A bout of volatility was witnessed as key benchmark indices trimmed gains after extending gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 24.69 points or 0.09% at 27,821.70. The market breadth indicating the overall health of the market was strong. Insurance stocks edged higher after media reports said the Parliamentary Select Committee has cleared the government's proposal of an increase in cap on foreign investment in the insurance sector to 49% from 26%.
Meanwhile, State Bank of India (SBI) Chairperson Arundhati Bhattacharya reportedly said yesterday, 9 December 2014, that lending rates will come down only after the bank is able to bring down its cost of funds and sees a pickup in credit growth, so that higher volumes can compensate for the income loss.
Index heavyweight ITC fell in volatile trade. ONGC, NHPC and Coal India gained after Finance Minister Arun Jaitley in written reply to a question in Rajya Sabha yesterday, 9 December 2014, said that the recent fall in share prices of these companies is nothing unusual and does not show any diminished appetite for these stocks. Power generation and distribution stocks gained on renewed buying. Power finance companies were also in demand. Among side counters, Bharti Infratel scaled record high. SKS Microfinance jumped after a foreign brokerage house reportedly initiated rating on the stock with a buy rating.
Meanwhile, Russian President Vladimir Putin arrives on a two-day visit to India today, 10 December 2014, for the 15th Annual India-Russia Summit.
Earlier, the Sensex had hit its lowest level in almost 6 weeks and the 50-unit CNX Nifty had touched its lowest level in more than 4 weeks in early trade.
Foreign portfolio investors sold shares worth a net Rs 221.52 crore yesterday, 9 December 2014, as per provisional data.
In overseas markets, Asian markets were mixed. The US stock market staged a rebound yesterday, 9 December 2014, but still ended the day lower, even after erasing steep opening losses sparked by China's tightening of lending rules and Greece's surprise elections announcement.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged lower on worries over a deepening supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
At 13:15 IST, the S&P BSE Sensex was up 24.69 points or 0.09% at 27,821.70. The index jumped 108.24 points at the day's high of 27,905.25 in early afternoon trade. The index lost 86.98 points at the day's low of 27,710.03 in early trade, its lowest level since 31 October 2014.
The CNX Nifty was up 12.65 points or 0.15% at 8,353.35. The index hit a high of 8,373.65 in intraday trade. The index hit a low of 8,317 in intraday trade, its lowest level since 10 November 2014.
The BSE Mid-Cap index was up 86.75 points or 0.85% at 10,293.28. The BSE Small-Cap index was up 100.44 points or 0.9% at 11,294.56. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,586 shares gained and 1,039 shares fell. A total of 94 shares were unchanged.
The total turnover on BSE amounted to Rs 1726 crore by 13:15 IST.
Index heavyweight ITC fell 1.09% to Rs 389.95. The stock was volatile. The stock hit high of Rs 395.55 and low of Rs 386.35 so far during the day. The company after market hours yesterday, 9 December 2014, in a clarification with regard to news item titled ITC Lines Up Rs.1K-crore Dairy & Juice Biz Foray, said that the company's Foods Division, as part of its business portfolio, launches various value added variants to augment its product range. Entry into the 'Dairy' and 'Juices' category are some of such initiatives, ITC said. ITC said that the news item under reference seems to paraphrase what has been covered in the speech delivered by the Chairman at the Annual General Meeting of the company held in July 2014 and news reports published in various newspapers.
ONGC (up 2.16%) and NHPC (up 0.26%) gained. Finance Minister Arun Jaitley said in written reply to a question in Rajya Sabha yesterday, 9 December 2014, that the recent fall in share prices of Coal India, ONGC and NHPC is nothing unusual and does not show any diminished appetite for these stocks. Jaitley said that the government has finalized plans to sell a part of its stake in Coal India, ONGC and NHPC under its disinvestment programme for the current fiscal year. As a general phenomenon, other things remaining the same, when the supply of any stock in the market increases, there is a run-down on the stock price. Disinvestment increases the quantity of CPSE stocks in the market. Therefore, the recent fall in share prices of Coal India, ONGC and NHPC is nothing unusual and does not show any diminished appetite for these stocks, Jaitley said.
The government has already approved selling 10% stake in Coal India, 5% stake in ONGC and 11.36% stake in NHPC.
Coal India (CIL) rose 0.33%. Coal India after market hours yesterday, 9 December 2014, in a clarification with regard to news item titled CIL signs pact for 1,000 mw solar power projects, said that a Memorandum of Understanding (MoU) was signed between CIL and Solar Energy Corporation of India (SECI) for setting up of 750 megawatt (MW) solar power plants in a solar park located in Madhya Pradesh (MP). A detailed project report (DPR) will be prepared by Solar Energy Corporation of India (SECI) at a cost of Rs 75 lakh. Coal India board in its meeting held on 8 November 2014 accorded its approval for engaging Solar Energy Corporation of India (SECI) to prepare detailed project report (DPR) for setting up of 750 MW of solar power plants. CIL board's approval is only for preparation of detailed project report (DPR) for setting up of 750 MW solar power plants. Only after examination of project report final decision would be taken about setting up of solar power plants, Coal India said.
