IT stocks led the rally on the bourses in what was a highly volatile trading session. Infosys led gains in IT stocks after the company reported stronger-than-expected Q3 December 2014 results. The latest rally for key benchmark indices materialized as Brent crude oil futures extended losses from 5-1/2-year low. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, garnered 183.67 points or 0.67% to settle at 27,458.38.
Shares of Infosys jumped after the company reported stronger-than-expected Q3 December 2014 results. Other IT stocks also edged higher after stronger-than-expected Q3 results from Infosys. Bank shares were mostly lower. Pharma stocks edged higher. Tata Steel advanced after the company said it has resumed mining operations at Noamundi in Jharkhand.
High intraday volatility was witnessed on the bourses today, 9 January 2015. After remaining firm until mid-morning trade, a sudden slide took key benchmark indices into the red from green in early afternoon trade. IT major and index heavyweight Infosys led a rebound in key benchmark indices in afternoon trade after company's stronger-than-expected Q3 December 2014 results which hit the market at about 12:40 noon. Volatility ruled the roost as key benchmark indices once again slipped into the red from green in mid-afternoon trade. Key indices surged during the last one hour or so of the trading session.
Meanwhile, Finance Minister Arun Jaitley yesterday, 8 January 2015, said that domestic policies to achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the Indian economy.
In overseas markets, European stocks dropped in volatile trade after the latest data showed Germany's economic recovery is slowing. Asian stocks ended on a mixed note. US stocks surged yesterday, 8 January 2015, as two days of steady oil prices along with dovish comments by a Federal Reserve member helped further fuel a buying frenzy which begun on Wednesday 7 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar on optimism demand for emerging-market assets will be sustained amid the prospect of further euro-area stimulus.
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Brent crude oil futures extended losses from 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.
The Sensex garnered 183.67 points or 0.67% to settle at 27,458.38, its highest closing level since 5 January 2015. The index surged 232.96 points at the day's high of 27,507.67 in early trade. The index declined 155.08 points at the day's low of 27,119.63 in early afternoon trade.
The CNX Nifty garnered 49.90 points or 0.61% to settle at 8,284.50, its highest closing level since 5 January 2015. The index hit a high of 8,303.30 in intraday trade. The index hit a low of 8,190.80 in intraday trade.
The BSE Mid-Cap index advanced 5.38 points or 0.05% to settle at 10,426.01. The BSE Small-Cap index rose 12.46 points or 0.11% to settle at 11,198.34. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,541 shares declined and 1,352 shares advanced. A total of 116 shares were unchanged.
The total turnover on BSE amounted to Rs 3272 crore, higher than Rs 3231.16 crore on yesterday, 8 January 2015.
Among sectoral indices on BSE, the S&P BSE Consumer Durables index (up 0.83%), BSE Healthcare index (up 1.78%), BSE IT index (up 3.51%), BSE Oil & Gas index (up 1.59%) and BSE Teck index (up 2.44%) outperformed the Sensex. The BSE Bankex index (down 0.31%), BSE Auto index (up 0.03%), BSE Capital Goods index (down 0.41%), BSE FMCG index (up 0.29%), BSE Metal index (down 0.32%), BSE Power index (down 0.92%) and BSE Realty index (down 1.39%) underperformed the Sensex.
Infosys edged higher in volatile trade after the company reported stronger-than-expected Q3 December 2014 results. The stock jumped 5.02% to Rs 2,073.60. The stock hit a high of Rs 2,108 and a low of Rs 1,914.10. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 5% to Rs 3250 crore on 3.4% increase in revenue to Rs 13796 crore in Q3 December 2014 over Q2 September 2014. The results hit the market at around 12:40 noon.
In a press release, Infosys said that the company has maintained its guidance of 7%-9% growth in revenue in dollar terms for the year ending March 2015 (FY 2015) based on exchange rates as on 30 September 2014. Due to cross currency headwinds, analysts were expecting Infosys' management to prune the company's revenue growth guidance in dollar terms for FY 2015 at the time of announcement of Q3 results today, 9 January 2015.
