Key benchmark indices edged lower in choppy trade, with selling intensifying towards the latter part of the trading session. Indian stocks today, 26 November 2013, gave away a portion of Monday's strong gains triggered by hopes that a price decline in oil -- India's biggest import product -- will narrow the nation's current-account deficit, the government's fiscal deficit and contain inflation. Crude oil prices rose today, 26 November 2013, after trimming intraday losses on Monday, 25 November 2013. Monday's volatility in crude oil price materialized after an interim agreement between Iran and six world powers on Sunday, 24 November 2013, to restrict Iran's nuclear program. Iran is one of the leading oil producers in the world.
Weakness in Asian and European stocks also weighed on Indian stocks today, 26 November 2013. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, lost 180.06 points or 0.87%, up 34.40 points from the day's low and off 179.25 points from the day's high. Asian and European stocks fell as investors await data on the US housing market and US consumer confidence.
The Sensex had jumped 387.69 points or 1.92% to settle at 20,605.08 on Monday, 25 November 2013, on hopes oil prices would slump after Iran clinched a nuclear deal with world powers on Sunday, 24 November 2013. The Sensex has fallen 739.50 points or 3.49% in November so far (till 26 November 2013). The Sensex has garnered 998.31 points or 5.14% in calendar 2013 so far (till 26 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 2,976.31 points or 17.06%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 896.51 points or 4.2%.
Coming back to today's trade, index heavyweight and cigarette major ITC dropped. Another heavyweight Reliance Industries (RIL) also fell in volatile trade. Bank stocks edged lower. Realty stocks also declined. PSU OMCs dropped as crude oil prices rose after trimming intraday losses on Monday, 25 November 2013. Education stocks rallied.
The market may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month November 2013 series to December 2013 series. The near month November 2013 derivatives contract expire on Thursday, 28 November 2013.
The S&P BSE Sensex lost 180.06 points or 0.87% to settle at 20,425.02, its lowest closing level since 22 November 2013. The index dropped 214.46 points at the day's low of 20,390.62 in late trade. The index fell 0.81 points at the day's high of 20,604.27 in opening trade.
The CNX Nifty shed 56.25 points or 0.92% to settle at 6,059.10, its lowest closing level since 22 November 2013. The index hit a low of 6,047.75 in intraday trade. The index hit a high of 6,112.70 in intraday trade.
The total turnover on BSE amounted to Rs 3943 crore, higher than Rs 1833.99 crore on Monday, 25 November 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,459 shares fell and 1,056 shares rose. A total of 139 shares were unchanged.
The BSE Mid-Cap index shed 0.26% and the BSE Small-Cap index fell 0.83%. Both the indices outperformed the Sensex.
The BSE Auto index (up 0.49%), the BSE Power index (up .36%), the BSE Capital Goods index (up 0.32%), the BSE IT index (down 0.29%), the BSE Teck index (down 0.53%), the BSE Metal index (down 0.73%) and the BSE HealthCare index (down 0.77%), outperformed the Sensex
The BSE Consumer Durables index (down 0.89%), the BSE Realty index (down 0.92%), the BSE FMCG index (down 1.14%), the BSE Oil & Gas index (down 1.23%), the BSE PSU index (down 1.36%) and the BSE Bankex (down 1.52%) underperformed the Sensex.
Among the 30-share Sensex pack, 23 stocks fell and rest rose. HDFC (down 1.61%), Dr Reddy's Laboratories (down 1.65%) and Bharti Airtel (down 2.14%) edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC dropped 1.96%.
Shares of United Spirits edged lower in volatile trade after the Office of Fair Trading (OFT), UK on Monday, 25 November 2013, said it is considering an offer from Diageo plc (Diageo) to sell most of its Whyte & Mackay business to address competition concerns regarding bottled blended Scotch whisky, arising from Diageo's acquisition of United Spirits. The stock shed 1.52% to settle at Rs 2581.05. The stock hit high of Rs 2,661.20 and low of Rs 2,400. Huge volumes were witnessed on the counter. On BSE, 71.87 lakh shares changed hands on the counter, compared with average daily volume of 1.5 lakh shares in the past one quarter.
