After erasing almost entire intraday losses, key indices edged lower again in early afternoon trade. The losses for the benchmark indices were tiny. The barometer index, the S&P BSE Sensex, was currently off 23.29 points or 0.08% at 28,362.90. The market breadth indicating the overall health of the market was positive. Global crude oil prices hit four-year low. Fall in global crude oil prices augur well for India as the country imports about 80% of its crude oil requirement.
Shares of IT major Infosys and FMCG giant Hindustan Unilever hit record high. Shares of tyre makers rose on lower natural rubber prices and on expectations of increase in demand for tyres from passenger vehicles makers. Shares of public sector oil marketing companies rose as crude oil prices fell.
Indian government's decision last month to decontrol diesel prices 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. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
Meanwhile, Canada's Fairfax Financial Holdings and Fairfax India Holdings Corporation yesterday, 26 November 2014, announced that Fairfax India has filed a preliminary prospectus with the securities regulatory authorities of all provinces and territories in Canada in respect of its initial public of subordinate voting shares. Fairfax India is an investment holding company whose investment objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, India.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 181.46 crore yesterday, 26 November 2014, as per provisional data.
Earlier, key benchmark indices had edged higher amid initial volatility.
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In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures hit four-year low amid speculation that OPEC will refrain from cutting output when ministers meet in Vienna today, 27 November 2014.
In overseas markets, Asian stocks were mixed. In the US yesterday, 26 November 2014, the S&P 500 and Dow Jones Industrial Average, both, attained record closing high after registering small gains as telecoms and technology shares rose.
Indian stocks may remain volatile today, 27 November 2014, as traders roll over positions in the futures & options (F&O) segment from November 2014 series to December 2014 series. The November 2014 derivatives contracts expire today, 27 November 2014.
At 12:17 IST, the S&P BSE Sensex was down 23.29 points or 0.08% at 28,362.90. The index rose 46.26 points at the day's high of 28,432.45 in morning trade. The index fell 43.08 points at the day's low of 28,343.11 in morning trade.
The CNX Nifty was down 3.15 points or 0.04% at 8,472.60. The index hit a high of 8,489.25 in intraday trade. The index hit a low of 8,465.30 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,436 shares gained and 1,114 shares fell. A total of 112 shares were unchanged.
The BSE Mid-Cap index was up 49.89 points or 0.49% at 10,169.84. The BSE Small-Cap index was up 63.63 points or 0.57% at 11,243.87. Both these indcies outperformed the Sensex.
Shares of public sector oil marketing companies rose as global crude oil prices fell. BPCL (up 2.28%), Indian Oil Corporation (up 1.65%) and HPCL (up 2.95%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
Tata Power Company gained 0.39%. The company said during market hours today, 27 November 2014, that the Appellate Tribunal for Electricity (APTEL) has delivered the judgement in Appeal no.331 of 2014 along with other connected appeals today, 27 November 2014. The company is studying the order, particularly in line with APTEL's direction for the need of uniformity in the treatment of Regulatory Assets (RA) by the two power distribution utilities. Tata Power said that according to its understanding of the judgement, APTEL has accepted Tata Power's methodology wherein RA is part of energy charges, and invalidated charging of RA as separate item in the other utility's invoicing, Tata Power said.
Infosys rose 1.36% to Rs 4,356 after hitting record high of Rs 4,362.80 in intraday trade.
FMCG major Hindustan Unilever (HUL) rose 1.8% to Rs 782.20 after hitting record high of Rs 786.90 in intraday trade.
Shares of tyre makers rose on lower natural rubber prices and on expectations of increase in demand for tyres from passenger vehicles makers. JK Tyre & Industries (up 3.37%), MRF (up 1.27%), Goodyear India (up 0.43%), and CEAT (up 1.06%) gained. Apollo Tyres fell 1.03%.
Natural rubber prices are currently near multi-year low. Natural rubber is a key raw material in tyre manufacturing.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.87, compared with its close of 61.855 during the previous trading session.
