Key benchmark indices slumped after data showing the fastest US economic growth in more than a decade bolstered the case for the US Federal Reserve to raise interest rates in the world's biggest economy. Investors are concerned that higher US rates will strengthen the dollar and cause inflows into emerging markets to slow. After languishing in red for most part of the trading session, the benchmark indices extended losses after a sudden slide in late trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing levels in almost a week. The market breadth indicating the overall health of the market was negative. The Sensex lost 297.85 points or 1.08% to settle at 27,208.61.
Meanwhile, the Union Cabinet at a meeting today, 24 December 2014, approved issuance of ordinances to implement coal and insurance reforms as the government was unable to get the Insurance Bill and Coal Bill passed during the winter session of parliament which concluded yesterday, 23 December 2014. The coal ministry today, 24 December 2014, said that it will commence the first batch of e-auction process for 24 Schedule II coal mines from tomorrow, 25 December 2014.
Metal and power stocks were mixed after Ministry of Coal said it will commence the first batch of e-auction process for 24 Schedule II mines from tomorrow, 25 December 2014. Shares of a number of state-run companies fell. Shares of public sector oil marketing companies fell on weakening rupee. Shares of companies operating insurance business edged higher after the Union Cabinet at a meeting today, 24 December 2014, approved issuing an ordinance to raise the cap on foreign investment the in the insurance sector as the government was unable to get the Insurance Bill passed during the winter session of parliament which concluded yesterday, 23 December 2014.
Foreign portfolio investors (FIIs) sold shares worth a net Rs 405.38 crore into the secondary equity markets yesterday, 23 December 2014, as per data from the National Securities Depository (NSDL).
In overseas markets, European shares were mixed. Asian stocks edged higher after positive US economic news powered Wall Street shares to a record overnight. In US yesterday, 23 December 2014, the Dow Jones Industrial Average closed above 18,000 for the first time ever and the S&P 500 notched up its 51st record close of the year, underscoring confidence in the strength of the US economy.
In the foreign exchange market, the rupee edged lower against the dollar after data showing the fastest US economic growth in more than a decade bolstered the case for the US Federal Reserve to raise interest rates in the world's biggest economy.
Brent crude oil futures edged lower, giving up some of the previous session's gains, as the dollar held near its highest level in nearly nine years on strong US economic data.
More From This Section
The stock market remains closed tomorrow, 25 December 2014, on account of Christmas.
The S&P BSE Sensex lost 297.85 points or 1.08% to settle at 27,208.61, its lowest closing level since 18 December 2014. The index fell 359.94 points at the day's low of 27,146.52 in late trade. The index rose 64.79 points at the day's high of 27,571.25 in morning session.
The CNX Nifty dropped 92.90 points or 1.12% to settle at 8,174.10, its lowest closing level since 18 December 2014. The index hit a low of 8,155.25 in intraday trade. The index hit a high of 8,286.40 in intraday trade.
The BSE Mid-Cap index rose 15.23 points or 0.15% to settle at 10,074.52. The BSE Small-Cap index gained 2.49 points or 0.02% to settle at 10,892.93. Both these indices outperformed the Sensex.
The S&P BSE IT index (down 1.38%) and the S&P BSE Oil & Gas index (down 1.36%) underperformed the Sensex. The S&P BSE Power index (down 0.88%), the S&P BSE Healthcare index (down 1.01%), the S&P BSE Teck index (down 1.07%), the S&P BSE Capital Goods index (down 0.76%), the S&P BSE Metal index (down 0.46%), the S&P BSE Consumer Durables index (down 0.81%), the S&P BSE Realty index (up 1.14%), the S&P BSE Bankex (down 0.38%), the S&P BSE Auto index (down 0.66%) and the S&P BSE FMCG index (up 1.02%) outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,487 shares fell and 1,340 shares rose. A total of 115 shares were unchanged.
The total turnover on BSE amounted to Rs 2538 crore, higher than turnover of Rs 2523.20 crore during the previous trading session.