Commenting on the third quarter results, Dr. Vishal Sikka, CEO and Managing Director, Infosys said that the company's 'renew and new' strategy is being received well by its clients. U. B. Pravin Rao, Chief Operating Officer, Infosys said that there was broad-based volume growth, increased utilization and strong client additions by Infosys in the third quarter. He further said that the company has made 100% variable payout for Q3 and the company has seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters. Infosys said that the 4.2% sequential volume growth registered by the company in Q3 December 2014 was its highest volume growth in 3 years. Infosys and its subsidiaries added 59 clients (gross) in Q3 December 2014.
Other IT stocks also edged higher after stronger-than-expected Q3 results from Infosys. MindTree (up 4.6%), TCS (up 2.8%), CMC (up 2.98%), and HCL Technologies (up 0.82%) edged higher. MphasiS (down 0.38%) and Oracle Financial Services Software (down 1.15%) edged lower.
Wipro rose 1.54% at Rs 553.45. With respect to news article titled "Wipro wins $400m IT Infra Deal from swiss Giant ABB", Wipro after market hours yesterday, 8 January 2015, clarified that the company does not comment on market rumours.
Tech Mahindra rose 4.41% at Rs 2,680.10. The company during market hours today, 9 January 2015, announced that the company has signed a definitive agreement to acquire SOFGEN Holdings (SOFGEN), a niche consulting and services company with worldwide presence specializing in private/wealth, commercial and retail banking solutions. The transaction is expected to close by March 2015, subject to regulatory approvals, Tech Mahindra said.
Pharma stocks advanced. Wockhardt (up 4.53%), Torrent Pharmaceuticals (up 3.19%), Cipla (up 2.33%), Aurobindo Pharma (up 3.9%), Ipca Laboratories (up 1.23%), Divi's Laboratories (up 2.58%), Sun Pharmaceutical Industries (up 1.49%), Ranbaxy Laboratories (up 1.65%), and Lupin (up 0.94%) edged higher.
Dr Reddys Laboratories rose 3.21% at Rs 3,163.85. In a clarification with regard to news item titled "Maharashtra suspends Dr.Reddy's Licences", Dr Reddys Laboratories during market hours today, 9 January 2015, said that the order relates only to the wholesale licence of the Clearing and Forwarding agent. Dr Reddy's said that in its opinion there has been no violation of any statute or regulation by the company and it has been in compliance. The product being investigated is not a drug and is neither manufactured nor marketed by Dr Reddy's, the company said. An interim stay has been granted today, 9 January 2015, by the High Court for two weeks, it added. The company said that it will approach the concerned state government minister on Monday, 12 January 2015, as directed by the court.
Cadila Healthcare rose 2.49% at Rs 1,687.20. In a clarification with regard to news item titled "Cadila recalls 19,536 bottles of cough treatment drug in US, the company at the fag end of trading session today, 9 January 2015, said that the recall by the company's US subsidiary was voluntary and a class-II type recall. Cadila Healthcare said that the company does not envisage any material impact of the recall on its operations or financials.
Tata Steel advanced after the company after said it has resumed mining operations at Noamundi in Jharkhand. The stock rose 1.23% at Rs 399.55. In its clarification with regard to news item titled "Tata Steel: Mining of Iron Ore from Noamundi in a few days", Tata Steel during trading hours today, 9 January 2015, said that based on the order from the High Court of Jharkhand, Tata Steel has received the order under section 8(3) of the MMDR Act 1957 from the state government of Jharkhand and has resumed mining operations in Noamundi. The mine renewal process is currently on-going, Tata Steel said.
Jindal Steel & Power (JSPL) fell 2.99% at Rs 152.75. The stock hit a high of Rs 161.35 and a low of Rs 151.65. In response to certain media reports regarding excess mining, JSPL during trading hours today, 9 January 2015, clarified that the company has followed the rules and regulations prevailing at that point of time and had done the mining within the prescribed approved limits of mine plan which was duly approved by Ministry of Coal, Government of India. JSPL has replied to the agency giving all the necessary details for the same, it added.
