crude oil prices. ONGC (down 0.74%), Cairn India (down 2.63%), Reliance Industries (RIL) (down 1.53%) and Oil India (down 2.43%) dropped. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms.
Shares of public sector oil marketing companies edged higher as global crude oil prices fell. BPCL (up 11%), and HPCL (up 0.06%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Indian Oil Corporation (IOCL) lost 0.16%. With respect to news article titled "IOC to form JV for Rs 5150-crore LNG terminal project in TN within a month", the company clarified during market hours that the board of IOCL at its meeting held in October 2014 had accorded approval for setting up a 5 million tonne LNG project at Ennore through a joint venture company. The cost of the project is estimated at Rs 5150 crore. The project would be implemented through a joint venture company and not directly by IOCL. As per the equity participation in the JV company; IOCL will hold 45%, TIDCO, a Tamil Nadu State Govt Enterprise holds 5% and balance 50% will be held by financial institutions.
The JV will be initially incorporated with a Seed Capital of Rs 1 lakh by aforesaid JV partners out of which IIOCL's investment would only be Rs 45000 at present. As the project activities progress, the strategic joint venture partners would be identified and inducted as equity partners. The project related activities are yet to commence.
Bajaj Corp rose 3.95% after net profit rose 43.78% to Rs 41.84 crore on 29.77% rise in total income from operations to Rs 205.79 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours on Friday, 9 January 2015.
Kansai Nerolac Paints rose 5.5% after the company said its board will meet on 30 January 2015 to consider stock split.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.16, compared with its close of 62.32 during the previous trading session.
Brent crude oil futures extended losses from the lowest level in more than 5 1/2 years as foreign investment bank reduced its price forecasts and Venezuela called on Organization of Petroleum Exporting Countries (OPEC) producers to work together to spur a recovery. Brent for February settlement was off 86 cents to $49.25 a barrel. The contract had lost 85 cents to settle at $50.11 a barrel on Friday, 9 January 2015, the lowest closing since April 2009. Brent for March settlement was off 81 cents to 50.49 a barrel.
On the macro front, data to be released today, 12 January 2015, is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours today, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.
The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours today, 12 January 2015.
The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
The rate of inflation based the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon on Wednesday, 14 January 2015.
The seventh annual Vibrant Gujarat Summit, a global investor conference was inaugurated by Prime Minister Narendra Modi on Sunday, 11 January 2015. The Summit ends tomorrow, 13 January 2015.
Most Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. Key indices in South Korea, Indonesia, China and Taiwan were off 0.1% to 2.12%. Hong Kong's Hang Seng rose 0.03%. Singapore's Straits Times was flat. Japanese stock market remained close for a holiday.
Trading in US index futures indicated that the Dow could fall 10 points at the opening bell today, 12 January 2015. US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
US job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labor market has yet to give much of a boost to workers. Nonfarm payrolls increased by 252,000 last month after an upwardly revised jump of 353,000 in November, the Labor Department said. The jobless rate fell 0.2 percentage point to a 6-1/2-year low of 5.6%, but that was mainly because people left the labor force.
The drop in labor participation and a surprise five-cent, or 0.2 percent, decrease in average hourly earnings, which nearly erased November's gains, took some shine off the otherwise upbeat report.
Meanwhile in Europe, the uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
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