Diageo and United Spirits are both suppliers of spirits in the UK and across the world. In the UK, United Spirits' subsidiary, Whyte & Mackay, is primarily active in the supply of whisky and it also owns and distributes other spirits, including vodka. The parties are major suppliers of bottled blended whisky to retailers with Whyte & Mackay also being an important supplier of own-label blended whisky. A number of retailers have expressed concerns to the OFT about possible price rises for bottled blended whisky sold in the UK as a result of the merger, OFT said in a press release.
The OFT's investigation found that there is substantial competition in the retail sector between Bell's whisky, a Diageo label, and Whyte & Mackay's own-label and branded blended whisky. After analysing evidence including data on consumer switching between brands, economic modelling and internal documents, the OFT found the merger may lead to a substantial lessening of competition in the supply of blended whisky to retailers.
The OFT considered to what extent other manufacturers of blended whisky were capable of competing with the merged business. The evidence showed that other manufacturers did not have, and could not quickly reach, sufficient capacity to offset the loss of competition likely to result from the merger.
United Spirits announced after market hours on Monday, 25 November 2013, that its board will consider the OFT announcement and determine further course of action in this regard.
Asian Paints dropped 2.11% after the company after trading hours on Monday, 25 November 2013, said that its wholly owned subsidiary -- Asian Paints Industrial Coatings (APICL) -- has closed down the operations of its powder coatings plant at Baddi, Himachal Pradesh with effect from 25 November 2013 due to significant decline in the processing volume of powder coatings over the last two years. APICL's plant at Sarigam, Gujarat will continue its normal operations and is sufficient to cater to the future requirements, Asian Paints said in a statement.
Index heavyweight Reliance Industries lost 1.3% to Rs 840.25. The stock hit a high of Rs 857.25 and low of Rs 840.
Cairn India fell 2.42% ahead of a meeting of the board of directors of the company today, 26 November 2013, to consider a proposal for buy back of equity shares of the company.
PSU OMCs dropped as crude oil prices rose after trimming intraday losses on Monday, 25 November 2013. HPCL (down 4.47%), BPCL (down 6.49%) and Indian Oil Corporation (down 2.11%) declined. Shares of PSU OMCs had surged on Monday, 25 November 2013, on hopes oil prices would slump after Iran clinched a nuclear deal with world powers on Sunday, 24 November 2013. US crude oil futures for January delivery were up 53 cents or 0.56% at $94.62 a barrel. Brent crude oil futures for January delivery were up 6 cents or 0.05% at $111.06 a barrel.
Iran and six world powers clinched a deal on Sunday, 24 November 2013, curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war. Iran's oil exports will be held to about 1 million barrels a day under sanctions that remain in force after the deal. The six-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, leaves in place banking and financial measures that have hampered its crude exports. Sanctions on sales of refined products also remain, while Iran gains access to $4.2 billion in oil revenue frozen in foreign banks. As part of the deal, the European Union (EU) will lift a ban on insurance for tankers transporting Iranian oil, making it easier for the Persian Gulf nation's six remaining customers to take delivery. The EU will continue to prohibit crude imports from Iran.
GAIL (India) declined 1.56%. The company after trading hours on Monday, 25 November 2013, said that the company has allocated one MMTPA of LNG volume sourced from the United States to its subsidiary GAIL Global (Singapore) Pte. (GGSPL) for trading in the global market. This experience of global trading would help to develop requisite skill sets and competence within the company and thereby expand the business in the global LNG market in a self-sustaining manner, GAIL (India) Chairman and Managing Director, Mr. B C Tripathi said. GAIL opened its Singapore office in 2011 through GGSPL for sourcing natural gas and for trading in LNG and petrochemicals, etc.
