Amid divergent trend among various index constituents, key equity benchmark indices registered small losses on the first trading day of the week. The barometer index, the S&P BSE Sensex, failed to retain the psychological 28,000 level. Earlier, initial gains had helped the Sensex move past the psychological 28,000 mark in intraday trade. The Sensex fell 45.58 points or 0.16% to settle at 27,842.32. The market breadth indicating the overall health of the market was positive. Asian and European stocks fell amid concern Greece will exit the common euro currency union.
Key benchmark indices snapped their six-day winning streak today, 5 January 2015.
Global crude oil prices hit 5-1/2-year low. 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.
Shares of public sector oil marketing companies (PSU OMCs) advanced on decline in global crude oil prices. Shares of state-run upstream oil exploration companies rose on hopes of lower subsidy burden as crude oil prices declined. Maruti Suzuki scaled record high on media reports that a foreign brokerage has retained Maruti Suzuki India as one its top picks from the auto sector in 2015. Ashok Leyland jumped after reporting strong sales for December 2014. L&T rose after the company said its construction division secured orders worth Rs 4006 crore in December 2014.
Cadila Healthcare advanced on reports a foreign brokerage has retained its outperform rating on the stock. Sugar stocks gained on renewed buying. Realty stocks also edged higher. Education stocks were also in demand on renewed buying.
Earlier, the 50-unit CNX Nifty had hit 4-week high and the Sensex had hit its highest level in almost four weeks in morning trade.
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Foreign portfolio investors bought shares worth a net Rs 263 crore from the secondary equity markets during the previous trading session on Friday, 2 January 2015.
In overseas markets, European shares edged lower in choppy trade amid concern Greece will exit the common euro currency union. Asian stocks edged lower amid concern Greece will exit the European currency union. Key equity benchmark indices in the US closed flat for the day on Friday, 2 January 2015, after giving back intraday gains following disappointing reports on US manufacturing and construction.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade.
Brent crude futures hit 5-1/2-year low as worries about a surplus of global supplies amid weak demand continued to drag on oil markets.
The S&P BSE Sensex fell 45.58 points or 0.16% to settle at 27,842.32, its lowest closing level since 1 January 2015. The index fell 101.05 points at the day's low of 27,786.85 in late trade. The index jumped 176.59 points at the day's high of 28,064.49 in morning trade, its highest level since 9 December 2014.
The CNX Nifty fell 17.05 points or 0.2% to settle at 8,378.40, its lowest closing level since 1 January 2015. The index hit a low of 8,363.90 in intraday trade. The index hit a high of 8,445.60 in intraday trade, its highest level since 8 December 2014.
The BSE Mid-Cap index rose 16.97 points or 0.16% to settle at 10,547.17. The BSE Small-Cap index rose 12.06 points or 0.11% to settle at 11,320.21. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,545 shares gained and 1,420 shares fell. A total of 124 shares were unchanged.
The total turnover on BSE amounted to Rs 2718 crore, lower than Rs 2992.80 crore during the previous trading session on Friday, 2 January 2015.
The S&P BSE Power index (down 0.17%), the S&P BSE Bankex (down 0.25%), the S&P BSE Healthcare index (down 0.26%), the S&P BSE Metal index (down 0.45%), the S&P BSE IT index (down 1.01%) and the S&P BSE Teck index (down 1.07%) underperformed the Sensex.
The S&P BSE Auto index (up 1.14%), the S&P BSE Consumer Durables index (up 1.11%), the S&P BSE Capital Goods index (up 0.73%), the S&P BSE Realty index (up 0.22%), the S&P BSE FMCG index (up 0.22%) and the S&P BSE Oil & Gas index (down 0.05%), outperformed the Sensex.
Auto stocks rose. Eicher Motors (up 0.37%), Tata Motors (up 2.46%), Bajaj Auto (up 0.13%), TVS Motor Company (up 1.38%) and Hero MotoCorp (up 0.18%) gained. Mahindra & Mahindra (M&M) slipped 0.56%.
Maruti Suzuki India rose 2.68% at Rs 3,449.70. The stock hit a record high of Rs 3,467.25 in intraday trade. A foreign brokerage has reportedly retained Maruti Suzuki India as one its top picks from the auto sector in 2015. The foreign brokerage is of the view that new products and exports will boost volume growth of the car major. Large margin expansion on yen, improving pricing and demand are the key catalysts to drive the stock price, the brokerage has reportedly said.
