Pharma, cement and PSU bank stocks edged higher as key benchmark indices extended intraday gains in afternoon trade. The barometer index, the S&P BSE Sensex, was currently above the psychological 29,000 level mark. Earlier, the Sensex had fallen below that psychological level soon after surpassing that mark in early afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in more than a week. Shares of banking giant State Bank of India (SBI) surged in volatile after the bank announced strong Q3 results. The Sensex was currently up 223.84 points or 0.78% at 29,028.94. The market breadth indicating the overall health of the market was positive.
Asian stocks edged higher after a breakthrough in talks with Ukraine yesterday, 12 February 2015, and on a friendlier tone between negotiators in Europe over Greece's debt troubles. Brent crude oil futures extended previous session's rally.
Bank stocks edged higher after SBI's strong Q3 results. Punjab National Bank advanced after raising Rs 1500 crore funds. FMCG stocks advanced. ACC and Hero MotoCorp extended previous session's gains triggered by reports that their weightings have been increased in the MSCI Indexes after a quarterly review.
On the macro front, the rate of inflation based on the consumer price index (CPI) accelerated to 5.11% in January 2015 from 4.28% in December 2014 after the statistics ministry revised the base year for the calculation of the index to 2012 from 2010. Meanwhile, growth in industrial production decelerated to 1.7% in December 2014 from 3.9% in November 2014. Both CPI and industrial production data was announced after market hours yesterday, 12 February 2015.
Prime Minister Narendra Modi yesterday, 12 February 2015, said that the government is committed to provide predictable and stable tax regime and policies. Finance Minister Arun Jaitley yesterday, 12 February 2015, said that the government is determined to pursue economic reforms despite a defeat for the Bharatiya Janata Party (BJP) in assembly election in Delhi early this week.
Foreign portfolio investors sold shares worth a net Rs 406.28 crore yesterday, 12 February 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 705.53 crore yesterday, 12 February 2015, as per provisional data.
In overseas markets, Asian stocks edged higher on news of a ceasefire accord in Ukraine, while Sweden's surprise move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished risk appetite. US stocks climbed yesterday, 12 February 2015, with major benchmarks nearing record highs, buoyed by a truce deal in Ukraine and strong quarterly earnings reports.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher as news of deeper industry spending cuts and a sinking US dollar revived buying. Global crude oil prices have witnessed high volatility over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. However, gains in rupee against the dollar will mitigate the negative impact of higher crude oil price. Gains in local currency will reduce the cost of imports. India imports about 80% of its crude oil requirements.
At 13:15 IST, the S&P BSE Sensex was up 223.84 points or 0.78% at 29,028.94. The index jumped 268.60 points at the day's high of 29,073.70 in afternoon trade, its highest level since 5 February 2015. The index gained 30.60 points at the day's low of 28,835.70 in early trade.
The CNX Nifty was up 70.75 points or 0.81% at 8,782.30. The index hit a high of 8,795.65 in intraday trade, its highest level since 5 February 2015. The index hit a low of 8,729.65 in intraday trade.
The BSE Mid-Cap index was up 78.33 points or 0.73% at 10,740.44. The BSE Small-Cap index was up 74.37 points or 0.66% at 11,274.52. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,405 shares rose and 1,210 shares fell. A total of 97 shares were unchanged.
State Bank of India (SBI) jumped 6.31% to Rs 302.35 after strong Q3 results. The stock was volatile. The scrip hit high of Rs 303.40 and low of Rs 285.50 so far during the day. The bank's net profit rose 30.24% to Rs 2910.06 crore on 12.07% rise in total income to Rs 43783.98 crore in Q3 December 2014 over Q3 December 2013. The bank announced Q3 results during market hours today, 13 February 2015.
SBI's ratio of net non-performing assets (NPAs) to net advances stood at 2.8% as on 31 December 2014, compared with 2.73% as on 30 September 2014 and 3.24% as on 31 December 2013. The bank's ratio of gross NPAs to gross advances stood at 4.9% as on 31 December 2014, compared with 4.89% as on 30 September 2014 and 5.73% as on 31 December 2013.
Provisions and contingencies rose 26.15% to Rs 5234.91 crore in Q3 December 2014 over Q3 December 2013. State Bank of India's provision coverage ratio stood at 63.56% as on 31 December 2014.
Shares of many other banks edged higher after SBI's strong Q3 results. Bank of India (up 2.75%), Canara Bank (up 2.55%), Bank of Baroda (up 1.66%), ICICI Bank (up 1.05%), and IndusInd Bank (up 0.32%) edged higher. Yes Bank (down 0.36%), Kotak Mahindra Bank (down 0.52%), and HDFC Bank (down 0.67%) edged lower.
Axis Bank rose 1.17% at Rs 586. Axis Bank after market hours yesterday, 12 February 2015, said that the bank has allotted unsecured redeemable non convertible subordinated debentures (Basel - III Compliant Tier II Debentures) (Series - 22) of Rs 10 lakh each for cash at par aggregating to Rs 850 crore.
Punjab National Bank (PNB) rose 1.41% at Rs 168.70. PNB after market hours yesterday, 12 February 2015, said that it has raised Rs 1500 crore through Basel III compliant perpetual debt instruments in the nature of debentures for inclusion in additional Tier I capital at an annual coupon of 9.15% per annum with call option at the end of 10 years through private placement.
