With the stock market regulator Securities and Exchange Board of India (Sebi) imposing restrictions on issue of Offshore Derivative Instruments (ODIs) by foreign portfolio investors (FPIs), key equity benchmark indices edged lower. The market was volatile. The barometer index, S&P BSE Sensex, lost 161.49 points or 0.57% to settle at 28,338.05. 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. The BSE Mid-Cap index fell 1.43% and the BSE Small-Cap index fell 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. Telecom shares declined after the Telecom Regulatory Authority of India (Trai) in its response to the telecom department's request for clarification over pricing of various bands of spectrum said that auctions are not the only way to allot spectrum.
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.
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.
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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.
The S&P BSE Sensex fell 161.49 points or 0.57% to settle at 28,338.05, its lowest closing level since 21 November 2014. The index slumped 282.04 points at the day's low of 28,217.50 in mid-afternoon trade. The index rose 41.68 points at the day's high of 28,541.22 in early trade.
The CNX Nifty fell 67.05 points or 0.79% to settle at 8,463.10, its lowest closing level since 20 November 2014. The index hit a low of 8,429.45 in intraday trade. The index hit a high of 8,535.35 at the onset of the trading session, 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. 2,173 shares fell and 823 shares rose. A total of 90 shares were unchanged.
The BSE Mid-Cap index fell 145.56 points or 1.43% to settle at 10,057.41. The BSE Small-Cap index fell 262.87 points or 2.32% to settle 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.
The S&P BSE Realty index (down 3.35%), the S&P BSE FMCG index (down 2.53%), the S&P BSE Power index (down 1.62%), the S&P BSE Consumer Durables index (down 1.45%), the S&P BSE Metal index (down 1.38%), the S&P BSE Bankex (down 1.33%), the S&P BSE Capital Goods index (down 1.08%) and the S&P BSE Auto index (down 1.06%), underperformed the Sensex.
The S&P BSE Teck index (down 0.14%), the S&P BSE IT index (down 0.12%), the S&P BSE Healthcare index (up 0.23%) and the S&P BSE Oil & Gas index (up 0.57%) outperformed the Sensex.
GMR Infrastructure (GIL) rose 0.50%. A GIL led consortium has emerged as lowest bidder in international competitive bidding for two packages of Eastern Dedicated Freight Corridor project involving construction of 417 km long double track railway line from Mughalsarai to New Bhaupur (near Kanpur) on EPC basis, the company said after market hours today, 25 November 2014. The Eastern Dedicated Freight Corridor extends from Ludhiana to Dankuni near Kolkata. Dedicated Freight Corridor Corporation of India (DFCCIL) received five bids for the project wherein the GIL led consortium quoted a price of Rs 5080 crore. The award of work will be subject to approval by DFCCIL.
As part of Asset Light Asset Right strategy, GMR Group is not required to provide any equity for the project since it is to be implemented on EPC basis. The project is financed by World Bank through DFCCIL. The project is to be completed in 45 months after award. GMR Infrastructure is currently implementing 2 railway projects for Rail Vikas Nigam (RVNL).
Bank stocks dropped. Among public sector banks, Syndicate Bank (down 5.24%), IDBI Bank (down 4.95%), Andhra Bank (down 4.56%), Bank of India (down 4.18%), Canara Bank (down 4.05%), Allahabad Bank (down 3.89%), Union Bank of India (down 3.74%), Punjab & Sind Bank (down 3.46%), Bank of Maharashtra (down 3.3%), Jammu & Kashmir Bank (down 3.11%), United Bank of India (down 2.81%), UCO Bank (down 2.78%), Bank of Baroda (down 2.72%), Dena Bank (down 2.57%), Central Bank (down 1.99%), State Bank of Mysore (down 1.85%), State Bank of Bikaner (down 1.68%), Vijaya Bank (down 1.67%), Indian Bank (down 1.23%), State Bank of India (down 1.15%) and Corporation Bank (down 0.69%) edged lower.
Punjab National Bank declined 2.23%. The bank said during market hours today, 25 November 2014, that it has fixed 19 December 2014 as record date for 5-for-1 stock split.
Among other private sector banks, Yes Bank (down 2.88%), City Union Bank (down 2.55%), IndusInd Bank (down 2.12%), ICICI Bank (down 2.02%), Axis Bank (down 1.65%) and Federal Bank (down 1.47%), edged lower. HDFC Bank was up 0.84%.
Kotak Mahindra Bank fell 3.31%. The bank announced during trading hours today, 25 November 2014, that it has received approval from Reserve Bank of India (RBI) to form a subsidiary to enter the general insurance business. The bank has already received an in-principle approval from Insurance Regulatory and Development Authority (IRDA) for incorporation of a general insurance company. Kotak will now be required to apply and complete the registration process with IRDA to act as a general insurance company.
Mahesh Balasubramanian has been named as Chief Executive Officer of the new venture. Balasubramanian is currently Executive Vice President and Co-Head, Branch Banking, Kotak Mahindra Bank. He was part of the integral team that helped grow the consumer bank and its branch network, Kotak Mahindra Bank said in a statement.
