Index heavyweights led rally in key benchmark indices on the first trading session of the week after India and the US on Sunday, 25 January 2015, reached an understanding on resolving the logjam in implementing the historic 2006 India-US nuclear deal and decided to take defence cooperation to a new level after bilateral meeting between Indian Prime Minister Narendra Modi and US President Barack Obama. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on intraday basis as well as closing basis. The Sensex rose 292.20 points or 1% to settle at 29,571.04. The market breadth indicating the overall health of the market was negative.
Key indices logged gains for the 8th trading sessions in a row.
Index heavyweights ITC, L&T, HDFC, ICICI Bank and HDFC Bank edged higher. But, Infosys which is also an index heavyweight, dropped. Maruti Suzuki India scaled record high after reporting good Q3 result. Max India scaled record high after the company's board approved a corporate restructuring plan to vertically split the company through a demerger into three separate listed companies. Sugar shares gained on renewed buying.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 2099.22 crore from the secondary equity market during the previous trading session on Friday, 23 January 2015, as per data from Central Depository Services. The stock market was closed yesterday, 26 January 2015, for Republic Day holiday.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher in a volatile trade.
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In overseas markets, European stocks edged lower as Siemens AG led industrial companies lower after the Europe's largest engineering company reported a decline in first-quarter profit. Asian stocks edged higher amid optimism the actions of Greece's new government won't force the nation to leave the euro currency bloc. US stocks eked out small gains yesterday, 26 January 2016, as investors mostly shrugged off the Greek election results which brought the leftist Syriza party to power.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month January 2015 series to February 2015 series. The near month January 2015 derivatives contract expire on Thursday, 29 January 2015.
The S&P BSE Sensex rose 292.20 points or 1% to settle at 29,571.04, a record closing high. The index jumped 339.75 points at the day's high of 29,618.59 in late trade, a lifetime high for the index. The index rose 7.25 points at the day's low of 29,286.09 in early afternoon trade.
The CNX Nifty rose 74.90 points or 0.85% to settle at 8,910.50, a record closing high. The index hit a high of 8,925.05 in intraday trade, a lifetime high for the index. The index hit a low of 8,825.45 in intraday trade.
The BSE Mid-Cap index rose 84.80 points or 0.79% to settle at 10,780.47. The BSE Small-Cap index rose 58.39 points or 0.51% to settle at 11,424.48. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,510 shares fell and 1,419 shares rose. A total of 113 shares were unchanged.
The total turnover on BSE amounted to Rs 3875 crore, lower than turnover of Rs 4032.25 crore during the previous trading session on Friday, 23 January 2015.
The S&P BSE Bankex (up 2.3%), the S&P BSE Capital Goods index (up 1.84%), the S&P BSE Auto index (up 1.24%), the S&P BSE FMCG index (up 1.14%) and the S&P BSE Realty index (up 1.03%), outperformed the Sensex. The S&P BSE Power index (up 0.88%), the S&P BSE Consumer Durables index (up 0.41%), the S&P BSE Healthcare index (up 0.34%), the S&P BSE Oil & Gas index (up 0.05%), the S&P BSE Metal index (down 0.60%), the S&P BSE Teck index (down 1.07%) and the S&P BSE IT index (down 1.66%), underperformed the Sensex.
Index heavyweight and cigarette major ITC advanced 3.01% to Rs 359.75. The stock hit high of Rs 360.45 and low of Rs 350.
Maruti Suzuki India rose 2.12% to Rs 3,685.20. The stock was volatile. The stock hit record high of Rs 3,704 in intraday trade. The stock hit a low of Rs 3,587.05 in intraday trade. Maruti Suzuki India's net profit rose 17.76% to Rs 802.16 crore on 15.38% rise in total income to Rs 12704.72 crore in Q3 December 2014 over Q3 December 2013. The company announced Q3 results during market hours today, 27 January 2015.
Maruti Suzuki India said that higher volumes, material cost reduction initiatives and favourable foreign exchange contributed to bottom line growth in Q3 December 2014.
Engineering and construction major L&T gained 2.07% to Rs 1,741.40. The stock hit high of Rs 1,749.50 and low of Rs 1,718.
IT major Infosys dropped 3.53% to Rs 2,136. The stock hit a high of Rs 2,216 and a low of Rs 2,131.
