Amid divergent trend among the various index components, key equity indices eked out small gains. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was provisionally up 43.78 points or 0.16% at 28,119.33. European and Asian stocks fell as the fallout from Switzerland scrapping its euro cap extended into a second day. Trading in US index futures indicated a weak opening of US stocks later in the global day today, 16 January 2015.
Union Bank of India joined United Bank of India in cutting base rate after a surprise reduction in repo rate announced by the Reserve Bank of India (RBI) yesterday, 15 January 2015, morning. The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review yesterday, 15 January 2015, and stated that easing of inflationary pressures provided headroom for a shift in the monetary policy stance.
Capital goods stocks rose. TCS dropped after reporting disappointing growth in services revenue in Q3 December 2014. Shares of PSU OMCs declined.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years.
Foreign portfolio investors bought shares worth a net Rs 1738.24 crore yesterday, 15 January 2015, as per provisional data.
In overseas markets, European and Asian stocks fell as the fallout from Switzerland scrapping its euro cap extended into a second day. US stocks edged lower in a volatile trading session yesterday, 15 January 2015, after the Swiss National Bank stunned global markets by cutting its currency cap with the euro.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Global crude oil prices took a breather from a selloff after the International Energy Agency said a price recovery might be in sight.
As per provisional figures, the S&P BSE Sensex was up 43.78 points or 0.16% at 28,119.33. The index jumped 100.55 points at the day's high of 28,176.10 in mid-afternoon trade. The index fell 130.24 points at the day's low of 27,945.31 in early trade.
The 50-unit CNX Nifty was up 21.15 points or 0.25% at 8,515.30, as per provisional figures. The index hit a high of 8,530.75 in intraday trade, its highest level since 8 December 2014. The index hit a low of 8,452.25 in intraday trade.
The total turnover on BSE amounted to Rs 4111 crore, lower than Rs 4305.55 crore yesterday, 15 January 2015.
The BSE Mid-Cap index was up 34.42 points or 0.32% at 10,633.11, outperforming the Sensex. The BSE Small-Cap index was down 4.17 points or 0.04% at 11,309.93, underperforming the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,552 shares declined and 1,373 shares rose. A total of 102 shares were unchanged.
Sugar stocks gained. Bajaj Hindusthan (up 0.26%) and Shree Renuka Sugars (up 0.32%) edged higher, gained. Balrampur Chini Mills fell 0.72%. The Cabinet Committee on Economic Affairs (CCEA) today, 16 January 2015, approved the Fair and Remunerative price of sugarcane payable by sugar mills for the 2015-16 sugar season to be fixed at Rs 230 per quintal. This will be linked to a basic recovery rate of 9.5%, subject to a premium of Rs 2.42 per quintal for every 0.1 percentage point increase in recovery above that level. This decision will ensure a guaranteed price to cane growers, a government statement said.
Shares of PSU OMCs declined. BPCL (down 0.85%) and HPCL (down 1.6%) declined. Indian Oil Corporation rose 0.3%.
The Union Cabinet today, 16 January 2015, gave its approval for amending the Motor Spirit (MS) and High Speed Diesel (HSD) control order for Regulation of Supply, Distribution and Prevention of Malpractices dated 19 December 2005. The amendment will allow private biodiesel manufacturers, their authorised dealers and joint ventures (JVs) of Oil Marketing Companies (OMCs) authorized by the Ministry of Petroleum & Natural Gas (MoP&NG) as dealers and give marketing/ distribution functions to them for the limited purpose of supply of bio-diesel to consumers. Further, the investment and production conditions (as applicable) specified in the Marketing Resolution dated 8 March 2002 of MoP&NG will also be relaxed and a new clause added to give marketing rights for Bio-diesel (B100) to the private biodiesel manufacturers, their authorised dealers and JVs of OMCs authorized by the MoP&NG for direct sales to consumers. This decision will encourage the production and use of bio-diesel in the country, a government statement said.
Capital goods stocks rose. ABB (India) (up 1.1%), L&T (up 1.69%), BEML (up 3.92%), Bharat Heavy Electricals (Bhel) (up 2.18%) Crompton Greaves (up 0.16%) and Siemens (up 1.27%) gained.
Axis Bank gained 0.03% to Rs 514.30 on strong Q3 result. The stock hit high of Rs 521.80 and low of Rs 513. The bank's net profit rose 18.43% to Rs 1899.76 crore on 15.85% rise in total income to Rs 10928.81 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours.
Axis Bank's provisions and contingencies jumped 150.45% to Rs 507.15 crore in Q3 December 2014 over Q3 December 2013. Provisions and contingencies declined 30.05% to Rs 507.15 crore in Q3 December 2014 over Q2 September 2014. The bank said that it held provision coverage of 78% as on 31 December 2014, as a proportion of gross NPAs, including prudential write-offs. The provision coverage before accumulated write-offs was 87%.
On absolute basis, gross non-performing assets (NPAs) edged up to Rs 3901.59 crore as on 31 December 2014, from Rs 3613.10 crore as on 30 September 2014 and Rs 3008.20 crore as on 31 December 2013. The ratio of gross NPAs to gross advances was unchanged at 1.34% as on 31 December 2014, from 1.34% as on 30 September 2014, and rose from 1.25% as on 31 December 2013. The ratio of net NAPs to net advances was unchanged at 0.44% as 31 December 2014, from 0.44% as on 30 September 2014 and rose from 0.42% as on 31 December 2013.
