Pharma and cement stocks led rally as key benchmark indices surged on the last trading session of the week on positive cues from Asian and European markets. State Bank of India (SBI) jumped after the banking giant reported strong Q3 results. The barometer index, the S&P BSE Sensex, moved past the psychological 29,000 level as index heavyweights ITC, ICICI Bank, HDFC, L&T and Reliance Industries (RIL) edged higher. The Sensex hit 1-1/2-week closing high. The 50-unit CNX Nifty hit two-week closing high. The Sensex rose 289.83 points or 1.01% to settle at 29,094.93. The market breadth indicating the overall health of the market was positive.
European stocks edged higher, boosted by the tentative signs that the eurozone economy is turning the corner and hopes that Greece and its creditors can strike a deal on extending its bailout. Asian stocks edged higher after Germany and France brokered a deal with Russia yesterday, 12 February 2015, to end fighting in Ukraine. Brent crude oil futures extended previous session's rally.
Bank stocks edged higher after SBI's strong Q3 results. FMCG stocks advanced. Index heavyweight and cigarette maker ITC gained after the company said it has entered into Asset Purchase 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. Mahindra & Mahindra (M&M) shrugged off weak Q3 results. BPCL rose after turnaround in Q3. Index heavyweights Infosys and HDFC Bank dropped.
Cement stocks rose. ACC extended previous session's gains triggered by reports that the stock's weightage has increased in the MSCI Indexes after a quarterly review. FMCG shares advanced. Cipla gained after good Q3 results. Lupin edged higher 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.
On the macro front, the rate of inflation based on the consumer price index (CPI) accelerated to 5.11% in January 2015 from 4.28% in December 2014 after the statistics ministry revised the base year for the calculation of the index to 2012 from 2010. Meanwhile, growth in industrial production decelerated to 1.7% in December 2014 from 3.9% in November 2014. Both CPI and industrial production data was announced after market hours yesterday, 12 February 2015.
Prime Minister Narendra Modi yesterday, 12 February 2015, said that the government is committed to provide predictable and stable tax regime and policies. Finance Minister Arun Jaitley yesterday, 12 February 2015, said that the government is determined to pursue economic reforms despite a defeat for the Bharatiya Janata Party (BJP) in assembly election in Delhi early this week.
Foreign portfolio investors (FIIs) sold shares worth a net Rs 280.89 crore into the secondary equity markets yesterday, 12 February 2015, as per data from the National Securities Depository (NSDL). 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.
In overseas markets, European stocks edged higher, boosted by the tentative signs that the eurozone economy is turning the corner and hopes that Greece and its creditors can strike a deal on extending its bailout. Asian stocks edged higher after Germany and France brokered a deal with Russia yesterday, 12 February 2015, to end fighting in Ukraine. 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.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment.
Brent crude oil futures edged higher as news of deeper industry spending cuts and a sinking US dollar revived buying. Global crude oil prices have witnessed high volatility over the past few days after a steep slide in prices over the past few months. The recent rebound in global crude oil prices will raise concerns pertaining to India's fiscal deficit, current account deficit and fuel price inflation. However, gains in rupee against the dollar will mitigate the negative impact of higher crude oil price. Gains in local currency will reduce the cost of imports. India imports about 80% of its crude oil requirements.
The S&P BSE Sensex rose 289.83 points or 1.01% to settle at 29,094.93, its highest closing level since 2 February 2015. The index jumped 349.57 points at the day's high of 29,154.67 in late trade. The index gained 30.60 points at the day's low of 28,835.70 in early trade.
The CNX Nifty gained 93.95 points or 1.08% to settle at 8,805.50, its highest closing level since 30 January 2015. The index hit a high of 8,822.10 and a low of 8,729.65 in intraday trade.
The BSE Mid-Cap index rose 78.84 points or 0.74% to settle at 10,740.95. The BSE Small-Cap index gained 39.13 points or 0.35% to settle at 11,239.28. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3991 crore, higher than turnover of Rs 3842.48 crore during the previous trading session.
The market breadth indicating the overall health of the market was positive. On BSE, 1,456 shares rose and 1,429 shares fell. A total of 98 shares were unchanged.
Infosys dropped 0.82% to Rs 2,296.40. The stock hit high of Rs 2,324.90 and low of Rs 2,286.95.