Bank shares were mostly lower. State Bank of India (down 0.46%), Canara Bank (down 2.66%), Bank of Baroda (down 1.73%), ICICI Bank (down 1.48%), Axis Bank (down 1.32%), Bank of India (down 0.63%), Yes Bank (down 0.51%) and Punjab National Bank (down 0.05%) edged lower. Kotak Mahindra Bank (up 1.5%), HDFC Bank (up 1.06%), IndusInd Bank (up 0.31%) and Federal Bank (up 0.07%) edged higher.
Bharat Heavy Electricals (Bhel) fell 1.16% at Rs 254.60. The stock hit a high of Rs 261.20 and a low of Rs 251.50. The company during market hours today, 9 January 2015, said it has achieved another milestone by successfully commissioning one more 600 megawatts (MW) thermal unit in Chhattisgarh. The unit was commissioned at Jindal Power's upcoming 4x600 MW thermal power project located at Tamnar in Raigarh district of Chhattisgarh. This is the third 600 MW unit of the project commissioned by Bhel. The first two units of 600 MW each were commissioned in March 2014. Pesently, about 85 utility sets aggregating to more than 20,000 MW of private sector developers are in various stages of execution by Bhel.
ABB India fell 1.68% at Rs 1,267.85. The stock hit a high of Rs 1,303.25 and a low of Rs 1,260. ABB India during market hours today, 9 January 2015, announced that the company has won an order worth about Rs 256 crore from Ceylon Electricity Board (CEB) to supply two new 220-kilovolt (kV) substations and upgrade an existing substation in Sri Lanka. The order was booked in the quarter ended December 2014, ABB India said.
HDFC fell 1.01% at Rs 1,112.20. The stock hit a high of Rs 1,136.20 and a low of Rs 1,104. The company after market hours today, 9 January 2015, said that the company has concluded the sale of the balance 69.82 lakh equity shares of HDFC Standard Life Insurance Company (HDFC Life) at a price of Rs 105 per share. After the stake sale, HDFC now holds 71.42% stake in HDFC Standard Life Insurance Company. Earlier, HDFC had on 22 December 2014 announced that it had agreed to sell up to 1.89 crore equity shares of HDFC Life, representing 0.95% of the total issued and paid-up equity capital of HDFC Life, to the Azim Premji Trust at a price of Rs 105 per share. At that time, HDFC had announced the sale of the first tranche 1.19 crore shares of HDFC Life to the Azim Premji Trust.
Titan Company fell 0.07% at Rs 373. The stock hit a high of Rs 376.70 and a low of Rs 369.90. In a clarification with regard to news item titled "Tanishq to open 25 'Mia' stores", Titan Company after market hours today, 9 January 2015, said that Mia is a sub-brand of Tanishq -- the jewellery division of the company. Mia is in existence in the market for over two years and the proposal to open 25 stores is part of the jewellery division's business plan. The company has opened quite a few Mia stores already in addition to Mia Shop-in-Shops and therefore this is not a new activity either, Titan said. Mia contributes a small percentage of the revenue of the jewellery business presently and therefore the management of the company does not view this development to be a material event for being classified as price sensitive information, Titan said.
Videocon Industries surged after the company said that Petroleo Brasileiro SA (Petrobras), the operator of the BM-SEAL-11 Concession has announced discovery of new oil accumulation in Farfan area in the Sergipe Basin, offshore Brazil. The stock was locked at 20% upper circuit at Rs 191.15. The consortium will carry on operations in the area to further confirm the extent of the hydrocarbons in place and the characteristic of the reservoir conditions encountered. Petrobras holds 60% participating interest in the concession and IBV Brasil, a Brazilian joint venture company equally held by Videocon Energy Brazil which is a wholly-owned overseas subsidiary of Videocon Industries and BPRL Ventures N.V., a wholly owned subsidiary of Bharat Petroleum Corporation (BPCL), holds the remaining 40% participating interest in the concession.
