Export oriented IT and pharma stocks led decline as key benchmark indices edged lower on last trading day of the week. A lion's portion of the slide for the benchmark indices materialized during the last 40 minutes or so of trade after the key indices moved in a narrow range for most part of the trading session. The market breadth indicating the overall health of the market turned negative from positive in late trade. The barometer index, the S&P BSE Sensex, shed 104.72 points or 0.37% to settle at 28,458.10. The BSE Mid-Cap index slipped into the red from green in late trade.
Brent extended losses from a four-year low. Fall in global crude oil prices augur well for India as the nation imports about 80% of its crude oil requirements.
IT and pharma stocks edged lower as the rupee edged higher against the dollar. Index heavyweight and cigarette major ITC scaled record high, with the stock extending yesterday's rally triggered by reports the government may put on hold its plan to ban sales of single cigarettes. Steel Authority of India (Sail) dropped in volatile trade. Bank stocks edged lower in volatile trade. Shares of Axis Bank and Yes Bank reversed direction after scaling record high. Shares of defence equipment makers rose. Cement stocks were in demand.
In overseas markets, European stocks rose after the latest data showed German industrial orders surpassed expectations significantly in October, pointing toward accelerating growth in Europe's largest economy. Chinese stocks led gains in Asian stocks after media reports said that China's banking sector regulator has issued draft rules for banks aimed at reducing funding costs for businesses as the economy slows. US stocks fell from record levels yesterday, 4 December 2014, as the European Central Bank (ECB) decided to hold off on additional stimulus after a monthly monetary policy review.
In the foreign exchange market, the rupee edged higher against the dollar on increased selling of the US currency by exporters and banks amid persistent foreign capital inflows.
Brent extended losses from a four-year low after Saudi Arabia cut January prices for US and Asian buyers, bolstering speculation the country is defending its market share. 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.
The S&P BSE Sensex fell 104.72 points or 0.37% to settle at 28,458.10, its lowest closing level since 3 December 2014. The index lost 153.77 points at the day's low of 28,409.05 in late trade. The index gained 88.93 points at the day's high of 28,651.75 in early trade.
The CNX Nifty fell 26.10 points or 0.3% to settle at 8,538.30, its lowest closing level since 3 December 2014. The index hit a low of 8,523.90 in intraday trade. The index hit a high of 8,588.35 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1,580 shares declined and 1,384 shares gained. A total of 94 shares were unchanged.
The BSE Mid-Cap index shed 27.53 points or 0.26% to settle at 10,498.29. The fall in the index was lower than Sensex's decline in percentage terms. The BSE Small-Cap index rose 3.44 points or 0.03% to settle at 11,474.69, outperforming the Sensex.
The total turnover on BSE amounted to Rs 3603 crore, lower than Rs 4021.88 crore yesterday, 4 December 2014.
Index heavyweight and cigarette major ITC rose 2.05% to Rs 390.60 after scaling a record high of Rs 392.10 in intraday trade. The stock had jumped 5.44% to settle at Rs 382.75 yesterday, 4 December 2014, after media reports suggest that the government may put on hold its plan to ban sales of single cigarettes. It may be recalled that the health ministry had last month accepted a panel's proposal to ban loose cigarettes to deter smoking.
Shares of oil production and exploration (E&P) companies declined as crude oil prices fell. Cairn India (down 0.67%), Oil India (down 0.86%) and ONGC (down 1.33%) declined. Lower crude oil prices will result in lower realizations from crude sales for oil E&P firms.
Reliance Industries (RIL) fell 0.16% to Rs 957. The stock was volatile. The stock hit a high of Rs 966.80 and low of Rs 955.50. RIL before market hours today, 5 December 2014, said that the company and the Mexican state owned company Petroleos Mexicanos (PEMEX) have entered into a Memorandum of Understanding (MOU). As per the MOU, RIL will cooperate with PEMEX for assessment of potential upstream oil and gas business opportunities in Mexico and jointly evaluate value added opportunities in international markets. RIL and PEMEX will also share expertise and skills in the relevant areas of oil and gas industry including for deep-water oil and gas exploration and production.