L&T rose 0.91% to settle at Rs 1,661.75. The stock hit high of Rs 1,674.25 and low of Rs 1,651
Reliance Industries (RIL) edged higher as global crude oil prices rose. The stock gained 0.74%. Higher crude oil prices would result in higher realizations from crude sales for oil exploration firms like RIL.
Cement stocks rose. Ambuja Cements (up 1.97%), UltraTech Cement (up 2.32%) and Shree Cement (up 1.22%) gained.
Grasim Industries rose 0.96%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
ACC extended previous session's gains triggered by reports that the stock's weightage has increased in the MSCI Indexes after a quarterly review. The stock was up 1.97%.
FMCG shares advanced. Colgate-Palmolive (India) (up 2.47%), Nestle India (up 3.79%), Britannia Industries (up 2.87%), Marico (up 0.72%), Hindustan Unilever (up 0.61%), Godrej Consumer Products (up 2.84%), and Dabur India (up 1.78%) edged higher.
Cipla gained 0.92% to Rs 668.10 after good Q3 results. The stock hit high of Rs 701.60 and low of Rs 660.30. 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.
Shares of other pharma stocks also gained after Cipla announced good Q3 results. Sun Pharmaceutical Industries (up 1.77%), Ranbaxy Laboratories (up 2.01%), Wockhardt (up 1.61%), Dr Reddy's Laboratories (up 0.25%), Cadila Healthcare (up 3.31%), Strides Arcolab (up 0.28%), Elder Pharmaceuticals (up 0.8%) and Divi's Laboratories (up 1.08%) gained.
Lupin rose 3.66% to Rs 1,679.05 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%. The stock hit record high of Rs 1,692.50 in intraday trade. Total FII holding in Lupin stood at 31.77% as on 31 December 2014.
Index heavyweight and cigarette maker ITC gained 1.97% 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.
State Bank of India (SBI) jumped 7.96% to Rs 307.05 after strong Q3 results. The stock was volatile. The scrip hit high of Rs 307.85 and low of Rs 285.50. The bank's net profit rose 30.24% to Rs 2910.06 crore on 12.07% rise in total income to Rs 43783.98 crore in Q3 December 2014 over Q3 December 2013. The bank announced Q3 results during market hours today, 13 February 2015.
SBI's ratio of net non-performing assets (NPAs) to net advances stood at 2.8% as on 31 December 2014, compared with 2.73% as on 30 September 2014 and 3.24% as on 31 December 2013. The bank's ratio of gross NPAs to gross advances stood at 4.9% as on 31 December 2014, compared with 4.89% as on 30 September 2014 and 5.73% as on 31 December 2013.
Provisions and contingencies rose 26.15% to Rs 5234.91 crore in Q3 December 2014 over Q3 December 2013. State Bank of India's provision coverage ratio stood at 63.56% as on 31 December 2014.
Meanwhile, SBI after market hours today, 13 February 2015, said that its board of directors at a meeting held on 10 February 2015, decided to issue equity shares on preferential basis not exceeding Rs 2970 crore to the Government of India (GoI), subject to the approval of GoI and the Reserve Bank of India.
Shares of many other banks edged higher after SBI's strong Q3 results. Bank of India (up 3.67%), Canara Bank (up 3.97%), Bank of Baroda (up 0.66%), ICICI Bank (up 1.27%), and Kotak Mahindra Bank (up 0.83%), edged higher. Yes Bank fell 0.42%.
HDFC Bank dropped 1.22% to Rs 1,064.50. The stock reversed direction after hitting intraday high of Rs 1,085.
Axis Bank fell 0.07% at Rs 578.85. The stock reversed direction after hitting intraday high of Rs 588.60. Axis Bank after market hours yesterday, 12 February 2015, said that the bank 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.
Punjab National Bank (PNB) rose 0.99% at Rs 168. PNB after market hours yesterday, 12 February 2015, said that it has raised Rs 1500 crore through Basel III compliant perpetual debt instruments in the nature of debentures for inclusion in additional Tier I capital at an annual coupon of 9.15% per annum with call option at the end of 10 years through private placement.
Indusind Bank rose 0.6%. With respect to news article titled "IndusInd to Say Bye to UK's Aviva, Hello to Birla Sun Life", Indusind Bank clarified during market hours that Indusind Bank had been reviewing several options to find the right long term partner(s) for life insurance business following earlier announcements by Aviva Life insurance company that their shareholders planned to exit the Life insurance business. Currently, no agreements with any new partners have been concluded. The bank continues to be in talks with several potential partners, it added.