Mr. Tripathi also mentioned about GAIL's plans to venture into LNG shipping to bring LNG volume from the US, doubling the capacity of Dabhol LNG terminal, upstream investment in Tanzania and setting up floating LNG re-gasification terminal in Andhra Pradesh along with GDF Suez and Shell. He emphasized that going forward, innovative new business models are essential for the LNG industry which can provide flexibility and security in supplies while reducing the total cost of LNG to consumers. He reiterated that GAIL would continue to promote regional cooperation among Asian buyers and create Asian Gas Index so that LNG prices for Asia become in sync with market prices.
GAIL (India) was the first Asian company to have signed a long term LNG Sales and Purchase Agreement with Sabine Pass Liquefaction, LLC, USA in 2011 for supply of 3.5 MTPA LNG over 20 years. This agreement had price linkage with Henry-Hub price instead of crude oil and signalled a new approach in gas pricing. Building on this deal, GAIL signed a Terminal Service Agreement with M/s Dominion Cove Point LNG LP for booking 2.3 MMTPA liquefaction capacity in the Cove Point liquefaction terminal in the US. The US subsidiary of GAIL contracted half of Dominion's capacity for 20 years. GAIL also executed a long-term Gas Sale and Purchase Agreement with Gazprom Marketing and Trading Singapore for supply of 2.5 MMTPA LNG per annum from its Shtokman production facilities over a period of 20 years. GAIL signed an MoU with EDF Trading of the US for cooperation in the areas of North American upstream equity investments, gas supply to export facilities and LNG supply optimization.
Coal India (CIL) shed 2.45%. Coal India has identified 126 new projects to take up during the 12th Plan period with an estimated capacity of 438.04 million tonnes (MT). Out of these 60 projects are likely to contribute about 88 MT during the terminal year of 12th Plan i.e. 2016-17. Beside this, CIL has planned a number of other initiatives to increase coal production. In order to infuse world class technology and modernize, CIL has been decided to appoint a consultant of international standings for the modernization of its mines. The bid for selection of consultant is under process.
In order to overcome the problem of slow coal evacuation from its three major coalfields namely North Karanpura - Auranga of CCL, Mand Raigarh - Korba of SECL & Ib Valley of MCL which have a high growth potential, CIL has planned investment of Rs 7045 crore in three major railway infrastructure facilities namely Tori-Shivpur (Kathotia), Mand-Raigarh- Korba & Gopalpur- Manoharpur in these coalfields respectively which is under various stages of implementation. These rail links together shall stretch to about 435 kms, are expected to handle 150 Mt by the end of 12th Plan periods.
IT stocks fell on weak economic data in US, the biggest outsourcing market for the Indian IT firms. TCS (down 1.02%), and Wipro (down 0.82%) declined.
Infosys fell in volatile trade. The stock shed 0.5% at Rs 3,311. The scrip hit a high of Rs 3,348.45 and low of Rs 3,293.25.
Metal stocks were mixed. Sesa Sterlite (up 1.4%), JSW Steel (up 0.47%), Hindalco Industries (up 0.08%), Hindustan Zinc (up 1.63%), edged higher. Tata Steel (down 1.46%), NMDC (down 3.89%), Sail (down 0.53%), National Aluminum Company (down 1.06%) and Hindustan Copper (down 2%) declined.
Auto stocks were mostly lower. Maruti Suzuki India dropped 1.52%. M&M slipped 0.07%. Ashok Leyland lost 1.28%. Tata Motors rose 1.09%.
Eicher Motors gained 3.82% to Rs 4,350. The stock hit a record high of Rs 4,353.50 in intraday trade.
Shares of two-wheeler makers were mixed. Hero MotoCorp shed 0.06%. Bajaj Auto rose 0.04%.
Capital goods stocks extended Monday's robust gains. ABB (up 5.12%), Crompton Greaves (up 0.51%), Bharat Heavy Electricals (up 2.12%) and L&T (up 0.03%) edged higher.
