Weakness during the latter part of the trading session pulled key benchmark indices lower. The decline in percentage terms in the barometer index, the S&P BSE Sensex, was much higher than the decline in the 50-unit CNX Nifty. The market breadth indicating the overall health of the market turned negative from positive in late trade. The Sensex declined 159.64 points or 0.58% to settle at 27,425.73. The CNX Nifty shed 23.60 points or 0.28% to settle at 8,299.40. 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.
Key indices snapped a three-day winning streak today, 13 January 2015.
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.
Bank stocks dropped. IndusInd Bank dropped in volatile trade as the bank's gross non-performing assets (NPAs) rose on absolute basis in Q3 December 2014. Realty stocks edged lower. Shares of oil exploration & production (E&P) firms declined along with fall in crude oil prices. Shares of paint makers gained on lower crude oil prices.
In overseas markets, European stocks edged higher as gains in retailers outweighed a decline in energy companies. 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.
In the foreign exchange market, the rupee edged higher against the dollar in volatile trade.
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Global crude oil prices extended losses after a steep slide in prices yesterday, 12 January 2015, after the United Arab Emirates's oil minister Suhail Mohamed Faraj al-Mazrouei said the Organization of the Petroleum Exporting Countries will stick to its decision to keep oil output unchanged, regardless of current oil prices. 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 S&P BSE Sensex declined 159.64 points or 0.58% to settle at 27,425.73, its lowest closing level since 8 January 2015. The index slumped 260.69 points at the day's low of 27,324.58 in late 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 shed 23.60 points or 0.28% to settle at 8,299.40, its lowest closing level since 9 January 2015. The index hit a low of 8,267.90 in intraday trade. The index hit a high of 8,356.65 in intraday trade, its highest level since 5 January 2015.
The BSE Mid-Cap index advanced 6.59 points or 0.06% to settle at 10,492.77, outperforming the Sensex. The BSE Small-Cap index declined 39.99 points or 0.35% at 11,251.51. The decline in the index was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,541 shares declined and 1,381 shares rose. A total of 93 shares were unchanged.
The total turnover on BSE amounted to Rs 3981 crore, higher than Rs 3019.46 crore yesterday, 12 January 2015.
Among sectoral indices on BSE, the S&P BSE Consumer Durables index (down 1.2%), BSE Capital Goods index (down 0.66%), BSE Oil & Gas index (down 1.06%), BSE Power index (down 0.89%), and BSE Realty index (down 1.85%) underperformed the Sensex. The BSE Auto index (down 0.08%), BSE Bankex index (down 0.55%), BSE FMCG index (up 0.72%), BSE Healthcare index (up 0.14%), BSE IT index (down 0.47%), BSE Metal index (down 0.42%), and BSE Teck index (down 0.45%) outperformed the Sensex.
Bank stocks edged lower. Among public sector banks, Andhra Bank (down 2.65%), Oriental Bank of Commerce (down 2.21%), Syndicate Bank (down 1.87%), Indian Overseas Bank (down 1.81%), Bank of India (down 1.47%), Union Bank of India (down 1.4%), IDBI Bank (down 1.2%), Punjab National Bank (down 0.91%), and State Bank of India (down 0.65%) edged lower. Bank of Baroda (up 0.21%), United Bank of India (up 0.35%) and Corporation Bank (up 1.39%) edged higher.
Among private sector banks, ICICI Bank (down 1.57%), HDFC Bank (down 0.47%), and Federal Bank (down 0.67%) edged lower. Canara Bank (up 0.09%), Yes Bank (up 0.53%), Axis Bank (up 0.25%) and Kotak Mahindra Bank (up 1.52%) edged higher.
IndusInd Bank dropped in volatile trade as the bank's gross non-performing assets (NPAs) rose on absolute basis in Q3 December 2014. The stock shed 1.06% at Rs 822.55. The stock hit high of Rs 849 and low of Rs 818. IndusInd Bank's net profit jumped 28.91% to Rs 447.19 crore on 16.15% rise in total income to Rs 3047.70 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 13 January 2015.
