A range bound movement was witnessed as key benchmark indices remained firm in early afternoon trade. While the benchmark indices retained positive zone, the broad market depicted weakness. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap and Mid-Cap indices, both, were in red. The barometer index, the S&P BSE Sensex, was currently up 193.36 points or 0.67% at 29,199.38.
There are expectations that inflows from foreign funds into India will rise after European Central Bank (ECB) yesterday, 22 January 2015, announced a massive new bond-buying program to boost sluggish eurozone economy.
Reliance Capital rose after shareholders approved preferential allotment of 70 lakh equity shares at Rs 530 per share, aggregating to Rs 371 crore, to Sumitomo Mitsui Trust Bank, Japan. Shares of public sector banks witnessed selling pressure. Shares of private sector banks were mixed. Most paint makers declined.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 592.79 crore yesterday, 22 January 2015, as per provisional data.
Earlier, the Sensex and the 50-unit CNX Nifty, had, both trimmed gains after hitting record high in early trade. The two benchmark indices had surged in early trade after European Central Bank (ECB) announced a massive new bond-buying program yesterday, 22 January 2015, aimed at boosting the sluggish eurozone economy.
In the foreign exchange market, the rupee edged higher against the dollar on optimism the European Central Bank's stimulus will boost demand for emerging- market assets.
Brent crude oil futures edged higher as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets.
In overseas markets, Asian stocks edged higher after European Central Bank announced a massive new bond-buying program after a monetary policy review yesterday, 22 January 2015. US stocks surged yesterday, 22 January 2015, after the European Central Bank laid out its plan to expand its asset-purchase program.
ECB left interest rates unchanged and announced larger-than-expected measures to stimulate the region's sagging economy after a monetary policy review yesterday, 22 January 2015. ECB will buy 60 billion euros worth of assets per month, more than markets had been hoping for. The ECB said it would purchase sovereign debt from this March until the end of September 2016.
At 12:15 IST, the S&P BSE Sensex was up 193.36 points or 0.67% at 29,199.38. The index jumped 402.71 points at the day's high of 29,408.73 in early trade, a lifetime high for the index. The index rose 159.54 points at the day's low of 29,165.56 in mid-morning trade.
The CNX Nifty was up 47.45 points or 0.54% at 8,808.85. The index hit a high of 8,866.40 in intraday trade, a lifetime high for the index. The index hit a low of 8,795.40 in intraday trade.
The BSE Mid-Cap index was off 29.16 points or 0.27% at 10,681.08. The BSE Small-Cap index was off 75.06 points or 0.66% at 11,374.44. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was weak. On BSE, 1,697 shares dropped and 949 shares advanced. A total of 95 shares were unchanged.
Reliance Capital rose after shareholders approved preferential allotment of 70 lakh equity shares at Rs 530 per share, aggregating to Rs 371 crore, to Sumitomo Mitsui Trust Bank, Japan. The stock was up 0.12% at Rs 463.80. The company announced during trading hours that its shareholders today, 23 January 2015, approved the preferential allotment to Sumitomo Mitsui Trust Bank of Japan. The allotment by Reliance Capital is part of the long term strategic alliance announced by two companies earlier last month, Reliance Capital said in a statement. The allotment resolution was passed by an overwhelming majority of 99.99% shareholders that voted on the resolution.
As part of the agreement, Sumitomo Mitsui Trust Bank will be taking an initial 2.77% strategic stake in Reliance Capital amounting to Rs 371 crore ($58.4 million) through preferential allotment, with a lock-in period of one year. The investment is being made at Rs 530 per share representing a premium of over 11% to the stock price of relevant date of Reliance Capital, the company said.
Shares of public sector banks witnessed selling pressure. Corporation Bank (down 2.22%), Punjab National Bank (down 1.95%), Punjab and Sind Bank (down 1.57%), UCO Bank (down 1.36%), Bank of India (down 1.22%), Allahabad Bank (down 1.09%), IDBI Bank (down 0.99%), Syndicate Bank (down 0.98%), Bank of Baroda (down 0.89%), United Bank of India (down 0.84%), Andhra Bank (down 0.71%), Bank of Maharashtra (down 0.58%), Union Bank of India (down 0.53%), Dena Bank (down 0.42%), Canara Bank (down 0.3%) and Vijaya Bank (down 0.1%), edged lower. Indian Bank (up 0.09%), Central Bank of India (up 0.24%) and State Bank of India (up 0.76%), edged higher.
