Volatility ruled the roost as key benchmark indices trimmed gains after a strong intraday rebound in afternoon trade. IT major and index heavyweight Infosys had led a rebound in key benchmark indices in afternoon trade after the company's stronger-than-expected Q3 December 2014 results. While the barometer index, the S&P BSE Sensex, was a tad lower, the 50-unit CNX Nifty was a tad higher for the day. The Sensex was currently off 3.82 points or 0.01% at 27,270.89. The market breadth indicating the overall health of the market was negative. European stocks dropped as data showed Germany's economic recovery is slowing. Asian stocks were mixed.
Auto stocks declined. Tech Mahindra advanced after the company said it has signed a definitive agreement to acquire SOFGEN Holdings, a niche consulting and services company with worldwide presence specializing in private/wealth, commercial and retail banking solutions. State Bank of India dropped amid volatility.
Foreign portfolio investors sold shares worth a net Rs 466.78 crore yesterday, 8 January 2015, as per provisional data.
Meanwhile, Finance Minister Arun Jaitley yesterday, 8 January 2015, said that domestic policies to achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the Indian economy.
In overseas markets, European stocks dropped as data showed Germany's economic recovery is slowing. Asian stocks were mixed. US stocks surged yesterday, 8 January 2015, as two days of steady oil prices along with dovish comments by a Federal Reserve member helped further fuel a buying frenzy which begun on Wednesday 7 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures edged higher in volatile trade.
At 14:15 IST, the S&P BSE Sensex was down 3.82 points or 0.01% at 27,270.89. The index declined 155.08 points at the day's low of 27,119.63 in early afternoon trade. The index surged 232.96 points at the day's high of 27,507.67 in early trade, its highest level since 6 January 2015.
The CNX Nifty was up 2.85 points or 0.03% at 8,237.45. The index hit a low of 8,190.80 in intraday trade. The index hit a high of 8,303.30 in intraday trade, its highest level since 6 January 2015.
The BSE Mid-Cap index was off 29.73 points or 0.29% at 10,390.90. The BSE Small-Cap index was down 3.04 points or 0.03% at 11,182.84. The decline in both the indices was higher than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,554 shares declined and 1,215 shares advanced. A total of 114 shares were unchanged.
Infosys edged higher in volatile trade after the company reported stronger-than-expected Q3 December 2014 results. The stock was up 3.87% at Rs 2,051. The stock hit a high of Rs 2,108 and a low of Rs 1,914.10 so far during the day. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 5% to Rs 3250 crore on 3.4% increase in revenue to Rs 13796 crore in Q3 December 2014 over Q2 September 2014. The results hit the market at around 12:40 noon.
In a press release, Infosys said that the company has maintained its guidance of 7%-9% growth in revenue in dollar terms for the year ending March 2015 (FY 2015) based on exchange rates as on 30 September 2014. Due to cross currency headwinds, analysts were expecting Infosys' management to prune the company's revenue growth guidance in dollar terms for FY 2015 at the time of announcement of Q3 results today, 9 January 2015.
Commenting on the third quarter results, Dr. Vishal Sikka, CEO and Managing Director, Infosys said that the company's 'renew and new' strategy is being received well by its clients. U. B. Pravin Rao, Chief Operating Officer, Infosys said that there was broad-based volume growth, increased utilization and strong client additions by Infosys in the third quarter. He further said that the company has made 100% variable payout for Q3 and the company has seen a further decline in attrition as a result of multiple initiatives taken over the last few quarters. Infosys said that the 4.2% sequential volume growth registered by the company in Q3 December 2014 was its highest volume growth in 3 years. Infosys and its subsidiaries added 59 clients (gross) in Q3 December 2014.
Auto stocks declined. Maruti Suzuki India (down 0.98%), Eicher Motors (down 2.11%), and Mahindra & Mahindra (M&M) (down 0.73%) edged lower. Tata Motors (up 0.82%) edged higher.
Shares of two-wheeler firms also declined. Hero MotoCorp (down 0.53%), Bajaj Auto (down 3.92%), and TVS Motor Company (down 0.68%) edged lower.
Tech Mahindra rose 3.19% at Rs 2,649. The company during market hours today, 9 January 2015, announced that the company has signed a definitive agreement to acquire SOFGEN Holdings (SOFGEN), a niche consulting and services company with worldwide presence specializing in private/wealth, commercial and retail banking solutions. The transaction is expected to close by March 2015, subject to regulatory approvals, Tech Mahindra said.
