A bout of volatilty was witnessed as barometer index, the S&P BSE Sensex, trimmed losses soon after extending losses in afternoon trade. A divergent trend continued between the two key indices. While the Sensex was a tad lower, the 50-unit CNX Nifty retained positive zone. The Sensex was currently off 11.28 points or 0.04% at 27,573.99. The market breadth indicating the overall health of the market was positive. Global crude oil prices slumped. India stands to benefit from a rout in global crude oil prices given that the nation meets 80% of its crude oil requirements from imports.
Macroeconomic data released after trading hours yesterday, 12 January 2015, showed a lower-than-expected acceleration in inflation based on the consumer price indices last month. Finance Minister Arun Jaitely yesterday, 12 January 2015, said that the government has taken major steps to improve the investment climate in the last several months and it will continue to do so.
Coal India edged higher after Minister of State for Power, Coal and New & Renewable Energy Piyush Goyal yesterday, 12 January 2015, said that the action plan for doubling production of Coal India to 1 billion tons in 5 years is ready. Shares of power generation firms declined. Cement shares advanced.
Earlier, the Sensex had hit one-week high and Nifty had hit its highest level in more than a week in early trade.
In overseas markets, Asian stocks were mixed. US stocks edged lower for the second day in a row yesterday, 12 January 2015, as a renewed assault on oil prices eroded investor confidence ahead of the start of fourth-quarter earnings season.
Meanwhile, foreign portfolio investors bought shares worth a net Rs 244.95 crore yesterday, 12 January 2015, as per provisional data.
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In the foreign exchange market, the rupee edged higher against the dollar.
Global crude oil prices extended losses after a steep slide in prices yesterday, 12 January 2015, amid speculation that US crude stockpiles will increase, exacerbating a global supply glut that's driven prices to the lowest in more than 5-1/2 years. 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.
At 13:15 IST, the S&P BSE Sensex was down 11.28 points or 0.04% at 27,573.99. The index declined 81.48 points at the day's low of 27,503.79 in afternoon trade. The index rose 84.92 points at the day's high of 27,670.19 in early trade, its highest level since 6 January 2015.
The CNX Nifty was up 17.85 points or 0.21% at 8,340.85. The index hit a high of 8,356.30 in intraday trade, its highest level since 5 January 2015. The index hit a low of 8,321.20 in intraday trade.
The BSE Mid-Cap index was up 64.55 points or 0.62% at 10,550.73. The BSE Small-Cap index was up 50.07 points or 0.44% at 11,341.57. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,448 shares advanced and 1,212 shares declined. A total of 113 shares were unchanged.
Coal India rose 0.22% at Rs 359.50 after Minister of State for Power, Coal and New & Renewable Energy Piyush Goyal yesterday, 12 January 2015, said that the action plan for doubling production of Coal India to 1 billion tons in 5 years is ready. Speaking at a seminar "Sustainable Energy for All" on the sidelines of Vibrant Gujarat, in Gandhinagar, Goyal further said that the government has also initiated a coal linkage rationalization exercise to link power genaration plants with their nearest coal mines to ensure minimum transportation of coal, unclog railway network, reduce ash related damage to the environment and pass-on the savings of about $1 billion to the consumers.
Shares of power generation companies declined. NTPC (down 0.61%), Tata Power Company (down 0.56%), NHPC (down 0.81%), JSW Energy (down 1.31%), Reliance Power (down 1.14%), Adani Power (down 1.39%), Reliance Infrastructure (down 0.54%), and GVK Power & Infrastructure (down 1.8%) edged lower.
Goyal also said yesterday, 12 January 2015, that the centre is laying unprecedented thrust on renewable sources of energy for the long-term energy security of India to meet our commitment to preserve the environment. The government foresees an investment of over $150 billion in renewables over the next few years, he said.
Cement shares were in demand. UltraTech Cement (up 4.51%), ACC (up 2.7%), Ambuja Cements (up 1.6%), and Shree Cement (up 0.16%) edged higher.
Grasim Industries rose 3.32% at Rs 3,549. Grasim Industries has exposure to cement industry through its subsidiary UltraTech Cement.
JSW Steel fell 0.12% at Rs 1,001.20. The stock hit a high of Rs 1,013.50 and a low of Rs 1,000. The company during market hours today, 13 January 2015, said its crude steel production declined 0.62% to 3.17 million tonnes in Q3 December 2014 over Q3 December 2013. Production of flat rolled products declined 1% to 2.56 million tonnes in Q3 December 2014 over Q3 December 2013. Production of long rolled products rose 14% to 0.50 million tonnes in Q3 December 2014 over Q3 December 2013.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.06, compared with its close of 62.165 during the previous trading session.
Brent crude oil futuers extended losses after a steep slide yesterday, 12 January 2015, amid speculation that US crude stockpiles will increase, exacerbating a global supply glut that's driven prices to the lowest in more than 5-1/2 years. Brent for February settlement was off $2.17 a barrel at $45.26 a barrel. The contract had lost $2.68 a barrel or 5.4% to settle at $47.43 a barrel during the previous trading session, its lowest finish since March 2009. Brent for March settlement was off $2.08 a barrel at $46.62 a barrel.
On macro front, India's Index of industrial production (IIP) increased at five-months high pace of 3.8% in November 2014, recovering from the sharpest pace of decline in three-years at 4.2% recorded in October 2014. The manufacturing sector's output growth rebounded to 3.8% in November 2014, snapping the largest decline in the last five-and-a-half years at 7.4% recorded in October 2014.
The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from nine-year low of 4.4% in November 2014, while snapping consistent decline for last four sequential months. An increase in inflation food items contributed entirely to the inflation rise in November 2014. The IIP and CPI data was announced after market hours yesterday, 12 January 2015.
The rate of inflation based on the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon tomorrow, 14 January 2015.
Finance Minister Arun Jaitely yesterday, 12 January 2015, said that the government has taken major steps to improve the investment climate in the last several months and it will continue to do so. Speaking at the Seminar Invest in India Summit 2015 - Financing for Future Growth, held on the sidelines of Vibrant Gujarat, in Gandhinagar, Jaitely said that in the near future, the nationwide goods and services (GST) tax could become a reality and further improve the investment climate.
On the political front, the Election Commission (EC) yesterday, 12 January 2015, announced that the assembly election will be held in Delhi on 7 February 2015 and counting of votes will take place on 10 February 2015. With the declaration of the poll schedule, the Model Code of Conduct will come into force with immediate effect, the EC said. The last government in Delhi was headed by the Aam Aadmi Party (AAP) but Chief Minister Arvind Kejriwal resigned 49 days after assuming office.
Asian stocks were mixed today, 13 January 2015. Key benchmark indices in China, Hong Kong, Indonesia and Taiwan were up by 0.22% to 0.9%. Key benchmark indices in Japan, Singapore and South Korea were off 0.2% to 0.64%.
China's exports rose 9.7 %in December from a year earlier on the back of stronger overseas demand, data released by the General Administration of Customs today, 13 January 2015, showed. The growth was higher than 4.7% rise in November. December imports fell 2.4% from a year earlier after a 6.7% fall in November. China's trade surplus narrowed to $49.61 billion in December from $54.47 billion in November.
Trading in US index futures indicated that the Dow could gain 15 points at the opening bell today, 13 January 2015. US stocks ended lower yesterday, 12 January 2015, led by another sharp decline in energy shares as oil prices tumbled and concern grew ahead of corporate earnings season.
Meanwhile in Europe, uncertainties over the status of Greece including its 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. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
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