A range bound movement was witnessed as key benchmark indices languished in red in afternoon trade. The barometer index, the S&P BSE Sensex, was currently down 119.78 points or 0.43% at 27,796.10. The market breadth indicating the overall health of the market was negative. As per media reports, at least a dozen new ministers are set to be inducted by Narendra Modi government as part of the cabinet expansion that is likely to take place on Sunday, 9 November 2014. Meanwhile, the Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus from tax.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1030.85 crore during the previous trading session on Wednesday, 5 October 2014, as per provisional data released by the stock exchanges. The stock market was closed yesterday, 6 November 2014, on account of Gurunanak Jayanti.
Shares of public sector oil marketing companies rose on fall in crude oil prices. Cairn India dropped as crude oil prices declined. Pharma stocks gained on weak rupee, with Dr Reddy's Laboratories hitting record high.
Earlier, the barometer index, the Sensex and 50-unit CNX Nifty, had trimmed losses after both the indices hit one-week low in morning trade.
In overseas markets, Asian stocks rose after a drop in American jobless claims bolstered optimism in the world's largest economy before a US government report on employment. US stocks edged higher yesterday, 6 November 2014, with the S&P 500 and Dow Jones Industrial Average climbing to record levels for the second straight day after European Central Bank president Mario Draghi hinted at monetary stimulus of as much as euro 1 trillion for eurozone economy.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength in dollar.
Brent crude futures dropped on a stronger dollar and on lower oil demand forecast by the Organization of the Petroleum Exporting Countries (OPEC).
At 13:15 IST, the S&P BSE Sensex was down 119.78 points or 0.43% at 27,796.10. The index lost 176.32 points at the day's low of 27,739.56 in morning trade, its lowest level since 31 October 2014. The index gained 65.05 points at the day's high of 27,980.93 in early trade.
The CNX Nifty was down 22.85 points or 0.27% at 8,315.45. The index hit a low of 8,290.25 in intraday trade, its lowest level since 31 October 2014. The index hit a high of 8,360.35 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,483 shares declined and 1,286 shares gained. A total of 96 shares were unchanged.
The BSE Mid-Cap index was up 23.18 points or 0.23% at 9,987.79. The BSE Small-Cap index was off 15.33 points or 0.14% at 11,145.65. Both these indices outperformed the Sensex.
Shares of public sector oil marketing companies rose on fall in crude oil prices. BPCL (up 2.93%), Indian Oil Corporation (up 2.04%) and HPCL (up 3.88%) edged higher. Lower crude oil prices will reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of lower global crude oil prices to that extent. The government has already freed pricing of petrol and diesel.
Cairn India dropped 0.68% as crude oil prices declined. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Pharma stocks gained on weak rupee. Sun Pharmaceutical Industries (up 1.6%), Cipla (up 0.47%), Lupin (up 0.99%), and Wockhardt (up 0.85%), gained. Weakness in rupee could boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.
Dr Reddy's Laboratories jumped 4.91% to Rs 3409.50 after hitting record high of Rs 3419 in intraday trade. As per reports the US Food and Drug Administration (FDA) has granted final approval to Dr Reddy's Laboratories and US firm Endo International Plc to make cheaper copies of Roche Holding AG's antiviral Valcyte.
Aurobindo Pharma rose 3.29% after net profit rose 58.41% to Rs 372.18 crore on 51.57% increase in total income to Rs 2908.51 crore in Q2 September 2014 over Q2 September 2013.
Ranbaxy Laboratories gained 0.76% to Rs 658.60. The stock was volatile. The stock hit high of Rs 661.05 and low of Rs 623 so far during the day. The company yesterday, 6 November 2014, announced that it received communication from the US Food and Drug Administration (FDA) wherein FDA has determined that Ranbaxy's Abbreviated New Drug Applications (ANDAs) of concern did not have any data integrity issues. However, FDA has rescinded the previously granted tentative approvals for Ranbaxy's ANDAs for esomeprazole magnesium delayed-release capsules, 20 milligram (mg) and 40 mg and for valganciclovir hydrochloride tablets USP, 450 mg.
FDA has said that its original decisions granting tentative approvals were in error because of the compliance status of the facilities referenced in the ANDAs at the time the tentative approvals were granted. As a consequence, in FDA's view, Ranbaxy has forfeited its eligibility for 180-day exclusivity for its ANDA for valganciclovir hydrochloride tablets USP, 450 mg. Ranbaxy said it is disappointed with this development and is actively evaluating all available options to preserve its rights.
GlaxoSmithKline Pharmaceuticals gained 1.49% after the company's net profit rose 27.46% to Rs 128.67 crore on 17.48% increase in total income to Rs 782.46 crore in Q3 September 2014 over Q3 September 2013.
Cadila Healthcare jumped 6.35% after consolidated net profit rose 51.65% to Rs 278.09 crore on 20.67% rise in total income to Rs 2122.61 crore in Q2 September 2014 over Q2 September 2013.
Torrent Pharmaceuticals rose 1.14% after the company's consolidated net profit surged 75% to Rs 198 crore on 25% growth in revenue to Rs 1217 crore in Q2 September 2014 over Q2 September 2013.
Pfizer shed 3.33% after the company reported net loss of Rs 11.83 crore in Q2 September 2014 as against net profit of Rs 69.59 crore in Q2 September 2013. Pfizer's total income from operations declined 0.83% to Rs 296.48 crore in Q2 September 2014 over Q2 September 2013.
Bata India fell 2.25%. The company's net profit rose 3.77% to Rs 39 crore on 13.22% rise in total income to Rs 558.53 crore in Q3 September 2014 over Q3 September 2013. The result hit the market after trading hours on Wednesday, 5 November 2014.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength in dollar. The partially convertible rupee was hovering at 61.5275, compared with its close of 61.42 during the previous trading session on Wednesday, 5 November 2014. The currency market was shut yesterday, 6 November 2014, on account of Gurunanak Jayanti.
