A bout of volatility was witnessed as key benchmark indices trimmed losses after extending intraday losses in early afternoon trade. The volatility on the domestic bourses materialized as global crude oil prices dropped further. Investors fear that the sharp slide in global crude oil prices over the past few months signals a weak global economy. The barometer index, the S&P BSE Sensex, was currently off 55.68 points or 0.2% at 27,402.70. The market breadth indicating the overall health of the market was positive.
Meanwhile, as per media reports, the government's revenue department is pushing the Income Tax department to include portfolio investors (FPIs) under the Minimum Alternate Tax (MAT) on their gains from stock market transactions. The Income Tax department reportedly issued show-cause notices to more than 35 foreign portfolio investors (FPIs) last month on why the concerned FPI isn't liable to pay MAT.
Shares of public sector banks advanced. Adani Enterprises rose after the company said it has signed a Memorandum of Understanding with SunEdison Inc., to establish a joint venture to build the largest, vertically integrated solar photovoltaic manufacturing facility in India with an investment of around $4 billion. Max India advanced after the company said that its board of directors has delegated authority to its Investment & Finance Committee, to examine options for corporate restructuring of the company.
Earlier, key indices had staged sharp recovery in morning trade after slipping into the red after a firm opening. The Sensex had hit its highest level in almost a week.
In overseas markets, Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. US stocks fell on Friday, 9 January 2015, after December's jobs report revealed a drop in wages.
In the foreign exchange market, the rupee edged higher against the dollar as a drop in US wages spurred speculation the US Federal Reserve will delay an increase in interest rates.
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Brent crude oil futures extended losses from the lowest level in more than 5-1/2 years after a prominent investment bank cut its oil-price projections for this year and the next. 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.
Foreign portfolio investors sold shares worth a net Rs 297.99 crore during the previous trading session on Friday, 9 January 2015, as per provisional data.
At 13:15 IST, the S&P BSE Sensex was down 55.68 points or 0.2% at 27,402.70. The index declined 134.64 points at the day's low of 27,323.74 in afternoon trade. The index rose 81.17 points at the day's high of 27,539.55 in early trade, its highest level since 6 January 2015.
The CNX Nifty was down 10.55 points or 0.13% at 8,273.95. The index hit a low of 8,245.60 in intraday trade. The index hit a high of 8,297.65 in intraday trade.
The BSE Mid-Cap index was up 43.21 points or 0.41% at 10,469.22. The BSE Small-Cap index was up 68.74 points or 0.61% at 11,266.94. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,498 shares advanced and 1,171 shares declined. A total of 111 shares were unchanged.
Shares of public sector banks advanced. Corporation Bank (up 4.02%), Syndicate Bank (up 2.75%), Bank of Baroda (2.06%), Allahabad Bank (up 2.41%), Union Bank of India (up 2.26%), IDBI Bank (up 2.07%), Oriental Bank of Commerce (up 1.89%), UCO Bank (up 1.86%), Punjab National Bank (up 1.65%), Andhra Bank (up 1.14%), Bank of India (up 1.21%), Dena Bank (up 0.91%), Canara Bank (up 0.93%), Indian Overseas Bank (up 0.75%), Central Bank of India (up 0.67%), and State Bank of India (up 0.56%) edged higher.
Reserve Bank of India (RBI) Deputy Governor R Gandhi reportedly said on Saturday, 10 January 2015 that dilution of government holding in PSBs may not be sufficient for meeting Basel III capital adequacy norms. Mr. Gandhi was quoted as saying that the PSBs would have to chart out a clear capital raising plan over the next five years.