Dr Reddys Laboratories rose 2.31% at Rs 3,136.10. In a clarification with regard to news item titled "Maharashtra suspends Dr.Reddy's Licences", Dr Reddys Laboratories during market hours today, 9 January 2015, said that the order relates only to the wholesale licence of the Clearing and Forwarding agent. Dr Reddy's said that in its opinion there has been no violation of any statute or regulation by the company and it has been in compliance. The product being investigated is not a drug and is neither manufactured nor marketed by Dr Reddy's, the company said. An interim stay has been granted today, 9 January 2015, by the High Court for two weeks, it added. The company said that it will approach the concerned state government minister on Monday, 12 January 2015, as directed by the court.
This is not expected to be material to the company's operations or consolidated results and hence it did not see a stock exchange notification necessary, Dr Reddy's said.
State Bank of India (SBI) fell 0.38% at Rs 303.55. The stock hit a high of Rs 308.40 and a low of Rs 302. In a clarification with regard to news item titled, "SBI to raise Rs 4000 cr for BPCL's petrochemical plan", SBI during market hours today, 9 January 2015, said that it has not received any mandate to raise any equity/listed securities for BPCL.
Shares of BPCL were up 0.32% at Rs 679.75.
Jindal Steel & Power (JSPL) fell 2.83% at Rs 153. The stock hit a high of Rs 161.35 and a low of Rs 152.25. In response to certain media reports regarding excess mining, JSPL during trading hours today, 9 January 2015, clarified that the company has followed the rules and regulations prevailing at that point of time and had done the mining within the prescribed approved limits of mine plan which was duly approved by Ministry of Coal, Government of India. JSPL has replied to the agency giving all the necessary details for the same, it added.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.3650, compared with its close of 62.68 during the previous trading session.
Brent crude futures edged higher in volatile trade. Brent for February settlement was up 2 cents at $50.98 a barrel. The contract had declined 19 cents to settle at $50.96 a barrel during the previous trading session.
Meanwhile, Finance Minister Arun Jaitley yesterday, 8 January 2015, said that domestic policies to achieve macro-economic balance and the on-going process of economic reforms would lend further strength to the recovery of the Indian economy. Jaitley made those comments during the Pre Budget Consultative Meeting with the representatives of Social Infrastructure, Human Capital and Development Groups. Jaitley said that emerging trends indicate the growth deceleration in India has bottomed-out. The Finance Minister said that significant downward trend in inflation has also been recorded in the second and third quarter of 2014-15. He said that external environment has also largely turned in India's favour.
On the macro front, data to be released in near future is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours on Monday, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.
The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours on Monday, 12 January 2015.
The Reserve Bank of India (RBI) 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 rate of inflation based the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon on 14 January 2015.
European shares edged lower today, 9 January 2015, after data showed Germany's economic recovery is slowing. Key indices in Germany, UK, and France were off 0.05% to 0.16%.
German industrial production declined fractionally in November, pulled down by declining activity in the energy sector, data released today, 9 January 2015 showed. According to regular data compiled by the economy ministry, industrial output eased by 0.1% in November, after increasing by a revised 0.6% in October. Manufacturing output increased by 0.3% while energy output was down by 2.4% and construction output declined by 0.6%, the ministry calculated.
Meanwhile, the uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
European Central Bank (ECB) President Mario Draghi yesterday, 8 January 2015, said the ECB's measures may include buying sovereign bonds. A drop in euro-area consumer prices in December has fueled speculation the ECB will bolster stimulus efforts.
Asian stocks were mixed today, 9 January 2015. Key indices in Japan, Hong Kong, South Korea, and Indonesia were up 0.18% to 1.05%. Key benchmark indices in Singapore, China and Taiwan were off 0.18% to 0.4%.
China's consumer inflation remained tepid in December, while prices at the factory gate continued to slide. The consumer price index rose 1.5% on year in December, up slightly from a 1.4% on-year rise in November, data from the National Bureau of Statistics showed today, 9 January 2015.
Trading in US index futures indicated that the Dow could fall 21 points at the opening bell today, 9 January 2015. US stocks surged yesterday, 8 January 2015, as two days of steady oil prices along with dovish comments by a Federal Reserve member helped further fuel a buying frenzy which begun on Wednesday 7 January 2015. Prospects for further central-bank easing in Europe are also whetting investors' appetite for riskier assets, namely equities.
The number of people who applied for US unemployment benefits at the end of the year fell slightly and remained below the key 300,000 mark for the 16th time in 17 weeks, offering more proof the labor market is still on an upswing.
Federal Reserve Bank of Chicago President Charles Evans on Wednesday, 7 January 2015, said that the Fed's target inflation rate might not be hit until 2018, and he doesn't advise a rate hike until 2016. Evans, who is a voting member of the Federal Open Market Committee this year, was speaking at an event sponsored by the University of Chicago.
The US Labor Department reports monthly payroll data for December 2014 later in global day today, 9 January 2015.
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