Metal stocks led an initial slide for key benchmark indices. At 9:25 IST, the barometer index, the S&P BSE Sensex, was off 69.22 points or 0.27% at 26,048.63. The Nifty 50 index was down 23.40 points or 0.3% at 7,907.95. The market breadth indicating the overall health of the market was positive. On BSE, 723 shares rose and 602 shares fell. A total of 54 shares were unchanged. The BSE Mid-Cap index was currently off 0.07%. The BSE Small-Cap index was currently off 0.04%. The decline in both these indices was lower in percentage terms than the Sensex's fall.
In overseas stock markets, Asian stocks declined after hawkish comments from Federal Reserve Chairwoman Janet Yellen reinforced the case for an interest rate hike during the middle of this month. US stocks fell yesterday, 2 December 2015, as Yellen signalled a readiness to hike interest rates and US data indicated a solid labour market. Yellen said she was looking forward to a US rate hike that will be seen as a testament to the economy's recovery from recession, although she did not indicate if she still expected a hike would be warranted at the Fed's last policy meeting of the year on 15-16 December 2015.
Investors in emerging markets, including India are worried that once the Fed starts raising interest rates, it will drain liquidity from global emerging markets and redirect it to developed economies. The Fed has held its benchmark short-term interest rate near zero since December 2008. The ultra-loose monetary policy in the US has encouraged heavy investment in higher-yielding emerging markets.
Wipro gained 0.93% after the company announced that it has signed an agreement with Landesbank Baden-Wuerttemberg (LBBW) to acquire 100% equity stake in cellent AG for 73.5 million euros. cellent AG is a leading IT consulting and software services company and has been offering holistic innovative IT solutions and services to its customers in the DACH region of Germany, Austria and Switzerland for the past 14 years. cellent AG clocked revenue of 87 million euros in the year ended 31 December 2014. This acquisition will provide Wipro with significant scale and prime customer relationships, especially in the manufacturing and automotive domains, which are key industry sectors in the DACH region. The acquisition is expected to be concluded in Q4 March 2016.
Aditya Birla Nuvo (ABNL) rose 1.37% after the company announced that Sun Life Financial (Sun Life) will increase its stake in the life insurance joint venture, Birla Sun Life Insurance (BSLI) from 26% to 49% at an investment of Rs 1664 crore, subject to the requisite approvals. The announcement was made after market hours yesterday, 2 December 2015. ABNL has entered into an agreement with the Canadian insurance major Sun Life to sell approximately 43.70 crore equity shares constituting 23% of the issued and paid up equity share capital of BSLI. On completion of the transaction, Sun Life's stake in BSLI will increase from current 26% to 49%, while ABNL will continue to hold the controlling stake at 51%. The stake sale values BSLI at Rs 7235 crore.
The transaction is expected to be completed by the end of year ending 31 March 2016 (FY 2016), subject to the customary closing conditions and the requisite statutory and regulatory approvals in India and Canada, ABNL said
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