Indian stocks surged after the government announced liberalization of foreign direct investment (FDI) norms for property development and construction sector. The 50-unit CNX Nifty hit record high. The barometer index, the S&P BSE Sensex, hit record high on intraday basis as well as on closing basis. The decision to relax FDI norms for the property development and construction sector comes close on the heels of the government's announcement of deregulation of diesel prices on 18 October 2014. The Sensex jumped rose 248.16 points or 0.92% to settle at 27,346.33. The market breadth indicating the overall health of the market was positive.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 757.54 crore from the secondary equity market yesterday 29 October 2014. Global credit rating agency Moody's Investors Service today, 30 October 2014, said that the Government of India's and the Reserve Bank of India's recent economic, fiscal and financial measures will, if successfully implemented, sustain higher GDP growth and address some of the constraints on India's sovereign credit profile. Meanwhile, the Finance Ministry yesterday, 29 October 2014, announced measures for fiscal prudence.
Maruti Suzuki India hit record high after reporting strong Q2 results. Index heavyweight Reliance Industries (RIL) gained. Realty shares jumped after the government after trading hours yesterday, 29 October 2014, announced relaxation of rules for foreign investment in property development and construction sector. Construction stocks were mixed. ACC rose after announcing strong Q3 results. ICICI Bank edged higher in choppy trade after announcing second quarter results.
A bout of volatility was witnessed in late trade as traders rolled over positions in the futures & options (F&O) segment from October 2014 series to November 2014 series. The October 2014 derivatives contracts expired today, 30 October 2014.
In overseas markets, European stocks reversed initial gains and Asian stocks dropped after the US Federal Reserve after a monetary policy review yesterday, 29 October 2014, announced its decision to end the last round of its recession-era bond buying program and said it could raise US interest rates sooner than markets have forecast, if the US economy expands faster than it expects.
In the foreign exchange market, the rupee edged lower against the dollar on speculation fund flows to emerging markets will slow as the US Federal Reserve moves closer to raising interest rates after ending its asset-purchase program.
Brent crude oil prices edged lower after previous day's sharp rise triggered by weekly data showing that US crude stockpiles rose less than expected last week.
The S&P BSE Sensex rose 248.16 points or 0.92% to settle at 27,346.33, its record closing high. The index jumped 292.43 points at the day's high of 27,390.60 in late trade, a lifetime high. The index fell 9.52 points at the day's low of 27,088.65 in early trade.
The CNX Nifty rose 78.75 points or 0.97% at 8,169.20. The index hit a high of 8,181.55 in intraday trade, a lifetime high for the index. The index hit a low of 8,085.20 in intraday trade.
The BSE Mid-Cap index rose 64.14 points or 0.66% at 9,714.43. The BSE Small-Cap index rose 37 points or 0.34% at 10,827.46. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,586 shares rose while 1,334 shares declined. A total of 122 shares were unchanged.
The total turnover on BSE amounted to Rs 3127 crore, higher than turnover of Rs 2869.03 crore on Wednesday, 29 October 2014.
The S&P BSE Realty index (up 3.44%), the S&P BSE IT index (up 2.04%), the S&P BSE Teck index (up 1.77%), the S&P BSE Oil & Gas index (up 1.65%), the S&P BSE Consumer Durables index (up 1.59%) and the S&P BSE Capital Goods index (up 0.94%), outperformed the Sensex.
The S&P BSE Healthcare index (up 0.21%), the S&P BSE Auto index (up 0.28%), the S&P BSE Metal index (up 0.46%), the S&P BSE FMCG index (up 0.54%), the S&P BSE Power index (up 0.58%) and the S&P BSE Bankex (up 0.72%), underperformed the Sensex.
Bharti Airtel rose 0.58% to Rs 407.50. On a consolidated basis, the company's net profit rose 170.2% to Rs 1383 crore on 7.1% increase in total revenue to Rs 22845 crore in Q2 September 2014 over Q2 September 2013. The results are as per International Financial Reporting Standards (IFRS). Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 12.1% to Rs 7705 crore in Q2 September 2014 over Q2 September 2013. Mobile data revenues grew 66.7% to Rs 2540 crore in Q2 September 2014 over Q2 September 2013, contributing more than two-third of the incremental revenues. The result was announced after market hours today, 30 October 2014.
Glenmark Pharmaceuticals fell 0.38% to Rs 711.70. On a consolidated basis, the company's net profit rose 7% to Rs 165.07 crore on 14.85% increase in total revenue to Rs 1680.70 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours today, 30 October 2014.
Dabur India rose 1.33% to Rs 220.85. The company announced after market hours today, 30 October 2014, that a fire broke out at the company's skin care products factory at Baddi, Himachal Pradesh, damaging fixed assets and inventory worth Rs 23 crore. The unit is fully insured and the claim process has been initiated. There is no significant impact to the company's business because of this incident as only the skin care unit was hit by the fire and steps have been initiated to manufacture skin care products at alternative locations, Dabur India said.