Mahindra & Mahindra (M&M) rose 4.94% to Rs 1,190. The stock hit high of Rs 1,198 and low of Rs 1,122.80. The company's net profit rose 0.86% to Rs 942.14 crore on 9.23% decline in total income to Rs 9667.08 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours. M&M's results were quite weak operationally. The net profit was boosted by exceptional item of Rs 299.34 crore in Q3 December 2014.
With regard to future business outlook, M&M said that the company remains alert to the possibility of ripple effects emanating from a sudden and sharp deterioration in the extant global economic climate.
BPCL rose 2.27% to Rs 723.35 after turnaround in Q3. The stock hit high of Rs 732.85 and low of Rs 693. The company reported net profit of Rs 551.16 crore in Q3 December 2014 as compared with net loss of Rs 1088.94 crore in Q3 December 2013. Total income dropped 10.38% to Rs 58265 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours.
Key benchmark indices edged higher for the fourth day in a row today, 13 February 2015. The Sensex has risen 867.54 points or 3.07% in four trading sessions from a recent low of 28,227.39 on Monday, 9 February 2015. The Sensex has lost 88.02 points or 0.3% in this month so far (till 13 February 2015). The Sensex has risen 1,595.51 points or 5.8% in this calendar year so far (till 13 February 2015). From a 52-week low of 20,149.01 on 14 February 2014, the Sensex has risen 8,945.92 points or 44.39%. The Sensex is off 749.23 points or 2.51% from a record high of 29,844.16 hit on 30 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar on global risk-on sentiment. The partially convertible rupee was hovering at 62.1775, compared with its close of 62.305 during the previous trading session.
Brent crude oil futures edged higher as news of deeper industry spending cuts and a sinking US dollar revived buying. Brent for April settlement was up 94 cents at $60.22 a barrel. The contract had surged $3.36 a barrel to settle at $59.28 a barrel during the previous trading session.
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. Meanwhile, growth in industrial production decelerated to 1.7% in December 2014 from 3.9% in November 2014. Both CPI and industrial production data was 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.
Prime Minister Narendra Modi yesterday, 12 February 2015, said that the government is committed to provide predictable and stable tax regime and policies. Modi made these comments during his meeting with Treasury Secretary of the United States Jacob Lew, accompanied by the Vice Chairman of the US Federal Reserve, Stanley Fischer. The two are visiting India for the India-US Economic and Financial Partnership dialogue which is co-chaired by the Finance Minister of India.
Finance Minister Arun Jaitley yesterday, 12 February 2015, said that the government is determined to pursue economic reforms despite a defeat for the Bharatiya Janata Party (BJP) in assembly election in Delhi early this week. Jaitley also reportedly said at a news conference after talks with his US counterpart, Treasury Secretary Jack Lew that India's economy is poised to take off at a much faster pace. The BJP was trounced in assembly election held in Delhi last week. The Aam Aadmi Party won 67 of 70 seats. The BJP won a mere 3 seats.
The next major event for the financial markets is Union Budget for 2015-16. Finance Minister Arun Jaitley will present Union Budget 2015-16 in Parliament 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.
European stocks edged higher today, 13 February 2015, boosted by the tentative signs that the eurozone economy is turning the corner and hopes that Greece and its creditors can strike a deal on extending its bailout. Key indices in France and UK were up 0.694% to 0.74%.
After Germany logged better-than-expected fourth-quarter growth, the DAX index surged above 11,000 points for the first time. The index was currently up 0.59% at 10,984.56.
A strong pickup in Germany led an acceleration in eurozone economic growth in the final three months of 2014, but large parts of the currency area were either close to stagnation or still contracting. The European Union's statistics agency said today, 13 February 2015, the combined gross domestic product of the 18 countries that then shared the euro was 0.3% higher in the fourth quarter than in the third.
Germany's Gross Domestic Product (GDP) rose by 0.7% in the fourth quarter of 2014, its fastest expansion since the first quarter of last year, latest data showed today, 13 February 2015. Destatis, the German statistics body, said that the country's economy gained momentum towards the end of 2014.
Meanwhile, 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. Greece is scrambling to reach a deal with creditors before it runs out of cash. Greece's current bailout plan expires on 28 February 2015.
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 0.21% to 1.07%. Japan's Nikkei Average fell 0.37%.
Trading in US index futures indicated that the Dow could gain 37 points at the opening bell today, 13 February 2015. 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.
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