Sensex drops below 26,000
Key benchmark indices edged lower in the week ended Friday, 4 December 2015 on prospects of increase in interest rates in the United States. The barometer index, the S&P BSE Sensex, fell below the psychological 26,000 mark during the week. The Sensex and the Nifty, both, settled at their lowest level in more than two weeks. Key indices edged lower in three out of five trading sessions during the week.
Hawkish comments from Federal Reserve Chairwoman Janet Yellen on Wednesday, 2 December 2015 reinforced the case for an interest rate hike during the middle of this month. The Fed is widely expected to announce an increase of 25 basis points in the federal funds rate after a regular monetary policy review scheduled during the middle of this month.
Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
In the week ended Friday, 4 December 2015, the 30-share S&P BSE Sensex lost 490.09 points or 1.88% to settle at 25,638.11, its lowest closing level since 18 November 2015. The 50-unit CNX Nifty lost 160.80 points or 2.02% to settle at 7,781.90, its lowest closing level since 18 November 2015.
The BSE Mid-Cap index fell 49.46 points or 0.45% to settle at 10,935.11. The fall in the index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index rose 11.68 points or 0.1% to settle at 11,557.52. The index outperformed the Sensex.
A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, settled with tiny gains while the 50-unit Nifty 50 index settled with small losses on Monday, 30 November 2015. The Sensex rose 17.47 points or 0.07% to settle at 26,145.67, its highest closing level since 6 November 2015.
Gains in metal, pharma and oil sector stocks enabled small gains for key benchmark indices on Tuesday, 1 December 2015 after the Reserve Bank of India (RBI) kept its benchmark interest rate unchanged after a monetary policy review. The Sensex rose 23.74 points or 0.09% to settle at 26,169.41, its highest closing level since 6 November 2015.
Losses for banking sector stocks and index heavyweights HDFC, Infosys and L&T outweighed gains for pharma stocks and index heavyweight Reliance Industries (RIL) resulting in small losses for key benchmark indices on Wednesday, 2 December 2015. The Sensex lost 51.56 points or 0.2% to settle at 26,117.85, its lowest closing level since 26 November 2015.
Prospects of increase in interest rates in the United States and data showing slowdown in India's services sector growth weighed on Indian stocks on Thursday, 3 December 2015, with barometer index, the S&P BSE Sensex, falling below the psychological 26,000 mark. The Sensex lost 231.23 points or 0.89% to settle at 25,886.62, its lowest closing level since 24 November 2015.
Key benchmark indices dropped on Friday, 4 December 2015, tracking slide in global stocks after the European Central Bank (ECB)'s stimulus package announced after policy meet on Thursday, 3 December 2015, fell well short of markets' high expectations. The Sensex lost 248.51 points or 0.96% to settle at 25,638.11, its lowest closing level since 18 November 2015.
Among the 30-share Sensex pack, 23 stocks declined and the rest of them rose in the week ended Friday, 4 December 2015.
Bharat Heavy Electricals (Bhel) (down 4.15%), ONGC (down 3.25%), GAIL (India) (down 3.13%), Infosys (down 1.73%) and L&T (down 1.68%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries (RIL) fell 1.36% to Rs 965.75.
Index heavyweight and cigarette major ITC dropped 2.43% to Rs 335.60.
Index heavyweight and housing finance major HDFC lost 4.73% to Rs 1,171.95.
Bharti Airtel fell 5.97%. Bharti Airtel during market hours on Monday, 30 November 2015, announced the launch of a massive network transformation program called Project Leap. Aimed at perceptibly improving network quality and delivering the best customer experience, this strategic project will see an investment of Rs 60000 crore in the next 3 years, Bharti Airtel said. The investment of Rs 60000 crore is over and above the Rs 1.60 lakh crore Bharti Airtel has already invested in its active and passive network, spectrum, fiber, submarine cables and systems till date, the company said.
Auto stocks declined. Hero MotoCorp (down 3.22%) and Tata Motors (down 4.23%) declined.
