Key benchmark indices moved in a narrow range in negative zone in mid-afternoon trade. The barometer index, S&P BSE Sensex, was currently down 137.60 points or 0.51% at 27,002.34. Weakness in Asian and European stocks and an overnight rally in Brent crude oil prices dampened sentiment. Higher crude oil prices could increase fiscal deficit and current account deficit and stoke fuel price inflation. The market breadth indicating the overall health of the market was weak. Capital goods stocks declined. Coal India rose after the company said five labour unions have served a joint notice to resort to work to rule seeking the retrieval of mines from private companies and to protest against any further disinvestment. Jaiprakash Associates tumbled after promoters pared stake in the company. TCS reversed diretion after scaling record high in intraday trade. Punjab National Bank declined after the bank's announcement of fund raising.
Meanwhile, India's Intelligence Bureau has reportedly issued an all-India alert after Al Qaeda leader Ayman al Zawahri announced the formation of an Indian branch of his militant group.
The Sensex has swung near the psychological 27,000 mark so far during the day after falling below that level in intraday trade. Earlier, the barometer index had slipped into the red soon after opening a tad higher.
In overseas markets, European stocks edged lower as investors awaited the European Central Bank's next steps on interest rates and quantitative easing. Shares of property developers led decline in Asian stocks.
At 14:15 IST, the S&P BSE Sensex was down 137.60 points or 0.51% at 27,002.34. The index fell 166.30 points at the day's low of 26,973.64 in early afternoon trade, its lowest level since 2 September 2014. The index gained 29.18 points at the day's high of 27,169.12 in early trade.
The CNX Nifty was down 41.60 points or 0.51% at 8,073. The index hit a low of 8,060.90 in intraday trade, its lowest level since 2 September 2014. The index hit a high of 8,114.80 in intraday trade.
The market breadth indicating the overall health of the market was weak. On BSE, 1,794 shares declined and 996 shares advanced. A total of 110 shares were unchanged.
The BSE Mid-Cap index was down 17.43 points or 0.18% at 9,587.44, outperforming the Sensex. The BSE Small-Cap index was down 69.09 points or 0.66% at 10,464.63, underperforming the Sensex.
Among 30 Sensex shares, 22 declined while 8 stocks advanced.
Capital goods stocks declined. Bharat Heavy Electricals (down 4.36%), Bharat Electronics (down 2.08%), Thermax (down 0.96%), L&T (down 0.9%), Siemens (down 0.6%), Crompton Greaves (down 0.26%), and Alstom T&D India (down 1.18%) declined.
Coal India rose 1.12% at Rs 380.20. The company during market hours said that five unions of the company have served a joint notice dated 31August 2014 to Coal India to resort to work to rule with effect from 18 September to 20 September 2014 seeking the retrieval of mines from private companies and to protest against any further disinvestment. The unions issued a joint notice to the coal secretary. "Work to rule means workers will stick to their shifts and would not do anything that's not part of their job profile. This is likely to affect production at a time when coal stocks at power plants are running low, as per reports.
Bhushan Steel surged by the maximum level of 5% at Rs 100.85 for the day.
J&K Bank jumped 6.94% at Rs 168.95. The stock started trading after giving effect to a 10-for-1 stock split. The stock was volatile. The stock hit a high of Rs 176.95 and a low of Rs 160 in intraday trade.
Jaiprakash Associates tumbled 15.41% at Rs 38.70. The company clarified during market hours that one of the promoters holding 72.36 crore shares, constituting 29.75% of the company's shares capital, has sold only 1.45% of share holding and continues to hold 68.83 crore shares, constituting 28.30% of the company's share capital. This small share holding has been disposed off by the promoter company to meet its requirement of funds including for social cause, Jaiprakash Associates said.
The promoters of Jaiprakash Associates continue to have full faith in the company and hope that the investor/stakeholders would continue to have confidence in the company and its Management, the company said.
The company issued the clarification after rumors in the market that the promoters are selling their share holding in the company.
Punjab National Bank lost 1.89% at Rs 942.50. The bank during market hours said that it is raising Rs 500 crore Tier-II Basel III compliant bonds at an annual coupon of 9.35% on private placement basis. The bond issue opened today, 4 September 2014, and it will conclude on 9 September 2014.
Meanwhile, India's Intelligence Bureau has reportedly issued an all-India alert after Al Qaeda leader Ayman al Zawahri announced the formation of an Indian branch of his militant group. The government has asked all the states to be on high alert for any possible attack, as per media reports. In a 55-minute video posted online Zawahri described the formation of Al-Qaeda in the Indian subcontinent as a glad tidings for Muslims in Burma, Bangladesh, Assam, Gujarat, Ahmedabad, and Kashmir and said that the new wing would rescue Muslims there from injustice and oppression.
Brent crude oil futures rallied Wednesday, 3 September 2014, on expectations that steps toward a cease-fire in eastern Ukraine could boost economic growth in Europe. Brent for October settlement surged $2.43 a barrel or 2.4% to settle at $102.77 a barrel yesterday, 3 September 2014. In today's trading, Brent for October settlement was down 74 cents at $102.03 a barrel.
Higher crude oil prices could increase fiscal deficit and current account deficit and stoke fuel price inflation. India imports 80% of its crude oil requirement.
Russian President Vladimir Putin on Wednesday, 3 September 2014, said he and his Ukrainian counterpart Petro Poroshenko had agreed to the outlines of a cease-fire for eastern Ukraine, calling for the separatists there to end their offensive and Kiev to pull its forces back.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.44, compared with its close of 60.4825 during the previous trading session.
European stocks edged lower today, 4 September 2014, as investors awaited the European Central Bank's next steps on interest rates and quantitative easing. Key benchmark indices in France and Germany were off 0.4% to 0.59%. In UK, the FTSE 100 index was up 0.15%.
German factory orders surged the most in more than one year in July after weak demand in the second quarter contributed to an economic contraction. Orders, adjusted for seasonal swings and inflation, rose 4.6% from June, when they slid a revised 2.7%, the Economy Ministry in Berlin said today. That's the biggest increase since June 2013.
A monthly meeting of the European Central Bank (ECB) is scheduled today, 4 September 2014. There are expectations that the European Central Bank (ECB) will announce quantitative easing in the coming months to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.
Bank of England will also announce its monetary-policy decision later in the global day today, 4 September 2014. The UK central bank is expected to keep its benchmark rate unchanged at 0.5%, the level it held since March 2009.
Shares of property developers led decline in Asian stocks today, 4 September 2014. Key indices in Japan, Taiwan, Indonesia, Hong Kong, and Singapore were off 0.04% to 0.34%. Key indices in South Korea and China rose 0.25% to 0.8%.
The Bank of Japan kept its record stimulus unchanged today, 4 September 2014 as Governor Haruhiko Kuroda looks to keep stoking inflation and boost economic momentum that's been sapped by a higher sales tax. The central bank kept its pledge to increase the monetary base at an annual pace of 60 trillion yen to 70 trillion yen ($667 billion), the bank said in a statement today, 4 September 2014.
Trading in US index futures indicated that the Dow could fall 5 points at the opening bell on Thursday, 4 September 2014. The US economy expanded at a modest to moderate pace over the past six weeks as a booming auto industry and tourism continued to drive growth, the Federal Reserve said in its Beige Book on Wednesday, 3 September 2014.
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