CASA (Current and Savings Account) and retail term deposits constituted 78% of the bank's total deposits as on 31 December 2014.
Axis Bank said that the bank is well capitalised with a healthy Capital Adequacy Ratio (CAR). Under Basel III, Total CAR & Tier I CAR (including the net profit for 9 months ended December 2014) stood at 15.64% & 12.44% respectively.
Axis Bank also said during market hours that the board of directors of the bank at its meeting held today, 16 January 2015, has approved issuance of long term bonds/non-convertible debentures upto Rs 15000 crore on a private placement basis. The approval of shareholders of the bank in terms of the provisions of Companies Act 2013 is proposed to be obtained by way of postal ballot.
TCS dropped after reporting disappointing growth in services revenue in Q3 December 2014. The stock was off 0.71% at Rs 2,527. The stock hit high of Rs 2,545 and low of Rs 2,484. The company's consolidated net profit rose 1.6% to Rs 5328 crore on 2.9% growth in revenue to Rs 24501 crore in Q3 December 2014 over Q2 September 2014. The result hit the market after market hours yesterday, 15 January 2015. TCS' consolidated operating profit rose 3.7% to Rs 6586 crore in Q3 December 2014 over Q2 September 2014.
TCS said that growth in Q3 December 2014 was driven by industries like Telecom, Hi Tech and Life Sciences. Europe led growth, driven by the investments made in that market, while North America also grew during the quarter, TCS said. Among emerging markets, Latin America and MEA registered strong growth, it added. Among service lines, Global Consulting, Asset Leveraged Solutions, Infrastructure Services and Assurance Services were the leaders, TCS said in a statement.
Dewan Housing Finance Corporation rose 2.94% after net profit rose 15.36% to Rs 159.65 crore on 17.30% increase in total income to Rs 1526.53 crore in Q3 December 2014 over Q3 December 2013. The result was announced during trading hours today, 16 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 62.03, compared with its close of 62.065 during the previous trading session.
Global crude oil prices took a breather from a selloff after the International Energy Agency said a price recovery might be in sight. Brent for March settlement was up $1.04 a barrel at $49.31 a barrel. The contract had fallen $1.59 a barrel or 3.18% to settle at $48.27 a barrel during the previous trading session.
On macro front, India's merchandise export declined 3.8% to $25.4 billion in December 2014 over December 2013. Meanwhile, merchandise imports also declined 4.8% to $34.83 billion in December 2014. Thus, the trade deficit narrowed to 10-month low of $9.4 billion in December 2014, while nearly halving from $16.86 billion in November 2014. Trade data was announced after market hours yesterday, 15 January 2015.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years. Also, the issues related to the state government of Rajasthan concerning Japanese trading firm Sojitz Corp, working for Dedicated Freight Corridor (DFC), has been resolved, the Ministry of Commerce & Industry said. The government has set up Japan Plus, a special management team to facilitate Japanese investors.
European stocks declined today, 16 January 2015, as the fallout from Switzerland abandoning the franc's cap extended into a second day. Key indices in France, Germany and UK were off 0.29% to 0.59%.
In its stunning move yesterday, 15 January 2015, the Swiss National Bank dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro.
In Germany, the latest data showed that inflation in Germany weakened in December, confirming its preliminary estimates for the previous month. The steep fall in prices in Germany, Europe's largest economy, supports mounting expectations in financial markets that the European Central Bank will announce large purchases of government bonds at its next policy meeting on Jan. 22, to avert a debilitating slide into deflation. The annual rate of inflation in Germany, measured according to common European Union standards, was 0.1% in December, while prices also rose 0.1% on the month, the Federal Statistics Office said, confirming its preliminary figures published earlier this month. Consumer prices, measured according to national standards, were unchanged on the month and rose 0.2% on the year, also unchanged from the preliminary data, the statistics office Destatis said. Energy continued to keep prices under downward pressure. In annual comparison, energy prices were 6.6% lower in December 2014 than a year earlier, Destatis said.
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 later this month. 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 stocks fell today, 16 January 2015, as the market turmoil sparked by Switzerland abandoning the franc's cap extended into a second day. Key benchmark indices in Singapore, Hong Kong, Taiwan, South Korea, Indonesia and Japan were off 0.29% to 1.43%. China's Shanghai Composite rose 1.2%.
China's central bank the People's Bank of China today, 16 January 2015, said it would lend 50 billion yuan ($8.1 billion) to banks at discounted rates to allow them to re-lend the money to farmers and small businesses - areas of the economy that are usually short of cash.
China's foreign direct investment (FDI) rose an annual 1.7% last year, although the pace slowed from 2013 as a cooling economy and shifting drivers of growth weighed on offshore investment flows. China attracted a record $119.56 billion from foreign investors last year compared to $117.6 billion in 2013, the Ministry of Commerce said in a statement.
Trading in US index futures indicated that the Dow could slide 99 points at the opening bell today, 16 January 2015. US stocks suffered their fifth-straight session of declines yesterday, 15 January 2015, under pressure from disappointing earnings and worries about global economic growth.
On economic data front, more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays. Jobless claims climbed by 19,000 to 316,000 in the week ended 10 January 2015, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed.
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