A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving away a lion's part of intraday gains in mid-afternoon trade. The market breadth, indicating the overall health of the market, was strong. The barometer index, the S&P BSE Sensex, was up 42.74 points or 0.2%, up close to 30 points from the day's low and off almost equal points from the day's high.
Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears. AXIS Bank rose after the government said that the Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of AXIS Bank for increase in foreign investment ceiling in the bank to 62% from 49%, subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank.
The market edged higher in early trade on firm Asian stocks. Key benchmark indices retained positive zone in morning trade. The Sensex extended gains and hit fresh intraday high in mid-morning trade. Key benchmark indices were off the day's high in early afternoon trade. The Sensex moved in a narrow range in positive zone in afternoon trade. A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving away a lion's part of intraday gains in mid-afternoon trade.
The market may remain volatile during the last one hour or so of the trading session as traders roll over positions in the futures & options (F&O) segment from the near month December 2013 series to January 2014 series. The near month December 2013 derivatives contracts expire today, 26 December 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 40.67 crore on Tuesday, 24 December 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was up 42.74 points or 0.2% to 21,075.45. The index gained 10.44 points at the day's low of 21,043.15 in mid-afternoon trade. The index rose 75.54 points at the day's high of 21,108.25 in mid-afternoon trade.
The CNX Nifty was up 12.85 points or 0.2% to 6,281.25. The index hit a high of 6,294.55 in intraday trade. The index hit a low of 6,270.05 in intraday trade.
The BSE Mid-Cap index rose 0.72% and the BSE Small-Cap index gained 1.36%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,564 shares gained and 853 shares fell. A total of 146 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined. Tata Power Company (up 3.07%), ONGC (up 2.21%) and Bharti Airtel (up 1.08%) gained.
AXIS Bank rose 2.18%. The government today, 26 December 2013, said that the Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of AXIS Bank for increase in foreign investment ceiling in the bank to 62% from 49%, subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of Rs 7250 crore (approximately) in the country, a government statement said.
The Reserve Bank of India had in November 2013 restricted further purchases of equity shares of AXIS Bank by foreigners after total foreign holding in the bank through Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)/American Depository Receipt (ADR)/Global Depository Receipts (GDRs) reached the trigger limit. RBI had allowed further purchases of AXIS Bank shares by foreigners only after obtaining the central bank's prior approval. FII holding in AXIS Bank stood at 43.37% as on 30 September 2013.
MTNL gained 3.55%. The Union Cabinet today, 26 December 2013, approved the erstwhile all categories (Group A, B, C & D) of employees of the government absorbed in MTNL and who have opted for combined service may be given similar treatment in the matter of payment of pensionary benefits as available to the absorbed employees of BSNL. Accordingly, consequential amendments to the Central Civil Services (Pension) Rules, adjustments in respect of Government pension liability previously discharged by MTNL and proposed change in methodology in pension contribution as per FR-116 upto 31 December 2005 on the maximum of the IDA pay-scales and with effect from 1 January 2006 on the actual pay drawn in the IDA pay-scales will be made.
Based on the approval for payment of pensionary benefits to the erstwhile government employees absorbed in MTNL who have opted for combined pension in the same manner as in BSNL, necessary amendments in Rule 37-A of CCS (Pension) Rules, 1972 to include MTNL along with BSNL, will be issued and adjustments in respect of Government pension liability previously discharged by MTNL will be done within three months, a government statement said. The government said that this would help to resolve the long pending MTNL pension issue. The proposal entails an estimated recurring expenditure of approximately Rs 500 crore per annum besides adjustments in respect of Government pension liability previously discharged by MTNL. This decision would give benefit to approximately 43,000 employees of Delhi and Mumbai.
Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) today, 26 December 2013, approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears. The expenditure for the scheme will be met fully from the Sugar Development Fund (SDF). The Central Government will provide an interest subvention upto 12%, at a simple rate of interest, for the additional working capital loans to the sugar undertakings, equivalent to last three sugar seasons excise duty, cess and surcharge on sugar (including notional equivalence for exports or availed Cenvat), to be provided by the banks. The sugar undertakings with loans classified non performing assets (NPA) by the banks will also be eligible for the loans, provided the concerned state governments give guarantee for their new loans. The interest subvention would be for total loan duration of 5 years, including 2 years moratorium period. No interest subvention will be provided for the period of default in the principal repayments. The loans would be meant exclusively for effecting cane price payments by the sugar mills.
