Key benchmark indices edged lower in volatile trade after the stock market regulator Securities and Exchange Board of India (Sebi) imposed restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs). Index heavyweight ITC led the decline. The barometer index, S&P BSE Sensex, was provisionally off 124.11 points or 0.44% at 28,375.43. ITC dropped after Health Minister J P Nadda said in a written reply in the Rajya Sabha that the Ministry of Health & Family Welfare has accepted recommendations of a committee that has suggested prohibition on sale of loose or single stick of cigarettes.
The market breadth indicating the overall health of the market was weak with more than two losers for every gainer on BSE. A number of side counters dropped. The BSE Mid-Cap index was off 1.45% and the BSE Small-Cap index was off 2.32%. The decline in these two indices was much sharper than the Sensex's slide in percentage terms.
Sebi in a circular issued yesterday, 24 November 2014, said that the conditions imposed on issue of ODIs will come into effect immediately. Existing ODI positions which are not in conformity with the latest conditions imposed on issue of ODIs, can be continued till the expiry of the ODI contract.
Cement stocks dropped. Realty stocks slumped. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade.
The government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the month-long winter session of parliament which began yesterday, 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.
Key indices snapped three-day winning streak today, 25 November 2014.
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In overseas markets, European stocks edged higher after the latest data confirmed a recovery in Germany's economy in the third quarter. Asian stocks were mixed. In the US yesterday, 24 November 2014, the S&P 500 and Dow Jones Industrial Average, both, attained another record closing high, on hopes that China will take further accommodative monetary policy action if needed.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures reversed intraday losses as markets brace for the highly anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC) later this week.
Indian stocks may remain volatile in near future 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 on Thursday, 27 November 2014.
As per provisional figures, the S&P BSE Sensex was down 124.11 points or 0.44% at 28,375.43. The index slumped 282.04 points at the day's low of 28,217.50 in mid-afternoon trade, its lowest level since 21 November 2014. The index rose 41.68 points at the day's high of 28,541.22 in early trade.
The CNX Nifty was down 60.50 points or 0.79% at 8,463.10, as per provisional figures. The index hit a low of 8,429.45 in intraday trade, its lowest level since 21 November 2014. The index hit a high of 8,535.35 in intraday trade, a record high for the index.
The market breadth indicating the overall health of the market was weak with more than two losers for every gainer on BSE. 2,156 shares fell and 837 shares rose. A total of 93 shares were unchanged.
The BSE Mid-Cap index was off 145.56 points or 1.43% at 10,057.41. The BSE Small-Cap index was off 262.87 points or 2.32% at 11,055.96. The decline in these two indices was much sharper than the Sensex's slide in percentage terms.
The total turnover on BSE amounted to Rs 7263 crore, sharply higher than Rs 3411.18 crore on Monday, 24 November 2014.
Cement stocks dropped. Shree Cement (down 0.01%), ACC (down 2.02%), Ambuja Cements (down 0.15%), and UltraTech Cement (down 1.96%) declined.
Grasim Industries declined 1.69%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Realty stocks slumped. Anant Raj (down 6.55%), D B Realty (down 4.14%), DLF (down 3.91%), Housing Development & Infrastructure (HDIL) (down 4.44%) and Unitech (down 8.38%) declined.
Index heavyweight Reliance Industries (RIL) rose 0.79% to Rs 992.35. The stock was volatile. The stock hit high of Rs 994.90 and low of Rs 974.
Index heavyweight and cigarette maker ITC dropped 4.99% to Rs 355.70. The stock hit high of Rs 378.80 and low of Rs 348.60. Health Minister J P Nadda stated in a written reply in the Rajya Sabha today, 25 November 2014, that the Ministry of Health & Family Welfare has accepted recommendations of a committee that has suggested prohibition on sale of loose or single stick of cigarettes, increasing the minimum legal age for sale of tobacco products, increasing the fine or penalty amounts for violation of certain provisions of the Cigarettes and Other Tobacco Products (Prohibition of Advertisement and Regulation of Trade and Commerce, Production, Supply and Distribution) Act, 2003 (COTPA), as well as making such offences cognizable. In this regard, a draft note for Cabinet has been circulated for Inter-Ministerial consultation.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 407.42 crore yesterday, 24 November 2014, as per provisional data.