Mr. Pradeep N. Dhoot, Dubai based Director of Global E&P Business of Videocon Hydrocarbon Holdings said: "The discovery of hydrocarbons in what was proposed as a data acquisition well and that too further away from reservoir of wells already drilled in the Sergipe Block is likely to add further to the hydrocarbon resources already indicated in the said blocks".
Shares of BPCL fell 0.03% at Rs 677.35. The stock hit a high of Rs 688.30 and a low of Rs 673.40.
Key indices advanced for a second straight day today, 9 January 2015. The Sensex has risen 549.56 points or 2.04% in two trading sessions from a recent low of 26,908.82 on Wednesday, 7 January 2015. The Sensex has declined 41.04 points or 0.14% in this month so far (till 9 January 2015). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,363.99 points or 4.73%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,495.26 points or 37.54%.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.36, compared with its close of 62.68 during the previous trading session.
Brent crude oil futures extended losses from 5-1/2-year low. Brent for February settlement was off 41 cents at $50.55 a barrel. The contract had declined 19 cents to settle at $50.96 a barrel during the previous trading session, at its lowest close since 30 April 2009.
Meanwhile, Finance Minister Arun Jaitley yesterday, 8 January 2015, said that domestic policies to achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the Indian economy. Jaitley made those comments during the Pre Budget Consultative Meeting with the representatives of Social Infrastructure, Human Capital and Development Groups. Jaitley said that emerging trends indicate the growth deceleration in India has bottomed-out. The Finance Minister said that significant downward trend in inflation has also been recorded in the second and third quarter of 2014-15. He said that external environment has also largely turned in India's favour.
On the macro front, data to be released in near future is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours on Monday, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.
The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours on Monday, 12 January 2015.
The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
The rate of inflation based 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 on 14 January 2015.
European shares edged lower today, 9 January 2015, after data showed Germany's economic recovery is slowing. Key indices in Germany, UK, and France were off 0.47% to 0.6%.
Manufacturing output across the UK rose by 0.7% in November, and was 2.7% higher than a year ago, latest data released by the Office for National Statistics today, 9 January 2015 showed.
German industrial production declined fractionally in November, pulled down by declining activity in the energy sector, data released today, 9 January 2015 showed. According to regular data compiled by the economy ministry, industrial output eased by 0.1% in November, after increasing by a revised 0.6% in October. Manufacturing output increased by 0.3% while energy output was down by 2.4% and construction output declined by 0.6%, the ministry calculated.
Meanwhile, the 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.
European Central Bank (ECB) President Mario Draghi yesterday, 8 January 2015, said the ECB's measures may include buying sovereign bonds. A drop in euro-area consumer prices in December has fueled speculation the ECB will bolster stimulus efforts.
Asian stocks were mixed today, 9 January 2015. Key indices in Japan, Hong Kong, South Korea, and Indonesia were up 0.09% to 1.05%. Key benchmark indices in Singapore, China and Taiwan were off 0.18% to 0.29%.
China's consumer inflation remained tepid in December, while prices at the factory gate continued to slide. The consumer price index rose 1.5% on year in December, up slightly from a 1.4% on-year rise in November, data from the National Bureau of Statistics showed today, 9 January 2015.
Trading in US index futures indicated that the Dow could fall 41 points at the opening bell today, 9 January 2015. US stocks surged yesterday, 8 January 2015, as two days of steady oil prices along with dovish comments by a Federal Reserve member helped further fuel a buying frenzy which begun on Wednesday 7 January 2015. Prospects for further central-bank easing in Europe are also whetting investors' appetite for riskier assets, namely equities.
The number of people who applied for US unemployment benefits at the end of the year fell slightly and remained below the key 300,000 mark for the 16th time in 17 weeks, offering more proof the labor market is still on an upswing.
Federal Reserve Bank of Chicago President Charles Evans on Wednesday, 7 January 2015, said that the Fed's target inflation rate might not be hit until 2018, and he doesn't advise a rate hike until 2016. Evans, who is a voting member of the Federal Open Market Committee this year, was speaking at an event sponsored by the University of Chicago.
The US Labor Department reports monthly payroll data for December 2014 later in global day today, 9 January 2015.
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