Mahindra & Mahindra (M&M) fell 2.39%. The company said during market hours on Tuesday, 1 December 2015 that its total auto sales rose 21% to 41,590 units in November 2015 over November 2014. Domestic sales rose 23% to 39,383 units in November 2015 over November 2014. Exports rose 1% to 2,207 units in November 2015 over November 2014.
Separately, M&M said that its total tractor sales jumped 42% to 21,717 units in November 2015 over November 2014. Domestic sales jumped 47% to 20,819 units in November 2015 over November 2014. Exports fell 20% to 898 units in November 2015 over November 2014.
Maruti Suzuki India rose 0.54%. The company's total sales rose 9.7% to 1.2 lakh vehicles in November 2015 over November 2014. Domestic sales rose 10.6% to 1.1 lakh vehicles in November 2015 over November 2014. Exports rose 1% to 10,225 vehicles in November 2015 over November 2014.
Bajaj Auto rose 0.36%. Bajaj Auto's total sales rose 0.13% to 3.09 lakh units in November 2015 over November 2014. Motorcycles sales rose 3% to 2.7 lakh units in November 2015 over November 2014. Commercial vehicles sales fell 18% to 38,787 units in November 2015 over November 2014. Exports dropped 17% to 1.37 lakh units in November 2015 over November 2014. The company announced sales volume data for October during market hours on Wednesday, 2 December 2015.
Bank stocks fell. HDFC Bank (down 1.23%), ICICI Bank (down 3.02%), Axis Bank (down 2.23%), and State Bank of India (down 3.45%) declined.
Pharma stocks rose. Dr Reddy's Laboratories (up 3.09%) and Sun Pharmaceutical Industries (up 2.18%) rose. Lupin fell 0.49%.
Cipla rose 0.47%. The company announced during market hours on Thursday, 3 December 2015 that it has launched a novel "5 in 1" anti-ageing skin care product Cutisera developed by Stempeutics.
Metal stocks rose. Hindalco Industries advanced 2.06%. Vedanta shed 0.16%.
Tata Steel gained 3.89%. Tata Steel announced that its subsidiary incorporated in Singapore T S Global Holdings Pte (TSGH) has executed agreements worth $1.5 billion for refinancing exiting debt. The new loan facilities comprise of a 5 year loan of $750 million and a 6 year loan of $750 million. The company said that the new loan facilities are at lower cost with extension of the loan tenor.
On macro front, the seasonally adjusted Nikkei Services Business Activity Index fell to 50.1 in November from October's eight-month high reading of 53.2, pointing to slowdown in growth in India's services sector. The reading of 50 separates contraction from expansion. Services companies displayed a lack of optimism with regards to the 12-month outlook for activity, as sentiment dropped to the lowest in the ten-year survey history. Difficult economic conditions and weak demand reportedly hit confidence.
India's gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth mainly driven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a pick up from 7% growth recorded in Q1 June 2015. Meanwhile, the GDP growth remained below 8.4% rise recorded in the corresponding quarter of the last year. The Q2 GDP data was announced after market hours on Monday, 30 November 2015. The finance ministry is expecting the economy to grow in the vicinity of 7.5% in the year ending 31 March 2016 (FY 2016).
Meanwhile, the outcome of a monthly survey showed tepid growth in India's manufacturing sector last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to a 25-month low of 50.3 in November 2015.
The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary policy review on Tuesday, 1 December 2015.
The central bank also kept the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL). Retaining the easing stance of monetary policy, the RBI said that it will use the space for further accommodation when available. The RBI said that switching to the marginal cost of funds methodology for determining the base rate and linking small savings interest rates to market interest rates will allow increased transmission of policy rates into lending rates.
On global front, the European Central Bank (ECB)'s stimulus package fell well short of markets' high expectations. The ECB cut its deposit rate deeper into negative territory and extended its asset buys by six months, as expected. But some market participants had hoped for greater stimulus. The ECB President Mario Draghi after a policy meet on Thursday, 3 December 2015, announced the central bank would extend its massive 60 billion euro ($63.5 billion) a month bond-buying scheme to at least March 2017. The ECB cut its deposit rate further into negative territory by 10 basis points to a fresh low of -0.3%, down from -0.2%.
