Key benchmark indices extended losses and hit fresh intraday low in afternoon trade after European market opened lower. The barometer index, the S&P BSE Sensex, fell below the psychological 25,000 mark. The market breadth indicating the overall health of the market turned negative from positive. The market sentiment was hit by firm global crude oil prices and hike in railway freight rates which stoked inflation worries. The government after trading hours on Friday, 20 June 2014, announced 14.2% increase in railway passenger fare and 6.5% hike in railway freight rate to boost revenue of the railways to meet its annual expenditure. The Sensex was down 152.12 points or 0.61%, off close to 244 points from the day's high and up about 58 points from the day's low.
Kotak Mahindra Bank fell after its exclusion from MSCI index. Sugar stocks were in demand after media reports suggested that in a move to bail out the ailing sugar industry, Food Minister Ram Vilas Paswan has agreed to raise import duty from 15% to 40%. Shares of Essar Group companies jumped after the board of directors of Essar Oil on Sunday, 22 June 2014, gave its nod to promoters' proposal to delist the company from Indian bourses.
At 13:20 IST, the S&P BSE Sensex was down 152.12 points or 0.61% to 24,953.39. The index shed 209.92 points at the day's low of 24,895.59 in afternoon trade, its lowest level since 5 June 2014. The index jumped 91.99 points at the day's high of 25,197.50 in early trade.
The CNX Nifty was down 48.45 points or 0.65% to 7,463. The index hit a low of 7,445.25 in intraday trade, its lowest level since 5 June 2014. The index hit a high of 7,534.80 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,465 shares fell and 1,258 shares rose. A total of 126 shares were unchanged.
The BSE Mid-Cap index was up 15.68 points or 0.17% at 8,977.64. The BSE Small-Cap index was up 15.20 points or 0.16% at 9,776.42. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 17 fell and the remaining shares rose. ITC (down 4.76%), Infosys (down 2.52%), Hindustan Unilever (down 1.8%), GAIL (India) (down 1.39%), Cipla (down 1.3%), Reliance Industries (down 1.14%), TCS (down 0.88%), Larsen & Toubro (down 0.86%), Wipro (down 0.72%) and HDFC Bank (down 0.67%) edged lower from the Sensex pack.
Hero MotoCorp (up 1.66%), Mahindra & Mahindra (up 1.20%), Sesa Sterlite (up 0.87%), ONGC (up 0.79%), Bajaj Auto (up 0.75%), Bharat Heavy Electricals (up 0.69%), Bharti Airtel (up 0.62%), Tata Steel (up 0.57%) and Hindalco Industries (up 0.49%) edged higher from the Sensex pack.
Private sector lender Kotak Mahindra Bank fell 3.61% to Rs 897.05 after the MSCI said it will delete the stock from its Global Standard Index with effect from 8 July 2014.
Sugar stocks were in demand after media reports suggested that in a move to bail out the ailing sugar industry, Food Minister Ram Vilas Paswan has agreed to raise import duty from 15% to 40%.
Shree Renuka Sugars (up 11.07%), Bajaj Hindusthan (up 9.50%), Eastern Sugar & Industries (up 9.16%), Balrampur Chini Mills (up 9.11%), Dhampur Sugar Mills (up 8.55%), EID Parry (India) (up 7.69%), Triveni Engineering & Industries (up 7.13%), KCP Sugar & Industries Corporation (up 5.07%), Empee Sugars and Chemicals (up 5%), Upper Ganges Sugar & Industries (up 5%), Simbhaoli Sugars (up 4.96%), Rana Sugars (up 4.93%), Dwarikesh Sugar (up 4.92%), Oudh Sugar Mills (up 4.91%), Sakthi Sugars (up 4.85%) and DCM Shriram Industries (up 3.06%), edged higher.
While taking the decision at a second high-level meeting on Monday, 23 June 2014, the food minister also extended sugar export incentives till September 2014. In addition, ethanol blending with petrol too has been raised to 10% from 5%, according to reports.
Paswan has reportedly said that the these latest measures for the revival of sugar industry are subject to the condition that sugar mills clear dues owed to farmers on sugarcane purchases estimated at Rs 11000 crore.
