Key benchmark indices further extended intraday gains in mid-afternoon trade. While the benchmark indices extended gains, the broad market depicted weakness. The market breadth indicating the overall health of the market was weak. The BSE Small-Cap index languished in red while the BSE Mid-Cap index was almost flat. The barometer index, the S&P BSE Sensex, was currently up 263.18 points or 0.91% at 29,269.20.
There are expectations that inflows from foreign funds into India will rise after European Central Bank (ECB) yesterday, 22 January 2015, announced a massive new bond-buying program to boost sluggish eurozone economy.
Mortgage lender HDFC and private sector bank HDFC bank, both, hit record high. Larsen & Toubro and Reliance Industries edged higher. Power generation stocks were mixed. Shares of pharmaceutical companies were mixed.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 592.79 crore yesterday, 22 January 2015, as per provisional data.
Earlier, the Sensex and the 50-unit CNX Nifty, had, both trimmed gains after hitting record high in early trade. The two benchmark indices had surged in early trade after European Central Bank (ECB) announced a massive new bond-buying program yesterday, 22 January 2015, aimed at boosting the sluggish eurozone economy.
In the foreign exchange market, the rupee edged higher against the dollar on optimism the European Central Bank's stimulus will boost demand for emerging- market assets.
Brent crude oil futures edged higher as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets.
In overseas markets, European stocks extending their new-year rally as investors cheered the European Central Bank's decision to buy government bonds in a bid to revive the region's economy and stave off deflation. Asian stocks edged higher after European Central Bank announced a massive new bond-buying program after a monetary policy review yesterday, 22 January 2015. US stocks surged yesterday, 22 January 2015, after the European Central Bank laid out its plan to expand its asset-purchase program.
ECB left interest rates unchanged and announced larger-than-expected measures to stimulate the region's sagging economy after a monetary policy review yesterday, 22 January 2015. ECB will buy 60 billion euros worth of assets per month, more than markets had been hoping for. The ECB said it would purchase sovereign debt from this March until the end of September 2016.
At 14:16 IST, the S&P BSE Sensex was up 263.18 points or 0.91% at 29,269.20. The index jumped 402.71 points at the day's high of 29,408.73 in early trade, a lifetime high for the index. The index rose 159.54 points at the day's low of 29,165.56 in mid-morning trade.
The CNX Nifty was up 62.80 points or 0.72% at 8,824.20. The index hit a high of 8,866.40 in intraday trade, a lifetime high for the index. The index hit a low of 8,795.40 in intraday trade.
The BSE Mid-Cap index was up 2.46 points or 0.02% at 10,712.70. The BSE Small-Cap index was off 51.61 points or 0.45% at 11,397.89. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was weak. On BSE, 1,760 shares dropped and 1,052 shares advanced. A total of 108 shares were unchanged.
Housing finance major HDFC rose 1.03% to Rs 1,292.95. The stock hit a high of Rs 1,340.30 so far during the trade, which is a record high for the counter. The stock hit a low of Rs 1,287.10 so far during the trade.
HDFC Bank rose 2.48% to Rs 1,046.45. The stock hit a high of Rs 1,047.85 so far during the trade, which is a record high for the counter. The stock hit a low of Rs 1,023.40 so far during the trade.
Larsen & Toubro rose 2.57% to Rs 1,705.80. The stock hit a high of Rs 1,712.95 and a low of Rs 1,673.10 so far during the trade.
Reliance Industries rose 1.07% to Rs 893.60. The stock hit a high of Rs 896.90 and a low of Rs 877.45 so far during the trade.
Power generation stocks were mixed. Adani Power (up 5.49%), Tata Power (up 2.89%), Reliance Power (up 2.82%), CESC (up 1.61%), Jaiprakash Power Ventures (up 1.27%), NTPC (up 1.21%), JSW Energy (up 0.81%), Torrent Power (up 0.81%) and Reliance Infrastructure (up 0.39%), edged higher. NHPC (down 0.75%) and GMR Infrastructure (down 0.88%), edged lower.
Minister for Power and Coal Piyush Goyal reportedly said on the sidelines of the World Economic Forum (WEF) meeting on Wednesday, 21 January 2015, that the country's power sector is set for $250 billion investment across different segments. Investments are expected across diverse areas of the energy sector including in renewables as well as transmission and distribution segments, Goyal reportedly said.
Dredging Corporation of India was down 0.07%. As per reports, the government is planning to sell a 5% stake in the state-run dredging company and has invited bids from merchant bankers. The government held 78.56% stake in the firm as on 31 December 2014.