The bank's provisions and contingencies declined 22.31% to Rs 98.01 crore in Q3 December 2014 over Q3 December 2013. The bank's provisions and contingencies surged on a sequential basis. Provisions and contingencies jumped 33.89% to Rs 98.01 crore in Q3 December 2014 over Q2 September 2013. The provision coverage ratio (PCR) stood at 70.04% as on 31 December 2014. The ratio of Current and Savings Accounts (CASA) deposits stood at 34% as on 31 December 2014, higher than 33.9% as on 30 September 2014.
On absolute basis, gross non-performing assets (NPAs) edged up to Rs 672.66 crore as on 31 December 2014, from Rs 654.54 crore as on 30 September 2014 and Rs 625.84 crore as on 31 December 2013. The ratio of gross NPAs to gross advances declined to 1.05% as on 31 December 2014, from 1.08% as on 30 September 2014 and 1.18% as on 31 December 2013. The ratio of net NAPs to net advances declined to 0.32% as 31 December 2014, from 0.33% as on 30 September 2014. The ratio of net NAPs to net advances edged up on year-on-year basis. The ratio of net NAPs to net advances edged up to 0.32% as 31 December 2014, from 0.31% as on 31 December 2013.
IndusInd Bank's net interest income (NII) rose 18% to Rs 861.37 crore in Q3 December 2014 over Q3 December 2013. Net interest margin (NIM) edged up to 3.67% in Q3 December 2014, from 3.65% in Q3 December 2013. The NIM was 3.63% in Q2 September 2014. The bank's core fee income jumped 22% to Rs 522.27 crore in Q3 December 2014 over Q3 December 2013.
As on 31 December 2014, the total advances were at Rs 63847 crore and total deposits were at Rs 69376 crore, showing a year-on-year growth of 21% and 23% respectively.
Realty stocks declined. Unitech (down 5.29%), Indiabulls Real Estate (down 4.14%), Housing Development & Infrastructure (down 2.89%), DLF (down 2.52%), Oberoi Realty (down 1.28%), Godrej Properties (down 0.94%), and Prestige Estates Projects (down 1.08%) edged lower. Sobha (up 0.33%) and Anant Raj (up 1.91%) edged higher.
Shares of oil exploration & production (E&P) firms declined along with fall in crude oil prices. Shares of paint makers gained on lower crude oil prices. ONGC (down 2.37%), Cairn India (down 0.57%) and Oil India (down 3.05%) dropped. Lower crude oil prices would result in lower realizations from crude sales for oil exploration firms.
Reliance Industries (RIL) declined 0.88% at Rs 843.05. The company after market hours yesterday, 12 January 2015, in a clarification with regard to news item titled Reliance announces Rs 1 lakh cr investment in 12-18 months said that this is just a reiteration of the statement, inter alia made by its Chairman in his speech at the fortieth annual general meeting of the company held on 18 June 2014. He said at that time In the past 37 years, we invested Rs 240000 crore and in this current three years' investment cycle, we will be investing over Rs 180000 crore. We are currently at the mid-point of the largest investment programee in Reliance's history. The next two years, 2014-15 and 2015-16, will see us focussed on executing and progressively bringing these projects on-stream in petrochemicals, refining, retail, and Jio.
RIL further said that the Chairman has mentioned clearly at the Summit inauguration function referred to in the subject newspaper report that the company will invest over Rs 100000 crore in the next 12-18 months in contributing to the Make-In-India and Digital India initiatives.
Reliance Communications dropped 1.86% at Rs 76.45. With respect to news titled "RCOM to Outsource Call Centre Ops to Vertex India," Reliance Communications clarified during market hours that as a part of the regular and ongoing business activities and in order to render specialised and customised services efficiently to its customers, the company has outsourced its captive call centre services to Vertex India vide long term contract between the parties.
Hindustan Unilever (HUL) fell 1.33% at Rs 884.70 on profit booking. The stock reversed gains after hitting record high of Rs 908.30 in intraday trade.
