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Key indices retain positive zone

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A range bound movement was witnessed as key benchmark indices retained positive zone in early afternoon trade. The Sensex was currently hovering above the psychological 29,000 mark, having alternately moved above and below that level so far during the trading session. The Sensex was currently up 118.30 points or 0.41% at 29,007.16. The market breadth indicating the overall health of the market was positive.

There are expectations that inflows from foreign funds into Indian equities will rise if the European Central Bank (ECB) boosts monetary stimulus for the eurozone 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.

 

Auto and FMCG stocks were mixed. Emami jumped after the company said its wholly owned subsidiary has acquired controlling stake of 66.67% in Fravin Pty Ltd (Fravin), a company based in Australia with major strength in R&D and manufacture of natural and organic personal care products in Australia. Oriental Bank of Commerce declined.

Earlier, the Sensex and the 50-unit CNX Nifty, both, hit record high in mid-morning trade as these two key benchmark indices extended their initial gains. The Sensex moved past the psychological 29,000 level for the first time in its history.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 2065.49 crore yesterday, 21 January 2015, as per provisional data.

In overseas markets, 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.

In the foreign exchange market, the rupee edged lower against the dollar.

Brent crude futures edged higher in volatile trade.

At 12:19 IST, the S&P BSE Sensex was up 118.30 points or 0.41% at 29,007.16. 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 53.07 points at the day's low of 28,941.93 in early trade.

The CNX Nifty was up 25.55 points or 0.29% at 8,755.05. The index hit a high of 8,772.70 in intraday trade, a lifetime high for the index. The index hit a low of 8,734.90 in intraday trade.

The BSE Mid-Cap index was up 29.69 points or 0.28% at 10,731.93, underperforming the Sensex. The BSE Small-Cap index was 61.61 points or 0.54% at 11,484.49, outperforming the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,329 shares advanced and 1,256 shares declined. A total of 90 shares were unchanged.

FMCG stocks were mixed. Bajaj Corp (up 1.83%), Colgate-Palmolive (India) (up 1.57%), Marico (up 1.11%), Hindustan Unilever (up 1.05%), Nestle India (up 1.03%), GlaxoSmithKline Consumer Healthcare (up 0.63%), Tata Global Beverages (up 0.57%), Dabur India (up 0.34%), Procter & Gamble Hygiene & Health Care (up 0.18%) and Jyothy Laboratories (up 0.13%), edged higher. Godrej Consumer Products (down 1.17%), Bata India (down 0.22%) and Britannia Industries (down 0.08%), edged lower.

Emami jumped 6.82%. The company announced during trading hours that Emami Overseas FZE (based in UAE), a wholly owned subsidiary of the company has acquired controlling stake of 66.67% in Fravin Pty Ltd (Fravin), a company based in Australia with major strength in R&D and manufacture of natural and organic personal care products in Australia. Consequent to the acquisition, Fravin alongwith its three subsidiary companies have become subsidiaries of Emami.

Auto stocks were mixed. Tata Motors (up 1.62%), Mahindra & Mahindra (up 0.30%), Bajaj Auto (up 0.20%), Hero MotoCorp (up 0.12%), Eicher Motors (up 0.05%) and TVS Motor Company (up 0.02%), edged higher. Maruti Suzuki India (down 0.46%), Escorts (down 0.49%) and Ashok Leyland (down 0.86%), edged lower.

Oriental Bank of Commerce was off 1.92%. The state-run bank announced during trading hours that its issue of Basel III Compliant Perpetual Debt Instruments of Rs 10 lakh each for cash at par aggregating Rs 500 crore is slated to open for subscription tomorrow, 23 January 2015. The issue closes on 6 February 2015. The bonds have been rated ICRA AA- (Hyb) & CARE AA- by ICRA & CARE respectively and bear coupon rate of 9.48% per annum.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.645, compared with its close of 61.635 during the previous trading session.

Brent crude futures edged slightly higher in volatile trade. Brent for March settlement was up 4 cents at $49.07 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.

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.

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 0.89%. 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 25 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 Europe, 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.

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.

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First Published: Jan 22 2015 | 12:16 PM IST

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