The MOU envisages sharing of RlL's pioneering expertise in deepwater development & best practices in East Coast of India and RlL's experience in shale gas in United States. RIL will also provide technical support and share experience with PEMEX for refining value maximisation and other technical optimization strategies.
RIL said its cooperation with PEMEX is in line with its growth strategy to explore opportunities to expand its international asset base in regimes having internationally attractive competitive terms. The company hopes to leverage its organizational capabilities and expertise to create long term value for Exploration and Production Business and for RIL on the whole.
PSU OMCs declined. HPCL (down 2.75%), BPCL (down 2.28%) and Indian Oil Corporation (IOCL) (down 0.46%) edged lower.
GAIL (India) shed 0.85% to Rs 466.40. The stock was volatile. The stock hit high of Rs 479.90 and low of Rs 466. GAIL (India) during market hours today, 5 December 2014, announced signing of a sourcing agreement between its subsidiary GAIL Global USA LNG LLC (GGULL) and US-based company WGL Midstream Inc. (WGLM) for procurement of natural gas required to produce about 2.5 MTPA of LNG at the Cove Point Terminal located in Maryland, US. WGLM is a subsidiary of WGL Holdings Inc., a prominent natural gas company of the United States. The definitive gas sale and purchase agreement has been signed for a period of 20 years and supplies are expected to commence from late 2017 when the LNG terminal, in which GGULL holds liquefaction capacity, becomes operational, GAIL (India) said.
GAIL (India) Chairman and Managing Director B. C. Tripathi said that this agreement is another milestone towards GAIL (India)'s efforts in sourcing of LNG to meet the rising demand of gas in the Indian market. GAIL (India) is currently in the process of chartering of LNG ships, thereby entrenching the company's presence across the complete LNG supply chain and bring more value to the Indian customers, he said.
Mahindra & Mahindra (M&M) rose 2.52%. With respect to media reports titled M&M Seen in Talks to Buy Saab Auto's Holding Co, M&M during market hours today, 5 December 2014, said that the company examines/pursues various opportunities in different areas from time to time on a continuing basis and it is not practicable to comment upon every opportunity at every stage. Given the policy of the company of not commenting on speculative news/reports, the management will not be able to comment on the same, M&M said.
Maruti Suzuki India shed 0.28%. The company during market hours today, 5 December 2014, said that production jumped 24.99% to 1.17 lakh units in November 2014 over November 2013.
IT stocks edged lower as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. TCS (down 2.3%), Infosys (down 1.83%), Wipro (down 2%), HCL Technologies (down 1.74%), Oracle Financial Services Software (down 2.58%) and Tech Mahindra (down 2.35%) declined.
Bank stocks edged lower in volatile trade. Among PSU bank stocks, Andhra Bank (down 0.62%), Canara Bank (down 0.51%), Bank of India (down 0.2%) and Union Bank of India (down 0.09%) declined. Bank of Baroda rose 1.39%.
State Bank of India (SBI) slipped 1.19% to Rs 316.45. The stock was volatile. The stock hit high of Rs 321 and low of Rs 316.25. The state-run bank during market hours today, 5 December 2014, said it has reduced the interest rate on retail term deposit below Rs 1 crore on select maturities with effect from Monday, 8 December 2014. The bank has reduced interest rate on term deposits for maturity between one year and less than five years to 8.5% from 8.75%. The bank has reduced interest rate on term deposits for maturity of five years and above to 8.25% from 8.5%.
Punjab National Bank rose 1.85% to Rs 1,115.15 after hitting a 52-week high of Rs 1,128.35 in intraday trade.
Among private bank stocks, IndusInd Bank (down 0.01%) and ING Vysya Bank (down 0.33%). HDFC Bank (up 0.07%) and Kotak Mahindra Bank (up 1.29%),
ICICI Bank fell 0.53%. ICICI Bank after market hours today, 5 December 2014, said that the board of directors has approved a proposal for the sale of ICICI Bank's shareholding in ICICI Bank Eurasia Limited Liability Company (IBEL), a non-material wholly-owned banking subsidiary in Russia, to Sovcombank, an unrelated third party Russian bank. At 30 September 2014, IBEL had total assets of RUB 4.5 billion and paid-up equity capital of RUB 1.6 billion. IBEL's profit after tax in the six months ended 30 September 2014 was RUB 28 million. IBEL accounted for less than 0.1% of ICICI Bank's consolidated total assets at that date and consolidated profit after tax for the period.
