Key benchmark indices tumbled in late trade on concerns over lower government expenditure in the upcoming Union Budget 2014-15. The barometer index, the S&P BSE Sensex, fell below 26,000 level after hitting record high in early trade. The Sensex hit one-week closing low. The 50-unit CNX Nifty hit its lowest closing level in more than a week. The Sensex fell 517.97 points or 1.98%, off close to 608 points from the day's high and up about 87 points from the day's low. The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. The BSE Mid-Cap index dropped 3.63%. The BSE Small-Cap index plunged more than 4%.
The sharp decline on the bourses came after Railway Budget 2014-15 was tabled by Railway Minister Sadananda Gowda in Lok Sabha. According to reports, the railway budget raised worries the government would slash spending when it unveils Union Budget 2014-15 on Thursday, 10 July 2014. The railway budget has revised up the plan outlay to Rs 65445 crore for 2014-15, up 1.8% compared with the Interim Budget's estimate of Rs 64305 crore, but lower than market's expectations.
Major announcements in Railway Budget 2014-15 include prioritizing completion of the ongoing projects, increase in budget allocation for cleanliness, proposal to mobilise resources for Railways through surplus of Railway PSUs, FDI and PPP, periodic revision in passenger fare and freight rates which is linked to revisions in fuel prices, proposal to launch bullet trains starting with Mumbai-Ahmedabad sector and a Diamond Quadrilateral Network of High Speed Rail connecting major metros and growth centers of the country. To help mobilization of resources for the railways, the Ministry of Railways is seeking Cabinet approval to allow FDI in rail sector. The bulk of the future projects of the Railways will be financed through PPP mode, including the high-speed rail which requires huge investments. With an increase in both passenger fare and freight rate already announced last month, there was no change in passenger fare and freight rates in the Rail Budget.
Bank stocks dropped. Rail stocks plunged after the announcement of Railway Budget 2014-15. PSU stocks fell across the board. Capital goods stocks edged lower. Index heavyweight Reliance Industries (RIL) dropped in volatile trade. Coal India dropped in volatile trade after the government on Monday, 7 July 2014, said it has no plan to set up an independent pricing authority for coal.
The S&P BSE Sensex fell 517.97 points or 1.98% to settle at 25,582.11, its lowest closing level since 1 July 2014. The index dropped 605.04 points at the day's low of 25,495.04 in late trade. The index rose 90.36 points at the day's high of 26,190.44 in early trade, a lifetime high of the index.
The CNX Nifty fell 163.95 points or 2.11% to settle at 7,623.20, its lowest closing level since 30 June 2014. The index hit a low of 7,595.90 in intraday trade. The index hit a high of 7,808.85 in intraday trade, a lifetime high of the index.
The total turnover on BSE amounted to Rs 4279 crore, higher than Rs 4205.06 crore on Monday, 7 July 2014.
The market breadth indicating the overall health of the market was weak, with more than two losers for every gainer on BSE. On BSE, 2,234 shares declined and 770 shares rose. A total of 92 shares were unchanged.
The BSE Mid-Cap index fell 346.93 points or 3.63% at 9,210.21. The BSE Small-Cap index fell 442.77 points or 4.19% at 10,128.01. Both these indices underperformed the Sensex.
The S&P BSE Realty index (down 7.16%), the S&P BSE Power index (down 6.37%), the S&P BSE Capital Goods index (down 4.8%), the S&P BSE Consumer Durables index (down 4.55%), the S&P BSE Metal index (down 4.22%), the S&P BSE Oil & Gas index (down 3.15%), the S&P BSE Bankex (down 2.35%) and the S&P BSE Auto index (down 2.27%), underperformed the Sensex.
The S&P BSE Teck index (down 1.36%), the S&P BSE Healthcare index (down 1.21%), the S&P BSE IT index (down 1.05%) and the S&P BSE FMCG index (down 0.48%), outperformed the Sensex.
Among the 30 Sensex shares, 27 fell and only three shares rose.
