Amid speculation that the European Central Bank (ECB) will announce plans for a quantitative-easing program later in the global day, key equity benchmark indices in India registered modest gains. A bout of volatility was witnessed in late trade as the benchmark indices bounced back after trimming intraday gains. The rebound in late trade materialized after Finance Minister Jaitley reportedly said at an event in Davos, Switzerland that the government has a roadmap to cut down fiscal deficit to below 3% of GDP in next few years. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high. The Sensex moved past the psychological 29,000 level for the first time in its history. The Sensex was provisionally up 120.64 points or 0.42% at 29,009.50. The market breadth indicating the overall health of the market was negative.
There are expectations that inflows from foreign funds into India will rise if the European Central Bank (ECB) boosts monetary stimulus for the euro zone economy after a monetary policy review later in the global day. The ECB is widely expected to announce a government-bond-buying program aimed at spurring Europe's ailing economy.
Shares of pharmaceutical companies were mixed. Sesa Sterlite rose after the company said its subsidiary Bharat Aluminium Company (BALCO) has received approval from the Chattisgarh State Pollution Control Board and other clearances for starting its Korba's based 1200 megawatts (MW) power plant. ITC extended yesterday's slide triggered by the company's disappointing Q3 December 2014 results.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 2065.49 crore yesterday, 21 January 2015, as per provisional data.
In overseas markets, European shares edged lower in volatile trade on caution ahead of the outcome of a monetary policy review from the European Central Bank (ECB) later in the global day. Asian shares edged higher after China's central bank injected 50 billion yuan ($8 billion) of liquidity into the financial system. US stocks eked out small gains yesterday, 21 January 2015, on speculation the European Central Bank (ECB) will unveil a government-bond-buying program aimed at spurring Europe's ailing economy.
Canada's central bank, the Bank of Canada, delivered a shock interest-rate cut after a monetary policy review yesterday, 21 January 2015, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth.
In the foreign exchange market, the rupee edged lower against the dollar on speculation the Reserve Bank of India intervened to stem the currency's advance.
Brent crude futures edged lower as traders braced for the outcome of the European Central Bank meeting.
As per provisional closing, the S&P BSE Sensex was up 120.64 points or 0.42% at 29,009.50. The index jumped 171.55 points at the day's high of 29,060.41 in mid-morning trade, a lifetime high for the index. The index rose 3.37 points at the day's low of 28,892.23 in mid-afternoon trade.
The Nifty was up 31.90 points or 0.37% at 8,761.40, as per provisional closing. The index hit a high of 8,774.15 in intraday trade, a lifetime high for the index. The index hit a low of 8,727 in intraday trade.
The BSE Mid-Cap index was up 8 points or 0.07% at 10,710.24. The BSE Small-Cap index was up 26.62 points or 0.23% at 11,449.50. Both theses indices underperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,577 shares declined and 1,346 shares gained. A total of 110 shares were unchanged.
The total turnover on BSE amounted to Rs 3543 crore, lower than turnover of Rs 4482.10 crore during the previous trading session.
Sesa Sterlite rose after the company said its subsidiary Bharat Aluminium Company (BALCO) has received approval from the Chattisgarh State Pollution Control Board and other clearances for starting its Korba's based 1200 megawatts (MW) power plant. The stock was up 0.88%.
Meanwhile, in its clarification with reference to the news item appearing in the newspaper captioned "Sterlite to restart mining in Goa in 2 weeks", Sesa Sterlite after trading hours yesterday, 21 January 2015, said that the Goa state government vide its order dated 15 January 2015 has revoked its earlier order dated 10 September 2012 vide which mining was temporarily suspended. Sesa Sterlite further said that the company has received approval for renewal of all its iron ore mining leases in Goa and that the company expects to resume mining in near future once the entire process for resumption of mining, i.e. execution of leases including registration, environment clearance and other approvals/consents is approved by the state government and other regulatory bodies.
Reliance Industries (RIL) fell 2.22%. RIL today, 22 January 2015, announced the pricing of $1 billion 4.125% Senior Unsecured Notes due 2025. The notes have been priced at 240 basis points over the 10-year US Treasury Note, at a price of 98.998 to yield 4.249%. The notes will be denominated in US dollars and will bear fixed interest of 4.125% p.a., with interest payable semi-annually in arrears and shall rank pari passu with all other unsecured and unsubordinated obligations of the company. The funds will be utilized for the company's ongoing capital expenditure, RIL said.
ITC extended yesterday's slide triggered by the company's disappointing Q3 December 2014 results. The stock was down 0.17% at Rs 352. The stock hit a high of Rs 359.60 and a low of Rs 348.90. ITC's net profit rose 10.46% to Rs 2635 crore on 2.47% growth in total income from operations (net) to Rs 8942.59 crore in Q3 December 2014 over Q3 December 2013. Segment wise results showed that sales of the cigarette division rose 0.62% to Rs 4141.94 crore in Q3 December 2014 over Q3 December 2013. Sales of the FMCG business jumped 11.37% to Rs 2314.12 crore in Q3 December 2014 over Q3 December 2013. ITC announced the third quarter results during market hours yesterday, 21 January 2015.