Adani Enterprises rose 2.43% at Rs 518.40. The company during market hours today, 12 January 2015, said it has signed a memorandum of understanding (MoU) with Australian energy major Woodside Energy for cooperation for exploring business opportunities across a broad spectrum in the oil and gas sector in India, as part of the Vibrant Gujarat initiative. The two companies will jointly explore opportunities in sourcing of liquefied natural gas (LNG), supply and purchase arrangements for India, LNG marketing, investment in upstream activities such as Oil & Gas Exploration, Production & Liquefaction plants, knowledge sharing, training, joint technology studies, technology workshops and connecting local R&D institutions and universities with each other, Adani Enterprises said in a statement.
Separately, Adani Enterprises during market hours today, 12 January 2015, said it has signed an MoU with SunEdison Inc., a leading solar technology manufacturer and provider of solar energy services, to establish a joint venture (JV) to build the largest, vertically integrated solar photovoltaic manufacturing facility in India with an investment of around $4 billion. The facility will create enough solar panels to fuel substantial solar growth in India, furthering India's goals for clean, renewable energy independence, Adani Enterprises said in a statement.
Max India rose 1.3% at Rs 396.60. The company during market hours today, 12 January 2015 said that its baord of directors delegated authority to its Investment & Finance Committee, to examine options for corporate restructuring of the company.
United Spirits (USL) rose 7.52% at Rs 3,076 after minority shareholders of the company approved a proposal to make and sell brands owned by its parent Diageo Plc. The announcement was made after market hours on Friday, 9 January 2015. USL said it has received approval from minority shareholders for exclusive licence and distribution agreements with its parent Diageo, a proposal that had been defeated in a previous vote in November 2014. USL said last month that the agreement will help generate roughly Rs 700 crore in estimated sales in the first full year. The company also said it would share marketing and advertising expenses with Diageo's India unit, based on net sales. Diageo's India unit is expected to shut down following the closure of the deal.
In the foreign exchange market, the rupee edged higher against the dollar as a drop in US wages spurred speculation the US Federal Reserve will delay an increase in interest rates. The partially convertible rupee was hovering at 62.1850, compared with its close of 62.32 during the previous trading session.
Brent crude oil futures extended losses from the lowest level in more than 5-1/2 years after a prominent investment bank cut its oil-price projections for this year and the next. Brent for February settlement was off $1.06 a barrel to $49.05 a barrel. The contract had lost 85 cents to settle at $50.11 a barrel during the previous trading session on Friday, 9 January 2015, the lowest closing since April 2009. Brent for March settlement was off $1.43 a barrel at $49.87 a barrel.
India is expected to implement a common goods and services tax (GST) across the country in the course of next year, Finance Minister Arun Jaitley reportedly said today, 12 January 2015. Jaitley presented the GST bill to parliament in December, which needs the support of two-thirds of its members as well as ratification by state legislatures.
Meanwhile, Finance ministry's chief economic adviser Arvind Subramanian reportedly said today, 12 January 2015, India's growth slowdown has bottomed out and the pace of economic expansion is expected to accelerate.
On the macro front, data to be released today, 12 January 2015, 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 today, 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 today, 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 Wednesday, 14 January 2015.
The seventh annual Vibrant Gujarat Summit, a global investor conference was inaugurated by Prime Minister Narendra Modi on Sunday, 11 January 2015. The Summit ends tomorrow, 13 January 2015.
Most Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. Key indices in South Korea, Indonesia, Singapore, China and Taiwan were off 0.19% to 1.65%. Key indices in Hong Kong and Singapore were up 0.03% to 0.38%. Japanese stock market remained close for a holiday.
Trading in US index futures indicated that the Dow could gain 9 points at the opening bell today, 12 January 2015. US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.
US job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labor market has yet to give much of a boost to workers. Nonfarm payrolls increased by 252,000 last month after an upwardly revised jump of 353,000 in November, the Labor Department said. The jobless rate fell 0.2 percentage point to a 6-1/2-year low of 5.6%, but that was mainly because people left the labor force.
The drop in labor participation and a surprise five-cent, or 0.2 percent, decrease in average hourly earnings, which nearly erased November's gains, took some shine off the otherwise upbeat report.
Meanwhile in Europe, 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.
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