The transaction is expected to conclude by the end of the financial year, ICICI Bank said.
Axis Bank shed 0.63% to Rs 496.80. The stock reversed direction after scaling record high of Rs 506 in intraday trade. Axis Bank announced after market hours yesterday, 4 December 2014, that it has closed its Senior Unsecured Redeemable Non-Convertible debenture issue of amount Rs 5705 crore and priced at 8.85% per annum payable annually maturing on 5 December 2024. The NCD's are rated AAA by CRISIL and ICRA. The NCDs are issued in Indian rupees at a fixed coupon and the proceeds shall be utilized for enhancing long term resources for funding infrastructure and affordable housing, Axis Bank said.
Yes Bank fell 1.35% to Rs 749.10. The stock reversed direction after scaling record high of Rs 766.85 in intraday trade.
Shares of Steel Authority of India (Sail) shed 2.46% at Rs 83.25. The stock was volatile. The stock hit high of Rs 84.70 and low of Rs 82.20. By 15:25 IST, bids were received for a total of 41.84 crore shares for the Offer for Sale (OFS) of the state-run steel company's shares by the government, as per data from the stock exchanges. The government had put on the block 20.65 crore shares of Sail, representing a 5% stake through Offer for Sale (OFS) via the stock exchanges mechanism today, 5 December 2014. The OFS began at 9:15 IST and ended at 15:30 IST. The floor price for the offer for sale (OFS) was fixed at Rs 83 per share.
Pharmaceutical shares declined as the rupee edged higher against the dollar. Cadila Healthcare (down 0.89%), Cipla (down 1.85%), Dr Reddy's Laboratories (down 2.37%), Lupin (down 0.32%), Ranbaxy Laboratories (down 1.52%) and Sun Pharmaceutical Industries (down 2.23%) declined.
Wockhardt advanced 1.31% to Rs 1,011.05 after hitting a 52-week high of Rs 1,038 in intraday trade.
Aurobindo Pharma fell 0.82%. Aurobindo Pharma after trading hours today, 5 December 2014, announced the completion of acquisition of assets of nutritional supplement maker, Natrol Inc. and other affiliate entities (Natrol) through its wholly owned subsidiary Aurobindo Pharma USA Inc. (APUSA). APUSA emerged as the highest and best bidder to acquire assets of Natrol under the auction process by the United States Bankruptcy Court for the District of Delaware was previously announced on 12 November 2014. APUSA expects its profitability to improve by combining the strength of both enterprises in creating a fully integrated nutraceuticals platform in the USA and other international markets.
Cement shares rose across the board. Ambuja Cements (up 3.15%), ACC (up 1.62%), UltraTech Cement (up 0.95%) and Shree Cement (up 2.48%) gained.
Grasim Industries was up 0.37% at Rs 3,487.45. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
SpiceJet tumbled 13.78% on reports the Airports Authority of India has decided to put operation of SpiceJet on cash and carry basis. According to reports, the Airports Authority of India (AAI) has decided to withdraw credit facility relating to airport user fees to the financially-embattled low-cost carrier SpiceJet at all airports in the country from midnight Thursday, 4 December 2014. The move has been spurred by the mounting dues that the airline has to pay the AAI. An airline is put on cash and carry mode when it is unable to clear its dues in the time specified by its vendor or when its dues mount beyond acceptable limit.
Bayer CropScience jumped 4.48% to Rs 3,091.10 after scaling a record high of Rs 3,228 in intraday trade.
NCC galloped 12.67% to Rs 80.05 after hitting a 52-week high of Rs 83 in intraday trade.
Raymond advanced 2.29% to Rs 564.55 after hitting a 52-week high of Rs 573.30 in intraday trade.
Redington India surged 5.12% to Rs 137.50 after scaling a record high of Rs 147.65 in intraday trade.
In the foreign exchange market, the rupee edged higher against the dollar on increased selling of the US currency by exporters and banks amid persistent foreign capital inflows. The partially convertible rupee was hovering at 61.865, compared with its close of 61.935 during the previous trading session.