Stock market regulator Securities and Exchange Board of India (Sebi) has imposed restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs). In a circular issued yesterday, 24 November 2014, Sebi said that a foreign portfolio investor (FPI) shall issue ODIs only to those ODI subscribers who are resident of a country whose securities market regulator is a signatory to International Organization of Securities Commission's Multilateral Memorandum of Understanding or a signatory to bilateral Memorandum of Understanding with Sebi. If the ODI applicant is a bank, the central bank of the country must be a member of Bank for International Settlements. An FPI cannot issue ODIs if the applicant is not resident in a country identified in the public statement of Financial Action Task Force as a jurisdiction having a strategic Anti-Money Laundering or Combating the Financing of Terrorism deficiencies to which counter measures apply or a jurisdiction that has not made sufficient progress in addressing the deficiencies or has not committed to an action plan developed with the Financial Action Task Force to address the deficiencies.
An FPI shall issue ODIs only to those subscribers which do not have opaque structures, Sebi said in a circular. Sebi also said that the investment restrictions which are applicable to FPIs will also apply to ODI subscribers.
Existing ODI positions which are not in conformity with these latest conditions imposed on issue of ODIs, can be continued till the expiry of the ODI contract. No additional issuances/renewal/rollover of such positions shall be permitted, Sebi said. The conditions imposed on issue of ODIs will come into effect immediately, Sebi said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.905, compared with its close of 61.945 during the previous trading session.
Brent crude oil futures reversed intraday losses as markets brace for the highly anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC) later this week. Brent crude for January settlement was up 29 cents at $79.97 a barrel. The contract had fallen 68 cents to finish at $79.68 a barrel during the previous trading session.
Oil ministers from the OPEC are scheduled to meet in Vienna on Thursday, 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.
The government will announce data on gross domestic product (GDP) for Q2 September 2014 at 17:30 IST on Friday, 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.
European stocks edged higher today, 25 November 2014, after the latest data confirmed a recovery in Germany's economy in the third quarter. Key benchmark indices in UK, Germany and France were up 0.09% to 0.73%.
Germany's gross domestic product rose 0.1% in Q3 September 2014, the Federal Statistics Office said today, 25 November 2014, confirming initial estimate. The expansion marks a rebound from the prior three months, when GDP fell 0.1%
Asian stocks were mixed. Key benchmark indices in Singapore, South Korea and Japan were up 0.08% to 0.29%. Key benchmark indices in Indonesia, Hong Kong and Taiwan were off 0.07% to 0.44%.
In mainland China, the Shanghai Composite rose 1.37%. China's central bank reportedly cut the yield for a key short-term money rate today, 25 November 2014, for the fourth time this year, as regulators step up efforts to reduce funding pressure on Chinese companies. The reduction of the yield on the 14-day bond repurchase agreement (repo) to 3.4%, from 3.6%, follows a surprise cut to benchmark lending rates on Friday, 21 November 2014, to support the cooling economy, and follows similar moves in October and July as growth wobbled. The People's Bank of China cut one-year benchmark lending rates by 40 basis points to 5.6% late on Friday, and at the same time increased the maximum payable deposit rate to 3.3% from 3.2%.
In Japan, the minutes of the Bank of Japan's (BOJ) Oct. 31 monetary policy meeting released today, 25 November 2014, showed BOJ Governor Haruhiko Kuroda proposed the additional stimulus for the Japanese economy. In a speech, Kuroda today, 25 November 2014, stressed the bank's readiness to expand stimulus further to meet its price goal.
Trading in US index futures indicated that the Dow could gain 21 poits at the opening bell today, 25 November 2014. The S&P 500 and Dow Jones Industrial Average, both, attained another record closing high yesterday, 24 November 2014, on hopes that China will take further accommodative monetary policy action if needed. Small-caps rallied and outperformed their large counterparts, in a sign that the current bull market has not run out of steam yet. Trading volumes were lower than usual, as the week is cut short by Thanksgiving holiday on Thursday, 27 November 2014. Trading on Friday, 28 November 2014, will be a half-day session.
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