Key benchmark indinces languished in negative zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently down 75.64 points or 0.29% at 25,589.63. The market breadth indicating the overall health of the market was negative. Weakness in Asian stocks dampened sentiment. Realty stocks declined. PSU OMCs gained on renewed buying.
Earlier, the key benchmark indices had once again slipped into the red in mid-morning trade after moving into positive zone from negative zone in morning trade.
At 12:16 IST, the S&P BSE Sensex was down 75.64 points or 0.29% to 25,589.63. The index rose 34.78 points at the day's high of 25,715.36 in morning trade. The index declined 106.86 points at the day's low of 25,558.41 in early afternoon trade, its lowest level since 4 August 2014.
The CNX Nifty was down 21.30 points or 0.28% to 7,650.75. The index hit a high of 7,686.70 in intraday trade. The index hit a low of 7,638.70 in intraday trade, its lowest level since 5 August 2014.
The market breadth indicating the overall health of the market was negative. On BSE, 1,431 shares fell and 1,068 shares rose. A total of 82 shares were unchanged.
The BSE Mid-Cap index was down 42.81 points or 0.47% at 9,158.43. The BSE Small-Cap index was down 42.60 points or 0.42% at 10,053.68. Both these indices underperformed the Sensex.
Realty stocks declined. DLF (down 0.96%), Housing Development & Infrastructure (HDIL) (down 0.67%), D B Realty (down 1.6%) and Unitech (down 0.55%) declined.
PSU OMCs rose on renewed buying. HPCL (up 2.88%), BPCL (up 1.21%) and Indian Oil Corporation (up 1.64%) edged higher. Brent crude oil prices for September delivery rose 16 cents to $104.75 a barrel in electronic trade today, 7 August 2014. The contract had fallen 2 cents to end at $104.59 a barrel on Wednesday, 6 August 2014.
PSU OMCs suffer under-recovery or revenue loss on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. It is expected that the gap between administered price and market price of diesel would be eliminated by early FY 2015, the Finance Ministry said in its fiscal policy strategy statement on 10 July 2014. The government has already freed pricing of petrol.
The under-recovery on High Speed Diesel (HSD) applicable for 1st fortnight of August effective 1 August 2014 will go down to Rs 1.33 per litre. This was Rs 2.49 per litre during 2nd fortnight of July 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the 1st fortnight of August 2014 will be Rs 32.98 per litre (Rs 33.07 per litre in last fortnight) and Rs 447.87 per cylinder (Rs 449.17 per cylinder in last fortnight) respectively. Oil Marketing Companies (OMCs), effective 1 August 2014, are now incurring combined daily under-recovery of about Rs 226 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 261 crore daily under-recoveries during previous fortnight. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14. The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed on 1 August 2014, international prices of crude oil and petroleum products during the 2nd fortnight of July 2014.
GlaxoSmithkline Consumer Healthcare lost 0.47% after net profit net profit rose 8.46% to Rs 130.12 crore on 8.92% growth in total income to Rs 1011.73 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Wednesday, 6 August 2014.
Lakshmi Machine Works advanced 3.8% after net profit jumped 91.4% to Rs 48.57 crore on 36% growth in total income to Rs 598.41 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Wednesday, 6 August 2014.
Shasun Pharmaceuticals lost 2.59% after the company reported consolidated net loss of Rs 4.80 crore in Q1 June 2014, lower than net loss of Rs 6.57 crore in Q1 June 2013. The Q1 result was announced after market hours on Wednesday, 6 August 2014. Shasun attributed loss in Q1 June 2014 mainly to phasing of orders in UK operations.
Shasun's consolidated gross revenue rose 38% to Rs 313.72 crore in Q1 June 2014 over Q1 June 2013. EBITDA after R&D cost rose 190.45% to Rs 21 crore in Q1 June 2014 over Q1 June 2013.
The government has opened up the defense and railway industries to more investment by foreign firms, in a move to attract more international capital and expertise to the sectors. The Union Cabinet on Wednesday, 6 August 2014, approved raising the maximum amount of foreign ownership allowed in military-equipment making firms to 49% from the previous cap of 26%. It also agreed to allow up to 100% foreign direct investment in railway-construction companies.
Last month, Finance Minister Arun Jaitley in the Union Budget 2014-15 had announced proposed to raise the ceiling on FDI in defence equipment manufacturing companies to 49% from 26%. In his maiden rail budget, Railway Minister D V Sadananda Gowda had last month said that the government was planning to open up the cash-starved railways to FDI.
The latest measures to open up the economy come at a time when the government is struggling to get the Insurance Laws (Amendment) Bill, 2008 passed in Rajya Sabha. The insurance bill seeks to increase the FDI limit in the insurance sector from 26% to 49%. While the Narendra Modi government has a majority in Lok Sabha, it is in a minority in the Rajya Sabha and needs the help of opposition parties to pass the bill. The insurance bill has to be passed by both the Houses of Parliament to become a law. Congress and few other opposition parties are demanding that the insurance bill be sent to a select committee of the Rajya Sabha as it has undergone substantive changes since the time it was introduced by the erstwhile UPA government.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.445, compared with its close of 61.5025 on Wednesday, 6 August 2014.
Asian stocks fell today, 7 August 2014, as tensions mounted over Ukraine. Key benchmark indices in China, Indonesia, Taiwan, Hong Kong, Singapore, and South Korea were off 0.14% to 1.09%. Japan's Nikkei Average rose 0.48%.
Trading in US index futures indicated that the Dow could gain 21 points at the opening bell on Thursday, 7 August 2014. US stocks edged higher on Wednesday, 6 August 2014, on gains in consumer-staples shares.
The US on Wednesday, 6 August 2014, joined NATO and Poland in warning there's a risk Russia could send troops into Ukraine.
Russia will reportedly ban billions of dollars of food imports from the US and other nations in retaliation for sanctions imposed over the turmoil in Ukraine. Russian President Vladimir Putin yesterday ordered restrictions on imports for one year from countries that have imposed or supported sanctions against Russia
In Europe, a policy meeting of the Governing Council of the European Central Bank (ECB) will be held today, 7 August 2014, in Frankfurt to decide euro zone interest rates. The Bank of England also holds its policy meeting today, 7 August 2014.
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