As on today, a steep slide in global crude oil prices stoked fears about deflation and as the prospect of Greece dropping the euro weighed on global equity markets, key equity benchmark indices in India registered heavy losses. Key indices extended losses in late trade, with the barometer index, the S&P BSE Sensex, falling below the psychological 27,000 level. Frontline stocks witnessed steep losses. The Sensex and the 50-unit CNX Nifty, both, hit their lowest closing level in almost three weeks. All the 12 sectoral indices on BSE declined. The market breadth indicating the overall health of the market was quite weak, with more than three losers for every gainer on BSE. The Sensex dropped 854.86 points or 3.07% to settle at 26,987.46. The BSE Mid-Cap and BSE Small-Cap indices shed 2.95% each. A number of side counters slumped, with quite a few stocks registering losses ranging from 5% to 20% on BSE.
Meanwhile, growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015.
Global crude oil prices tumbled to 5-1/2-year low amid continuing concerns about a global supply glut. 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.
In overseas markets, energy stocks led losses in European stocks as crude oil prices continued to drop after a steep selloff overnight. Asian stocks tumbled after overnight sharp slide in US stocks triggered by another plunge in oil prices and concerns about the political situation in Greece. US stocks were clobbered yesterday, 5 January 2015, in an indiscriminate sell-off triggered by a renewed plunge in crude oil prices and surging dollar, which left the Dow Jones Industrial Average and the S&P 500 with their worst losses since October.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks witnessed a carnage.
Brent crude futures continued to drop after a steep selloff overnight amid continuing concerns about a global supply glut.
The S&P BSE Sensex lost 854.86 points or 3.07% to settle at 26,987.46, its lowest closing level since 17 December 2014. The index tumbled 905.26 points at the day's low of 26,937.06 in late trade. The index declined 143.39 points at the day's high of 27,698.93 in early trade.
The CNX Nifty lost 251.05 points or 3% to settle at 8,127.35, its lowest closing level since 17 December 2014. The index hit a low of 8,111.35 in intraday trade. The index hit a high of 8,327.85 in intraday trade.
The euro zone economy ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank (ECB) to act. Markit's final December Composite Purchasing Managers' Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4.
In Greece, uncertainties over the status of Greece including a possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. A radical left opposition party is leading in opinion polls ahead of the vote on promises to raise wages, increase government jobs and persuade the euro area to write off some Greek debt.
French consumer confidence in December jumped to its highest level since June 2012, latest data showed. Consumer confidence index edged up to 90 in December, from 88 in November.
Asian markets were sharply lower today, 6 January 2015, after stocks on Wall Street declined overnight following the relentless fall in oil prices. Key indices in Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea and Indonesia were off 0.98% to 3.02%. China's Shanghai Composite index rose 0.03%.
Meanwhile, growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015.
Global crude oil prices tumbled to 5-1/2-year low amid continuing concerns about a global supply glut. 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.
In overseas markets, energy stocks led losses in European stocks as crude oil prices continued to drop after a steep selloff overnight. Asian stocks tumbled after overnight sharp slide in US stocks triggered by another plunge in oil prices and concerns about the political situation in Greece. US stocks were clobbered yesterday, 5 January 2015, in an indiscriminate sell-off triggered by a renewed plunge in crude oil prices and surging dollar, which left the Dow Jones Industrial Average and the S&P 500 with their worst losses since October.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks witnessed a carnage.
Brent crude futures continued to drop after a steep selloff overnight amid continuing concerns about a global supply glut.
The S&P BSE Sensex lost 854.86 points or 3.07% to settle at 26,987.46, its lowest closing level since 17 December 2014. The index tumbled 905.26 points at the day's low of 26,937.06 in late trade. The index declined 143.39 points at the day's high of 27,698.93 in early trade.
The CNX Nifty lost 251.05 points or 3% to settle at 8,127.35, its lowest closing level since 17 December 2014. The index hit a low of 8,111.35 in intraday trade. The index hit a high of 8,327.85 in intraday trade.
The euro zone economy ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank (ECB) to act. Markit's final December Composite Purchasing Managers' Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4.
In Greece, uncertainties over the status of Greece including a possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. A radical left opposition party is leading in opinion polls ahead of the vote on promises to raise wages, increase government jobs and persuade the euro area to write off some Greek debt.
French consumer confidence in December jumped to its highest level since June 2012, latest data showed. Consumer confidence index edged up to 90 in December, from 88 in November.
Asian markets were sharply lower today, 6 January 2015, after stocks on Wall Street declined overnight following the relentless fall in oil prices. Key indices in Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea and Indonesia were off 0.98% to 3.02%. China's Shanghai Composite index rose 0.03%.