Brent crude oil futures hit four-year low amid speculation that OPEC will refrain from cutting output when ministers meet in Vienna today, 27 November 2014. Brent for January settlement was off $1.14 a barrel at $76.61 a barrel. The contract hit a low $76.28 a barrel in intraday trade, its lowest level since September 2010. Brent for January settlement had fallen 58 cents a barrel to finish at $77.75 a barrel during the previous trading session.
Oil ministers from the OPEC are scheduled to meet in Vienna today, 27 November 2014, to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015. OPEC, which pumps about 40% of the world's crude, has maintained its official quota at 30 million barrels a day since January 2012. Saudi Arabia's Oil Minister Ali al-Naimi said yesterday, 26 November 2014, that he expects the oil market to stabilize itself eventually, hinting he wouldn't push for a cut in OPEC's production targets.
Meanwhile, Canada's Fairfax Financial Holdings (Fairfax Financial) and Fairfax India Holdings Corporation (Fairfax India) yesterday, 26 November 2014, announced that Fairfax India has filed a preliminary prospectus with the securities regulatory authorities of all provinces and territories in Canada in respect of its initial public of subordinate voting shares. Fairfax India is an investment holding company whose investment objective is to achieve long-term capital appreciation, while preserving capital, by investing in public and private equity securities and debt instruments in India and Indian businesses or other businesses with customers, suppliers or business primarily conducted in, or dependent on, India. Generally, Indian Investments will be made with a view to acquiring control or significant influence positions, Fairfax Financial Holdings said in a statement. Fairfax Financial has taken the initiative to create Fairfax India, according to the statement.
In addition to the public offering of subordinate voting shares, and as a condition to the closing of the offering, Fairfax India will issue to Fairfax Financial, either directly or to one or more of Fairfax Financial's subsidiaries, 30 million multiple voting shares of the company, on a private placement basis, for an aggregate purchase price of $300 million. Further, cornerstone investors have committed to subscribe for, on a private placement basis, approximately $200 million of subordinate voting shares. "We are excited to launch, for the first time in our nearly 30-year history, a new company sponsored and promoted by Fairfax Financial - a company focused purely on the potential of India and Indian businesses," said Prem Watsa, Chairman of Fairfax Financial and Fairfax India. "We believe India will be transformed by the business-friendly government of Prime Minister Narendra Modi - and Fairfax India, with our resources and expertise in India developed over the last 15 years, will be well positioned to make excellent significant long-term investments in businesses with experienced and ethical management teams," Watsa said. Watsa, who hails from Hyderabad, founded Fairfax in 1985.
The Indian government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the winter session of parliament which began on 24 November 2014. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.
The government will announce data on gross domestic product (GDP) for Q2 September 2014 at 17:30 IST tomorrow, 28 November 2014. India's GDP grew 5.7% in Q1 June 2014 over the corresponding period of the previous year.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 2 December 2014. The central bank 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 annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
Asian stocks were mixed today, 27 November 2014. Key benchmark indices in China, South Korea, Indonesia and Taiwan were up 0.05% to 0.47%. Key benchmark indices in Singapore, Hong Kong and Japan were off 0.11% to 0.78%.
Industrial profits in China fell the most in two years, underscoring the need for looser monetary conditions as the world's second-largest economy slows. Total profits of China's industrial enterprises fell 2.1% from a year earlier in October, the National Bureau of Statistics said today, 27 November 2014, in Beijing. That compares with September's 0.4% increase and is the biggest drop since August 2012, based on previously reported data.
In the US, the S&P 500 and Dow Jones Industrial Average ended slightly higher yesterday, 26 November 2014, scoring their 47th and 30th record closes this year, respectively. Trading on Wall Street was thin with many participants taking off early for the Thanksgiving holiday. Market reaction to mostly disappointing economic reports was muted, as much of the data were shrugged off as volatile and in some cases backward looking.
Durable goods orders, a measure of business spending plans, fell for a second straight month in October, consumer spending rose less than market expectations in October and new home sales also unexpectedly fell in October. A separate report from the Labor Department showed initial claims for state unemployment benefits rose above the 300,000 threshold last week for the first time since early September.
The US stock market is closed today, 27 November 2014, for Thanksgiving Day holiday. The market will reopen tomorrow, 28 November 2014, for a shortened session ending at 1 p.m.
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