Shares of companies whose fortunes are linked to orders from Indian Railways edged lower after the presentation of Railway Budget. Texmaco Rail and Engineering (down 20%), Simplex Casting (down 8.45%), Container Corporation of India (down 7.12%), BEML (down 5%), Kalindee Rail Nirman (Engineers) (down 4.99%), NELCO (down 4.99%), Titagarh Wagons (down 4.99%), Zicom Electronic Security Systems (down 4.96%), Hind Rectifiers (down 4.94%), Kernex Microsystems (India) (down 4.94%), Stone India (down 4.91%) and Transformers & Rectifiers (India) (down 0.34%), edged lower.
PSU stocks fell across the board. HMT (down 11.31%), MMTC (down 9.3%), MTNL (down 9.2%), Shipping Corporation of India (down 8.29%), Bharat Heavy Electricals (down 8.16%), Balmer Lawrie & Company (down 8.09%), Power Finance Corporation (down 7.92%), National Aluminium Company (down 7.57%), NHPC (down 7.55%), Hindustan Copper (down 7.51%), National Fertilisers (down 7.38%), were the major losers in the S&P BSE PSU index.
Bank stocks dropped. Among PSU bank stocks, Union Bank of India (down 7.98%), IDBI Bank (down 7.62%), Bank of India (down 5.74%), Canara Bank (down 4.64%), Punjab National Bank (down 3.98%), Bank of Baroda (down 3.97%) and State Bank of India (down 3.94%), edged lower.
Among private sector banks, Federal Bank (down 6.24%), Yes Bank (down 3.1%), ICICI Bank (down 2.65%), Axis Bank (down 1.78%), HDFC Bank (down 1.18%) and Kotak Mahindra Bank (down 0.21%), edged lower.
IndusInd Bank dropped 0.67%. The bank announces Q4 results tomorrow, 9 July 2014.
Capital goods stocks edged lower. ABB (down 7.75%), Jindal Saw (down 6.17%), Bharat Electronics (down 5.9%), Crompton Greaves (down 5.49%), Praj Industries (down 5.31%), BEML (down 5%), Pipavav Defence and Offshore Engineering Company (down 4.99%), Punj Lloyd (down 4.91%), Suzlon Energy (down 4.83%), Larsen & Toubro (down 4.35%), Alstom T&D India (down 3.09%), Havells India (down 2.98%), SKF India (down 2.74%), Thermax (down 2.25%) and Lakshmi Machine Works (down 1.53%), edged lower.
Siemens fell 7.71% to Rs 907.95. The company said during market hours that it has won an order worth of approximately Rs 52 crore from NTPC.
Glenmark Pharmaceuticals fell 4.55% to Rs 562.35. The company said during market hours Glenmark Generics Inc., USA a subsidiary of Glenmark Generics, has been granted final abbreviated new drug approval (ANDA) from the United States Food and Drug Administration (US FDA) for Telmisartan Tablets. Glenmark will commence distribution of the product immediately.
Telmisartan Tablets are Glenmark's generic version of Boehringer Ingelheim's Micardis. Telmisartan is indicated for the treatment of hypertension. The approval is for the 20 mg, 40 mg and 80 mg tablets. For the 12 month period ending March 2014, Telmisartan garnered annual sales of $250 million in the United States, according to IMS Health.
ONGC dropped 4.23% to Rs 397.60 on reports the government is planning to sell a 5 to 10% stake in state-run oil & gas exploration firm.
HDFC rose 0.48% to Rs 1,022.40 after hitting record high of Rs 1,045.20 in intraday trade. There are expectations that the tax benefit with respect to interest payment on housing loans will be raised in the Union Budget on Thursday, 10 July 2014. At present, a maximum deduction of Rs 1.5 lakh is allowed on taxable income towards interest on housing loan.
Index heavyweight Reliance Industries (RIL) fell 3.04% to Rs 995.15. The stock was volatile. The stock hit high of Rs 1,034.45 and low of Rs 991 in intraday trade. The company announced after market hours on Monday, 7 July 2014, that Independent Media Trust (IMT) of which RIL is the sole beneficiary, has completed the acquisition of control of Network 18 Media and Investments (NW18) including its subsidiary TV18 Broadcast (TV18).