China's official reading on factory activity fell to 49.60 in November 2015 from 49.80 in October 2015. The Caixin China manufacturing purchasing managers index, a private gauge, rose to 48.60 in November 2015 from 48.30 in October 2015. A reading below 50 indicates contraction.
Hawkish comments from Federal Reserve Chairwoman Janet Yellen on Wednesday, 2 December 2015 reinforced the case for an interest rate hike during the middle of this month. The Fed is widely expected to announce an increase of 25 basis points in the federal funds rate after a regular monetary policy review scheduled during the middle of this month.
Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
In the week ended Friday, 4 December 2015, the 30-share S&P BSE Sensex lost 490.09 points or 1.88% to settle at 25,638.11, its lowest closing level since 18 November 2015. The 50-unit CNX Nifty lost 160.80 points or 2.02% to settle at 7,781.90, its lowest closing level since 18 November 2015.
The BSE Mid-Cap index fell 49.46 points or 0.45% to settle at 10,935.11. The fall in the index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index rose 11.68 points or 0.1% to settle at 11,557.52. The index outperformed the Sensex.
A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, settled with tiny gains while the 50-unit Nifty 50 index settled with small losses on Monday, 30 November 2015. The Sensex rose 17.47 points or 0.07% to settle at 26,145.67, its highest closing level since 6 November 2015.
Gains in metal, pharma and oil sector stocks enabled small gains for key benchmark indices on Tuesday, 1 December 2015 after the Reserve Bank of India (RBI) kept its benchmark interest rate unchanged after a monetary policy review. The Sensex rose 23.74 points or 0.09% to settle at 26,169.41, its highest closing level since 6 November 2015.
Losses for banking sector stocks and index heavyweights HDFC, Infosys and L&T outweighed gains for pharma stocks and index heavyweight Reliance Industries (RIL) resulting in small losses for key benchmark indices on Wednesday, 2 December 2015. The Sensex lost 51.56 points or 0.2% to settle at 26,117.85, its lowest closing level since 26 November 2015.
Prospects of increase in interest rates in the United States and data showing slowdown in India's services sector growth weighed on Indian stocks on Thursday, 3 December 2015, with barometer index, the S&P BSE Sensex, falling below the psychological 26,000 mark. The Sensex lost 231.23 points or 0.89% to settle at 25,886.62, its lowest closing level since 24 November 2015.
Key benchmark indices dropped on Friday, 4 December 2015, tracking slide in global stocks after the European Central Bank (ECB)'s stimulus package announced after policy meet on Thursday, 3 December 2015, fell well short of markets' high expectations. The Sensex lost 248.51 points or 0.96% to settle at 25,638.11, its lowest closing level since 18 November 2015.
Among the 30-share Sensex pack, 23 stocks declined and the rest of them rose in the week ended Friday, 4 December 2015.
Bharat Heavy Electricals (Bhel) (down 4.15%), ONGC (down 3.25%), GAIL (India) (down 3.13%), Infosys (down 1.73%) and L&T (down 1.68%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries (RIL) fell 1.36% to Rs 965.75.
Index heavyweight and cigarette major ITC dropped 2.43% to Rs 335.60.
Index heavyweight and housing finance major HDFC lost 4.73% to Rs 1,171.95.
Bharti Airtel fell 5.97%. Bharti Airtel during market hours on Monday, 30 November 2015, announced the launch of a massive network transformation program called Project Leap. Aimed at perceptibly improving network quality and delivering the best customer experience, this strategic project will see an investment of Rs 60000 crore in the next 3 years, Bharti Airtel said. The investment of Rs 60000 crore is over and above the Rs 1.60 lakh crore Bharti Airtel has already invested in its active and passive network, spectrum, fiber, submarine cables and systems till date, the company said.
Auto stocks declined. Hero MotoCorp (down 3.22%) and Tata Motors (down 4.23%) declined.
Mahindra & Mahindra (M&M) fell 2.39%. The company said during market hours on Tuesday, 1 December 2015 that its total auto sales rose 21% to 41,590 units in November 2015 over November 2014. Domestic sales rose 23% to 39,383 units in November 2015 over November 2014. Exports rose 1% to 2,207 units in November 2015 over November 2014.