Shares of private sector banks were mixed. HDFC Bank (up 2.07%), Yes Bank (up 1.68%), IndusInd Bank (up 1.62%), Federal Bank (up 0.52%), ICICI Bank (up 0.16%) and Kotak Mahindra Bank (up 0.10%), edged higher. Axis Bank (down 0.18%), ING Vysya Bank (down 0.26%) and City Union Bank (down 0.32%) edged lower.
Most paint makers declined. Berger Paints India (down 2.16%), Akzo Nobel India (down 1.66%), Asian Paints (down 0.43%) and Shalimar Paints (down 0.34%), edged lower. Kansai Nerolac Paints was up 0.98%.
In the foreign exchange market, the rupee edged higher against the dollar on optimism the European Central Bank's stimulus will boost demand for emerging- market assets. The partially convertible rupee was hovering at 61.505, compared with its close of 61.705 during the previous trading session.
Brent crude oil futures edged higher as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets. Brent for March settlement was up $1.13 a barrel at $49.65 a barrel. The contract had fallen 51 cents or 1.06% to settle at $48.52 a barrel during the previous trading session. Abdullah died early today, 23 January 2015, and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.
US President Barack Obama arrives on a visit to India this weekend. The US President is the chief guest for India's Republic Day celebrations in New Delhi on 26 January 2015.
Stock market regulator Securities and Exchange Board of India (Sebi) yesterday, 22 January 2015, announced that 25% of the issue price must be received upfront where partly paid shares are issued through public issue and rights issue. The balance consideration shall continue to be received within 12 months if the issue size is less than Rs 500 crore. Where the issue size exceeds Rs 500 crore and the issuer has appointed a monitoring agency, the period can be decided by the issuer as per the existing regulatory framework, Sebi said. In respect of warrants issued along with public or rights issue of specified securities, 25% of the consideration shall be received upfront by the issuer and tenure of such warrants shall be 18 months as against 12 months presently, Sebi said.
The Sebi board also approved amendments to Issue and Listing of Debt Securities (ILDS) Regulations to incorporate express provisions for enabling "Consolidation and Re-issuance of Debt Securities" and "Call and Put options". By enabling consolidation and re-issuance of debt-securities, the illiquid and infrequently traded corporate bonds can be re-issued thereby leading to creation of a larger floating stock that can increase liquidity in the market, Sebi said in a press release. By enabling Call and Put options, the issuer and investors would have flexibility in redemption of debt securities.
In order to further develop the securitisation market, the Sebi board has approved amendments to Securitised Debt Instruments (SDI) regulations to rationalize and clarify the role and responsibilities of trustee, allowing banks and public financial institutions to act as trustee without obtaining registration, terms of appointment and capital requirement for trustee, and providing for a summary term sheet. This is expected to enhance the confidence of investors in securitisation transactions, Sebi said.
Asian stocks rallied after ECB launched a landmark bond-buying stimulus programme that buoyed investors' risk appetite. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.79% to 1.37%.
China's Shanghai Composite was up 0.44%. China's manufacturing sector strengthened slightly at the start of the year, according to a measure released Friday, but remains in a weak spot. A preliminary reading of the HSBC China Manufacturing Purchasing Managers Index rose to 49.80 in January from a final reading of 49.60 in December. A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction. The overall growth of China's economy slowed to 7.4% in 2014, its slowest pace in more than 20 years, in part because of problems in manufacturing.
Trading in US index futures indicated that the Dow could fall 14 points at the opening bell today, 23 January 2015. US stocks ended higher yesterday following ECB's stimulus announcement. Separately, the number of Americans filing new claims for unemployment benefits fell last week from a seven-month high, pointing to continued improvement in labour market conditions. Initial claims for state unemployment benefits slipped 10,000 to a seasonally adjusted 307,000 for the week ended 17 January 2015, the Labour Department said yesterday.
In Europe, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country on Sunday, 25 January 2015. Greece is set to hold snap elections 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.
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