Network 18 Media fell 4.66% to Rs 57.25. TV18 Broadcast gained 0.16% to Rs 30.85.
With the completion of this transaction, IMT and RIL have become promoters of NW18 and TV18. The open offers to the public shareholders for acquisition of equity shares of NW18, TV18 and Infomedia Press as announced on 29 May 2014 by IMT are in process and the draft letter of offer has been filed with Securities & Exchange Board of India (Sebi) for its comments, RIL said in a statement.
Coal India shed 4.96% to Rs 376.85. The stock hit high of Rs 397.95 and low of Rs 373 during the day. Minister of state for Power, Coal & New and Renewable Energy Piyush Goyal said in a written reply to a question in the Rajya Sabha on Monday, 7 July 2014, that the government has no plan to set up an independent pricing authority for coal. Goyal said that the pricing of coal has been fully deregulated and coal companies themselves fix the coal price based on input costs, inflation index, market trends etc. and notify the same periodically.
Aban Offshore clocked a highest turnover of Rs 129.48 crore on BSE. Larsen & Toubro (Rs 123.27 crore), State Bank of India (Rs 110.68 crore), MCX (Rs 88.70 crore) and ICICI Bank (Rs 68.21 crore), were the other turnover toppers on BSE in that order.
Unitech reported highest volumes of 1.12 crore shares on BSE. SpiceJet (87.82 lakh shares), Cals Refineries (74.78 lakh shares), Aadhaar Ventures India (72.18 lakh) and Alok Industries (60.74 lakh shares), were the other volume toppers on BSE in that order.
A bout of volatility was witnessed as key benchmark indices trimmed gains after opening on a firm note. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both scaled record high. Volatility continued as key benchmark indices reversed initial gains in morning trade. Volatility continued as key benchmark indices weakened once again after cutting entire intraday losses in early afternoon trade as Railway Minister Sadananda Gowda started presenting the final Railway Budget for 2014-15 in Lok Sabha today, 8 July 2014. Key benchmark indices extended losses in afternoon trade. The Sensex extended losses and hit fresh intraday lows in mid-afternoon trade. The Sensex slumped in late trade.
The Sensex has gained 168.33 points or 0.66% in this month so far (till 8 July 2014). The Sensex has gained 4,411.43 points or 20.84% in calendar year 2014 so far (till 8 July 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 8,133.40 points or 46.61%.
With Railway Budget over, the focus will shift to final Union Budget for 2014-15 due on Thursday, 10 July 2014. Finance Minister Arun Jaitley will present the final Union Budget for 2014-15 in Lok Sabha at 11:00 IST on Thursday, 10 July 2014. Before that, the Finance Ministry will table Economic Survey for 2013-14 tomorrow, 9 July 2014.
There are expectations that the finance minster will announce measures in the Budget aimed at bolstering economic growth. Increase in outlay on infrastructure sector with focus on stricter and time-bound implementation of projects, initiatives towards investments in agriculture and irrigation aimed at easing supply bottlenecks for food-grains, fiscal prudence with roadmap to reduce the fiscal deficit, a roadmap for reducing the subsidy burden and timeline for implementation of the Goods and Services Tax are some of the expectations from the Budget.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.82, compared with its close of 60.0125/0225 on Monday, 7 July 2014.
European shares were trading lower on Tuesday, 8 July 2014, before earnings announcements. Key benchmark indices in UK, France and Germany were down by 0.36% to 0.53%.
Most Asian stocks edged higher in choppy trade on Tuesday, 8 July 2014. Key benchmark indices in China, South Korea, Taiwan and Indonesia rose 0.08% to 0.72%. Hong Kong's Hang Seng was flat. Key benchmark indices in Singapore and Japan were off 0.25% to 0.42%.
Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Tuesday, 8 July 2014. US stocks fell Monday, 7 July 2014, on profit booking after Dow Jones Industrial Avergae and the S&P 500 index hit record high last week.
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