Separately, M&M said that its total tractor sales jumped 42% to 21,717 units in November 2015 over November 2014. Domestic sales jumped 47% to 20,819 units in November 2015 over November 2014. Exports fell 20% to 898 units in November 2015 over November 2014.
Maruti Suzuki India rose 0.54%. The company's total sales rose 9.7% to 1.2 lakh vehicles in November 2015 over November 2014. Domestic sales rose 10.6% to 1.1 lakh vehicles in November 2015 over November 2014. Exports rose 1% to 10,225 vehicles in November 2015 over November 2014.
Bajaj Auto rose 0.36%. Bajaj Auto's total sales rose 0.13% to 3.09 lakh units in November 2015 over November 2014. Motorcycles sales rose 3% to 2.7 lakh units in November 2015 over November 2014. Commercial vehicles sales fell 18% to 38,787 units in November 2015 over November 2014. Exports dropped 17% to 1.37 lakh units in November 2015 over November 2014. The company announced sales volume data for October during market hours on Wednesday, 2 December 2015.
Bank stocks fell. HDFC Bank (down 1.23%), ICICI Bank (down 3.02%), Axis Bank (down 2.23%), and State Bank of India (down 3.45%) declined.
Pharma stocks rose. Dr Reddy's Laboratories (up 3.09%) and Sun Pharmaceutical Industries (up 2.18%) rose. Lupin fell 0.49%.
Cipla rose 0.47%. The company announced during market hours on Thursday, 3 December 2015 that it has launched a novel "5 in 1" anti-ageing skin care product Cutisera developed by Stempeutics.
Metal stocks rose. Hindalco Industries advanced 2.06%. Vedanta shed 0.16%.
Tata Steel gained 3.89%. Tata Steel announced that its subsidiary incorporated in Singapore T S Global Holdings Pte (TSGH) has executed agreements worth $1.5 billion for refinancing exiting debt. The new loan facilities comprise of a 5 year loan of $750 million and a 6 year loan of $750 million. The company said that the new loan facilities are at lower cost with extension of the loan tenor.
On macro front, the seasonally adjusted Nikkei Services Business Activity Index fell to 50.1 in November from October's eight-month high reading of 53.2, pointing to slowdown in growth in India's services sector. The reading of 50 separates contraction from expansion. Services companies displayed a lack of optimism with regards to the 12-month outlook for activity, as sentiment dropped to the lowest in the ten-year survey history. Difficult economic conditions and weak demand reportedly hit confidence.
India's gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth mainly driven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a pick up from 7% growth recorded in Q1 June 2015. Meanwhile, the GDP growth remained below 8.4% rise recorded in the corresponding quarter of the last year. The Q2 GDP data was announced after market hours on Monday, 30 November 2015. The finance ministry is expecting the economy to grow in the vicinity of 7.5% in the year ending 31 March 2016 (FY 2016).
Meanwhile, the outcome of a monthly survey showed tepid growth in India's manufacturing sector last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to a 25-month low of 50.3 in November 2015.
The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary policy review on Tuesday, 1 December 2015.
The central bank also kept the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL). Retaining the easing stance of monetary policy, the RBI said that it will use the space for further accommodation when available. The RBI said that switching to the marginal cost of funds methodology for determining the base rate and linking small savings interest rates to market interest rates will allow increased transmission of policy rates into lending rates.
On global front, the European Central Bank (ECB)'s stimulus package fell well short of markets' high expectations. The ECB cut its deposit rate deeper into negative territory and extended its asset buys by six months, as expected. But some market participants had hoped for greater stimulus. The ECB President Mario Draghi after a policy meet on Thursday, 3 December 2015, announced the central bank would extend its massive 60 billion euro ($63.5 billion) a month bond-buying scheme to at least March 2017. The ECB cut its deposit rate further into negative territory by 10 basis points to a fresh low of -0.3%, down from -0.2%.
China's official reading on factory activity fell to 49.60 in November 2015 from 49.80 in October 2015. The Caixin China manufacturing purchasing managers index, a private gauge, rose to 48.60 in November 2015 from 48.30 in October 2015. A reading below 50 indicates contraction.
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