After erasing a lion's portion of intraday losses, key benchmark indices weakend gains in afternoon trade. The market breadth indicating the overall health of the market was negative. The BSE Small-Cap index slipped into the red from green. The BSE Mid-Cap index continued to languish in negative zone. The barometer index, the S&P BSE Sensex, was currently off 105.67 points or 0.36% at 29,453.51.
Asian Paints dropped after Q3 results. Shares of pharmaceutical companies were mixed. Oriental Bank of Commerce dropped after the state-run bank reported weak Q3 result.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1723.17 crore yesterday, 28 January 2015, as per provisional data.
Indian stocks may remain volatile during the remaining part of the trading session today, 29 January 2015, as traders roll over positions in the futures & options (F&O) segment from the near month January 2015 series to February 2015 series. The near month January 2015 derivatives contracts expire today, 29 January 2015.
In the foreign exchange market, the rupee edged lower against the dollar as the US central bank reiterated its commitment to raising interest rates in the United States some time in the latter part of the year after the conclusion of a two-day meeting on monetary policy review yesterday, 28 January 2015.
Brent crude oil futures edged higher.
In overseas markets, Asian stocks declined after the US Federal Reserve unexpectedly lifted its view on the economy, signalling that the US central bank remains firmly on track with plans to raise interest rates this year. US stocks edged lower yesterday, 28 January 2015, after the US Federal Reserve unexpectedly lifted its view on the economy, signalling that the US central bank remains firmly on track with plans to raise interest rates this year.
At 13:22 IST, the S&P BSE Sensex was down 105.67 points or 0.36% at 29,453.51. The index lost 180.88 points at the day's low of 29,378.30 in early trade, its lowest level since 27 January 2015. The index fell 19.77 points at the day's high of 29,539.41 in early afternoon trade.
The CNX Nifty was down 38.10 points or 0.43% at 8,876.20. The index hit a low of 8,861.25 in intraday trade, its lowest level since 27 January 2015. The index hit a high of 8,907.85 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,434 shares dropped and 1,240 shares rose. A total of 119 shares were unchanged.
The BSE Mid-Cap index was off 24.10 points or 0.22% at 10,784.34. The BSE Small-Cap index was down 1.84 points or 0.02% at 11,367.27. The fall in both these indices was lower than the Sensex's decline in percentage terms.
Asian Paints fell 4.31% to Rs 871.10 after the company announced Q3 results during trading hours. The stock hit a high of Rs 922.80 and low of Rs 868.10 in intraday trade so far. On a consolidated basis, the company's net profit rose 11.79% to Rs 368.18 crore on 5.82% increase in total income to Rs 3684.64 crore in Q3 December 2014 over Q3 December 2013. Income from operations rose 5.8% to Rs 3652.60 crore in Q3 December 2014 over Q3 December 2013.
Separately Asian Paints announced that PT Asian Paints Indonesia has been incorporated in Indonesia as a wholly owned subsidiary of Berger International, Singapore (an indirect subsidiary of the company). Further steps to be taken for setting up the manufacturing plant with a capacity of 24,550 ton in Indonesia will be subject to necessary regulatory and other approvals, Asian Paints said.
Further, a second application for investment approval was made with Badan Koordinasi Penanaman Modal ("BKPM"), the Investment Coordinating Board of Republic of Indonesia, for incorporating a second company in Indonesia which will engage in import of finished goods including decorative paints, other coatings and related items for sale in Indonesia. BKPM has issued a principal license approving the said investment application, Asian Paints said in a statement.
Coal India fell 3.14% to Rs 372. The stock hit a high of Rs 374 and low of Rs 364.60 so far in intraday trade. The government after market hours yesterday, 28 January 2015, announced divestment of its stake in the company. The government has offered to sell 31.58 crore equity shares, or 5% equity, of face value of Rs 10 each with an option to sell an additional upto 31.58 crore equity shares, or 5% equity, of face value of Rs 10 each of Coal India, collectively aggregating to 10% of the total paid up equity share capital of Coal India through a sale on the separate window provided by the stock exchanges for this purpose. The sale shall commence on 30 January 2015 at 9:15 IST and shall close on the same day at 15:30 IST. The floor price for the OFS will be announced after market hours today, 29 January 2015.
The government has reserved 20% of the size of the sale for retail investors. Retail investors will be offered a discount of 5% to the bid price entered by them in accordance with the Sebi OFS circulars. A minimum of 25% of the sale shares will be reserved for mutual funds and insurance companies.
Meanwhile, with respect to news titled "CIL Stake Sale : Unions Threaten to 'Go Slow' Now," Coal India clarified during trading hours that it is neither aware of the strike nor any notice has been received from any unions to this effect.
Shares of pharmaceutical companies were mixed. Aurobindo Pharma (up 3.19%), Lupin (up 2.98%), Dr. Reddy's Laboratories (up 2.79%), Wockhardt (up 2.73%), GlaxoSmithKline Pharmaceuticals (up 2.67%), Divi's Laboratories (up 1.71%), Cadila Healthcare (up 0.82%) and Glenmark Pharmaceuticals (up 0.14%) edged higher.
IPCA Laboratories (down 0.22%), Piramal Enterprises (down 0.63%), Strides Arcolab (down 0.98%), Sun Pharmaceutical Industries (down 1.09% to Rs 899.40), Ranbaxy Laboratories (down 1.16%) and Cipla (down 1.01%), edged lower.