Hindalco Industries rose 0.26% at Rs 151.45 after US based aluminum major Alcoa Inc reported better-than-expected Q4 earnings yesterday, 12 January 2015. Lightweight metals leader Alcoa reported net income of $159 million, or $0.11 per share in Q4 December 2014, compared with a net loss of $2.3 billion or $2.19 per share in Q4 December 2013. Revenue rose 14% to $6.4 billion in Q4 December 2014 over Q4 December 2013. Higher sales in Alcoa's value-add businesses, favorable metal prices and energy sales drove the company's year-over-year revenue increase.
Hindalco Industries' US subsidiary Novelis Inc., the world's largest producer of rolled aluminium products, competes with Alcoa in the North American markets.
Shares of paint makers were in demand as global crude oil prices slumped. Berger Paints India (up 1.43%), Shalimar Paints (up 4%), and Kansai Nerolac Paints (up 1.13%) edged higher. Falling crude oil prices augur well for paints makers. Titanium dioxide is a key raw material for paint companies and is derived from crude oil.
Asian Paints gained 3.19% at Rs 833.10. The company after market hours yesterday, 12 January 2015, in a clarification with regard to news item titled Asian Paints in talks for Rs 2500-crore project in South, said the company has been exploring the possibility of setting up an additional paint manufacturing plant and that the management has been talks with some of the southern states of the country since the last four to five years. It usually takes three to four years for the company for setting up a greenfield plant including acquisition of land, obtaining all necessary environmental and other clearances and approvals, Asian Paints said. The final capacity of the proposed paint plant will be dependent on the location and area of the land allotted to the company, it added. The cost of setting up a manufacturing plant of a capacity in the range of 4 lakh KL to 6 lakh KL, subject to various factors would be approximately Rs 2000 crore to Rs 2500 crore, Asian Paints said. Since the company has not been allotted the required land and pending other approvals, as may be required for setting up the said manufacturing facility, the company has not made any announcements in this regard, Asian Paints said. As soon as the required land is allotted to the company and necesssary approvals for setting up of the paint plant are granted by the concerned state government, the company will promptly make appropriate disclosures including the location and the details of the investment, it added.
As regards the company's greenfield venture in Indonesia is concerned, the company vide its letters dated 22 August 2014 and 1 October 2014 had made announcements that the company had made an application for investment approval for setting up a greenfield paint manufacturing facility in Indonesia. The Badan Koordinasi Penanaman Modal (BKPM), the investment coordinating Board of Republic of Indonesia had approved the investment application and issued a principal license for setting up manufacturing facility. The company had further informed that the further steps to be taken for setting up the greenfield operations in Indonesia will be subject to necessary regulatory and other approvals, Asian Paints said.
Regarding the company's proposed acquisition of 51% stake in Kadisco Paint and Adhesive Industry Share Company, Ethiopia, (Kadisco), the company had made announcement dated 22 October 2014 wherein the company had stated that, Berger International, Singapore (indirect subsidiary of the company) had signed the share purchase agreement and other definitive agreements and documents to acquire 51% stake in Kadisco. The company had further stated that the acquisition would be subject to regulatory approvals, Asian Paints said.
Coal India rose 0.77% at Rs 361.45 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 0.93%), Tata Power Company (down 1.37%), NHPC (down 0.54%), JSW Energy (down 2.03%), Reliance Power (down 1.8%), Adani Power (down 2.78%), Reliance Infrastructure (down 1.84%), and GVK Power & Infrastructure (down 3.06%) 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 4.16%), ACC (up 2.71%), Ambuja Cements (up 0.94%), and Shree Cement (up 0.44%) edged higher.
Grasim Industries rose 3.17% at Rs 3,544.10. Grasim Industries has exposure to cement industry through its subsidiary UltraTech Cement.
