With the outcome of a monthly survey showing a solid expansion in India's services sector activity in January 2015, key equity benchmark indices pared losses in mid-morning trade. The barometer index, the BSE Sensex, was currently trading below the psychological 29,000 mark. The Sensex was currently off 33.18 points or 0.11% at 28,966.96. The market breadth indicating the overall health of the market was positive. Prime Minister Narendra Modi yesterday, 3 February 2015, said that the priority of the government is growth and to create jobs.
Metal shares were mixed. Jindal Steel & Power (JSPL) edged hgiher after Q3 results. Capital goods shares were mixed.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit 2-week low as these two key benchmark indices reversed direction after a firm start.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 264.35 crore yesterday, 3 February 2015, as per provisional data.
In overseas market, Asian shares edged higher after overnight rally in US stocks. US stocks surged yesterday, 3 February 2015, as equities kept pace with surging crude-oil prices.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower after a sharp surge during the previous trading session.
At 11:20 IST, the S&P BSE Sensex was down 33.18 points or 0.11% at 28,966.96. The index fell 133.14 points at the day's low of 28,867 in mid-morning trade, its lowest level since 21 January 2015. The index jumped 133.48 points at the day's high of 29,133.62 at the onset of trading session.
The CNX Nifty was down 12.55 points or 0.14% at 8,744. The index hit a low of 8,716.40 in intraday trade, its lowest level since 21 January 2015. The index hit a high of 8,792.85 in intraday trade.
The BSE Mid-Cap index was down 12.26 points or 0.11% at 10,755.97. The decline in the index matched the Sensex's decline in percentage terms. The BSE Small-Cap index was up 26.07 points or 0.23% at 11,452.85, outperforming the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,201 shares advanced and 1,170 shares declined. A total of 106 shares were unchanged.
Metal shares rose. Sesa Sterlite (up 2.23%), JSW Steel (up 1.97%), Hindustan Zinc (up 1.76%), Tata Steel (up 1.33%), Hindustan Copper (up 0.71%), Hindalco Industries (up 0.68%) and Steel Authority of India (up 0.54%), edged higher. NMDC (down 0.14%) and Bhushan Steel (down 0.42%) edged lower.
Jindal Steel & Power was up 3.12% to Rs 156.95. The stock hit a high of Rs 159.15 and a low of Rs 149.90 in intraday trade. Jindal Steel & Power (JSPL) reported consolidated net loss of Rs 1618.78 crore in Q3 December 2014 compared with net profit of Rs 561.51 crore in Q3 December 2013. The company's total income fell 1.38% to Rs 5078.93 crore in Q3 December 2014 over Q3 December 2013. The company's performance during Q3 was negatively impacted due to combination of several adverse developments which interalia include imposition of additional duty on the coal extracted since the start of mining operations in its captive mines, low demand of steel in the domestic as well as export markets and the consequent decline in market price levels, continued suspension of iron ore supplies for its major supplier SMPL and non-availability of coal for its Tamnar phase-II, 600 megawatts power plants. The company announced Q3 results after market hours yesterday, 3 February 2015.
The company's profit before tax was adversely affected due to unfavourable market conditions and high cost of raw materials. The results was also affected by substantially higher costs on account of depreciation and interest which for the consolidated operations during Q3 December 2014, increased by Rs 528 crore compared to Q3 December 2013. As a result of Supreme Court's decision to impose additional levy retrospectively, JSPL was forced to pay lumpsum amount of Rs 3089 crore which caused it to post a loss.
In its future outlook, the company said with economy gradually picking up, JSPL is targeting a double digit growth in turnover in both standalone and consolidated level starting from Q1 June 2015. It is also expecting its raw material issues to be resolved by the end of Q4 March 2015. With all the new production facilities fully operational, JSPL is fully geared to meet any enhanced demand opportunities in the market.
Capital goods shares were mixed. Jindal Saw (up 5.49%), ALSTOM India (up 1.36%), ABB (up 1.16%), Suzlon Energy (up 0.87%), SKF India (up 0.71%), Praj Industries (up 0.69%), Alstom T&D India (up 0.55%), Punj Lloyd (up 0.28%) and Pipavav Defence and Offshore Engineering Company (up 0.1%), edged higher. Bharat Electronics (down 0.06%), AIA Engineering (down 0.69%), Larsen & Toubro (down 0.97%), Thermax (down 1%), Havells India (down 1.05%), BEML (down 1.07%), Siemens (down 1.81%), Bharat Heavy Electricals (Bhel) (down 2.24%), Lakshmi Machine Works (down 2.39%) and Crompton Greaves (down 6.18%), edged lower.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.655, compared with its close of 61.68 during the previous trading session.
Brent crude oil futures edged lower after a sharp surge during the previous trading session. Brent for March settlement was off 18 cents at $57.73 a barrel. The contract had jumped $3.16 a barrel or 5.8% to settle at $57.91 a barrel during the previous trading session.
The outcome of a monthly survey released today, 4 February 2015, showed a solid expansion in India's services sector activity in January 2015. The HSBC India Services PMI Business Activity Index edged up to 52.4 in January 2015, from 51.1 in December 2014. According to survey responses, the latest increase in the services activity reflected further growth of new business during the month. Indian service providers were the most upbeat regarding the 12-month outlook for activity since mid- 2014. Panel members attributed optimism to anticipated improvements in demand and new commercial initiatives. Input costs faced by Indian services firms rose for the second straight month in January, having fallen for the first time in more than five-and-a-half years in November. The rate of cost inflation picked up to the sharpest in six months, although it remained muted in the context of historical data. Prices charged in the Indian service economy also increased for the second consecutive month in January.
Prime Minister Narendra Modi yesterday, 3 February 2015, said that his priority was for India to establish global benchmarks in areas such as governance, transparency and taxation. Interacting over dinner with participants of the BlackRock India Investor Summit, he said that the priority of the government is growth and to create jobs. The Prime Minister said infrastructure development is one of the best routes to create jobs for the youth. He said India requires both expansion and upgradation of its infrastructure. He said the Railways could become a growth engine for the economy. The Prime Minister said the goal of Affordable Housing for all by 2022, would in itself, provide a huge boost for the economy. In terms of the education system, he said the best in the world should be there in India as well. The Prime Minister said he believes in a fair, predictable and consistent tax system, and in economic policies that will drive growth.
Asian share markets tracked US market higher today as revived risk sentiment dented the US dollar and sovereign bonds. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.05% to 1.77%.
The HSBC Hong Kong Purchasing Managers Index contracted in January, a signal of the city's deteriorating output at the start of 2015 amid China's economic slowdown. HSBC said Wednesday that January's manufacturing PMI fell to 49.4 from 50.3 in December. A reading below 50 indicates a contraction in manufacturing, while a reading above that indicates an expansion.
The HSBC China services purchasing managers index fell to a six-month low at 51.8 in January from 53.4 in December, HSBC Holdings PLC said Wednesday, pointing to a slowdown outside the nation's factory sector. Despite the fall in the index, service activity was still expanding from the previous month, although at a slower rate.
Trading in US index futures indicated that the Dow could gain 23 points at the opening bell today, 4 February 2015. US market ended higher for second day in a row on Tuesday, 3 February 2015, led by energy shares as oil prices extended their recent rally, while higher-than-expected January car sales also bolstered the advance.
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