Shares of a number of state-run companies fell. Bharat Heavy Electricals (down 3.06%), ONGC (down 2.5%), NTPC (down 2.42%), SJVN (down 2.09%), Power Grid Corporation of India (down 1.87%) and Power Finance Corporation (down 1.46%) edged lower.
Shares of public sector oil marketing companies fell on weakening rupee. HPCL (down 3.18%) and BPCL (down 2.31%) edged lower. A weak rupee raises the cost of importing crude oil. PSU OMCs suffer under-recoveries on domestic sale of LPG and kerosene at government controlled prices. The government has already freed pricing of petrol and diesel.
Indian Oil Corporation (IOC) was down 2.42%. With respect to news item captioned "IOC to invest Rs 6800 cr on Gujarat capacity expansion", IOC clarified that its board had only accorded in-principle (1st stage) approval for the expansion of the Gujarat refinery from 13.7 million tonnes to 18 million tonnes, subject to carrying out detailed feasibility study. The feasibility study is still in progress. Once the board accords final approval to the project, IOC shall notify the stock exchanges. As regards, the quality improvement project is concerned, it is a statutory requirement as per the government guidelines which are being implemented to adhere to the Euro-IV fuel quality norms, IOC said. The clarification was made during trading hours today, 24 December 2014.
Corporation Bank gained 1.25%. The state-run bank after market hours today, 24 December 2014, announced that it has fixed 23 January 2015 as the record date for 5-for-1 stock split.
Aurobindo Pharma fell 1.25%. With respect to the media report stating "AstraZeneca files patent case against Aurobindo Pharma", Aurobindo Pharma clarified during trading hours today, 24 December 2014, this matter is subjudice and will not have any material impact on the company. Aurobindo Pharma said that the company had filed an Abbreviated New Drug Application (ANDA) for Saxagliptin tablets certifying P-IV against the relevant patents listed in U S Food and Drug Administration (US FDA) Orange Book. Based on this, Astrazeneca had filed a case in a US District Court against Aurobindo. It is usual practice for an innovator company to file law suit against a generic company who files an ANDA with a P-IV certification for a particular product. Aurobindo is responding to the complaint appropriately within the stipulated time frame, Aurobindo Pharma said.
Shares of companies operating insurance business edged higher after the Union Cabinet at a meeting today, 24 December 2014, approved issuing an ordinance to raise the cap on foreign investment the in the insurance sector as the government was unable to get the Insurance Bill passed during the winter session of parliament which concluded yesterday, 23 December 2014. Max India (up 2.79%), Religare Enterprise (up 1.47%), Aditya Birla Nuvo (up 1.42%), ICICI Bank (up 0.69%), Bajaj Finserv (up 0.56%) and State Bank of India (up 0.50%), edged higher. HDFC was down 1.31%.
The winter session of Parliament ended yesterday, 23 December 2014, with the government unable to get key legislative reforms bills passed. The opposition parties targeted Prime Minister Narendra Modi's government on a plethora of issues from black money to religious conversions during the winter session. While only the Lok Sabha passed the Coal Bill, the government was unable to get the Insurance Bill passed in Lok Sabha and Rajya Sabha during the winter session.
It may be recalled that the Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
Reliance Capital rose 4.36%. The company said after market hours today, 24 December 2014, that a meeting of the board of directors of the company will be held tomorrow, 25 December 2014, to consider a strategic long term alliance with a foreign partner, including inter alia a preferential allotment of a minority equity stake in the company.
GAIL (India) was off 3.61%. Rashtriya Chemicals and Fertilizers (RCF) was flat at Rs 67.75. Coal India fell 1.36%.
In a significant step towards augmenting the domestic urea capacity, GAIL (India), Coal India (CIL), Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corporation of India (FCIL) today, 24 December 2014, signed joint ventures agreements (JVAs) to set up an integrated coal gasification cum fertilizer and ammonium nitrate complex at Talcher in Odisha. The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources, the Ministry of Petroleum & Natural Gas said in a statement.