Oriental Bank of Commerce (OBC) dropped 8% to Rs 287.95 after weak Q3 results. The stock hit a high of Rs 315 and low of Rs 286.65 so far in intraday trade. The state-run bank reported 91.27% fall in net profit to Rs 19.56 crore on 7.79% rise in total income to Rs 5458.79 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 29 January 2015.
OBC said that it had sold financial assets for a consideration of Rs 195.20 crore to asset reconstruction companies on cash and security receipts basis during the half year ended 30 September 2014 and booked a gain of Rs 146.08 crore the difference between aggregate consideration and aggregate value (net of provisions). During the course of discussions on draft preliminary risk assessment report 2013-14, the Reserve Bank of India (RBI) observed that only cash component of the sale consideration is eligible to be booked as profit. Based on observation of RBI, bank has reduced the book value of security receipts by Rs 137.38 crore during Q3 December 2014, OBC said.
OBC's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.43% as on 31 December 2014 compared with 4.74% as on 30 September 2014 and 3.87% as on 31 December 2013. The ratio of net NPAs to net advances stood at 3.68% as on 31 December 2014 compared with 3.29% as on 30 September 2014 and 2.91% as on 31 December 2013.
The bank's provisions and contingencies jumped 57.75% to Rs 885.14 crore in Q3 December 2014 over Q3 December 2013. Provision coverage ratio as at 31 December 2014 stood at 57.39%.
OBC's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 11.26% as on 31 December 2014 as against 10.88% as on 30 September 2014 and 11% as on 31 December 2013.
In the foreign exchange market, the rupee edged lower against the dollar as the US central bank reiterated its commitment to raising interest rates in the United States some time in the latter part of the year after the conclusion of a two-day meeting on monetary policy review yesterday, 28 January 2015. The partially convertible rupee was hovering at 61.4750, compared with its close of 61.41 during the previous trading session.
Brent crude oil futures edged higher. Brent for March settlement was up 13 cents at $48.60 a barrel. The contract had declined $1.13 a barrel or 2.27% to settle at $48.47 a barrel during the previous trading session.
Meanwhile, the Union Cabinet yesterday, 28 January 2015, decided that the Government of India (GoI) will not file Special Leave Petition (SLP) before the Supreme Court of India against a Bombay High Court order dated 10 October 2014 which had quashed a transfer pricing-related tax demand on Vodafone Group Plc. The Union Cabinet also decided that the GoI will accept orders of courts/IT AT/DRP in cases of other taxpayers where similar transfer pricing adjustments have been made and the courts/IT AT/DRP have decided/decide in favour of the taxpayer. These decisions will bring greater clarity and predictability for taxpayers as well as tax authorities, thereby facilitating tax compliance and reducing litigation on similar issues, according to a government statement. This will also set at rest the uncertainty prevailing in the minds of foreign investors and taxpayers in respect of possible transfer pricing adjustments in India on transactions related to issuance of shares and thereby improve the investment climate in the country, the statement said. The Union Cabinet came to this view as this is a transaction on the capital account and there is no income to be chargeable to tax. So applying any pricing formula is irrelevant.
Meanwhile, the Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged at 7.75% after a monetary policy review next week. The sixth bi-monthly monetary review from the RBI is scheduled on Tuesday, 3 February 2015. The central bank may likely focus on the details of the upcoming Union Budget 2015-16 which is scheduled on 28 February 2015, before taking a call on further monetary policy easing. The RBI surprised financial markets by announcing a cut in the repo rate by 25 basis points in an unscheduled monetary policy review on 15 January 2015, citing easing of inflationary pressures in the economy. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from 4.4% in November 2014. Over the long term, the RBI aims to restrict consumer price inflation to 4%, within a two-per-cent band.
Asian stocks declined today, 29 January 2015, after the US Federal Reserve unexpectedly lifted its view on the economy, signalling that the US central bank remains firmly on track with plans to raise interest rates this year. Key benchmark indices in China, Taiwan, Hong Kong, Japan, Indonesia and South Korea fell by 0.22% to 1.31%. In Singapore, the Straits Times index rose 0.16%.
Japanese retail sales rose 0.2% in December from a year earlier, marking the sixth straight month of increase, the government said today, 29 January 2015. The figures, released by the Ministry of Economy, Trade and Industry, highlighted that consumer demand continues to rebound after the national sales tax increased to 8% from 5% in April.
Trading in US index futures indicated that the Dow could rise 52 points at the opening bell today, 29 January 2015. US stocks ended yesterday's choppy trading session sharply lower after the Federal Reserve's policy-making committee reiterated it plans to remain patient and watch the data as it decides when to raise interest rates.
The US Federal Reserve yesterday, 28 January 2015 said the US economy was expanding "at a solid pace" with strong job gains in a signal that the central bank remains on track with its plans to raise interest rates this year. The Fed repeated it would be "patient" in deciding when to raise benchmark borrowing costs from zero, though it also acknowledged a decline in certain inflation measures.
After a two-day meeting of the Federal Open Market Committee, policymakers struck an upbeat tone on the US economy's prospects and held to their view that energy-led weakness in inflation would dissipate. "Economic activity has been expanding at a solid pace," the Fed said in a statement that marked an upgrade to its prior assessment of a "moderate pace" of growth. "Labor market conditions have improved further, with strong job gains and a lower unemployment rate."
The Commerce Department releases its first estimate of fourth-quarter GDP tomorrow, 30 January 2015.
In Europe, Greece's Prime Minister Alexis Tsipras reportedly said yesterday, 28 January 2015, that he will push for debt relief from the country's international creditors.
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