Shares of pharmaceutical companies were mixed. GlaxoSmithKline Pharmaceuticals (up 7.85%), Wockhardt (up 1.76%), Divi's Laboratories (up 1.18%), Ranbaxy Laboratories (up 1.18%), Cipla (up 0.77%), Cadila Healthcare (up 0.52%) and Sun Pharmaceutical Industries (up 0.22%), edged higher. Piramal Enterprises (down 0.07%), Aurobindo Pharma (down 0.17%), Strides Arcolab (down 0.23%), Lupin (down 0.66%) and Glenmark Pharmaceuticals (down 2.41%), edged lower.
Dr Reddy's Laboratories (DRL) fell 0.06% to Rs 3359.40. The stock hit a high of Rs 3400 and a low of Rs 3350.35 so far during the trading session. DRL's wholly owned subsidiary Aurigene Discovery Technologies and Curis Inc. after trading hours in India yesterday, 22 January 2015, announced that they have entered into an exclusive collaborative agreement focused on immune-oncology and selected precision oncology targets. The collaboration provides for inclusion of multiple programs, with Curis having the option to exclusively license compounds once a development candidate is nominated within each respective program. The partnership draws from each company's respective areas of expertise, with Aurigene having the responsibility for conducting all discovery and preclinical activities, including Investigational New Drug (IND)-enabling studies and providing Phase 1 clinical trial supply, and Curis having responsibility for all clinical development, regulatory and commercialization efforts worldwide, excluding India and Russia, for each program for which it exercises an option to obtain a license.
The first two programs under the collaboration are an orally-available small molecule antagonist of programmed death ligand-1 (PD-L1) in the immuno-oncology field and an orally-available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4 (IRAK4) in the precision oncology field. Curis expects to exercise its option to obtain exclusive licenses to both programs and file IND applications for a development candidate from each in 2015.
In connection with the transaction, Curis has agreed to issue to Aurigene approximately 17.1 million shares of its common stocks, or 19.9% of its outstanding common stock immediately prior to the transaction, in partial consideration for the rights granted to Curis under the collaboration agreement. The shares to be issued to Aurigene will be subject to a lock-up agreement until 18 January 2017, with a portion of the shares being released from such lock-up in equal installments between now and such date.
The agreement provides that the two companies will collaborate exclusively in immuno-oncology for an initial period of approximately two years, with the option for Curis to extend the broad immuno-oncology exclusivity.
In addition, Curis has agreed to make a payment of up to $52.5 million per program to Aurigene for the first two programs, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any. For the third and fourth programs, Curis has agreed to make a payment of up to $50 million per program, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any. For any program thereafter, Curis has agreed to make payment of up to $140.5 million per program, including $87.5 million per program in approval and commercial milestones, plus specified approval milestone payments for additional indications, if any.
Curis has agreed to pay Aurigene royalties on any net sales ranging from high single digits to 10% in territories where it successfully commercializes products and will also share in amounts that it receives from sub-licensees depending upon the stage of development of the respective molecule.
Ipca Laboratories slumped after the company said that the United States Food and Drug Administration (USFDA) issued an import alert to the company's active pharmaceutical ingredients (APIs) manufacturing facility located at Ratlam in Madhya Pradesh yesterday, 22 January 2015. The stock was off 8.49%. Ipca clarified that four API manufactured at this manufacturing facility viz. Hydroxychloroquine Sulfate, Propanolol Hydrochloride, Trimethoprim and Ondansetron are excluded from the import alert.
In July last year, the company had already voluntarily suspended API shipments from the unit temporarily after the company received certain inspection observations in Form FDA 483 from the USFDA. Ipca today, 23 January 2015, said that the company is fully committed in resolving this issue at the earliest. Ipca further said that the company is also committed to its philosophy of highest quality in manufacturing, operations, systems, integrity and cGMP culture.
Biotechnology firm Biocon fell 2.85% to Rs 414. The stock hit a high of Rs 422 and a low of Rs 411 so far during the trading session. The company reported 13.39% fall in consolidated net profit to Rs 90.93 crore on 8.25% rise in total income to Rs 778.99 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours yesterday, 22 January 2015.
Commenting on the quarterly performance and highlights, Chairman and Managing Director, Kiran Mazumdar Shaw stated, A significant ramp up in R&D expenses this quarter reflects advances made in multiple R&D programs. Two programs viz. trastuzumab and glargine are progressing well in global Phase III clinical trials, while two other biosimilar programs have entered the clinical stage globally. This clearly positions Biocon as having one of the largest portfolio of Biosimilars in the clinic. Our Research Services arm, Syngene, has reported the best quarter thus far at Rs 220 crore which bodes well as the company prepares for a public listing. I am also pleased to announce the expansion of Biocon's Board with the induction of two new distinguished Board members: Dr. Jeremy Levin, former CEO of TEVA and Prof. Vijay Kuchroo, renowned immunologist and Director of the Evergrande Centre, Harvard Medical School. Biocon continues to invest in its uniquely differentiated Biosimilars portfolio, which straddles both Insulins and Monoclonal Antibodies. We are confident this will deliver short term growth in the emerging markets and drive markets and drive long term value creation across global markets.