Wipro fell 0.61% to Rs 597.85. The stock hit high of Rs 605.45 and low of Rs 596 in intraday trade. Wipro announced before market hours today, 27 January 2015, that the company has been awarded a multi-year strategic infrastructure management contract by Allied Irish Banks, p.l.c. (AIB), a leading bank in Ireland offering a full range of personal and corporate banking services.
Tata Motors rose 2.93% to Rs 605.10. Tata Motors after market hours today, 27 January 2015, announced that the company's board of directors has decided to seek approval of the shareholders through a postal ballot for raising upto Rs 7500 crore through a rights issue of ordinary shares and 'A' ordinary shares having differential voting rights for meeting the company's growth plans as well as for reducing the debt. The quantum, pricing and timing of the issue will be decided at a later point in time, depending upon the market conditions post shareholders' and other approvals, Tata Motors said.
GMR Infrastructure fell 1.48% to Rs 16.60. The company after market hours today, 27 January 2015, announced that GMR-Megawide Cebu Airport Corporation (GMCAC) a joint venture between GMR Infrastructure (40% shareholding) and Megawide Construction Corporation (60% shareholding) has amended its financing documents of its Mactan Cebu International Airport (MCIA) located in Cebu, Philippines to include ADB to fund the project. The financing will fund 70% of its total project cost of Php 33 billion (approximately $750 million). ADB will fund $75 million of this as a portion of its share in the funding. The loan is now being financed by a consortium of seven banks including ADB.
GMCAC has taken full operational control from 1 November 2014 for renovation and modernization of MCIA. GMCAC will operate the airport for a period of 25 years.
Shares of private sector banks edged higher. Axis Bank (up 4.83%), City Union Bank (up 2.58%), Federal Bank (up 0.94%), IndusInd Bank (up 0.68%), ING Vysya Bank (up 0.39%) and Kotak Mahindra Bank (up 0.25%) edged higher.
Yes Bank rose 0.82% to Rs 882.45. The private sector bank after trading hours today, 27 January 2015, announced that the bank has teamed up with the Overseas Private Investment Corporation (OPIC), the US government's development finance institution, by signing a memorandum of understanding to explore OPIC financing of up to $220 million to increase lending to micro, small and medium enterprises (MSMEs) in India. Specifically, $100 million of the financing would be used to support either Micro-SMEs or SMEs in underserved rural and urban markets, Yes Bank and OPIC said in a joint statement. US-based lender Wells Fargo Bank, N.A., will act as sponsor and co-lender to the project.
Index heavyweight ICICI Bank rose 3.58% to Rs 383.70. The stock hit a high of Rs 385 and low of Rs 372.45 in intraday trade.
Another index heavyweight HDFC Bank rose 2.98% to Rs 1,074. The stock hit a high of Rs 1,077.60 and low of Rs 1,041.85 in intraday trade.
Shares of public sector banks dropped. Central Bank of India (down 2.26%), Punjab and Sind Bank (down 1.92%), Vijaya Bank (down 1.9%), Corporation Bank (down 1.67%), Punjab National Bank (down 1.16%), Syndicate Bank (down 1.11%), Bank of India (down 0.94%), Indian Bank (down 0.76%), UCO Bank (down 0.69%), Dena Bank (down 0.51%), Andhra Bank (down 0.49%), United Bank of India (down 0.48%), IDBI Bank (down 0.46%), Bank of Maharashtra (down 0.35%), Allahabad Bank (down 0.2%) and Bank of Baroda (down 0.13%), edged lower. Canara Bank rose 0.22%.
State Bank of India (SBI) rose 0.75%. The state-run bank before market hours today, 27 January 2015, said that the Committee of Directors for Capital Raising (the Committee) has decided to take enabling approval from the shareholders for raising additional equity share capital up to Rs 15000 crore by way of public issue (i.e. follow-on-public issue) or rights issue or private placement, including qualified institutions placement (QIP)/global depository receipt (GDRs)/American depository receipt (ADRs) and/or any other mode(s) or a combination(s) thereof. The Committee also decided to seek the approval of the Government of India and the Reserve Bank of India for raising capital under Section 5(2) of the State Bank of India Act, 1955 and take all necessary steps in this regard.
Union Bank of India dropped 5.25% to Rs 238.20. The stock hit a high of Rs 253 and a low of Rs 232.20 in intraday trade. The bank's net profit fell 13.33% to Rs 302.42 crore on 8.39% growth in total income to Rs 8921 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 27 January 2015.
