After a sharp surge in early trade triggered by European Central Bank's (ECB) announcement of a massive new bond-buying program yesterday, 22 January 2015, aimed at boosting the sluggish eurozone economy, key equity benchmark indices in India trimmed gains in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, trimmed gains after hitting record high. The market breadth turned negative from positive. The BSE Small-Cap and Mid-Cap indices, both, slipped into the red from green. The Sensex was currently up 311.36 points or 1.07% at 29,317.38.
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.
Auto stocks were in demand. Tata Motors hit record high after the company yesterday, 22 January 2015, announced the commercial launch of its much-awaited sporty hatchback Bolt. SpiceJet edged higher after the company said that the airline has received approval from the Ministry of Civil Aviation for change in ownership, management and control of SpiceJet in favour of Mr. Ajay Singh.
HCL Infosystems slumped after weak Q3 numbers. Shares of fertilizer companies rose after the Ministry of Consumer Affairs, Food & Public Distribution after trading hours yesterday, 22 January 2015, said that the High Level Committee (HCL) on restructuring of Food Corporation of India (FCI) has in its report submitted to the government has suggested that farmers should be given direct cash subsidy of about Rs 7,000 per hectare and fertilizer sector can then be deregulated.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 592.79 crore yesterday, 22 January 2015, as per provisional data.
In the foreign exchange market, the rupee edged higher against the dollar as European Central Bank's stimulus program may boost fund flows to higher-yielding emerging-market assets.
Brent crude oil futures edged higher after Saudi Arabia announced that King Abdullah had died and his successor, Salman, moved quickly to name his own heir to rule the world's biggest oil exporter.
In overseas markets, Asian stocks rallied after European Central Bank (ECB) launched a landmark bond-buying stimulus programme that buoyed investors' risk appetite. 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 10:15 IST, the S&P BSE Sensex was up 311.36 points or 1.07% at 29,317.38. 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 183.31 points at the day's low of 29,189.33 at the onset of the trading session.
The CNX Nifty was up 80.95 points or 0.92% at 8,842.35. The index hit a high of 8,866.40 in intraday trade, a lifetime high for the index. The index hit a low of 8,827 in intraday trade.
The BSE Mid-Cap index was off 7.69 points or 0.07% at 10,702.55. The BSE Small-Cap index was off 38.20 points or 0.33% at 11,411.30. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market turned negative from positive in morning trade. On BSE, 1,169 shares dropped and 992 shares advanced. A total of 95 shares were unchanged.
Shares of fertilizer companies rose after the Ministry of Consumer Affairs, Food & Public Distribution after trading hours yesterday, 22 January 2015, said that the High Level Committee (HCL) on restructuring of Food Corporation of India (FCI) has in its report submitted to the government has suggested that farmers should be given direct cash subsidy of about Rs 7,000 per hectare and fertilizer sector can then be deregulated.
Gujarat State Fertilizers Company (up 6.64%), Rashtriya Chemicals and Fertilisers (up 3.24%), National Fertilizers (up 1.69%), Coromandel International (up 1.58%), Chambal Fertilisers & Chemicals (up 1.32%), Deepak Fertilisers & Petrochemicals Corporation (up 1.31%), Fertilisers & Chemicals Travancore (up 1.06%) and Tata Chemicals (up 0.39%), edged higher. Zuari Global was off 2.01%.
The HLC said in its report that direct cash subsidy to farmers would help plug diversion of urea to non-agricultural uses as well as to neighbouring countries and help raise the efficiency of fertilizer use. This type of direct cash subsidy to farmers will go a long way to help those who take loans from money lenders at exorbitant interest rates to buy fertilizers or other inputs, thus relieving some distress in the agrarian sector, the HLC said. Since the whole system of food management operates within the ambit of providing food security at a national as well as at household level, it must be realized that farmers need due incentives to raise productivity and overall food production in the country, the HLC said in its report. In India, urea prices are administered at a very low level compared to prices of DAP and MOP, creating highly imbalanced use of N, P and K, the HLC said.
Auto stocks were in demand. TVS Motor Company (up 1.5%), Hero MotoCorp (up 1.26%), Mahindra & Mahindra (up 1.19%), Bajaj Auto (up 0.87%), Maruti Suzuki (India) (up 0.41%), Ashok Leyland (up 0.32%) and Escorts (up 0.04%), edged higher. Eicher Motors was off 0.05%.
Tata Motors hit record high after the company yesterday, 22 January 2015, announced the commercial launch of its much-awaited sporty hatchback Bolt. The stock was up 2.2% at Rs 578.75. The stock hit a high of Rs 586.45 in intraday trade so far during the trading session, which is record high for the counter. The stock hit a low of Rs 573.50 so far during the trading session.
HCL Infosystems lost 9.38% to Rs 44.90. The stock hit a high of Rs 49.75 and a low of Rs 43.85 so far during the trading session. The company reported consolidated net loss of Rs 50.82 crore in Q2 December 2014, higher than net loss of Rs 44.15 crore in Q2 December 2013. Total income fell 25% to Rs 1468.81 crore in Q2 December 2014 over Q2 December 2013. The result was announced after trading hours yesterday, 22 January 2015.
SpiceJet rose 2.94%. The company announced during trading hours that it received the approval of the competent authority, the Ministry of Civil Aviation, Government of India for the scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet by Ajay Singh in accordance with the application made by the company.
SpiceJet had last week said that its board of directors at a meeting held on 15 January 2015, inter-alia, considered the proposal of the principal shareholder and promoter, Kalanithi Maran and KAL Airways to transfer the ownership, management and control of the company to Ajay Singh pursuant to a scheme of reconstruction and revival for the takeover of ownership, management and control of the company to be filed before the Ministry of Civil Aviation, Government of India.
In the foreign exchange market, the rupee edged higher against the dollar as European Central Bank's stimulus program may boost fund flows to higher-yielding emerging-market assets. The partially convertible rupee was hovering at 61.435, compared with its close of 61.705 during the previous trading session.
Brent crude oil futures edged higher after Saudi Arabia announced that King Abdullah had died and his successor, Salman, moved quickly to name his own heir to rule the world's biggest oil exporter. Brent for March settlement was up 92 cents at $49.44 a barrel. The contract had fallen 51 cents or 1.06% to settle at $48.52 a barrel during the previous trading session.
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.
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 0.72% to 1.26%.
China's Shanghai Composite was up 1.39%. 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.
Trading in US index futures indicated that the Dow could fall 12 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.
In Europe, 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.
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