After a weak opening, key benchmark indices bounced back in morning trade. The barometer index, the S&P BSE Sensex, was currently off 12.86 points or 0.05% at 27,337.82. The market breadth indicating the overall health of the market was negative. IT stocks declined after IT major TCS after trading hours on Friday, 12 December 2014, said that the company's revenue from retail, manufacturing and hi-tech may be impacted adversely by holidays in Q3 December 2014.
Foreign portfolio investors sold shares worth a net Rs 864.96 crore during the previous trading session on Friday, 12 December 2014, as per provisional data.
The Sensex and the 50-unit CNX Nifty, had, both hit 6-1/2-week at the onset of the trading session on weak Asian stocks.
On the macro front, industrial production declined 4.2% in October 2014, compared with 2.8% (revised) increase in September 2014, due to a 2.5% decline in the manufacturing sector in October 2014. Meanwhle, the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. Data on both industrial production and CPI was released after trading hours on Friday, 12 December 2014.
In overseas markets, Asian stocks edged lower after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar.
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Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week.
At 10:20 IST, the S&P BSE Sensex was down 12.86 points or 0.05% at 27,337.82. The index lost 245.64 points at the day's low of 27,105.04 in early trade, its lowest level since 30 October 2014. The index rose 8.86 points at the day's high of 27,359.54 in morning trade.
The CNX Nifty was almost unchanged at 8,223.75. The index hit a low of 8,152.50 in intraday trade, its lowest level since 30 October 2014. The index hit a high of 8,231.60 in intraday trade.
The BSE Mid-Cap index was up 11.50 points or 0.11% at 10,120.10. The BSE Small-Cap index was almost unchanged at 11,068.02. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,009 shares fell and 925 shares rose. A total of 72 shares were unchanged.
TCS dropped 3.16%. TCS in its business update for Q3 December 2014 issued after trading hours on Friday, 12 December 2014, said that currency fluctuations will have a marginal positive impact on the company's earnings before interest and tax (EBIT) in Q3 December 2014. The target EBIT margin band for Q3 December 2014 remains unchanged, TCS said. There will be adverse currency impact of 20 basis points (bps) on constant currency revenue in rupee terms in Q3 December 2014. There will be adverse currency impact of 220 bps on constant currency revenue in dollar terms in Q3 December 2014. TCS said that revenue in Q3 December 2014 is expected to be in-line with the seasonal trends. Retail, manufacturing and Hi-Tech verticals are likely to see impact of holidays and furloughs. The BFSI vertical continues to be impacted by weakness in insurance and products. Telecom and smaller verticals are expected to grow better than the company average. Demand environment in North America is on expected lines, adjusted for seasonal weakness. TCS expects business in Europe to grow better than average while the business in UK remains weak due to seasonality and impact of insurance. TCS said that the strength in the IT infrastructure services vertical continues.
Among other IT stocks, HCL Technologies (down 1.62%), Infosys (down 0.92%), Tech Mahindra (down 2.94%) and Wipro (down 1.91%) declined.
ING Vysya Bank rose 2.42%. Kotak Mahindra Bank gained 2.33%. ING Vysya Bank during market hours today, 15 December 2014, said that in accordance with the terms of the proposed merger and as assured by Kotak Mahindra Bank in its public statement, Kotak would respect and honour all employee-related contractual commitments of ING Vysya Bank as agreed upon in the merger deal. ING Vysya Bank further said it will abide by its obligations to make appropriate disclosures as and when such disclosures are necessitated by decisions taken by the bank.
Kotak and ING Vysya Bank on 20 November 2014 had approved an all-stock amalgamation of ING Vysya Bank with Kotak Mahindra Bank.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar. The partially convertible rupee was hovering at 62.4575, compared with its close of 62.29 during the previous trading session.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week. Brent for January settlement was up 65 cents at $62.50 a barrel. The contract had lost $1.83 a barrel or 2.9% to settle at $61.85 during the previous trading session on Friday, 12 December 2014, the lowest closing level since July 2009. Brent for February settlement was up 64 cents to 62.40 a barrel.
Index of industrial production (IIP) declined, at a sharpest pace in three-years, contracting 4.2% in October 2014 compared with 2.8% (revised) increase in September 2014. The manufacturing sector's output dipped to 2.5% in October 2014, recording largest decline in last five-and-half years. The decline in the industrial production was entirely contributed by the manufacturing sector. Lesser number of working days in October 2014 mainly led to sharp decline in manufacturing sectors output.
The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. The corresponding provisional inflation rates for rural area were 4.1% and urban area also 4.7% as against 5.5% and 5.6% for October 2014.
The annual rate of inflation based on the wholesale price index (WPI) is seen easing further to 1.2% in November 2014, from 1.77% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the inflation data based on wholesale price index (WPI) for November 2014 at 12.15 noon today, 15 December 2014.
Meanwhile, the Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
The Lok Sabha on Friday, 12 December 2014, passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year. The challenge for the government now will be to find support for the bill in the Rajya Sabha where it's in a minority.
Asian stocks edged lower today, 15 December 2014, after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns. Key indices in China, Hong Kong, Singapore, Indonesia, South Korea, Hong Kong and Taiwan were off 0.38% to 1.06%.
Japanese Prime Minister Shinzo Abe's coalition cruised to a big election win on Sunday, 14 December 2014, ensuring he will stick to reflationary economic policies and a muscular security stance, but record low turnout pointed to broad dissatisfaction with his performance.
Confidence of Japan's large manufacturers declined in the fourth quarter as a recession offset a boost from a weaker yen, underlining the economic challenges facing Prime Minister Shinzo Abe after his election win. The Tankan's big manufacturer index slipped to 12 in December from 13 in September Bank of Japan today, 15 December 2014.
Meanwhile, large parts of central Sydney were in lockdown today, 15 December 2014, after at least one gunman took hostages in a cafe and placed an Islamic flag in the window, sparking concerns a terrorist attack was under way. Authorities sealed off surrounding streets, evacuated people from buildings, and suspended several rail routes into and out of the city after the incident began around 9:45 a.m. at the Lindt Chocolate Cafin Martin Place in the heart of the business district.
Trading in US index futures indicated that the Dow could gain 63 points at the opening bell today, 15 December 2014. US stocks sank on Friday, 12 December 2014, as oil prices continued to slide. The US Senate on Saturday, 12 December 2014, passed a $1.1 trillion spending bill that lifts the threat of a government shutdown as Congress attempts to wrap up a two-year legislative session marked by bitter partisanship and few major accomplishments. The Senate's 56-40 vote sends the measure to President Barack Obama, who is expected to sign it into law before federal spending authority expires at midnight.
A two-day meeting of Federal Open Market Committee (FOMC) to discuss monetary policy review starts tomorrow, 16 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy. It remains to be seen whether Federal Reserve officials would signal a rate hike by dropping their assurance that rates will stay low for a considerable time.
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