Ashok Leyland rose 7.96% at Rs 57.65. The stock hit a record high of Rs 58.30 in intraday trade. The company before market hours today, 5 January 2015, said its total sales jumped 48% to 9,290 units in December 2014 over December 2013. Sales of medium and heavy commercial vehicle (M&HCV) surged 85% to 7,210 units in December 2014 over December 2013. Sales of light commercial vehicles (LCV) declined 13% to 2,080 units in December 2014 over December 2013.
L&T rose 1.65% at Rs 1,560 after the the company said its construction division secured orders worth Rs 4006 crore across various business segments in December 2014 in both the domestic and international markets. The announcement was made during trading hours today, 5 January 2015. Commenting on the latest orders won by the company, S N Subrahmanyan, Member of the Board and Senior Executive Vice President (Infrastructure & Construction), L&T said that these orders reveal the increased activity at ground level in the infrastructure space which augurs well for the Indian economy and, more particularly, for EPC players like L&T.
Shares of public sector oil marketing companies (PSU OMCs) rose on decline in international crude oil prices. BPCL (up 0.36%), HPCL (up 3.22%) and Indian Oil Corporation (up 1.49%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. 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. The government has already freed pricing of petrol and diesel.
Shares of state-run upstream oil exploration companies rose on hopes of lower subsidy burden as crude oil prices declined. ONGC (up 1.09%) and GAIL (India) (up 0.96%) edged higher. Oil India lost 2.87%.
ONGC, GAIL (India) and Oil India share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
IT stocks edged lower in volatile trade. TCS (down 1.25%), Oracle Financial Services Software (down 0.29%), Tech Mahindra (down 1.91%), Infosys (down 1.11%) declined. Wipro (up 0.21%) and MphasiS (up 0.35%) edged higher.
Persistent Systems lost 6.52% to Rs 1,753.20 on profit booking after surging 14.97% in the preceding three trading sessions to Rs 1875.45 on 2 January 2015, from a recent low of Rs 1631.30 on 30 December 2014.
R S Software (India) rose 3.53%. The company during market hours said it has fixed 22 January 2015 as record date for 2-for-1 stock split.
Coal India fell 1.43% at Rs 376.20. The stock hit a high of Rs 385.60 and a low of Rs 375.40. The company during market hours today, 5 January 2015, said that Sutirtha Bhattacharya has assumed the charge of Chairman-cum-Managing Director of the company with effect from 5 January 2015.
Meanwhile, according to reports, the government is likely to allow private firms to build and operate critical railway lines connecting Coal India mines to power, steel and cement projects. The proposal, agreed 'in-principal' by the railway and coal ministries, will allow private companies to charge fee from the users of the rail links, similar to the toll charged by highway developers, reports suggested.
NMDC shed 0.24%. NMDC during market hours today, 5 January 2015, said that on a provisional basis, the company's total iron ore production rose 11.55% to 22.50 million tonnes during April-December 2014 over the corresponding period in the previous year. Sales rose 8.19% to 22.83 million tonnes during April-December 2014 over the corresponding period in the previous year..
Meanwhile, NMDC kept price of iron ore unchanged for January 2015. NMDC said it has rolled over the December 2014 price of lump ore of Rs 4,200 per tonne and price of fines at Rs 3,060 per tonne to the month of January 2015.
MOIL fell 1.35%. The company before market hours today, 5 January 2015, said that the company has reduced price of all ferro grades of ore (expect fines) by 5% for Q4 March 2015. The prices of manganese ore fines have been reduced by 7.5%. The price of the electrolytic manganese dioxide (EMD) has been cut by 5%. MOIL undertakes revision of prices of its product prices at the beginning of each quarter.
Shares of public sector banks (PSBs) were mostly lower. State Bank of India (SBI) (down 0.78%), Dena Bank (down 1.02%), Oriental Bank of Commerce (down 0.85%), Vijaya Bank (down 0.48%), Punjab National Bank (down 1.12%), Allahabad Bank (down 1.78%), Syndicate Bank (down 1.39%), IDBI Bank (down 1.04%), Union Bank of India (down 0.6%), Indian Overseas Bank (down 1.96%) and Andhra Bank (down 2.23%) edged lower. Bank of Baroda (up 0.06%), Canara Bank (up 0.68%), Bank of India (up 0.02%) edged higher.
Minister of State for Finance Jayant Sinha reportedly said in a television interview today, 5 January 2015, that the government has no desire to dilute its stake in state-run banks at current valuations. His comments come close on the heels of a suggestion from PSBs to the government to reduce government's stake in PSBs to below 51% at the two day Retreat for Banks and Financial Institutions called Gyan Sangam held at National Institute of Banking Management (NIBM) in Pune, Maharashtra on 2 and 3 January 2015.