ING Vysya Bank fell 3.29%. According to media reports, the Securities and Exchange Board of India (Sebi) is looking into unusual trading activity in the shares of Kotak Mahindra Bank and ING Vysya Bank on the eve of the announcement of the merger between these two private sector banks last week. Shares of Kotak Mahindra Bank had surged 7.28% to settle at Rs 1,157.05 on Thursday, 20 November 2014. On that day, shares of ING Vysya Bank had surged 7.15% to settle at Rs 814.20. Kotak Mahindra Bank and ING Vysya Bank after trading hours on Thursday, 20 November 2014, announced merger of ING Vysya Bank with Kotak Mahindra Bank. ING Vysya shareholders will receive 725 shares of Kotak for every 1,000 shares held in ING Vysya as per the swap ratio for merger.
Zee Entertainment Enterprises rose 1.58% to Rs 391.40. The stock hit 52-week high of Rs 401.60 in intraday trade.
Cement stocks dropped. UltraTech Cement (down 1.92%), ACC (down 1.82%), Ambuja Cements (down 0.65%) and Shree Cement (down 0.01%) declined.
Grasim Industries declined 1.69%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Realty stocks slumped. Unitech (down 7.87%), Indiabulls Real Estate (down 6.8%), Anant Raj (down 6.55%), Housing Development and Infrastructure (HDIL) (down 4.87%), Oberoi Realty (down 4.8%), D B Realty (down 3.76%), DLF (down 3.64%), Peninsula Land (down 1.48%), Godrej Properties (down 1.22%) and Parsvnath Developers (down 0.81%) edged lower.
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.
L&T declined 1.93%. With respect to press release dated 24 November 2014 titled L&T Technology Services closes acquisition of Dell's Engineering Services Business", the company has clarified on request of certain queries from the stock exchanges that L&T Technologies Services intends to acquire Dell's Engineering Services business located at US and India, subject to regulatory approvals. The acquisition price is $12.5 million, subject to customary net asset adjustments at the time of closing. There are no further disclosures.
Havells India declined 1.03%. The company said during market hours that in the annual surveillance conducted by ICRA of the credit rating assigned by it to the FD (Fixed Deposit) programme of the company, ICRA has upgraded the rating to MAAA (pronounced as M triple A) from MAA (pronounced as M double A) earlier. MAAA is the highest-credit-quality rating assigned by ICRA.
Telecom shares declined after regulator Telecom Regulatory Authority of India (Trai) in its response to the telecom department's request for clarification over pricing of various bands of spectrum said that auctions are not the only way to allot spectrum. Reliance Communications (down 4.48%), MTNL (down 4.36%), Idea Cellular (down 2.94%) and Tata Teleservices (Maharashtra) (down 1.79%) edged lower.
One option could be to allot airwaves at a nominal price with tough rollout obligations, Trai suggested. Trai termed the telecom department's view of the sector 'myopic,' referring to the DoT's moves to sell a limited amount of 2G spectrum upfront in February and hold separate auctions for 3G later.
The regulator, meanwhile, stuck to its recommendations on the auction starting levels - Rs 3004 crore per unit of 900 MHz in 18 telecom circles and Rs 2138 crore per MHz across 20 circles for 1800 MHz airwaves - and strongly reiterated its proposal that the department hold a simultaneous multi-band auction of frequencies, citing the small amount of airwaves - that too from operators currently using them - which will drive up bidding levels and leave the industry bleeding. It once again called for exploring the extended GSM band to add to the pool of airwaves.
Bharti Airtel rose 1.13% after the company said it has entered into a definitive pact with American Tower Corporation for the sale of over 4,800 of Bharti Airtel's communications towers in Nigeria. The announcement was made after trading hours yesterday, 24 November 2014.
State Bank of India reported highest turnover of Rs 68.49 crore on BSE. Reliance Capital (Rs 53.76 crore), Bharat Forge (Rs 47.38 crore), Reliance Industries (Rs 40.36 crore) and ITC (Rs 38.37 crore), were the other turnover toppers on BSE in that order.
Unitech clocked highest volume of 90.12 lakh shares on BSE. Jaiprakash Associates (67.77 lakh shares), Jaiprakash Power Ventures (40.16 lakh shares), Reliance Power (32.30 lakh shares) and Alok Industries (25.54 lakh shares), were the other volume toppers on BSE in that order.
Key indices snapped three-day winning streak today, 25 November 2014. The Sensex had jumped 466.69 points or 1.66% in three trading sessions to a record closing high of 28,499.54 on 24 November 2014, from a recent low of 28,032.85 on 19 November 2014. The Sensex has gained 472.22 points or 1.69% in this month so far (till 25 November 2014). The Sensex has gained 7,167.37 points or 33.86% in calendar year 2014 so far (till 25 November 2014). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,374.93 points or 41.95%. From a record high of 28,541.96 struck yesterday, 24 November 2014, the Sensex has fallen 203.91 points or 0.71%.
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 61.88, 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 47 cents at $80.15 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 0.12% to 0.87%.
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 20 points 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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