A bout of volatilty was witnessed as key benchmark indices trimmed losses after extending intraday losses in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently off 225.33 points or 0.81% at 27,605.77. Weakness in global stocks weighed on sentiment. The market breadth indicating the overall health of the market was weak.
Sugar stocks advanced after the Cabinet Committee on Economic Affairs approved a mechanism for procurement of ethanol by PSU OMCs to carry out the ethanol blended petrol program. FMCG stocks declined.
Foreign portfolio investors bought shares worth a net Rs 5.39 crore yesterday, 10 December 2014, as per provisional data.
Earlier, the Sensex and the 50-unit CNX Nifty had, both, hit their lowest level in almost 6 weeks in early trade on weak cues from global markets.
In overseas markets, Asian stocks edged lower after Wall Street finished sharply lower overnight on the back of further oil price declines, while a worse-than-expected machinery orders report from Japan accelerated the market's slide. US stocks suffered their worst declines in about two months yesterday, 10 December 2014, as a renewed slump in oil prices slammed energy companies while investors fretted that a stunning drop in oil prices signals a more worrisome global-economic slowdown.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentiment.
Brent crude futures slumped yesterday, 10 December 2014, on data showing a surprise increase in weekly US oil inventory. 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. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
At 12:16 IST, the S&P BSE Sensex was off 225.33 points or 0.81% at 27,605.77. The index lost 291.63 points at the day's low of 27,539.47 in early afternoon trade, its lowest level since 31 October 2014. The index lost 34.76 points at the day's high of 27,796.34 in opening trade.
The CNX Nifty was off 66.55 points or 0.8% at 8,289.10. The index hit a low of 8,272.40 in intraday trade, its lowest level since 31 October 2014. The index hit a high of 8,348.30 in intraday trade.
The BSE Mid-Cap index was down 79.21 points or 0.77% at 10,222.14. The fall in the index was lower than the Sensex's decline in percentage terms. The BSE Small-Cap index was down 97.80 points or 0.86% at 11,214.74. The fall in the index was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was weak. On BSE, 1,624 shares declined and 846 shares gained. A total of 78 shares were unchanged.
Sugar stocks advanced after the Cabinet Committee on Economic Affairs (CCEA) approved a mechanism for procurement of ethanol by PSU OMCs to carry out the ethanol blended petrol program. Balrampur Chini Mills (up 6.05%), Shree Renuka Sugars (up 5.93%), Sakthi Sugars (up 7.54%), Rana Sugars (up 4.3%), Simbhaoli Sugars (up 15.9%), Triveni Engineering & Industries (up 3.08%), Bajaj Hindusthan (up 6.19%), Dhampur Sugar Mills (up 1.86%), and Dwarikesh Sugar Industries (up 6.84%) edged higher.
The Cabinet Committee on Economic Affairs (CCEA) yesterday, 10 December 2014, approved a mechanism for procurement of ethanol by public sector oil marketing companies (PSU OMCs) to carry out the ethanol blended petrol (EBP) program. The CCEA approved replacing the current procedure on ethanol and decided that the delivered price of ethanol may be fixed in the range of Rs 48.50 per litre to Rs 49.50 per litre, depending upon the distance of sugar mill from the depot/installation of the PSU OMCs. These rates proposed would be delivered price at depot location and inclusive of all central and state taxes, transportation costs, etc which would be borne by the ethanol suppliers. PSU OMCs will incorporate "Supply or Pay" clause duly backed up with bank guarantee in their supply agreement with ethanol suppliers. PSU OMCs will sign MOU with the state governments for a comprehensive system for uninterrupted inter-depot transfer of ethanol within a State. This may include annual excise permits to PSU OMCs for movement of ethanol and other relevant measures, a government statement said.
In order to give fillip to the EBP program, the government decided in November 2012 that 5% ethanol blending with petrol should be implemented across the country. However, PSU OMCs are yet achieve this across the country due to supply and pricing issues, according to reports.
FMCG stocks declined. Dabur India (down 0.57%), Colgate-Palmolive (India) (down 0.79%), Hindustan Unilever (down 0.11%), and Marico (down 0.03%) edged lower. Nestle India (up 0.33%) and Godrej Consumer Products (up 1.46%) edged higher.
Excel Industries fell 1.91% at Rs 361.55. The stock hit a high of Rs 370 and a low of Rs 360.30. The company during market hours today, 11 December 2014, said that a meeting of the Allotment Committee of the directors of the company will be held on 15 December 2014 to issue and allot 10 lakh equity shares of the company to Utkarsh Global Holdings (a promoter group company ) by conversion of 10 lakh warrants out of 20 lakh convertible warrants held by the allottee on preferential basis.
