Banking and insurance stocks led recovery as key benchmark indices reversed intraday losses in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 24.19 points or 0.09% at 27,821.20. The market breadth indicating the overall health of the market was positive. Insurance stocks edged higher after media reports said the Parliamentary Select Committee has reportedly cleared the government's proposal of a composite cap of 49% on foreign investment in the insurance sector.
State Bank of India (SBI) Chairperson Arundhati Bhattacharya reportedly said yesterday, 9 December 2014, that lending rates will come down only after the bank is able to bring down its cost of funds and sees a pickup in credit growth, so that higher volumes can compensate for the income loss.
Bank stocks advanced across the board. Cairn India recovered on bargain hunting after recent steel slide triggered by fall in crude oil prices. Cipla advanced after the company said that its wholly owned subsidiary has entered into a definitive agreement to sell its entire 48.22% equity interest in Jiangsu Cdymax Pharmaceuticals Co. China for a total consideration of $18.5 million.
Meanwhile, Russian President Vladimir Putin arrives on a two-day visit to India today, 10 December 2014, for the 15th Annual India-Russia Summit.
Earlier, the Sensex had hit its lowest level in almost 6 weeks and the 50-unit CNX Nifty had touched its lowest level in more than 4 weeks in early trade.
Foreign portfolio investors sold shares worth a net Rs 221.52 crore yesterday, 9 December 2014, as per provisional data.
In overseas markets, Asian markets were mixed. The US stock market staged a rebound yesterday, 9 December 2014, but still ended the day lower, even after erasing steep opening losses sparked by China's tightening of lending rules and Greece's surprise elections announcement.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower on worries over a deepening supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
At 12:15 IST, the S&P BSE Sensex was up 24.19 points or 0.09% at 27,821.20. The index gained 78.28 points at the day's high of 27,875.29 in early trade. The index lost 86.98 points at the day's low of 27,710.03 in early trade, its lowest level since 31 October 2014.
The CNX Nifty was up 6.85 points or 0.08% at 8,347.55. The index hit a high of 8,361.80 in intraday trade. The index hit a low of 8,317 in intraday trade, its lowest level since 10 November 2014.
The BSE Mid-Cap index was up 78.84 points or 0.77% at 10,285.37. The BSE Small-Cap index was up 82.03 points or 0.73% at 11,276.15. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,467 shares gained and 1,007 shares fell. A total of 91 shares were unchanged.
Bank stocks advanced. Canara Bank (up 2.31%), Bank of India (up 2.29%), Punjab National Bank (up 1.61%), Bank of Baroda (up 1.7%), IndusInd Bank (up 1.22%), Kotak Mahindra Bank (up 0.74%), Axis Bank (up 0.73%), Yes Bank (up 0.56%), HDFC Bank (up 0.45%), ICICI Bank (up 0.3%), and Federal Bank (up 0.11%) edged higher.
State Bank of India (SBI) rose 1.52% at Rs 311.35. State Bank of India (SBI) Chairperson Arundhati Bhattacharya reportedly said yesterday, 9 December 2014, that lending rates will come down only after the bank is able to bring down its cost of funds and sees a pickup in credit growth, so that higher volumes can compensate for the income loss. She was speaking at an event to launch an economic index developed by the bank.
Insurance stocks edged higher after media reports said the Parliamentary Select Committee has reportedly cleared the government's proposal of a composite cap of 49% on foreign investment in the insurance sector. Max India (up 6.76%), Exide Industries (up 2%), Aditya Birla Nuvo (up 1.24%), Religare Enterprises (up 0.79%) and ICICI Bank (up 0.41%) edged higher. HDFC (down 0.08%), and Bajaj Finserv (down 1.47%) edged lower. The Parliamentary Select Committee has reportedly cleared the government's proposal of a composite cap of 49% on foreign investment in insurance sector. The Insurance Amendment Bill seeks to raise foreign investment cap to 49% in the insurance sector from current 26%. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the "composite cap" in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
The government intends to get the Insurance Laws Amendment Bill that seeks to enhance foreign investment limit in capital starved insurance sector passed during the ongoing winter session of parliament.
Reliance Capital rose 3.86% at Rs 535.50. According to reports, the company plans to sell its entire stake in online travel company Yatra.com for Rs 500 crore. The company had invested Rs 40 crore in Yatra.com in 2006 for a 16% stake.
Tata motors rose 0.64% at Rs 506.30. The stock hit a high of Rs 507.30 and a low of Rs 493 in intraday. The company after market hours yesterday, 9 December 2014, said that rating agency ICRA has reaffirmed the rating assigned to PTCs backed by a pool of commercial vehicle loan receivables originated by Tata Motors Finance (TMFL), while it has downgraded the rating of the second loss facility (SLF) under the transaction.
Over the past few quarters, there has been considerable stress on transport operators' cashflow, resulting in worsening delinquency profile of most commercial vehicle (CV) loan portfolios, including that of TMFL, ICRA said. Nevertheless, over the past few months, TMFL's collections/recovery team has been strengthened and various initiatives have been undertaken such as greater thrust on repossessions and constitution of teams focused on certain specific segments of the overall loan portfolio, ICRA said. The impact of these initiatives on the pool's collection performance and delinquency profile will be an important input for further rating actions under this transactions, ICRA said.
