After staging intraday rebound in morning trade, key benchmark inidces weakened once again in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently off 68.75 points or 0.25% at 27,281.93. Weakness in global stocks weighed on sentiment on the domestic bourses. The market breadth indicating the overall health of the market was negative. BSE Small-Cap and Mid-Cap indices, both, slipped into the red from green.
ONGC rose after the company said its board of directors at its meeting held on Friday, 12 December 2014, was notified the three discoveries made by the company recently. Reliance Capital gained after Reliance MediaWorks (RMW) and Carnival Cinemas today, 15 December 2014, announced the signing of definitive agreements for sale of RMW's multiplexes business to Carnival Cinemas.
Foreign portfolio investors sold shares worth a net Rs 864.96 crore during the previous trading session on Friday, 12 December 2014, as per provisional data.
The Sensex and the 50-unit CNX Nifty, had, both hit 6-1/2-week at the onset of the trading session on weak Asian stocks.
On the macro front, industrial production declined 4.2% in October 2014, compared with 2.8% (revised) increase in September 2014, due to a 2.5% decline in the manufacturing sector in October 2014. Meanwhile, the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. Data on both industrial production and CPI was released after trading hours on Friday, 12 December 2014.
In overseas markets, Asian stocks edged lower after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week.
At 11:20 IST, the S&P BSE Sensex was down 68.75 points or 0.25% at 27,281.93. The index lost 245.64 points at the day's low of 27,105.04 in early trade, its lowest level since 30 October 2014. The index rose 8.86 points at the day's high of 27,359.54 in morning trade.
The CNX Nifty was down 17.55 points or 0.21% at 8,206.55. The index hit a low of 8,152.50 in intraday trade, its lowest level since 30 October 2014. The index hit a high of 8,232.60 in intraday trade.
The BSE Mid-Cap index was off 11.04 points or 0.11% at 10,097.56. The BSE Small-Cap index was off 20.63 points or 0.19% at 11,047.85. The fall of both these indcies was lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,319 shares fell and 1,000 shares rose. A total of 80 shares were unchanged.
ONGC rose after the company said its board of directors at its meeting held on Friday, 12 December 2014, was notified the three discoveries made by the company recently. The stock was up 1.31%. ONGC said that the board was notified of the three discoveries made recently which includes one in deepwater Krishna Godavari Basin, off the east coast of the country, one in Mumbai offshore Basin, off the west coast of the country and one in Cauvery basin in the southern onland part of the country.
The company's board of directors at its meeting held on Friday, 12 December 2014 also approved interim dividend of Rs 5 per share for the year ending 31 March 2015. The announcement was made after market hours on Friday, 12 December 2014.
Meanwhile, with respect to the news item titled "ONGC bags offshore block in New Zealand", ONGC clarified during market hours that ONGC Videsh has been awarded an exploration block in Taranaki basin, New Zealand in the bidding round block offer-2014 by the Government of New Zealand. ONGC Videsh had submitted its bid for this exploration block in October 2014. The exploration permit has been awarded to ONGC Videsh by Mr. Simon Bridges, Minister of Energy and Resources, Government of New Zealand at a formal ceremony held at Wellington in the Parliament on 9 December 2014.
Reliance Capital gained 0.74% after Reliance MediaWorks (RMW) and Carnival Cinemas today, 15 December 2014, announced the signing of definitive agreements for sale of RMW's multiplexes business to Carnival Cinemas in the largest ever deal in the sector in India. The proposed transaction is in furtherance of Reliance Capital's stated objective of focusing purely on its core financial services businesses, significantly reducing exposure to non-core investments in the media and entertainment sector, and reducing overall debt, said Sam Ghosh, CEO, Reliance Capital. The transaction will reduce Reliance Capital's leverage by about Rs 700 crore, through a combination of transfer of debt of RMW and infusion of cash proceeds.
The deal excludes real estate owned by RMW at IMAX Wadala and other properties, which are intended to be separately monetized for an estimated value of Rs 200 crore. Reliance Capital will have the option to acquire a pre IPO minority stake in Carnival Cinemas at an appropriate discount, upon eventual listing of the company.
The proposed transaction is subject to necessary statutory and other approvals and is expected to be closed by 31 March 2015 (FY 2015).
Coal India rose 2.05%. With respect to news titled "CIL gets order to import 5 lakh tones of coal for FY'15," the company clarified during market hours that there is no material impact on the company as the company has merely performed its obligations under the enforceable fuel supply agreement (FSA) and complied with the provision of Presidential Directives dated 17 Jul 2013. As per Presidential directives issued in April 2012 and July 2013, CIL board decided that under FSAs for new power plants commissioned after 2009, out of the minimum assured quantity i.e 80% of annual contracted quantity, 15% shall be supplied from imported coal to the power plants who have opted to take the same from CIL and balance 65% from domestic coal till 2014-15. For the subsequent two years, the domestic coal component shall increase to 67% and 75% respectively with corresponding reduction in imported supply.