UltraTech Cement (up 4.36%) and Jaiprakash Associates (up 8.96%), edged higher. UltraTech Cement's board of directors at its meeting held yesterday, 23 December 2014, approved acquisition of two cement units of Jaiprakash Associates in Madhya Pradesh viz. integrated cement plant with clinker capacity of 2.1 mtpa and cement grinding capacity of 2.6 mtpa at Bela, Madhya Pradesh (MP), integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP, and 180 MW TPP of which 25 MW is situated at Bela and 155 MW at Sidhi.
UltraTech board has approved the memorandum of understanding setting out the broad terms and conditions of the proposed acquisition. The enterprise value of this acquisition has been agreed at Rs 5400 crore, UltraTech Cement said in a statement. The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.
UltraTech Cement said that this acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8 - 2.5 MTPA in addition to the 4.9 MTPA. This acquisition will enable the company to increase its presence in Satna cluster of MP, UltraTech Cement said. With this acquisition, the company's cement capacity in India will increase from about 60 MTPA to 65 MTPA and with projects underway, the capacity will stand raised to about 71 MTPA by 2016, UltraTech Cement said in a statement.
Grasim Industries, which holds majority stake in UltraTech Cement, was up 0.15%.
Ambuja Cements declined 0.12%. The company said after market hours yesterday, 23 December 2014, that the company has filed a Special Leave Petition in the Supreme Court, challenging a demand notice for Rs 248 crore arising from disallowance of a sales tax incentive availed by the company in Rajasthan for the period 2001-02 to 2008-09. Ambuja Cements said that the company had availed sales tax incentives under the incentive schemes of the Rajasthan state government for the period 2001-02 to 2008-09 pursuant to the order passed by the Board of Industrial and Financial Rehabilitation (BIFR) while sanctioning the Scheme of Rehabilitation of erstwhile Ambuja Cements Rajasthan which was subsequently merged with Ambuja Cements. Later, the Assistant Commissioner, Commercial Taxes Department, Rajasthan issued demand notices on the company for Rs 248 crores (including the interest of Rs. 134 crores) by rejecting the company's claim of availing sales tax incentives under the BIFR order. The company had subsequently filed Writ Petitions in the Jodhpur bench of the Rajasthan High Court challenging the demand notices. On 19 December 2014, the Rajasthan High Court passed an order dismissing the writ petitions filed by the company.
Metal stocks were mixed. Sesa Sterlite (up 0.59%), Bhushan Steel (up 0.98%), Tata Steel (up 0.06%), Jindal Steel & Power (up 0.07%) and Hindustan Zinc (up 0.62%) edged higher. JSW Steel (down 0.83%), NMDC (down 0.14%), Hindalco Industries (down 1.47%) and Steel Authority of India (Sail) (down 0.3%) edged lower.
Power generation stocks were mixed. JSW Energy (up 0.35%), Jaiprakash Power Ventures (up 2.47%), CESC (up 0.9%), Reliance Infrastructure (up 1.75%), and Reliance Power (up 0.83%) edged higher. Torrent Power (down 2.6%), Tata Power (down 0.18%), GMR Infrastructure (down 2.89%), Power Grid Corporation of India (down 2.26%), and NTPC (down 2.35%), edged lower.
Key indices fell for the second day in a row today, 24 December 2014. From a recent high of 27,701.79 on 22 December 2014, the Sensex has fallen 493.18 points or 1.78% in two trading sessions. The Sensex has declined 1,485.38 points or 5.17% in this month so far (till 24 December 2014). The Sensex has gained 6,037.93 points or 28.52% in calendar year 2014 so far (till 24 December 2014). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,613.76 points or 5.59%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,245.49 points or 36.29%.
In the foreign exchange market, the rupee edged lower against the dollar after data showing the fastest US economic growth in more than a decade bolstered the case for the US Federal Reserve to raise interest rates in the world's biggest economy. The partially convertible rupee was hovering at 63.53, compared with its close of 63.29 during the previous trading session.
Brent crude oil futures edged lower, giving up some of the previous session's gains, as the dollar held near its highest level in nearly nine years on strong US economic data. Brent for February settlement off $1.02 a barrel at $60.67 a barrel. The contract had jumped $1.58 a barrel or 2.63% to settle at $61.69 a barrel during the previous trading session.
