Key benchmark indices edged higher in early trade on firmness in Asian stocks and higher finish for US stocks yesterday, 12 February 2015. The barometer index, the S&P BSE Sensex was currently up 50.71 points or 0.18% at 28,855.81. The market breadth indicating the overall health of the market was strong.
Bharat Heavy Electricals (Bhel) slumped on weak Q3 results. Axis Bank rose after the bank said that it has allotted unsecured redeemable non convertible subordinated debentures (Basel - III Compliant Tier II Debentures) (Series - 22) of Rs 10 lakh each for cash at par aggregating to Rs 850 crore. Cipla gained on good Q3 results.
The rate of inflation based on the consumer price index (CPI) rose 5.11% in January 2015 and the industrial production rose 1.7% in December 2014, data showed after market hours yesterday, 12 February 2015.
Foreign portfolio investors sold shares worth a net Rs 406.28 crore yesterday, 12 February 2015, as per provisional data. Domestic institutional investors (DIIs) bought shares worth a net Rs 705.53 crore yesterday, 12 February 2015, as per provisional data released by the stock exchanges.
Among overseas markets, Asian stocks edged higher on news of a ceasefire accord in Ukraine, while Sweden's surprise move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished risk appetite. US stocks climbed yesterday, 12 February 2015, with major benchmarks nearing record highs, buoyed by a truce deal in Ukraine and strong quarterly earnings reports.
At 9:23 IST, the S&P BSE Sensex was up 50.71 points or 0.18% at 28,855.81. The index rose 110.17 points at the day's high of 28,915.27 in early trade. The index gained 30.60 points at the day's low of 28,835.70 in early trade.
The CNX Nifty was up 38.15 points or 0.44% at 8,749.70. The index hit a high of 8,752.70 in intraday trade. The index hit a low of 8,729.65 in intraday trade.
The BSE Mid-Cap index was up 36.59 points or 0.34% at 10,698.70. The BSE Small-Cap index was up 51.38 points or 0.46% at 11,251.53. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 855 shares rose and 391 shares fell. A total of 35 shares were unchanged.
Lupin rose 3.55% after the Reserve Bank of India yesterday, 12 February 2015, raised the ceiling on investment in the company's shares by foreign institutional investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) under the portfolio investment scheme to 49% of the company's equity capital with effect from 12 February 2015, from earlier 33%. Total FII holding in Lupin stood at 31.77% as on 31 December 2014.
Coal India gained 0.39%. The company's consolidated net profit fell 16.21% to Rs 3262.49 crore on 4.36% rise in total income to Rs 19944.86 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours yesterday, 12 February 2015.
Bharat Heavy Electricals (Bhel) slumped 5.34% on weak Q3 results. The company's net profit fell 69.4% to Rs 212.60 crore on 27.48% decline in total income to Rs 6472.06 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours on Thursday, 12 February 2015. Bhel had an outstanding order book position of about Rs 103900 crore as on 31 December 2014.
Axis Bank rose 0.3% after the bank after market hours yesterday, 12 February 2015 said that it has allotted unsecured redeemable non convertible subordinated debentures (Basel - III Compliant Tier II Debentures) (Series - 22) of Rs 10 lakh each for cash at par aggregating to Rs 850 crore.
Cipla gained 1.57% on good Q3 results. The company's consolidated net profit rose 15.3% to Rs 328 crore on 6.5% growth in income from operations to Rs 2765 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours yesterday, 12 February 2015.
Cipla's EBITDA (earnings before interest, taxation, depreciation, and amortization) rose 18.5% to Rs 554 crore in Q3 December 2014 over Q3 December 2013.
Domestic sales rose 14.2% to Rs 1199 crore in Q3 December 2014 over Q3 December 2013. The growth in domestic sales was largely on account of growth in respiratory, anti-infectives, cardiac and gastro intestinal therapies, Cipla said in a statement.
Exports of formulations declined 6.2% to Rs 1275 crore in Q3 December 2014 over Q3 December 2013. Exports of APIs fell 4.4% to Rs 151 crore in Q3 December 2014 over Q3 December 2013.
Meanwhile, Cipla said it has signed a definitive agreement to acquire 60% stake of Jay Precision Pharmaceuticals (Jay Precision), Mumbai, from the existing shareholders, for a cash consideration of Rs 96 crore. Jay Precision is an existing supplier of respiratory devices to the company and has a state of the art manufacturing facility at Vasai, Maharashtra. Considering company's leading position in inhalation therapy, this transaction is aimed at integrating the value chain and will serve as platform for development of next generation respiratory devices, Cipla said. Pharmaceutical undertaking of Jay Precision Products (India) was demerged into Jay Precision effective 1 January 2014. Turnover of Jay Precision for the year ended 31 March 2014 was Rs 30 crore. The transaction is expected to be completed by end of this financial year, subject to completion of certain conditions precedent, Cipla said.