Siemens rose 1.49%, with the stock extending Monday's strong gains triggered by the company's announcement that its order inflow rose 7% to Rs 10957.30 crore in the year ended 30 September 2013 (FY 2013) over the year ended 30 September 2012 (FY 2012).
NHPC shed 0.56%. The company during market hours informed that consequent upon successful trial run on full load of unit number 2 of Uri-11 HE Project (4X60 megawatt), this unit will be put on commercial operation with effect from 1 December 2013.
Sun Pharmaceutical Industries fell 1.46%, with the stock reversing intraday gain. Taro Pharmaceutical Industries, the US based subsidiary of Sun Pharma announced on Monday, 25 November 2013, that it has commenced a modified "Dutch auction" tender offer to repurchase up to $200 million of its ordinary shares at a price not greater than $97.50 per share nor less than $84.50 per share (the "Offer"). If the Offer is fully subscribed, the number of shares to be purchased in the Offer represents approximately 4.6% to 5.3% of Taro's currently issued and outstanding shares depending on the purchase price payable for those shares pursuant to the Offer, Taro said in a statement. The NYSE closing price of Taro ordinary shares on 22 November 2013, the last full trading day before announcement and commencement of this tender offer, was $89.57 per share.
The Offer will expire at 12 midnight, New York City time, on Monday, 23 December 2013, unless extended by Taro. Tendering stockholders may specify a price not greater than $97.50 per share nor less than $84.50 per share (in increments of $0.25) at which they are willing to sell their shares pursuant to the Offer. On the terms and subject to the conditions of the Offer, the company will designate a single per share price that the company will pay for shares properly tendered and not properly withdrawn from the Offer, taking into account the total number of shares tendered and the prices specified by tendering stockholders. The company will select the lowest purchase price, not greater than $97.50 per share nor less than $84.50 per share, that will allow it to purchase ordinary shares having an aggregate purchase price of $200 million, or a lower amount depending on the number of ordinary shares properly tendered and not properly withdrawn. Only shares validly tendered at prices at or below the Final Purchase Price, and not properly withdrawn, will be eligible for purchase in the Offer.
As of 31 October 2013, Taro had approximately $741 million in cash and cash equivalents and short-term bank deposits. Taro will use a portion of its cash and cash equivalents and short-term bank deposits to fund the tender offer.
Bank stocks edged lower. ICICI Bank (down 2.61%) and HDFC Bank (down 1.11%) declined.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed 1.04% to 5.52%.
The Reserve Bank of India (RBI) on Monday, 25 November 2013, said that it has decided to include incremental bank loans to medium manufacturing enterprises (as defined in the MSMED Act, 2006), extended by banks after 13 November 2013 as priority sector advances. The RBI also said that incremental bank loans to medium service enterprises extended after 13 November 2013, up to the credit limit of Rs 10 crore, would qualify as priority sector advances. The RBI has also raised the loan limit given to micro and small service enterprises to Rs 10 crore from Rs 5 crore that will be treated as priority sector advance. This facility will remain open till 31 March 2014, the RBI said in a statement.
Under priority sector advance, most banks have to lend 40% of their loans to agriculture, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sectors.
IDBI Bank fell in choppy trade after global credit rating agency Standard and Poor's downgraded the lender's rating to below investment grade citing expectations for weaker asset quality. The stock shed 1.23% at Rs 64. The scrip hit high of Rs 64.65 and low of Rs 63.55. S&P lowered IDBI's foreign currency issuer credit rating to "BB-plus/B" from "BBB-minus/A-3." The outlook is "negative." "We downgraded IDBI because we expect the bank's asset quality to remain weak over the next 12-18 months," said Standard and Poor's in a report released on Monday, 25 November 2013.
Realty stocks declined. HDIL (down 0.53%), Unitech (down 6.19%) and D B Realty (down 3.16%) declined. DLF was flat.