IT stocks edged higher. Tech Mahindra (up 0.26%), HCL Technologies (up 0.5%), MphasiS (up 1.44%), MindTree (up 3.4%), and Wipro (up 1.18%) edged higher. TCS (down 0.55%) edged lower.
Shares of Infosys fell 1.3% at Rs 2,087.25 on profit booking. The stock had gained 7.1% in the preceding two sessions after the company reported stronger-than-expected Q3 December 2014 results. 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 result was announced on 9 January 2015.
At the time of announcement of the third quarter results, Infosys said on that day 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.
JSW Steel fell 1% to Rs 992.35. The stock hit a high of Rs 1,014.40 and a low of Rs 988. 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.
Sesa Sterlite fell 0.68% at Rs 204.45. The stock hit a high of Rs 208.75 and a low of Rs 203.25. The company after market hours yesterday, 12 January 2015 in a clarification with regard to news item titled "HZL, Sesa Sterlite and Cairn India to be merged with the Vedanta Group said that the media reports were on the basis of an interview by the Press Trust of India with its Chairman Emeritus, Mr.Anil Agarwal/Chairman, Vedanta Resources Plc. Sesa Sterlite said its management evaluates various strategies from time to time to create value for shareholders. The company added that at this point of time there is no definite proposal for any merger and no such event or negotiations have taken place. Sesa Sterlite said it has simplified its corporate structure and it will always explore ways that can further help simplify the corporate structure of the group. At various points, the company receive solicited and unsolicited comments from various experts on restructuring and related questions, Sesa Sterlite said. If there is any such event which is considered by the Board of Directors of the company, as in the past, the company will make appropriate announcement to the stock exchange, Sesa Sterlite said.
Jet Airways (India) surged 5.12% at Rs 464.25 on slide in crude oil prices. The stock hit 52-week high of Rs 471.25 in intraday trade. Jet fuel constitutes over 40% of an airline's operating costs. Prices of jet fuel are directly linked to crude oil prices. PSU OMCs review jet fuel prices on the last day of the month based on the average imported oil price in the preceding fortnight.
Key indices snapped a three-day winning streak today, 13 January 2015. The Sensex had risen 676.45 points or 2.51% in three trading sessions to settle at 27,585.27 yesterday, 12 January 2015, from a recent low of 26,908.82 on 7 January 2015. The Sensex has lost 73.69 points or 0.26% in this month so far (till 13 January 2015). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,396.64 points or 4.84%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,462.61 points or 37.38%.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.13, compared with its close of 62.165 during the previous trading session.
Brent crude oil futures extended losses after a steep slide yesterday, 12 January 2015, after the United Arab Emirates's oil minister Suhail Mohamed Faraj al-Mazrouei said the Organization of the Petroleum Exporting Countries will stick to its decision to keep oil output unchanged, regardless of current oil prices. Brent for February settlement was off $1.27 a barrel at $46.16 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 $1.30 a barrel at $47.40 a barrel.
Reserve Bank of India (RBI) Deputy Governor Dr. Urjit Patel yesterday, 12 January 2015, said that the dramatic fall in oil prices is a boon for India. It saves, on an annualised basis, around $50 billion, roughly, which is one-third of India's annual gross POL imports of about $160 billion, Patel said in a speech at an event in Mumbai. The welcome development enhances disposable income (which will increase consumer demand for other goods and services), reduce input cost for businesses (which will increase margins and help to enthuse investment demand) and aid government finances by reducing the energy subsidy burden in the budget, Patel said.
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, data released by the government yesterday, 12 January 2015, showed. 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.
European stocks edged higher in volatile trade today, 13 January 2015, as gains in retailers outweighed a decline in energy companies. Key benchmark indices in France, Germany and UK were up 0.55% to 0.81%.
UK's inflation dropped by worse than expected 0.5% in December.
Meanwhile, 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.
Asian stocks were mixed today, 13 January 2015. Key benchmark indices in China, Hong Kong, Indonesia and Taiwan were up by 0.22% to 0.79%. Key benchmark indices in Japan, Singapore and South Korea were off 0.17% 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 66 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.
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