Cipla said that none of the persons belonging to promoter/promoter group(s) of the company has any interest in the transaction and it is not a related party transaction for the company. The transaction does not require any governmental or regulatory approval(s), Cipla added.
In separate news, Cipla said before market hours that a binding term sheet has been entered into with the company's existing partner, Biopharm SPA, for establishing a joint venture (JV) company in Algeria. The JV company will manufacture and market respiratory products facilitating Cipla's front-end presence in Algeria. As per the term sheet, the company's wholly owned subsidiary, Cipla (EU), will hold a 40% stake in the JV company while the remainder will be held by a Biopharm-led Algerian consortium. The JV company is expected to make an investment of up to $15 million in the construction of a manufacturing facility. Cipla (EU)'s initial investment in cash in the JV company is expected to be $6 million. None of the persons belonging to promoter/promoter group(s) of the company has any interest in the transaction and it is not a related party transaction for the company. The transaction is subject to execution of definitive agreement and applicable approvals.
ITC gained 0.59% after the company said before market hours that it has entered into Asset Purchase Agreements (Agreements) with Johnson & Johnson, India & Johnson & Johnson Pte., Singapore on 12 February 2015, for purchase of 'Savlon' and 'Shower To Shower' trademarks and other intellectual property, respectively, primarily for use in India. These Agreements are subject to customary closing conditions and regulatory permissions as may be necessary.
On macro front, the rate of inflation based on the consumer price index (CPI) rose 5.11% in January 2015 compared with a 4.28% gain in December 2014. The Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation has revised the base year of the CPI from 2010 to 2012. The industrial production rose 1.7% in December 2014. The CPI and IIP data were announced after market hours yesterday, 12 February 2015.
The rate of inflation based on the wholesale price index (WPI) is seen accelerating to 0.4% in January 2015 from 0.1% in December 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil WPI data for January 2015 at 12.10 noon on 16 February 2015.
The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 on 28 February 2015. Analysts will scrutinize measures in the Budget for financing infrastructure projects as well as the government's own capital expenditure on infrastructure for the year ahead. This is the first full fledged Budget of the Narendra Modi government and analysts will look for a roadmap for economic growth for the next few years.
Changes in rates of dividend distribution tax, capital gains tax on sale of shares, Securities Transaction Tax (STT) and Minimum Alternate Tax (MAT), if any, will be closely watched. The dividend distribution tax is currently at 15%. The minimum alternate tax is currently at 18.5% of book profits. Short term capital gains tax on sale of shares is currently at 15% while there is zero long capital gains tax on sale of shares held for a period of more than one year.
The upcoming Budget session of the parliament assumes utmost importance as the government intends to replace the ordinances it had promulgated after the conclusion of the winter session of the parliament with Bills and get them cleared by both Houses of Parliament during the budget session. The Narendra Modi government promulgated a slew of ordinances after the last session of Parliament. Some of the key ordinances include raising the FDI in the insurance sector from 26% to 49%, e-auctioning of coal mines and amendment to the Land Acquisition Act.
Asian stocks edged higher today, 13 February 2015, on news of a ceasefire accord in Ukraine, while Sweden's surprise move to cut its main rate into negative territory and hopes of a resolution between debt-strapped Greece and its creditors burnished risk appetite. Key indices in China, Hong Kong, Singapore, Taiwan, Indonesia, and South Korea were up 0.08% to 1.57%. Japan's Nikkei Average fell 0.31%.
US stocks climbed on Thursday, 12 February 2015, with major benchmarks nearing record highs, buoyed by a truce deal in Ukraine and strong quarterly earnings reports.
In economic news, jobless claims in the week ended Feb. 7 rose 25,000 to 304,000, the Labor Department said. Retail sales fell in January for the second month in a row, fueling worries that the drop in gasoline prices isn't translating into more consumer spending. Sales fell 0.8% last month to $439.77 billion, the Commerce Department said.
Meanwhile in Europe, a standoff between Greece and its European creditors on Greece's bailout program eased somewhat after Greece made an about-face yesterday, 12 February 2015, agreeing to talk to the "troika" of international lenders.
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