Maruti Suzuki India rose 1.14% to Rs 3242.15 after company reported strong Q2 results. The stock hit record high of Rs 3,297 in intraday trade. The stock hit low of Rs 3,173.95 in intraday trade. The company's net profit rose 28.69% to Rs 862.54 crore on 18.24% rise in total income to Rs 12497.03 crore in Q2 September 2014 over Q2 September 2013. Growth in domestic sales and cost reduction initiatives by the company contributed significantly to bottomline growth during Q2 September 2014.
The company's board of directors has recommended an increase in the foreign institutional investors' (FII) limit to 40%, broadly the level of public shareholding in the company. Reserve Bank of India (RBI) has put restriction on further purchases of shares of Maruti by FIIs. RBI had on 3 Mar 2014 notified that the foreign share holding under portfolio investment scheme in Maruti Suzuki India had reached the trigger limit of 22% and therefore fresh purchases of equity shares of this company would be allowed only after obtaining prior approval of the Reserve Bank of India.
Maruti's board also approved dividend payment guidelines in which it said company would endeavour to keep the dividend payout ratio, except for reasons to be recorded, within the range of 18% to 30%.
ACC rose 0.70% to Rs 1,494.70 after consolidated net profit jumped 61.98% to Rs 192.60 crore on 9.26% increase in total income to Rs 2847.23 crore in Q3 September 2014 over Q3 September 2013. The stock was volatile. The stock hit high of Rs 1,509 and low of Rs 1,474. The result was announced during trading hours today, 30 October 2014.
ICICI Bank edged higher in choppy trade after announcing second quarter results. The stock rose 0.47% at Rs 1,611.50. The stock hit record high of Rs 1,620 in intraday trade. The scrip hit low of Rs 1,584.70 in intraday trade. ICICI Bank's net profit rose 15.18% to Rs 2709.01 crore on 14.71% growth in total income to Rs 14888.95 crore in Q2 September 2014 over Q2 September 2013. The Q2 result was announced during market hours today, 30 October 2014.
ICICI Bank's net non-performing assets stood at Rs 3997 crore as on 30 September 2014, higher than Rs 3474 crore as on 30 June 2014 and Rs 2707 crore as on 30 September 2013. The net non-performing asset ratio was 0.96% as on 30 September 2014, higher than 0.87% as on 30 June 2014 and 0.73% as on 30 September 2013. The bank's provision coverage ratio, computed in accordance with RBI guidelines, was 65.9% at end September 2014. Net loans to companies whose facilities have been restructured stood at Rs 11020 crore as on 30 September 2014, lower than Rs 11265 crore as on 30 June 2014, but sharply higher than Rs 6826 crore as on 30 September 2013.
ICICI Bank said it has seen healthy trends in current and savings account (CASA) deposits mobilisation. During Q2 September 2014, savings account deposits increased by Rs 2871 crore and current account deposits increased by Rs 6440 crore. The bank's CASA ratio improved to 43.7% as on 30 September 2014, from 43% as on 30 June 2014. The average CASA ratio for Q2 September 2014 remained stable at 39.5%.
On a consolidated basis, ICICI Bank's net profit rose 13.61% to Rs 3064.62 crore on 16.49% growth in total income to Rs 22150.39 crore in Q2 September 2014 over Q2 September 2013.
IndusInd Bank rose 2.84% to Rs 712.40. The stock hit a record high of Rs 714 in intraday trade.
Kotak Mahindra Bank rose 1.89% to Rs 1,099.95. The stock hit a record high of Rs 1,100 in intraday trade.
Yes Bank rose 3.79% to Rs 662.70 after net profit surged 30.01% to Rs 482.54 crore on 13.25% growth in total income to Rs 3337.97 crore in Q2 September 2014 over Q2 September 2013. The Q2 result was announced during market hours today, 30 October 2014.
Among other private sector banks, Axis Bank (up 1.01%), HDFC Bank (up 0.44%) and Federal Bank (up 0.43%), edged higher.
Among state-run banks, Punjab National Bank (up 1.22%), Bank of Baroda (up 0.76%), IDBI Bank (up 0.52%) and Bank of India (up 0.26%), edged higher. State Bank of India (down 0.17%), Canara Bank (down 0.32%) and Union Bank of India (down 0.47%), edged lower.
Index heavyweight Reliance Industries (RIL) gained 2.94% to Rs 979.30. The stock hit high of Rs 981.45 and low of Rs 948.30.
Realty shares jumped after the government after trading hours yesterday, 29 October 2014, announced relaxation of rules for foreign investment in property development and construction sector. Unitech (up 8.43%), Peninsula Land (up 6.34%), Housing Development & Infrastructure (HDIL) (up 5.99%), DLF (up 4.87%), Indiabulls Real Estate (up 4.07%), D B Realty (up 2.16%), Prestige Estates (up 2.16%), Parsvnath Developers (up 2.01%), Anant Raj (up 1.72%), Phoenix Mills (up 1.39%), Oberoi Realty (up 0.93%), Godrej Properties (up 0.58%) and Sunteck Realty (up 0.12%), edged higher. Sobha Developers fell 0.23%.