Meanwhile, the Union Cabinet at a meeting today, 24 December 2014, approved issuance of ordinances to implement coal and insurance reforms. The move comes after a month-long parliament session that ended yesterday, 23 December 2014, failed to vote on a bill to raise the cap on foreign investment in insurance companies to 49% from 26%, and another piece of legislation to overhaul the troubled coal sector. An ordinance is a provision to enact laws outside a Parliament session and has the same force and effect as an act of Parliament. It stays valid for six months within which Parliament has to ratify it for it to become a law. India's president would also need to sign off the decree.
The government was unable to get the Insurance Laws (Amendment) Bill, 2008, passed in Lok Sabha and Rajya Sabha during the winter session. The Insurance Bill, which has been pending since 2008 in the Rajya Sabha, seeks to increase the composite foreign investment limit in insurance companies to 49% from current level of 26%. This will now be done through the ordinance route. It may be recalled that the Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
The Coal Mines (Special Provisions) Bill that was moved to replace an ordinance issued earlier was passed by the Lok Sabha in the winter session but it could not be taken up in the Rajya Sabha. The government promulgated the Coal Mines (Special Provisions) Ordinance, 2014, in October to facilitate coal block auctions after the Supreme Court cancelled 204 coal blocks in September. The bill provides for the allocation of coal mines and vesting of the right, title and interest in and over land and mine infrastructure, together with mining leases, to successful bidders and allottees through a transparent bidding process.
On the political front, the results for Jammu & Kashmir (J&K) and Jharkhand assembly polls came out yesterday, 23 December 2014, with the People's Democratic Party (PDP) emerging as the single-largest party in Jammu & Kashmir and the BJP with its ally the All Jharkhand Students Union (AJSU) getting simple majority in Jharkhand. PDP got 28 seats in Jammu & Kashmir with the BJP coming second with 25 seats in the states. With no party getty clear majority in the northern state, J&K opens up the possibility all kinds of combinations to form the new government.
Jharkhand, a state that was formed 14 years ago, got its first stable government with the BJP winning in 37 in the 81-seat assembly. It ally AJSU has won five seats giving the alliance 42 seats, one more than the required majority of 41.
European shares were mixed today, 24 December 2014, in a shortened session ahead of the Christmas break. UK's FTSE 100 was up by 0.27%. However, France's CAC 40 was down 0.2%. The stock market in Germany was closed for Christmas Eve holiday.
Asian stocks were trading higher today, 24 December 2014, after US equities climbed to all-time high overnight as the world's biggest economy grew at the fastest pace in 11 years. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.07% to 1.24%. China's Shanghai Composite was down 1.98%.
Trading in US index futures indicated that the Dow could gain 15 points at the opening bell today, 24 December 2014. US stocks soared Tuesday, 23 December 2014, with the blue-chip Dow Jones Industrial Average smashing the psychologically important 18,000 milestone for the first time, after the US economy grew at its quickest pace in more than a decade last quarter.
The final estimate of the US gross domestic product (GDP) for the third quarter was revised up to a 5% annual pace, its quickest in 11 years, from 3.9% reported last month, on stronger consumer and business spending, Commerce Department said in its third and final estimate Tuesday.
Meanwhile, data Tuesday showed consumer spending, which accounts for nearly two-thirds of the US economy, jumped to its largest gain in three months in November as falling gasoline prices has left more discretionary income in consumers' pockets during the holiday shopping season. Consumer spending rose 0.6% last month while October was upwardly revised to a 0.3% increase, the Commerce Department said Tuesday.
Further, US consumer sentiment jumped to its highest level in nearly eight years as cheaper gasoline prices boosted consumer optimism. Consumer sentiment rose to 93.6, its highest reading since January 2007, according to the University of Michigan's final December reading.
Separate data on Tuesday painted a mixed picture on the US housing market as sales of new single-family homes fell for a second straight month in November. Sales fell 1.6% to a seasonally adjusted annual rate of 438,000 units, the Commerce Department said Tuesday. Last months figures declined 1.6% from October's report, which was revised down to 445,000 units from 458,000 units.
Powered by Capital Market - Live News