Bharti Airtel declined 0.43%. Bharti Airtel through its subsidiary company Bharti Airtel International (Netherlands) BV and IHS Holding, the largest mobile telecommunications infrastructure provider in Africa, today, 15 December 2014, announced an agreement under which IHS will acquire over 1,100 telecoms towers across 2 countries. The agreements will allow Bharti Airtel to focus on its core business and customers, enable it to deleverage through debt reduction, and will significantly reduce its on-going capital expenditure on passive infrastructure in these African markets. The consequences for the mobile subscribers will be more stable networks, higher network uptimes in which to make calls and a more ubiquitous service across the country. The agreements are subject to statutory and regulatory approvals.
Siemens declined 0.73% to Rs 879. The stock was volatile. The stock hit high of Rs 896.60 and low of Rs 878.60 so far during the day. The company after trading hours on Friday, 12 December 2014, said it recently won an order worth approximately Rs 317 crore from Bihar Grid Company (BGCL), a joint venture between Bihar State Power Holding Company and Power Grid Corporation of India. This is the company's first GIS substation order from BGCL and also marks the establishment of the first 220 kV GIS in the state of Bihar, Siemens said.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar. The partially convertible rupee was hovering at 62.69, compared with its close of 62.29 during the previous trading session.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week. Brent for January settlement was up 51 cents at $62.36 a barrel. The contract had lost $1.83 a barrel or 2.9% to settle at $61.85 during the previous trading session on Friday, 12 December 2014, the lowest closing level since July 2009. Brent for February settlement was up $1.03 a barrel to 62.80 a barrel.
Index of industrial production (IIP) declined, at a sharpest pace in three-years, contracting 4.2% in October 2014 compared with 2.8% (revised) increase in September 2014. The manufacturing sector's output dipped to 2.5% in October 2014, recording largest decline in last five-and-half years. The decline in the industrial production was entirely contributed by the manufacturing sector. Lesser number of working days in October 2014 mainly led to sharp decline in manufacturing sectors output.
The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. The corresponding provisional inflation rates for rural area were 4.1% and urban area also 4.7% as against 5.5% and 5.6% for October 2014.
The annual rate of inflation based on the wholesale price index (WPI) is seen easing further to 1.2% in November 2014, from 1.77% in October 2014, as per the median estimate of a poll of economist carried out by Capital Market. The government will release the inflation data based on wholesale price index (WPI) for November 2014 at 12.15 noon today, 15 December 2014.
Meanwhile, the Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
The Lok Sabha on Friday, 12 December 2014, passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year. The challenge for the government now will be to find support for the bill in the Rajya Sabha where it's in a minority.
Asian stocks edged lower today, 15 December 2014, after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns. Key indices in China, Hong Kong, Singapore, Indonesia, South Korea, Hong Kong and Taiwan were off 0.15% to 1.24%.
Japanese Prime Minister Shinzo Abe's coalition cruised to a big election win on Sunday, 14 December 2014, ensuring he will stick to reflationary economic policies and a muscular security stance, but record low turnout pointed to broad dissatisfaction with his performance.
Confidence of Japan's large manufacturers declined in the fourth quarter as a recession offset a boost from a weaker yen, underlining the economic challenges facing Prime Minister Shinzo Abe after his election win. The Tankan's big manufacturer index slipped to 12 in December from 13 in September Bank of Japan today, 15 December 2014.
Meanwhile, large parts of central Sydney were in lockdown today, 15 December 2014, after at least one gunman took hostages in a cafe and placed an Islamic flag in the window, sparking concerns a terrorist attack was under way. Authorities sealed off surrounding streets, evacuated people from buildings, and suspended several rail routes into and out of the city after the incident began around 9:45 a.m. at the Lindt Chocolate Cafin Martin Place in the heart of the business district.
Trading in US index futures indicated that the Dow could gain 64 points at the opening bell today, 15 December 2014. US stocks sank on Friday, 12 December 2014, as oil prices continued to slide. The US Senate on Saturday, 12 December 2014, passed a $1.1 trillion spending bill that lifts the threat of a government shutdown as Congress attempts to wrap up a two-year legislative session marked by bitter partisanship and few major accomplishments. The Senate's 56-40 vote sends the measure to President Barack Obama, who is expected to sign it into law before federal spending authority expires at midnight.
A two-day meeting of Federal Open Market Committee (FOMC) to discuss monetary policy review starts tomorrow, 16 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. It remains to be seen whether Federal Reserve officials would signal a rate hike by dropping their assurance that rates will stay low for a considerable time.
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