Power generation and distribution stocks gained on renewed buying. Reliance Power (up 1.71%), Adani Power (up 2.64%), NTPC (up 0.7%), Reliance Infrastructure (up 1.65%), GVK Power & Infrastructure (up 0.92%) and Tata Power Company (up 2.58%) edged higher.
Among power finance companies REC (up 2.38%) and Power Finance Corporation (up 2.2%) gained.
Bharti Infratel gained 2.74% to Rs 327.90 after scaling a record high of Rs 330.95 in intraday trade.
SKS Microfinance jumped 8.21% to Rs 377.80 after a foreign brokerage house reportedly initiated rating on the stock with a buy rating. Non-banking microfinance companies have resumed their growth trajectory, the foreign brokerage house reportedly said.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.985, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged lower on worries over a deepening supply glut. Brent for January settlement was off 69 cents a barrel at $66.15 a barrel. The contract had gained 65 cents a barrel to settle at $66.84 during the previous trading session.
The Indian government plans to introduce the Coal Mines (Special Provisions) Bill, 2014 to replace the Coal Mines (Special Provisions) Ordinance, 2014 in Lok Sabha this week. The government is also likely to introduce the constitutional amendment bill for the goods & services tax during the ongoing winter session of parliament. The government also plans to bring the MMDR Amendment Bill, 2014 during the ongoing winter session of parliament.
The government also intends to get the Insurance Laws Amendment Bill that seeks to enhance foreign investment limit in capital starved insurance sector passed during the ongoing winter session of parliament.
Meanwhile, Russian President Vladimir Putin arrives on a two-day visit to India today, 10 December 2014, for the 15th Annual India-Russia Summit. Ahead of his visit, India's Ministry of External Affairs on 5 December 2014 said that the Summit will have a strong focus on redefining the economic partnership between the two countries. Several documents are under preparation for signing at the Summit, in the fields of defence, nuclear energy, customs, banking and energy, the Ministry of External Affairs said had said at that time. India is keenly interested in participating in more hydrocarbon projects in Russia, the Ministry of External Affairs said on 5 December 2014. India has said clearly that it cannot be party to any sanctions against Russia, the Ministry of External Affairs said on 5 December 2014.
Meanwhile, the Ministry of Urban Development yesterday, 9 December 2014, said that a ten member all Party Parliamentary delegation from Romania which is currently on a six day visit to India has expressed the desire to enhance Romania's engagement with India in Parliamentary and economic spheres. At a meeting between Parliamentary Affairs Minster M.Venkaiah Naidu and Valeriu Stefan Zgone, President of the Chambers of Deputies, Parliament of Romania, it was felt that the present level of bilateral trade of about $666 million between India and Romania is inadequate to the potential and need to be increased by identifying new areas of cooperation for mutual benefit, the Ministry of Urban Development said. Naidu is also the Minister of Urban Development.
The government will unveil industrial production data for October 2014 on Friday, 12 December 2014. Industrial production growth improved to 2.5% in September 2014, from a revised 0.5% growth in August 2014.
The government will release annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India for November 2014 on Friday, 12 December 2014. CPI for urban and rural India eased to 5.52% in October 2014, from 6.46% in September 2014.
The government will release the inflation data based on wholesale price index (WPI) for November 2014 on 15 December 2014. WPI eased to 1.77% in October from 2.38% in September 2014.
Asian markets were mixed today, 10 December 2014. Key indices in China, Hong Kong, Singapore and Indonesia were up 0.24% to 2.93%. Key indices in Taiwan, Japan, and South Korea were off 1.06% to 2.25%.
China's annual consumer inflation eased to a five-year low of 1.4% in November, signalling persistent weakness in the world's second-largest economy and giving policymakers more room to ease policy to support growth. The consumer price index fell 0.2% in November from October, the National Bureau of Statistics said today, 10 December 2014.
Japanese consumer confidence in November worsened for a fourth straight month, a Cabinet Office survey showed today, 10 December 2014, showing the April sales tax hike is continuing to weigh on sentiment. The survey's sentiment index for general households, which includes views on incomes and jobs, was at 37.7 in November, the lowest since April.
Trading in US index futures indicated that the Dow could gain 12 points at the opening bell today, 10 December 2014. The US stock market staged a rebound yesterday, 9 December 2014, but still ended the day lower, even after erasing steep opening losses sparked by China's tightening of lending rules and Greece's surprise elections announcement. Overseas news overshadowed speculation that the Federal Reserve may be close to pulling back its pledge to keep rates low, with yields falling amid a flight to quality.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 16-17 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy.
In Europe, Greece has brought forward to this month the date of its next presidential election, which is conducted by the country's parliament. The announcement yesterday, 9 December 2014, came after eurozone ministers approved a Greek request for a two-month extension to its bailout programme, due to end later this month. The presidential vote on 17 December will be a vital test for embattled Prime Minister Antonis Samaras.
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