Brent crude futures dropped on a stronger dollar and on lower oil demand forecast by the Organization of the Petroleum Exporting Countries (OPEC). A stronger greenback makes it more expensive for holders of other currencies to buy dollar-denominated commodities. Brent for December delivery was off 51 cents at $82.35 a barrel. The contract had fallen 9 cents a barrel to settle at $82.86 a barrel yesterday, 6 November 2014.
OPEC expects its crude production to fall by 1.8 million barrels a day by the end of 2017 to 28.2 million barrels a day, it said in its annual outlook report. In general, it is expected that the US recovery will provide a significant support factor for medium-term global economic growth, the cartel said, but added that weak data from Brazil, Russia, India and China have lowered the medium-term forecast for these countries.
Meanwhile, as per media reports, at least a dozen new ministers are set to be inducted by Narendra Modi government as part of the cabinet expansion that is likely to take place on Sunday, 9 November 2014. Goa Chief Minister Manohar Parrikar is tipped to get the defence portfolio. Currently Finance Minister Arun Jaitley is handling the defence portfolio. BJP general secretary JP Nadda's name is doing the rounds as a possible environment minister. Jayant Sinha, who is the son of former finance minister Yashwant Sinha, is tipped to become minister of state for finance.
Prime Minister Narendra Modi is also likely to induct some representatives of the allies into the union cabinet. According to reports, Suresh Prabhu might get an important cabinet berth, possibly rural development.
Reserve Bank of India (RBI) Deputy Governor H.R. Khan reportedly said today, 7 November 2014, that India's inflation has a long way to go before it eases because of high input costs. The reasons for elevated food price inflation remain structural, he said. Khan, in a speech in Mumbai, also noted rural inflation was high because of supply chain issues. Khan also warned against too much complacency in markets, but he did not elaborate.
Prime Minister Narendra Modi today, 7 November 2014, said that the government is working towards revitalizing the textile sector through a scientific approach, coupled with infusion of appropriate technology. He said so after laying the foundation stone of the Trade Facilitation Centre and Crafts Museum, and inaugurating the Powerloom Service Centre in Varanasi in Uttar Pradesh.
India's Ministry of Urban Development yesterday, 6 November 2014, said that Singapore has shown keen interest in partnering with India in the urban development sector, including development of a new smart satellite city and a new capital for the state of Andhra Pradesh. Top leadership of Singapore conveyed their areas of interest during the extensive talks that the Minister of Urban Development M.Venkaiah Naidu held with Singapore's Prime Minister Lee Hsien Loong and former Prime Minister and Emeritus Minister Goh Chok Tong in separate meetings in Singapore yesterday, 6 November 2014.
Meanwhile, the Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus from tax. India, which has blacklisted the tax haven for not sharing information on bank accounts, will lift this restriction only if Cyprus agrees to scrap the capital gains exemption. A team of officials from the external affairs ministry will reportedly travel to Cyprus this month. India is also concerned at the misuse of the tax benefit by investors from third countries that route their investments via Cyprus into the South Asian nation to take advantage of the tax exemption.
Asian stocks rose today, 7 November 2014, after a drop in American jobless claims bolstered optimism in the world's largest economy before a US government report on employment. Key benchmark indices in Singapore, Taiwan, Japan and South Korea were up 0.16% to 0.52%. Key benchmark indices in China, Hong Kong and Indonesia were off 0.32% to 0.94%.
China's central bank vowed to lower funding costs for corporate borrowers amid increasing pressure on the nation's slowing economy. In a report published yesterday, 6 November 2014, on third-quarter monetary policy, the People's Bank of China also confirmed it had already conducted two rounds of liquidity injections into the country's banking system in September and October totaling 769.5 billion yuan ($125.9 billion) in a bid to guide interest rates lower and support economic growth. A report on the central bank's website indicated that the central bank had pumped the funds with a tenor of 3 months at an interest rate of 3.5% into the country's state, midsize and smaller lenders.
Trading in US index futures indicated that the Dow could rise 33 points at the opening bell today 7 November 2014. US stocks edged higher yesterday, 6 November 2014, with the S&P 500 and Dow Jones Industrial Average climbing to record levels for the second straight day after European Central Bank president Mario Draghi hinted at monetary stimulus of as much as euro 1 trillion for eurozone economy. In economic news, the number of Americans applying for new jobless benefits lingered below 300,000 for the eighth straight week amid the lowest level of layoffs in years. US productivity in the third quarter grew at a 2% annual pace, preliminary data show, marking the fourth sizable increase in the past five quarters.
The influential US nonfarm payrolls report for October will be released later in the global day today, 7 November 2014.
In Europe, the latest data showed that Germany's industrial production rose less than expected in September, potentially augmenting growth concerns about Europe's largest economy. In monthly terms, industrial output increased by 1.4% in September, data provided by the country's economy ministry showed today, 7 November 2014. Data for August was revised upward to show a decline of only 3.1%, versus the 4.0% drop originally reported.
The European Central Bank, left interest rates unchanged after a policy meeting yesterday, 6 November 2014. The ECB's key lending rate, known as the refi rate, was left at 0.05%, while the rate the ECB pays on deposits held at the central bank remains at minus-0.2%. ECB President Mario Draghi said policy makers will be ready to implement further measures if needed as he signaled officials may cut growth forecasts next month. Speaking at a press conference in Frankfurt yesterday, 6 November 2014, Draghi said that the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate.
The Bank of England yesterday, 6 November 2014, held the size of its bond-buying program steady and left its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee maintained its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($599 billion).
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