Bajaj Hindusthan (up 3.18%), Balrampur Chini Mills (up 0.76%) and Shree Renuka Sugars (up 2.76%) gained.
IRB Infrastructure Developers rose 1.67% after the company said that NHAI has selected the company as the selected bidder for a highway project in Maharashtra. The announcement was made during trading hours today, 26 December 2013.
IRB Infrastructure Developers (IRB) said that National Highways Authority of India (NHAI) by way of a Letter of Award (LoA) dated 24 December 2013 whereby NHAI has accepted the company's price bid and has declared IRB as the selected bidder for the project of four laning of Solapur to Yedeshi section of national highway (NH)-211 in Maharashtra under National Highways Development Project (NHDP) Phase IV on design, build, finance, operate and transfer (DBFOT) (Toll) basis.
IRB had on 17 December 2013 said that the project cost was about Rs 1500 crore with a concession period of 29 years. IRB has sought Rs 189 crore as viability gap funding from NHAI.
Also, IRB today, 26 December 2013 said that IRB Westcoast Tollway, a wholly-owned subsidiary of the company, has achieved financial closure in terms of the concession agreement executed with NHAI, by tying up of project finance of Rs 1406 crore.
The total cost of this project is Rs 2639 crore, out of which viability gap funding from NHAI of Rs 536 crore, equity contribution by the company will be about Rs 697 crore and remaining will be funded through project finance of Rs 1406 crore, IRB said. The average cost of this project finance is approximately 11.75% per annum, it added.
IRB said that a consortium of lenders comprising of IDBI Bank-Lead Institution, Allahabad Bank, Bank of Baroda, Bank of India, Canara Bank and Union Bank of India have financed this project.
In foreign exchange market, rupee edged lower against the dollar on broad-based gains in dollar. The partially convertible rupee was hovering at 61.975, compared with its close of 61.79/80 on Tuesday, 24 December 2013. Indian financial markets were closed on Wednesday, 25 December 2013, on account of Christmas.
European stock markets were closed on Thursday, 26 December 2013, for Christmas holidays.
Asian stocks edged higher on Thursday, 26 December 2013, led by Japanese stocks after the yen fell to a five-year low against the dollar. Key benchmark indices in Taiwan, Japan, and Singapore were up 0.21% to 1.03%. South Korea's Kospi dropped 0.11%. Stock markets in Hong Kong and Indonesia were shut for holidays.
In mainland China, the Shanghai Composite fell 1.58%, ending a three-day recovery as investors reacted negatively to a lack of additional cash injections from the central bank, used last week to calm a spike in interbank lending rates that has eroded investor confidence.
China's ruling Communist Party reportedly unveiled on Wednesday a five-year plan to fight pervasive graft, with particular attention on corruption that triggers protests or happens in the course of economic reforms.
China's economy this year is likely to expanded 7.6%, compared with the government's 7.5% target, a News Agency in China reportedly said, citing a report by the State Council.
The minutes of the Bank of Japan's Nov. 20-21 board meeting released on Wednesday, 25 December 2013, showed that not all members were convinced that the country's growth was on a long-term upward trend. One member said that the recent deceleration in real gross domestic product growth could signal a downward shift in the economy's trend.
The consumer confidence index in South Korea stayed at 107 in December, unchanged from November, the nation's central bank said in a statement today, 26 December 2013.
The US stock market was closed on Wednesday, 25 December 2013, for Christmas. US stocks ended higher on Tuesday, 24 December 2013, with the Dow Jones Industrial Average and the S&P 500 rising to record closes after an upbeat report on durable-goods orders. Investors welcomed Tuesday's durable-goods report showing that orders for big-ticket US items, such as aircraft and transportation equipment, rose 3.5% last month.
In a separate report, US home prices rose 8.2% in October from the same month last year, according to the Federal Housing Finance Agency. Prices rose 0.5% from September.
Rising mortgage rates did not affect the sales of new single-family homes much, according to US Commerce Department data released on Tuesday. Sales declined 2.1% in November to a seasonally adjusted annual rate of 464,000, down from a rate of 474,000 in October, which was the fastest pace since July 2008.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
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