In the foreign exchange market, the rupee edged higher against the dollar on optimism the European Central Bank's stimulus will boost demand for emerging- market assets. The partially convertible rupee was hovering at 61.5050, compared with its close of 61.705 during the previous trading session.
Brent crude oil futures edged higher as news of the death of Saudi Arabia's King Abdullah added to uncertainty in energy markets. Brent for March settlement was up 97 cents at $49.49 a barrel. The contract had fallen 51 cents or 1.06% to settle at $48.52 a barrel during the previous trading session. Abdullah died early today, 23 January 2015, and his brother Salman became king, the royal court in the world's top oil exporter and birthplace of Islam said in a statement carried by state television.
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.
Stock market regulator Securities and Exchange Board of India (Sebi) yesterday, 22 January 2015, announced that 25% of the issue price must be received upfront where partly paid shares are issued through public issue and rights issue. The balance consideration shall continue to be received within 12 months if the issue size is less than Rs 500 crore. Where the issue size exceeds Rs 500 crore and the issuer has appointed a monitoring agency, the period can be decided by the issuer as per the existing regulatory framework, Sebi said. In respect of warrants issued along with public or rights issue of specified securities, 25% of the consideration shall be received upfront by the issuer and tenure of such warrants shall be 18 months as against 12 months presently, Sebi said.
The Sebi board also approved amendments to Issue and Listing of Debt Securities (ILDS) Regulations to incorporate express provisions for enabling "Consolidation and Re-issuance of Debt Securities" and "Call and Put options". By enabling consolidation and re-issuance of debt-securities, the illiquid and infrequently traded corporate bonds can be re-issued thereby leading to creation of a larger floating stock that can increase liquidity in the market, Sebi said in a press release. By enabling Call and Put options, the issuer and investors would have flexibility in redemption of debt securities.
In order to further develop the securitisation market, the Sebi board has approved amendments to Securitised Debt Instruments (SDI) regulations to rationalize and clarify the role and responsibilities of trustee, allowing banks and public financial institutions to act as trustee without obtaining registration, terms of appointment and capital requirement for trustee, and providing for a summary term sheet. This is expected to enhance the confidence of investors in securitisation transactions, Sebi said.
European stocks extending their new-year rally as investors cheered the European Central Bank's decision to buy government bonds in a bid to revive the region's economy and stave off deflation. Key benchmark indices in UK, France and Germany were up by 0.44% to 1.21%.
French business confidence in the manufacturing sector was stable in January compared to December, skirting just below the long-term average. Confidence in the manufacturing sector stood at 99 in January--just below the long-term average of 100--as business leaders were less confident about recent production levels, but more bullish about future prospects, a monthly survey by statistics agency Insee showed.
A wider reading of business confidence--including wholesale, construction, retail and services as well as industry--was also stable at 94. Confidence amongst business leaders in retail jumped to 103 from 95 in December, while the construction and wholesale sectors posted slight declines in confidence.
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 Sunday, 25 January 2015. Greece is set to hold snap elections 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 rallied after ECB launched a landmark bond-buying stimulus programme that buoyed investors' risk appetite. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.79% to 1.34%.
China's Shanghai Composite was up 0.25%. China's manufacturing sector strengthened slightly at the start of the year, according to a measure released Friday, but remains in a weak spot. A preliminary reading of the HSBC China Manufacturing Purchasing Managers Index rose to 49.80 in January from a final reading of 49.60 in December. A reading above 50 indicates expansion from the previous month, while a reading below 50 indicates contraction. The overall growth of China's economy slowed to 7.4% in 2014, its slowest pace in more than 20 years, in part because of problems in manufacturing.
Taiwan's industrial output posted stronger-than-expected gains in December, driven by demand for the island's electronic components for new hand-held devices and stocking demand ahead of the Lunar New Year holidays. The index--which measures output from domestic factories, utilities and mines--rose 7.33% year-over-year in December to 111.58, the Ministry of Economic Affairs said today.
Trading in US index futures indicated that the Dow could gain 9 points at the opening bell today, 23 January 2015. US stocks ended higher yesterday following ECB's stimulus announcement. Separately, the number of Americans filing new claims for unemployment benefits fell last week from a seven-month high, pointing to continued improvement in labour market conditions. Initial claims for state unemployment benefits slipped 10,000 to a seasonally adjusted 307,000 for the week ended 17 January 2015, the Labour Department said yesterday.
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