A range bound movement was witnessed as key benchmark indices hovered near the flat line in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently up 5.79 points or 0.02% at 28,081.34. The market breadth indicating the overall health of the market was positive. Asian stocks fell after the Swiss National Bank in its stunning move yesterday, 15 January 2015, dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro. Trading in US equity index futures indicated weak opening of US stocks later in the global day today, 16 January 2015.
Union Bank of India joined United Bank of India in cutting base rate after a surprise reduction in repo rate announced by the Reserve Bank of India (RBI) yesterday, 15 January 2015, morning. The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review yesterday, 15 January 2015 and stated that easing of inflationary pressures provided headroom for a shift in the monetary policy stance.
Capital goods stocks rose. Reliance Industries (RIL) gained ahead of its Q3 results today, 16 January 2015. Piramal Enterprises (PEL) rose after the company announced that it is in final stages of discussion with the University of Kentucky for the potential acquisition of Coldstream Laboratories Inc. -- a Contract Development and Manufacturing Organisation.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years.
Foreign portfolio investors bought shares worth a net Rs 1738.24 crore yesterday, 15 January 2015, as per provisional data.
In overseas markets, Asian stocks fell today, 16 January 2015, after the Swiss National Bank in its stunning move yesterday, 15 January 2015, dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro. US stocks edged lower in a volatile trading session yesterday, 15 January 2015, after the Swiss National Bank stunned global markets by cutting its currency cap with the euro.
In the foreign exchange market, the rupee edged higher against the dollar in volatile trade.
Brent crude futures edged higher after yesterday's decline.
At 11:23 IST, the S&P BSE Sensex was up 5.79 points or 0.02% at 28,081.34. The index rose 30.67 points at the day's high of 28,106.22 in early trade. The index fell 130.24 points at the day's low of 27,945.31 in early trade.
The CNX Nifty was up 9.20 points or 0.11% at 8,503.35. The index hit a high of 8,530.75 in intraday trade, its highest level since 8 December 2014. The index hit a low of 8,452.25 in intraday trade.
The BSE Mid-Cap index was up 65.05 points or 0.61% at 10,573.51. The BSE Small-Cap index was up 54.08 points or 0.48% at 11,368.18. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,332 shares advanced and 1,062 shares declined. A total of 95 shares were unchanged.
Capital goods stocks rose. L&T (up 0.93%), BEML (up 2.9%), Bharat Heavy Electricals (Bhel) (up 0.8%), Thermax (up 0.7%), Punj Lloyd (up 0.13%), Crompton Greaves (up 1.12%) and Siemens (up 1.34%) gained.
Reliance Industries (RIL) gained 0.22% ahead of its Q3 results today, 16 January 2015.
Piramal Enterprises (PEL) rose after the company announced that it is in final stages of discussion with the University of Kentucky for the potential acquisition of Coldstream Laboratories Inc. -- a Contract Development and Manufacturing Organisation. The stock was up 2.01%. PEL said that the total consideration for the acquisition will be about $30.65 million. Of this, $5.65 million would be towards the Coldstream facility on the Research Park Campus of the University, while the rest would be towards purchase of the company's shares. This potential transaction is subject to corporate approvals and is expected to be completed by the end of this week.
Coldstream is a Contract Development and Manufacturing Organisation (CDMO) focused on the development and manufacturing of sterile injectable products and is majorly owned by University of Kentucky Research Foundation (an affiliate of the University of Kentucky). The company operates from a FDA approved facility located in Lexington, Kentucky, USA. This acquisition allows PEL to move further into the injectable market segment and has strong synergy with its existing Pharma Solutions business, PEL said in a statement. The transaction is not subject to any regulatory approvals, PEL said.
In the foreign exchange market, the rupee edged higher against the dollar in volatile trade. The partially convertible rupee was hovering at 61.93, compared with its close of 62.065 during the previous trading session.
Brent crude futures edged higher after yesterday's decline. Brent for March settlement was up 39 cents at $48.66 a barrel. The contract had fallen $1.59 a barrel or 3.18% to settle at $48.27 a barrel during the previous trading session.
On macro front, India's merchandise export declined 3.8% to $25.4 billion in December 2014 over December 2013. Meanwhile, merchandise imports also declined 4.8% to $34.83 billion in December 2014. Thus, the trade deficit narrowed to 10-month low of $9.4 billion in December 2014, while nearly halving from $16.86 billion in November 2014. Trade data was announced after market hours yesterday, 15 January 2015.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years. Also, the issues related to the state government of Rajasthan concerning Japanese trading firm Sojitz Corp, working for Dedicated Freight Corridor (DFC), has been resolved, the Ministry of Commerce & Industry said. The government has set up Japan Plus, a special management team, to facilitate Japanese investors.
Asian stocks fell today, 16 January 2015 as the market turmoil sparked by Switzerland abandoning the franc's cap extended into a second day. Key benchmark indices in Singapore, Hong Kong, Taiwan, South Korea, Indonesia and Japan were off 0.03% to 2.16%. In mainland China, the Shanghai Composite was up 1.7%.
China's foreign direct investment (FDI) rose an annual 1.7% last year, although the pace slowed from 2013 as a cooling economy and shifting drivers of growth weighed on offshore investment flows. China attracted a record $119.56 billion from foreign investors last year compared to $117.6 billion in 2013, the Ministry of Commerce said in a statement.
Trading in US index futures indicated that the Dow could slide 100 points at the opening bell today, 16 January 2015. US stocks suffered their fifth-straight session of declines yesterday, 15 January 2015, under pressure from disappointing earnings and worries about global economic growth.
On economic data front, more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays. Jobless claims climbed by 19,000 to 316,000 in the week ended 10 January 2015, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed.
In Europe, in its stunning move yesterday, 15 January 2015, the Swiss National Bank dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro.
Meanwhile 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.
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