Shares of pharmaceutical companies were in mixed. Ranbaxy Laboratories (up 3.69%), Sun Pharmaceutical Industries (up 3.50%), Wockhardt (up 1.84%), Cipla (up 1.74%), Lupin (up 1.35%), Glenmark Pharmaceuticals (up 1.18%), Dr. Reddy's Laboratories (up 0.97%), Aurobindo Pharma (up 0.89%) and Strides Arcolab (up 0.23%), edged higher. GlaxoSmithKline Pharmaceuticals (down 0.17%), Piramal Healthcare (down 0.24%), IPCA Laboratories (down 0.31%), Cadila Healthcare (down 0.54%) and Divi's Laboratories (down 1.21%), edged lower.
Aurobindo Pharma was up 1.06%. With respect to news article titled "Aurobindo, Actavis recall Gabapentin capsules," Aurobindo Pharma clarified during trading hours that its US subsidiary, Aurobindo Pharma USA Inc voluntarily recalled a batch of Gabapentine Capsules USP 300mg, 100-count bottles in November 2014, as the product lot was found to contain some empty capsules. The recall did not have any material impact on the company's financials, Aurobindo Pharma said. The company further said that that Actavis Pharma Manufacturing is a different entity and has no association or connection with Aurobindo Pharma.
In the foreign exchange market, the rupee edged lower against the dollar on speculation the Reserve Bank of India intervened to stem the currency's advance. The partially convertible rupee was hovering at 61.6825, compared with its close of 61.635 during the previous trading session.
Brent crude futures edged lower as traders braced for the outcome of the European Central Bank meeting. Brent for March settlement was off 26 cents at $48.77 a barrel. The contract had risen $1.04 a barrel or 2.17% to settle at $49.03 a barrel during the previous trading session.
Finance Minister Jaitley reportedly said at an event in Davos, Switzerland today, 22 January 2015, that the government has a roadmap to cut down fiscal deficit to below 3% of GDP in next few years. The government intends to rationalise subsidies, Jaitely said.
Meanwhile, in his foreword to the fourth edition of the annual Status Paper on Government Debt which gives detailed analysis of the government's debt position released yesterday, 21 January 2015, Finance Minister Arun Jaitely has said that the overall liabilities of the Central Government are on a medium-term declining trajectory with low roll-over risk, notwithstanding the slight increase in a couple of years in recent past due to stimulus spending in the wake of the global financial crisis. The share of public account liabilities in the total liabilities of the General Government are also on a declining trend. The average interest cost, which is stable and well below nominal GDP growth rate, indicates that India is comfortably placed in terms of sustainability parameters of public debt, Jaitley said. The government's debt portfolio is characterized by prudent risk profile with share of short-term debt within safe limits. Most of the debt is of domestic origin insulating the debt portfolio from currency risk. The limited external debt is almost entirely from official sources on concessional terms, providing safety from volatility in the international financial markets. The relatively long maturity of debt and its predominantly fixed-coupon character point to low roll-over and interest rate risks, Jaitley said.
This paper reiterates the government's commitment to keep the level of public debt within sustainable limits, the finance ministry said at the time of releasing the fourth edition of the annual Status Paper on Government Debt yesterday, 21 January 2015.
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.
European shares edged lower today, 22 January 2015, on caution ahead of the outcome of a monetary policy review from the European Central Bank (ECB) later in the global day. Key benchmark indices in France and Germany were off 0.26% to 0.40%. In UK, the FTSE 100 was up 0.08%.
The governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review today, 22 January 2015. The ECB may announce a large-scale bond-buying program today, 22 January 2015, aimed at spurring Europe's ailing economy. According to media reports, the ECB may announce a proposal for a quantitative-easing program of euro 50 billion ($58 billion) a month aimed at stimulating growth.
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 on 25 January 2015. 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.
Asian shares edged higher today, 22 January 2015, after China's central bank injected 50 billion yuan ($8 billion) of liquidity into the financial system. Key benchmark indices in China, Hong Kong, Japan, Indonesia, Singapore and Taiwan were up by 0.28% to 0.70%. South Korea's Seoul Composite was off 0.02%.
China's central bank today, 22 January 2015, injected cash into the money markets using short-term instruments it hasn't used in a year, spurring speculation that further loosening of monetary policy may be on the way as the economy grows at its slowest rate in more than two decades. The People's Bank of China offered 50 billion yuan ($8 billion) of seven-day reverse repos, a short-term lending facility to commercial banks, in its open-market operation today, 22 January 2015. The move to keep the banks flush with cash comes ahead of the Lunar New Year holiday next month when demand for funds normally increases substantially as people spend on gifts and dining.
The injection of funds into the country's money markets came after the central bank yesterday, 21 January 2015, said that it rolled over three-month loans of 269.5 billion yuan ($43.5 billion) and offered 50 billion yuan of medium-term loans to designated commercial banks.
Trading in US index futures indicated that the Dow could rise 47 points at the opening bell today, 22 January 2015. The US stock market ended Wednesday's choppy trading day with modest gains, extending its winning streak to three sessions, as investors widely expect the European Central Bank to deliver on monetary stimulus at its key meeting today, 22 January 2015.
In Canada, the nation's central bank, the Bank of Canada, delivered a shock interest-rate cut after a monetary policy review yesterday, 21 January 2015, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth. The Bank of Canada, which had been widely expected to hold rates steady before raising them later in the year or in early 2016, cut its benchmark overnight rate by a quarter percentage point to 0.75%the first cut to the rate since April 2009, when the economy was mired in recession. Sliding oil prices, which the central bank said it expects will recover to around $60 in the medium term, will erode growth and inflation for Canada, it said in a statement announcing the interest-rate cut. It lowered its growth forecast for the first half of 2015 to 1.5%, and to 2.1% for the full year from 2.4%.
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