Sinha also reported said that bad loans at state-run banks are at unacceptably high levels.
At the two day Retreat for Banks and Financial Institutions called Gyan Sangam held at National Institute of Banking Management (NIBM) in Pune, Maharashtra on 2 and 3 January 2015, PSBs have suggested the government to transfer government's stake in PSBs to a bank investment company. PSBs also suggested that eventually the government should reduce its stake in PSBs to less than 51%.
On the second and last day of the summit on Saturday, 3 January 2015, Prime Minister Narendra Modi said banks would be run professionally, and there would be no interference. But accountability was essential. He said the government had no vested interest, and public sector banks can derive strength from this fact. The Prime Minister said that banks in India should actually compete for achieving maximum cashless transactions, as this would be the best solution to the problem of black money. Speaking at the summit, Finance Minister Arun Jaitley said that banks have a major role to play in the financing of infrastructure.
Jaitley said that the government is open to bold decisions for professionalization of the management and autonomy in decision making, rewarding merit, and relooking at the recruitment process at the top management level of PSBs. The government was ready to protect commercial decisions so as to avoid the delay in good decisions, Jaitley said.
Earlier, Chief Economic Advisor to the finance ministry Dr. Arvind Subramanian proposed that the PSBs should be differentiated into weak, good and strong categories and accordingly consolidation and restructuring measures could be applied to them. The current overhang of stressed assets should be resolved by distribution of the pain between promoters, creditors and tax payers, Dr. Subramanian said.
Reserve Bank of India Governor Dr. Raghuram Rajan stated that there is a need for internationalisation of the banking system in the current global environment. In the short term (up to 12 months), he said that there was need to clean up the NPAs and then restructure other stressed loans so as to put the economy back on the track.
Cadila Healthcare rose 4.43% on reports a foreign brokerage has retained its outperform rating on the stock. The brokerage has reportedly said that Cadila Healthcare has taken a 3.5-times price increase in an anti malarial drug which could aid fiscal year ending March 2016 (FY 2016) earnings by 15%. Additionally, benefit of higher prices and market share should be visible in Dec 2014 quarter results, the brokerage reportedly added.
Credit Analysis and Research (CARE) rose 3.1% to Rs 1,614 after scaling a record high of Rs 1,683.80 in intraday trade
Max India rose 1.5%. Max India after trading hours today, 5 January 2015, announced that Bupa, the international healthcare group, proposes to increase its stake in Max Bupa Health Insurance (Max Bupa) to 49% from current 26%. Following the Insurance Laws Amendment Ordinance 2014 receiving legislative assent in the 2015 Budget Session of Parliament, Bupa, the international healthcare group, proposes to increase its stake in Max Bupa from 26% to 49%, Max Bupa said in a statement issued after trading hours today, 5 January 2015.
Max Bupa, a leading Indian standalone private health insurer, is a joint venture between Max India, which owns 74% of Max Bupa, and Bupa, the UK-headquartered global healthcare group, which owns 26%. Commenting on the decision to increase Bupa's stake in Max Bupa, David Fletcher, Managing Director of International Development Markets at Bupa said that this decision underlines Bupa's commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa.
Rahul Khosla, Managing Director, Max India said that Bupa's intention to increase its stake in Max Bupa is testimony to the huge opportunity for health insurance in India and Max India's reputation in successfully managing joint ventures. Max Bupa will stand to benefit from Bupa's expertise in areas such as under-writing health risks and product innovation, Khosla said.
Realty stocks advanced on renewed buying. Housing Development & Infrastructure (up 2.86%), Indiabulls Real Estate (up 0.21%), Godrej Properties (up 2.71%) and Sobha (up 0.45%) edged higher. DLF lost down 2.8%.
Unitech gained 4.6%. With reference to the media reports pertaining to Department of Telecom (DoT) moving Supreme Court for retaining Rs 160 crore bank guarantee given by Unitech Wireless, Unitech after market hours today, 5 January 2015, clarified that Unitech has no economic interest in Unitech Wireless. Unitech has no exposure whatsoever to the telecom business, the company said.
Sugar stocks gained on renewed buying. Triveni Engineering Industries (up 3.71%), Dwarikesh Sugar Industries (up 2.17%), Bajaj Hindusthan (up 1.59%), Shree Renuka Sugars (up 1.28%), and Balrampur Chini Mills (up 0.17%) edged higher.
Education stocks were in demand on renewed buying. CORE Education & Technologies (up 19.93%), Everonn Education (up 10.79%), Educomp Solutions (up 6.41%), Zee Learn (up 1.99%) and Aptech (up 1.39%) gained.