Bank of Maharashtra rose 0.7% at Rs 42.95. The bank during market hours today, 11 December 2014, said it has decided to cut the bank's base rate from 10.4% per annum to 10.25% per annum with effect from 15 December 2014.
In the foreign exchange market, the rupee edged lower against the dollar on global risk-off sentimeent. The partially convertible rupee was hovering at 62.22, compared with its close of 62.02 during the previous trading session.
Brent crude futures slumped yesterday, 10 December 2014, on data showing a surprise increase in weekly US oil inventory. Brent for January settlement was up 51 cents a barrel at $64.75 a barrel. The contract had lost $2.60 a barrel to settle at $64.24 during the previous trading session.
The Indian government plans to introduce the Coal Mines (Special Provisions) Bill, 2014 to replace the Coal Mines (Special Provisions) Ordinance, 2014 in Lok Sabha this week. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the ongoing winter session of parliament. The government also plans to bring the MMDR Amendment Bill, 2014 during the ongoing session of parliament.
The government also intends to get the Insurance Laws Amendment Bill that seeks to enhance foreign investment limit in capital starved insurance sector passed during the ongoing winter session of parliament.
Minister of State for Finance, Jayant Sinha yesterday, 10 December 2014, said India needs to develop alternative model of economic growth based on mix of policies including market driven entrepreneurship innovations, scope for larger private investment and free market economy in democratic polity among others. He was delivering the Inaugural Address after inaugurating the two day Delhi Economic Conclave 2014. The theme of the two day Conclave is Structural Reforms and Growth in India. Stressing on the non-inflationary, inclusive and sustainable growth, Sinha said that structural reforms shall keep taking place at gradual intervals as being done by the present government so that as overall net result, these gradual reforms lead to transformation of India into an economy with a sustainable growth of 7-8% and inflation in the range of 4-6%. Delivering the Key Note Address on this occasion, Tharman Shanmugaratnam, Deputy Prime Minister and Finance Minister, Singapore said that India does not have time on its side and will have to race against competitive countries, intelligent machines among others. He said that India has very highly talented people including scientists, IT experts, academicians, entrepreneurs, but there is a gap at the middle and lower level in comparison with other competitive countries like China.
Piyush Goyal, Minister of State (IC), Power, Coal and NRE, said that there is need for change of mind set of policy makers, policy implementers, stakeholders including private entrepreneurs among others to achieve the goal of high and sustainable growth. He said that the present government is focusing on bringing transparency and honesty in allocation of natural resources including coal blocks, iron ore and other minerals as well in time to come. Goyal specifically mentioned about e-auction of coal blocks which will bring more transparency, competitiveness and efficiency in the system.
The Ministry of Consumer Affairs, Food & Public Distribution yesterday, 10 December 2014, said that the Centre has asked state government to expedite implementation of National Food Security Act. They have been urged to complete all the preparatory work by March next year so that the Act can be roll-out all over the country in April 2015, the Ministry of Consumer Affairs, Food & Public Distribution said in a statement. Addressing the Conference of State Food Secretaries, Minister of Consumer Affairs, Food & Public Distribution Ram Vilas Paswan said that the time-limit of one year provided in the National Food Security Act for identification of eligible households had to be extended twice as several state governments were unable to do so in the prescribed time limit.
On the domestic macro front, inflation is seen easing further in November 2014 and growth in industrial production is seen improving a bit in October 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen easing further to 4.4% in November 2014, from 5.52% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the data on CPI inflation for November 2014 after trading hours tomorrow, 12 December 2014.
The annual rate of inflation based on the wholesale price index (WPI) is seen easing further to 1.2% in November 2014, from 1.77% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the inflation data based on wholesale price index (WPI) for November 2014 at 12.15 noon on 15 December 2014.
Growth in industrial production is seen inching up to 2.7% in October 2014, from 2.5% in September 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will unveil industrial production data for October 2014 after trading hours tomorrow, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from 0.5% in August 2014.
Asian bourses were lower today, 11 December 2014, after Wall Street finished sharply lower overnight on the back of further oil price declines, while a worse-than-expected machinery orders report from Japan accelerated the market's slide. Key indices in China, Hong Kong, Japan, Singapore, Indonesia, Taiwan, and South Korea were off 0.2% to 1.09%.
Japan's core machinery orders, a leading indicator of capital spending, snapped a four-month rising streak in October, data released yesterday, 10 December 2014 showed. Core machinery orders fell 6.4% on month, On year-on-year, machinery orders fell 4.9% in October.
Trading in US index futures indicated that the Dow could gain 31 points at the opening bell today, 11 December 2014. US stocks closed sharply lower yesterday, 10 December 2014, furthering the week's losses, as the price of crude fell to a new five-year low and the Organization of Petroleum Exporting Countries cut its demand outlook for next year.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 16-17 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy.
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