Union Bank of India's ratio of net non-performing assets (NPAs) to net advances stood at 2.95% as on 31 December 2014, compared with 2.71% as on 30 September 2014 and 2.26% as on 31 December 2013. The bank's ratio of gross NPAs to gross advances stood at 5.08% as on 31 December 2014, compared with 4.69% as on 30 September 2014 and 3.85% as on 31 December 2013.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 10.30% as on 31 December 2014, compared with 10.30% as on 30 September 2014 and 10.12% as on 31 December 2013.
Provisions (other than tax) and contingencies rose 39.56% to Rs 851.92 crore in Q3 December 2014 over Q3 December 2013. The bank's provision coverage ratio as on 31 December 2014 stood at 57.25%.
Net interest margin (NIM) stood at 2.57% for Q3 December 2014 as against 2.6% for Q2 September 2014 and 2.64% in Q3 December 2013.
CASA (current and savings account) deposits grew by 9.5% to Rs 89910 crore as on 31 December 2014 from Rs 82112 crore in the previous year. As on 31 December 2014, CASA share in the bank's total deposits stood at 28.7%. Domestic CASA ratio stood at Rs 29.2% as on 31 December 2014.
Housing finance major HDFC advanced 1.95% to Rs 1,315.65. The stock hit a high of Rs 1,320.65 and low of Rs 1,288.05 in intraday trade.
Max India jumped 8.40% to Rs 492.75 after scaling a record high of Rs 505 in intraday trade. Max India during market hours today, 27 January 2015, said its board approved a corporate restructuring plan to vertically split the company through a demerger into three separated listed companies, to give investors specific and undiluted access to its diverse lines of businesses, provide sharper focus to each underlying business and unlock shareholder value. The board also approved divestment of the clinical research business.
Upon completion of the demerger, the existing company, Max India, is proposed to be renamed Max Financial Services (MFS) and will focus solely on the group's flagship life insurance activity, through its 72.1% shareholding in Max Life. Upon completion of the demerger, it is proposed to name the second vertical Max India, which will continue to manage investments in the high potential health and allied businesses comprising Max Healthcare, Max Bupa, Antara Senior Living and supported by a corporate management services team. The corporate management services team will manage a shared services centre, which will provide functional support to all 3 verticals.
The third vertical will house the investment activity in the group's manufacturing subsidiary, Max Speciality Films which is an innovation leader in the speciality packaging films business and will be named Max Ventures and Industries (MVIL).
Once the demerger scheme becomes effective after due regulatory approvals, Max India's shareholders will retain one equity share of Rs 2 each in MFSL and will additionally get one equity share of Max India for each equity share of Rs 2 each held in MFSL, and one equity share of MVIL for every 5 equity shares held in MFSL.
Max India has also initiated action for the divestment of its entire 100% stake in the clinical research business. Max Neeman entities in India and United States are proposed to be divested to a Canadian Contract Research Organisation (CRO), JSS Medical Research Inc., for a consideration of $1.5 million, subject to successful completion of due diligence and signing of definitive agreements, expected by mid-February 2015.
Max India has cash reserves of Rs 605 crore as at 31 December 2014. It is proposed to split the cash reserves as on the appointed date of 1 April 2015 between the 3 listed companies such that MFSL will hold Rs 150 crore, MVIL will hold Rs 10 crore and balance likely to be over Rs 400 crore will be held by the newly formed Max India.
Sugar shares gained on renewed buying. Upper Ganges Sugar & Industries (up 13.74%), Bajaj Hindusthan (up 8.80%), Shree Renuka Sugar (up 8.60%), Simbhaoli Sugars (up 7.03%), Balrampur Chini Mills (up 6.81%), Oudh Sugar Mills (up 5.74%), Sakthi Sugars (up 5.23%), Rana Sugars (up 4.95%), Dhampur Sugar Mills (up 3.94%), Dwarikesh Sugar Industries (up 3.76%), Eastern Sugar & Industries (up 3.70%), EID Parry (India) (up 2.76%), Triveni Engineering & Industries (up 2.69%), KCP Sugar & Industries Corporation (up 2.59%) and Empee Sugars and Chemicals (up 2.20%), edged higher. DCM Shriram Industries was down 1.55%.