Career Point gained 1.63% after the company said it has joined hands with Techno India Group to provide best in class tutorial services to students of various schools managed by Techno India. As per the agreement, Career Point will provide tutorial services to students of Techno India Group Public Schools (TIGPS) in class 9th, 10th, 11th, and 12th students of Pre-Engineering and Pre-Medical entrance test preparation courses. The agreement is valid for five academic sessions commencing from 1 April 2015. The company made announcement during market hours today, 5 January 2015.
Jet Airways (India) fell 2.86% to Rs 426.50 on profit booking after the stock rose 15.78% in the preceding three sessions to Rs 439.05 on 2 January 2015, from a recent low of Rs 379.20 on 30 December 2014.
VA Tech Wabag rose 5.67% after the company said it has won an order worth Rs 220 crore for design and construction of a sewage treatment plant at Varanasi including operation and maintenance for ten years. VA Tech Wabag said the scope of work for the company includes design, engineering, supply, installation, testing and commissioning of the sewage treatment plant whereas the civil construction will be carried out by the joint venture partner. The announcement was made on Sunday, 4 January 2015.
B L Kashyap and Sons surged 5.61% after the company said that the proposal of the company regarding the restructuring of its debt has been approved by the CDR Empowered Group of Corporate Debt Restructuring Cell. The company is in the process of executing Master Restructuring Agreement (MRA) with the CDR lenders. The company made announcement before market hours today, 5 January 2015.
Key benchmark indices snapped their six-day winning streak today, 5 January 2015. The Sensex had gained 679.29 points, or 2.49% in six trading sessions to settle at 27,887.90 on Friday, 2 January 2015, from recent low of 27,208.61 on 24 December 2014. From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 980.05 points or 3.4%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,879.20 points or 39.46%.
In the foreign exchange market, the rupee edged lower against the dollar in choppy trade. The partially convertible rupee was hovering at 63.345, compared with its close of 63.29 during the previous trading session on Friday, 2 January 2015.
Brent crude futures hit 5-1/2-year low as worries about a surplus of global supplies amid weak demand continued to drag on oil markets. Brent for February settlement was off 85 cents at $55.57 a barrel. The contract had declined 91 cents or 1.6% to settle at $56.42 a barrel during the previous trading session on Friday, 2 January 2015, its lowest settlement since 30 April 2009.
HSBC Holdings Plc and Markit Economics will release the HSBC India Services PMI for December 2014 tomorrow, 6 January 2015.
European shares edged lower in choppy trade today, 5 January 2015, amid concern Greece will exit the currency union. Key indices in Germany, France and UK were off 0.17% to 0.59%.
In Greece, political parties have embarked on a campaign for elections this month that may determine the fate of the country's membership in the euro currency area, with Der Spiegel magazine reporting German Chancellor Angela Merkel is ready to accept a Greek exit.
Asian stocks edged lower today, 5 January 2015, amid concern Greece will exit the European currency union. Key indices in Japan, Hong Kong, Taiwan, Singapore, South Korea, and Indonesia were off 0.24% to 1.26%.
Mainland Chinese stocks rallied to their highest close in more than five years, led by strength in the energy and real-estate sectors. The Shanghai Composite Index surged 3.58% to end at 3,350.52, marking its biggest daily percentage gain in a month. Coal-related shares soared after several provincial governments adjusted their resource-tax rates as part of nationwide reforms of coal tax, aimed at reducing the burden on coal enterprises. Property shares also saw strong gains, as the Beijing government increased the cap on housing loans.
In Japan, the final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) came at 52 in December, slightly less than a preliminary reading of 52.1 and unchanged from the final reading in November.
Trading in US index futures indicated that the Dow could fall 37 points at the opening bell today, 5 January 2015. US stocks ended near unchanged on Friday, 2 January 2015, with the S&P 500 down for a third session, after economic reports showed manufacturing slowing but still in expansion mode at the end of 2014. Factory activity in the United States grew at the slowest pace in six months in December 2014, weakened by declines in orders and production. The Institute for Supply Management, a trade group of purchasing managers, said on Friday, 2 January 2015, that its manufacturing index fell to 55.5 in December from 58.7 in November, which was just below a three-year high reached in October.
Minneapolis Fed President Narayana Kocherlakota yesterday, 4 January 2015, said that the Federal Reserve should not be forced to adopt any set rules to determine how it makes monetary policy. Discretion is better than any rule, Kocherlakota said in discussing tying policy moves to data or other indicators. The Fed has information about inflation pressures that would be hard to boil down into a rule, Kocherlakota said during a talk at the American Economic Association meeting.
On Wednesday, 7 January 2015, the Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".
The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.
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