Brent extended losses from a four-year low after Saudi Arabia cut January prices for US and Asian buyers, bolstering speculation the country is defending its market share. Brent for January settlement was off 39 cents a barrel at $69.25 a barrel. The contract had lost 28 cents a barrel to settle at $69.64 yesterday, 4 December 2014, the lowest close since May 2010.
Saudi Arabia's state-owned oil company Saudi Arabian Oil Co., also known as Saudi Aramco, yesterday, 4 December 2014, reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It also cut prices for all crude grades to the US by between 10 cents and 90 cents a barrel. Saudi Arabia is the biggest and most influential member of the Organization of the Petroleum Exporting Countries (OPEC), which late last month decided to maintain output levels despite a global oversupply.
Meanwhile, India's Ministry of Railways today, 5 December 2014, announced the setting up a High Level Committee (HLC) to identify factors, issues and avenues for improving financial health of Indian Railways. The HLC will examine the efficacy and sufficiency of the existing revenue structure in Indian Railways and avenue for raising revenues. The HCL will suggest ways and means for monetization of the resources of Indian Railway. The terms of reference of the HCL include identifying other sources of funding for meeting the long term modernization, expansion and updation needs of Indian Railways and avenues for reduction in expenditure of Indian Railways. The committee will submit its report by 21 December 2014.
The Indian government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the ongoing winter session of parliament. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the winter session of parliament.
European stocks edged higher today, 5 December 2014, after the latest data showed German industrial orders surpassed expectations significantly in October, pointing toward accelerating growth in Europe's largest economy. Key benchmark indices in UK, France and Germany were up 0.57% to 1.2%.
The eurozone economy was close to stagnation in the third quarter, as an acceleration in consumer spending was partly offset by a decline in investment spending and the contribution from trade. Figures released by the European Union's statistics agency today, 5 December 2014 confirmed that the currency area's gross domestic product was just 0.2% higher in the third quarter than in the second, a slight acceleration from the 0.1% expansion recorded in the three months to June.
Industrial orders in Germany were significantly stronger than expected in October, driven by domestic demand and pointing toward accelerating growth in Europe's largest economy in the fourth quarter. Industrial orders rose 2.5% on the month of October in price, seasonal-and work-day-adjusted terms, the Ministry of Economy said today, 5 December 2014.
Meanwhile, Germany's central bank Bundesbank today, 5 December 2014, cut the nation's growth forecast for the current and coming years. Nonetheless, Bundesbank President Jens Weidmann said there is reason to hope that the current sluggish phase will prove to be short-lived. The Bundesbank now expects German adjusted growth in gross domestic product to be 1.4% in 2014, down from a forecast of 1.9% in June. It projects a growth rate of 0.8% in 2015, compared with 1.8% previously, and a rate of 1.5% in 2016, down from 1.7%. Weidmann said the recent sharp slide in crude oil prices has the effect of a small stimulus package in that it reduces both households' cost of living and companies' production cost. If crude oil prices remain at this subdued level for an extended period, economic growth in 2015 and 2016 could turn out to be between 0.1% and 0.2% higher in each case, Weidmann said.
The European Central Bank (ECB) left its key interest rate unchanged at 0.05% after a monthly monetary policy review yesterday, 4 December 2014, and announced that it will wait until 2015 to consider additional market supportive measures, including buying European sovereign debt.
Chinese stocks led gains in Asian stocks today, 5 December 2014, after media reports said that China's banking sector regulator has issued draft rules for banks are aimed at reducing funding costs for businesses as the economy slows. Key benchmark indices in China, Singapore, Hong Kong, Indonesia, and Japan were up 0.19% to 1.32%. South Korea's Kospi was flat. In Taiwan, the Taiwan Weighted index fell 0.2%.
Trading in US index futures indicated that the Dow could gain 19 points at the opening bell today, 5 December 2014. US stocks fell from record levels yesterday, 4 December 2014, as the European Central Bank (ECB) decided to hold off on additional stimulus after a monthly monetary policy review.
In economic news, US jobless claims in the week ended Nov. 29 fell by 17,000 to 297,000, the Labor Department said yesterday, 4 December 2014. US government's monthly nonfarm payrolls report for November will be out later in the global day today, 5 December 2014.
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