Key equity benchmark indices edged higher for the 8th day in a row today, 27 January 2015. From a recent low of 27,346.82 on 14 January 2015, the Sensex has gained 2,224.22 points or 8.13% in eight trading sessions. The Sensex has gained 2071.62 points or 7.53% in this month so far (till 27 January 2015). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 9,607.92 points or 48.13%.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.43, compared with its close of 61.44 during the previous trading session on Friday, 23 January 2015. The foreign exchange market was closed yesterday, 26 January 2015, for Republic Day holiday.
Brent crude oil futures edged higher in a volatile trade. Brent for March settlement was up 12 cents at $48.28 a barrel. The contract had fallen 63 cents or 1.29% to settle at $48.16 a barrel during the previous trading session.
Prime Minister Narendra Modi yesterday, 26 January 2015, said big projects involving large investment would be monitored by the Prime Minister's Office. He was speaking at the interactive India US CEO Forum, in the presence of US President Barack Obama, and top business leaders from both countries. He mentioned the importance of investment in the infrastructure sector, especially in the Railways.
India and the US on Sunday, 25 January 2015, reached an understanding on resolving the logjam in implementing the historic 2006 India-US nuclear deal and decided to take defence cooperation to a new level after bilateral meeting between Indian Prime Minister Narendra Modi and US President Barack Obama. The two countries resolved key hurdles pertaining to the liability of suppliers of nuclear reactors in the event of an accident and the tracking of fuel supplied by the US. Both countries also agreed on a Working Group to explore aircraft carrier technology besides designing and development of jet engine technology, according to media reports.
In a media statement issued during a joint press interaction with Obama, Modi on Sunday, 25 January 2015, said that the Indo-US civil nuclear agreement was the centrepiece of a transformed relationship between India and the United States, which demonstrated new trust. "I am pleased that six years after we signed our bilateral agreement, we are moving towards commercial cooperation, consistent with our law, our international legal obligations, and technical and commercial viability. President Obama has also assured me of strong US efforts in support of India's full membership of the four international export control regimes at the earliest", Modi said. Separately, a joint statement issued by India and the US stated that Modi and Obama welcomed the understandings reached on the issues of civil nuclear liability and administrative arrangements for civil nuclear cooperation, and looked forward to US-built nuclear reactors contributing to India's energy security at the earliest.
Obama today, 27 January 2015, concludes his 3-day visit to India.
Meanwhile, the Reserve Bank of India (RBI) on Friday, 23 January 2015, relaxed rules for companies and banks to restructure and reschedule existing overseas borrowings by permitting an increase in the total cost of external commercial borrowing (ECB). The RBI has also allowed changes in the drawdown and repayment schedules of ECB. However, the easing of rules will not be applicable for foreign currency convertible bonds, the RBI said.
European stocks edged lower today, 27 January 2015, as Siemens AG led industrial companies lower after the Europe's largest engineering company reported a decline in first-quarter profit. Key benchmark indices in UK, France and Germany were off 0.28% to 0.62%.
In Greece, the leftist Syriza party which ran on an antiausterity platform, won elections held in the country on Sunday, 25 January 2015. Syriza and its outspoken leader, Alexis Tsipras, who had campaigned against the austerity measures imposed on Greece by its international creditors, formed a coalition government yesterday, 26 January 2015, with a right-wing fringe party, Independent Greeks.
Asian stocks edged higher today, 27 January 2015, amid optimism the actions of Greece's new government won't force the nation to leave the euro currency bloc. Key benchmark indices in Taiwan, Singapore, Japan, Indonesia and South Korea rose 0.33% to 1.72%. Key benchmark indices in China and Hong Kong fell 0.41% to 0.89%. China reported a service trade deficit of $23.5 billion in December, compared with a deficit of $20.8 billion in November, official data showed today, 27 December 2015. For 2014, the country's service trade deficit stood at $198.0 billion, as per the State Administration of Foreign Exchange. China's service trade deficit was $118.4 billion in 2013.
Trading in US index futures indicated that the Dow could fall 66 points at opening bell today, 27 January 2015. US stocks ended higher yesterday, 26 January 2015, as investors brushed off fears that a leftist victory in Greece would bring fresh crisis to the Eurozone and energy stocks advanced.
A two-day meeting of the Federal Open Market Committee (FOMC) begins today, 27 January 2015. In its last meet in December 2014, FOMC had based on its assessment, judged that it can be patient in beginning to normalize the stance of monetary policy.
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