ACC and Hero MotoCorp extended previous session's gains triggered by reports that their weightings have been increased in the MSCI Indexes after a quarterly review. Hero MotoCorp rose 1.48% at Rs 2,854.45.
Cement major ACC rose 2.58% at Rs 1,634.
FMCG shares advanced. Emami (up 2.79%), Colgate-Palmolive (India) (up 2.97%), Nestle India (up 1.94%), Britannia Industries (up 1.29%), Marico (up 0.85%), and Hindustan Unilever (up 0.73%), and Dabur India (up 0.22%) edged higher. Godrej Consumer Products (down 1.09%) edged lower.
NHPC rose 0.24% at Rs 20.80. The stock hit a high of Rs 20.90 and a low of Rs 20.45 so far during the day. NHPC during market hours today, 13 February 2015, said that its board of directors at a meeting held on 3 February 2015 accorded its approval to the proposal for the award of EPC contract for the development of 50 MW wind power project at Lakmana, Jaisalmer District in Rajasthan along with its comprehensive O&M for 10 years to INOX Wind, Noida.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.145, compared with its close of 62.305 during the previous trading session.
Brent crude oil futures edged higher as news of deeper industry spending cuts and a sinking US dollar revived buying. Brent for April settlement was up 87 cents at $60.15 a barrel. The contract had surged $3.36 a barrel to settle at $59.28 a barrel during the previous trading session.
On macro front, the rate of inflation based on the consumer price index (CPI) rose 5.11% in January 2015 compared with a 4.28% gain in December 2014. The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has revised the base year of the CPI from 2010 to 2012. Meanwhile, growth in industrial production decelerated to 1.7% in December 2014 from 3.9% in November 2014. Both CPI and industrial production data was announced after market hours yesterday, 12 February 2015.
The rate of inflation based on the wholesale price index (WPI) is seen accelerating to 0.4% in January 2015 from 0.1% in December 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil WPI data for January 2015 at 12.10 noon on 16 February 2015.
Prime Minister Narendra Modi yesterday, 12 February 2015, said that the government is committed to provide predictable and stable tax regime and policies. Modi made these comments during his meeting with Treasury Secretary of the United States Jacob Lew, accompanied by the Vice Chairman of the US Federal Reserve, Stanley Fischer. The two are visiting India for the India-US Economic and Financial Partnership dialogue which is co-chaired by the Finance Minister of India.
Finance Minister Arun Jaitley yesterday, 12 February 2015, said that the government is determined to pursue economic reforms despite a defeat for the Bharatiya Janata Party (BJP) in assembly election in Delhi early this week. Jaitley also reportedly said at a news conference after talks with his US counterpart, Treasury Secretary Jack Lew that India's economy is poised to take off at a much faster pace. The BJP was trounced in assembly election held in Delhi last week. The Aam Aadmi Party won 67 of 70 seats. The BJP won a mere 3 seats.
The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 in Parliament on 28 February 2015. Analysts will scrutinize measures in the Budget for financing infrastructure projects as well as the government's own capital expenditure on infrastructure for the year ahead. This is the first full fledged Budget of the Narendra Modi government and analysts will look for a roadmap for economic growth for the next few years.
Changes in rates of dividend distribution tax, capital gains tax on sale of shares, Securities Transaction Tax (STT) and Minimum Alternate Tax (MAT), if any, will be closely watched. The dividend distribution tax is currently at 15%. The minimum alternate tax is currently at 18.5% of book profits. Short term capital gains tax on sale of shares is currently at 15% while there is zero long capital gains tax on sale of shares held for a period of more than one year.
The upcoming Budget session of the parliament assumes utmost importance as the government intends to replace the ordinances it had promulgated after the conclusion of the winter session of the parliament with Bills and get them cleared by both Houses of Parliament during the budget session. The Narendra Modi government promulgated a slew of ordinances after the last session of Parliament. Some of the key ordinances include raising the FDI in the insurance sector from 26% to 49%, e-auctioning of coal mines and amendment to the Land Acquisition Act.
Asian stocks edged higher today, 13 February 2015, on news of a ceasefire accord in Ukraine, while Sweden's surprise move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished risk appetite. Key indices in China, Hong Kong, Singapore, Taiwan, Indonesia, and South Korea were up 0.03% to 0.98%. Japan's Nikkei Average fell 0.37%.
Trading in US index futures indicated that the Dow could gain 9 points at the opening bell today, 13 February 2015. US stocks climbed on Thursday, 12 February 2015, with major benchmarks nearing record highs, buoyed by a truce deal in Ukraine and strong quarterly earnings reports.
In economic news, jobless claims in the week ended Feb. 7 rose 25,000 to 304,000, the Labor Department said. Retail sales fell in January for the second month in a row, fueling worries that the drop in gasoline prices isn't translating into more consumer spending. Sales fell 0.8% last month to $439.77 billion, the Commerce Department said.
Meanwhile in Europe, a standoff between Greece and its European creditors on Greece's bailout program eased somewhat after Greece made an about-face yesterday, 12 February 2015, agreeing to talk to the "troika" of international lenders.
Germany's Gross Domestic Product (GDP) rose by 0.7% in the fourth quarter of 2014, its fastest expansion since the first quarter of last year, latest data showed today, 13 February 2015. Destatis, the German statistics body, said that the country's economy gained momentum towards the end of 2014.
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