Shares of hospitality firms rose after the Reserve Bank of India on Monday, 25 November 2013, widened the definition of infrastructure sector lending to include hotels with project costing more than Rs 200 crore in any place in India and of any star rating as well as convention centres with project worth Rs 300 crore. Indian Hotels (up 5.82%), EIH (up 1.67%) and Hotel Leela Venture (up 4.83%) rose. The Finance Ministry has favoured relaxation of lending rules for infrastructure projects in order to expedite them. Also, it has written to the RBI suggesting changes in the rules for infrastructure financing, including the treatment of non-performing loans to the sector.
SpiceJet slumped 7.33% to Rs 15.80. The stock hit a 52-week low of Rs 15.50 in intraday trade.
Education stocks rallied. Core Education Technologies, Everonn Education, Educomp Solutions, Aptech, NIIT, Zee Learn, Edserv Softsystems and Career Point rose 1.12% to 20%.
Select stocks tumbled on exclusion from MSCI index.
Unitech (down 6.19%), Canara Bank (down 4.65%), Bank of India (down 3.73%) and Wockhardt (down 3.45%), edged lower.
The Morgan Stanley Capital International (MSCI) dropped these shares from its MSCI India index. All the changes were effective from close of trade today, 26 November 2013. MSCI Barra is a leading provider of benchmark indices and risk management analytics products. Many global mutual funds are linked with MSCI indices. Hence, deletion of a stock from the MSCI index leads to outflow of passive funds that use the MSCI index to benchmark their portfolios.
In the foreign exchange market, the rupee gave away entire intraday gains against the dollar and ended flat for the day on month-end demand for the US currency from oil firms. The partially convertible rupee ended steady at 62.50/51 per dollar compared to its close on Monday, 25 November 2013. The pair moved in a range of 62.28 to 62.5350 during the session.
India's economic growth is seen recovering a bit in Q2 September 2013. The GDP growth for Q2 September 2013 is projected at 4.7%, as per the median estimate of a poll of economists carried out by Capital Market. India's GDP grew at its slowest pace in four years at 4.4% in Q1 June 2013. The government unveils Q2 September 2013 GDP growth data on Friday, 29 November 2013.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
European stocks edged lower in choppy trade on Tuesday, 26 November 2013, as investors awaited data on the US housing market and consumer confidence. Key benchmark indices in France, Germany and UK were off 0.03% to 0.38%.
Asian stocks edged lower in choppy trade on Tuesday, 26 November 2013. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, and Japan were off 0.01% to 2.3%. Key benchmark indices in South Korea and Taiwan were up 0.33% to 0.74%.
Most Bank of Japan board members agreed that inflation was likely to reach around 2% toward the latter half of the projection period of between the 2013 and 2015 fiscal years, according to minutes of the Oct. 31 meeting released today in Tokyo.
China's central bank governor said on Tuesday, 26 November 2013, that Beijing is moving ahead with plans to liberalize domestic interest rates and reduce its intervention in the foreign exchange market, the state-run China Securities Journal's website reported. In a speech at a financial forum, People's Bank of China Governor Zhou Xiaochuan repeated statements that the central bank is focusing on liberalizing deposit rates and wants to withdraw from routine intervention in the foreign exchange market. Mr. Zhou also was cited as saying that China will speed its move toward capital account convertibility in order to facilitate overseas trade and investment by domestic companies. The central bank chief also called for expanded quotas under the qualified domestic institutional investors and qualified foreign institutional investors programs, which cover inbound and outbound investments by institutions.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Tuesday, 26 November 2013. US stocks ended mixed on Monday, 25 November 2013, after disappointing report on the housing market. The number of contracts Americans signed to buy previously-owned homes unexpectedly fell in October for a fifth consecutive month amid higher borrowing costs that are denting the real-estate recovery. The gauge of pending home sales decreased 0.6% after a 4.6% drop in September, the National Association of Realtors said in Washington.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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