Tata Motors Finance is a wholly owned subsidiary of Tata Motors.
L&T fell 0.58% at Rs 1,552.05. The stock hit a high of Rs 1,565.50 and a low of Rs 1,549.25. The company during market hours today, 10 December 2014, said that its construction arm has won orders worth Rs 2008 crore, including two new international orders, in the months of November and December 2014.
Cipla rose 0.48% at Rs 642.95. The company during market hours today, 10 December 2014, said that Meditab Holdings Mauritius, a wholly owned subsidiary of the company, has entered into a definitive agreement to sell its entire 48.22% equity interest in Jiangsu Cdymax Pharmaceuticals Co. China (Jiangsu) to an affiliate of one of the other shareholders of Jiangsu, for a total consideration of $18.5 million. The closing of the transaction is subject to receipt of applicable regulatory approvals in China.
Cairn India recovered on bargain hunting after recent steel slide triggered by fall in crude oil prices. The stock was up 1.69% at Rs 258.60. The stock had hit a 52-week low of Rs 252.15 in the intraday trade yesterday, 9 December 2014.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.9475, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged lower on worries over a deepening supply glut. Brent for January settlement was off 52 cents a barrel at $66.32 a barrel. The contract had gained 65 cents a barrel to settle at $66.84 during the previous trading session.
The Indian government plans to introduce the Coal Mines (Special Provisions) Bill, 2014 to replace the Coal Mines (Special Provisions) Ordinance, 2014 in Lok Sabha this week. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the ongoing winter session of parliament. The government also plans to bring the MMDR Amendment Bill, 2014 during the ongoing winter session of parliament.
Meanwhile, Russian President Vladimir Putin arrives on a two-day visit to India today, 10 December 2014, for the 15th Annual India-Russia Summit. Ahead of his visit, India's Ministry of External Affairs on 5 December 2014 said that the Summit will have a strong focus on redefining the economic partnership between the two countries. Several documents are under preparation for signing at the Summit, in the fields of defence, nuclear energy, customs, banking and energy, the Ministry of External Affairs said had said at that time. India is keenly interested in participating in more hydrocarbon projects in Russia, the Ministry of External Affairs said on 5 December 2014. India has said clearly that it cannot be party to any sanctions against Russia, the Ministry of External Affairs said on 5 December 2014.
Meanwhile, the Ministry of Urban Development yesterday, 9 December 2014, said that a ten member all Party Parliamentary delegation from Romania which is currently on a six day visit to India has expressed the desire to enhance Romania's engagement with India in Parliamentary and economic spheres. At a meeting between Parliamentary Affairs Minster M.Venkaiah Naidu and Valeriu Stefan Zgone, President of the Chambers of Deputies, Parliament of Romania, it was felt that the present level of bilateral trade of about $666 million between India and Romania is inadequate to the potential and need to be increased by identifying new areas of cooperation for mutual benefit, the Ministry of Urban Development said. Naidu is also the Minister of Urban Development.
The government will unveil industrial production data for October 2014 on Friday, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from a revised 0.5% growth in August 2014.
The government will release annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India for November 2014 on Friday, 12 December 2014. CPI for urban and rural India eased to 5.52% in October 2014, from 6.46% in September 2014.
The government will release the inflation data based on wholesale price index (WPI) for November 2014 on 15 December 2014. WPI eased to 1.77% in October from 2.38% in September 2014.
Asian markets were mixed today, 10 December 2014. Key indices in China, Hong Kong, Singapore and Indonesia were up 0.29% to 1.96%. Key indices in Taiwan, Japan, and South Korea were off 1.06% to 2.25%.
China's annual consumer inflation eased to a five-year low of 1.4% in November, signalling persistent weakness in the world's second-largest economy and giving policymakers more room to ease policy to support growth. The consumer price index fell 0.2% in November from October, the National Bureau of Statistics said today, 10 December 2014.
Japanese consumer confidence in November worsened for a fourth straight month, a Cabinet Office survey showed today, 10 December 2014, showing the April sales tax hike is continuing to weigh on sentiment. The survey's sentiment index for general households, which includes views on incomes and jobs, was at 37.7 in November, the lowest since April.
Trading in US index futures indicated that the Dow could gain 5 points at the opening bell today, 10 December 2014. The US stock market staged a rebound yesterday, 9 December 2014, but still ended the day lower, even after erasing steep opening losses sparked by China's tightening of lending rules and Greece's surprise elections announcement. Overseas news overshadowed speculation that the Federal Reserve may be close to pulling back its pledge to keep rates low, with yields falling amid a flight to quality.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 16-17 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy.
In Europe, Greece has brought forward to this month the date of its next presidential election, which is conducted by the country's parliament. The announcement yesterday, 9 December 2014, came after eurozone ministers approved a Greek request for a two-month extension to its bailout programme, due to end later this month. The presidential vote on 17 December will be a vital test for embattled Prime Minister Antonis Samaras.
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