After alternately swinging between gains and losses in intraday trade, key benchmark indices eked out small gains. The overall movement for the benchmark indices was within a relatively narrow range during the trading session. The barometer index, the S&P BSE Sensex, was provisionally up 41.54 points or 0.15% to 27838.55. The market breadth indicating the overall health of the market was positive. The BSE Small-Cap index was up 1.06%, outperforming the Sensex. Insurance stocks edged higher after the Parliamentary Select Committee cleared the government's proposal of an increase in cap on foreign investment in the insurance sector to 49% from 26%.
Meanwhile, 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 edged higher in renewed buying. Jewellery stocks jumped on reports that the government may change gold-import rules for trading houses. Tata Power Company advanced after the company said it has signed a share purchase agreement for acquisition of a 540 megawatts (MW) coal based thermal power project in Maharashtra.
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, European stocks recovered after yesterday's slide triggered by political uncertainty in Greece. Asian markets ended on a mixed note. 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 weakened past 62 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.
As per provisional closing, the S&P BSE Sensex was up 41.54 points or 0.15% to 27838.55. The index jumped 108.24 points at the day's high of 27,905.25 in early afternoon 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 14.95 points or 0.18% at 8,355.65, as per provisional closing. The index hit a high of 8,376.80 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 94.82 points or 0.93% at 10,301.35. The BSE Small-Cap index was up 118.42 points or 1.06% at 11,312.54. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,667 shares gained and 1,261 shares fell. A total of 111 shares were unchanged.
The total turnover on BSE amounted to Rs 3022 crore, lower than turnover of Rs 3040.29 crore during previous trading session.
Bank stocks edged higher in renewed buying. Bank of India (up 5.32%), Canara Bank (up 3.82%), Federal Bank (up 2.31%), Bank of Baroda (up 2.21%), Punjab National Bank (up 2.34%), IndusInd Bank (up 1.72%), Kotak Mahindra Bank (up 1.17%), HDFC Bank (up 0.52%), Axis Bank (up 0.02%), ICICI Bank (up 0.6%) and Yes Bank (up 0.19%) edged higher.
State Bank of India (SBI) rose 3.49% at Rs 317.40. 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 the Parliamentary Select Committee cleared the government's proposal of an increase in cap on foreign investment in the insurance sector to 49% from 26%. Max India (up 4.52%), Exide Industries (up 1.95%), Aditya Birla Nuvo (up 0.38%), Religare Enterprises (up 0.39%) and ICICI Bank (up 0.6%) edged higher. HDFC (down 0.33%), and Bajaj Finserv (down 2.66%) edged lower. 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.
Reliance Capital rose 4.54% at Rs 539. The company during market hours today, 10 December 2014, in a clarification with regard to news item titled "RCAP to gain 12-fold from Rs. 500 cr Yatra.com stake sale" said that the company is continuously engaged in evaluating opportunities to unlock value from all its minority investments in non-core areas outside its financial services businesses. As and when any transaction is finalised resulting in a disclosable event, the stock exchanges will be promptly informed as required under Clause 36 of the Listing Agreement, Reliance Capital said. Reliance Capital issued the clarification after media reports said that the company plans to sell its entire stake in online travel company Yatra.com for Rs 500 crore.
Jewellery stocks jumped on reports that the government may change gold-import rules for trading houses. Gitanjali Gems (up 9.02%), Shree Ganesh Jewellery House (I) (up 8.4%), Titan Company (up 3.99%), Tribhovandas Bhimji Zaveri (up 4.2%), Tara Jewels (up 1.06%), PC Jeweller (up 2.56%), and Rajesh Exports (up 1.56%) edged higher. According to reports, the government will announce changes to a rule mandating trading houses to export 100% of their gold imports. The government could also announce changes to rules imposed last year mandating that all imports be paid fully with cash margins, the report added.
The government had last month scrapped a rule mandating traders to export 20% of all gold imported into the country, known as the 80:20 rule.
Tata motors rose 1.55% at Rs 510.90. The stock hit a high of Rs 514.75 and a low of Rs 493. 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 1.25% at Rs 1,541.70. The stock hit a high of Rs 1,565.50 and a low of Rs 1,540. 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 1.29% at Rs 648.10. 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.
Tata Power Company rose 1.87% at Rs 87. The company during market hours today, 10 December 2014, said that the company has signed a share purchase agreement (SPA) for acquisition of 100% shareholding in Ideal Energy Projects (IEPL). IEPL owns a 540 MW coal based thermal power project near village Bela in the Nagpur district of Maharashtra. Half the power plant's capacity was commissioned in May 2013 and is based on domestic coal.
This project will help Tata Power service its customers in Maharashtra competitively, Tata Power said. With this acquisition, Tata Power's total generation capacity will increase to 8,885 MW, the company said in a statement.
In the foreign exchange market, the rupee weakened past 62 against the dollar. The partially convertible rupee was hovering at 62.01, 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 88 cents a barrel at $65.96 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.
The government also 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.
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.
On the domestic macro front, inflation is seen easing further in November 2014 and growth in industrial production is seen improving a bit in October 2014. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India is seen easing further to 4.4% in November 2014, from 5.52% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the data on CPI inflation for November 2014 after trading hours on Friday, 12 December 2014.
The annual rate of inflation based on the wholesale price index (WPI) is seen easing further to 1.2% in November 2014, from 1.77% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the inflation data based on wholesale price index (WPI) for November 2014 at 12.15 noon on 15 December 2014.
Growth in industrial production is seen inching up to 2.7% in October 2014, from 2.5% in September 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will unveil industrial production data for October 2014 after trading hours on Friday, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from 0.5% in August 2014.
European stocks recovered today, 10 December 2014, after yesterday's slide triggered by political uncertainty in Greece. Key indices in Germany, UK, and France were up 0.28% to 0.8%.
French industrial output fell in October as production of energy, agricultural and food products declined on the month, official data showed today, 10 December 2014. Industrial production in the eurozone's second largest economy fell 0.8% in October compared with September, the national statistics agency Insee said.
Greece's government yesterday, 9 December 2014, said it will hold a presidential election two months earlier than expected, on 17 December 2014. The announcement came a day after eurozone finance ministers early this week extended bailout talks for Greece into early 2015. The target for Greece to exit its 240 billion-euro ($297.07 billion) bailout program was the end of this year, but progress has been held up by a deadlock between the government and its international creditors over the Greek budget.
Asian markets were mixed today, 10 December 2014. Key indices in China, Hong Kong, Singapore and Indonesia were up 0.14% to 2.96%. 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 2 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.
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