Shares of Essar Group companies jumped after the board of directors of Essar Oil on Sunday, 22 June 2014, gave its nod to promoters' proposal to delist the company from Indian bourses. Essar Ports (up 6.59%), Essar Oil (up 5%) and Essar Shipping (up 5%), edged higher.
Essar Energy Holdings (EEHL) -- the promoter of Essar Oil -- said the delisting proposal of Essar Oil would be in furtherance of the business strategy of Essar Energy Plc, of taking the entire hydrocarbon/energy business group of Essar Energy Plc private, following the delisting of the shares of Essar Energy Plc from the London Stock Exchange on 10 June 2014. EEHL believes that Essar Oil requires substantial investment to develop and grow its businesses, especially the refining and marketing business. Full ownership of Essar Oil will provide EEHL with increased operational/financial flexibility to support the company's businesses and strategic needs.
The market edged higher amid initial volatility as the government's announcement after trading hours on Friday, 20 June 2014, to raise passenger fare and railway freight fuelled expectations that the Centre has started taking tough decisions which are required to bring the economy on growth path. But, the initial gains proved short lived as firm global crude oil prices and hike in railway freight rates stoked inflation worries. The Sensex and the 50 Nifty, both, hit their lowest level in 2-1/2 weeks in morning trade. A bout of volatility was witnessed as key benchmark indices weakened once again after trimming losses after hitting fresh intraday low in mid-morning trade as firm global crude oil prices and hike in railway freight rates stoked inflation worries. The Sensex regained the psychological 25,000 level after falling below that mark in intraday trade. Key benchmark indices weakened once again after trimming intraday losses in early afternoon trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade after European market opened lower. The Sensex fell below the psychological 25,000 mark.
Indian stocks may continue to remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire on Thursday, 26 June 2014.
The government on Friday, 20 June 2014, raised passenger fare and freight rates. A flat 10% increase in passenger fare was announced for all classes. In addition, there will be an increase of 4.2% in fares on account of FAC (Fuel Adjustment Component) which is due from April 2014. The overall increase in passenger fare is 14.2%.
There has been a flat 5% increase in freight rates. In addition there will be an increase of 1.4% in fares on account of FAC (Fuel Adjustment Component) which is due from April 2014. The overall increase in freight rates will be about 6.5% for major commodities. The revised passenger fare and freight rates and freight structure rationalization will come into effect from 25 June 2014.
Brent crude oil prices rose as militant violence in Iraq continues, raising concerns of oil supply from a key oil exporter of the world. Brent oil futures for August delivery were up 41 cents or 0.36% at $115.22 a barrel. Brent had dropped on Friday, 20 June 2014, after settling at its highest level in more than nine months at $115.06 a barrel on Thursday, 19 June 2014.
Increase in crude oil prices has sparked worries about India's macroeconomic situation as India imports majority of its crude oil requirements. Increase in crude oil prices has raised concerns of increase in India's current account deficit and fiscal deficit. Firm global crude oil prices and the latest hike in railway freight rate have also stoked inflation worries.
In the foreign exchange market, the rupee was unchanged against the dollar. The partially convertible rupee was hovering at 60.1850, compared with its close of 60.185/195 on Friday, 20 June 2014.
European market were trading lower in early trade on Monday, 23 June 2014. Key benchmark indices in UK, France and Germany were down 0.21% to 0.86%.
Asian stocks were mostly lower on Monday, 23 June 2014. Key benchmark indices in Indonesia, China, Singapore, Hong Kong and Taiwan were down by 0.04% to 1.49%. However, key benchmark indices in Japan and South Korea were up by 0.13% and 0.35% respectively.
Activity in China's factory sector expanded in June for the first time in six months as new orders surged, a preliminary HSBC survey showed on Monday, offering new signs the economy is stabilising thanks to Beijing's measures to shore up growth. The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose to 50.8 in June from May's final reading of 49.4. It was the first time since December that the PMI was in growth territory, and the highest reading since November, when it was also 50.8.
Trading in US index futures indicated that the Dow could fall 7 points at the opening bell on Monday, 23 June 2014. The Dow Jones Industrial Average and the S&P 500 index closed at record highs on Friday, helped by the prospect of the Federal Reserve keeping interest rates low for a long period of time.
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