The Union Cabinet yesterday, 29 October 2014, announced relaxation of rules for foreign investment in property development and construction. 100% foreign direct investment (FDI) under automatic route will be permitted in the construction development sector. In case of development of serviced plots, there is no condition of minimum land. In case of construction-development projects, a minimum floor area will be 20,000 sq. meters. The investee company will be required to bring minimum FDI of $5 million within six months of commencement of the project. Subsequent tranches of FDI can be brought till the period of ten years from the commencement of the project or before the completion of the project, whichever expires earlier. The investor will be permitted to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure.
Thermax fell 1.73% to Rs 881.20. The company after market hours today, 30 October 2014, said it has bagged an order worth Rs 321 crore to build and commission a captive power plant in Africa. The scope of work includes system design, manufacture, supply and supervision of erection and commissioning of the plant. The power plant is to be commissioned within a time frame of 15-16 months.
Shriram Transport Finance Company clocked a highest turnover of Rs 101.88 crore on BSE. SRF (Rs 88.48 crore), DLF (Rs 73.78 crore), State Bank of India (Rs 61.52 crore) and Maruti Suzuki India (Rs 51.17 crore), were the other turnover toppers on BSE in that order.
Unitech reported highest volumes of 1.30 crore shares on BSE. VKS Projects (61.83 lakh shares), DLF (60 lakh shares), Media Matrix Worldwide (51.65 lakh shares) and Visesh Infotechnics (49.15 lakh shares), were the other volume toppers on BSE in that order.
The Sensex and Nifty gained for the third day in a row today, 30 October 2014. The Sensex has risen 593.43 points or 2.22% in the past three sessions from a recent low of 26,752.90 on Monday, 27 October 2014. The Sensex has risen 715.82 points or 2.69% in this month so far (till 30 October 2014). The Sensex has gained 6,175.65 points or 29.17% in calendar year 2014 so far (till 30 October 2014). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,383.21 points or 36.98%.
In the foreign exchange market, the rupee edged lower against the dollar on speculation fund flows to emerging markets will slow as the US Federal Reserve moves closer to raising interest rates after ending its asset-purchase program. The partially convertible rupee was hovering at 61.46, compared with its close of 61.36 during the previous trading session.
Brent crude oil prices edged lower after previous day's sharp rise triggered by weekly data showing that US crude stockpiles rose less than expected last week. Brent crude for December delivery was off 75 cents at $86.37 a barrel. The contract had gained $1.09 a barrel to settle at $87.12 a barrel during the previous trading session.
The Union Cabinet yesterday, 29 October 2014, announced relaxation of rules for foreign investment in property development and construction. 100 percent foreign direct investment (FDI) under automatic route will be permitted in the construction development sector. In case of development of serviced plots, there is no condition of minimum land. In case of construction-development projects, a minimum floor area will be 20,000 sq. meters. The investee company will be required to bring minimum FDI of $5 million within six months of commencement of the project. Subsequent tranches of FDI can be brought till the period of ten years from the commencement of the project or before the completion of the project, whichever expires earlier. The investor will be permitted to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure.
Global credit rating agency Moody's Investors Service today, 30 October 2014, said that the Government of India's and the Reserve Bank of India's recent economic, fiscal and financial measures will, if successfully implemented, sustain higher GDP growth and address some of the constraints on India's sovereign credit profile. Moody's points out that these measures are incremental rather than radical. However, together, the various measures will harness India's economic advantages of size, diversity and a deep pool of labor and savings. They will also improve its investment climate, and allow the economy to reap the benefits of lower global commodity prices and international financial flows seeking real investment assets, Moody's said. Higher investment and lower macro-economic imbalances could sustain growth rates of around 7.5% in India over the next 5-10 years. Such a result would be significantly higher than the 5%-6% growth Moody's expects for India in 2015, the rating agency said.
However, given the early days and the incremental nature of policy change, Moody's expects that it will take several quarters for an improvement in quantitative and qualitative credit metrics to crystallize.
Meanwhile, the Finance Ministry yesterday, 29 October 2014, announced measures for fiscal prudence. For the year 2014-15, every Ministry/Department shall effect a mandatory 10% cut in non-Plan expenditure, the Finance Ministry said. This excludes interest payment, repayment of debt, Defence capital, salaries, pension and Finance Commission grants to the states. No re-appropriation of funds to augment the Non-Plan heads of expenditure on which cuts have been imposed shall be allowed during the current fiscal year, the Finance Ministry said.
European stocks reversed intraday gains today, 30 October 2014, after the US Federal Reserve after a monetary policy review yesterday, 29 October 2014, announced its decision to end the last round of its recession-era bond buying program and said it could raise US interest rates sooner than markets have forecast, if the US economy expands faster than it expects. Key benchmark indices in France, Germany and UK were off 0.95% to 1.54%.
Asian stocks edged lower today, 30 October 2014, after the US Federal Reserve after a monetary policy review yesterday, 29 October 2014, announced its decision to end the last round of its recession-era stimulus program. Key benchmark indices in Indonesia, South Korea, Hong Kong and Taiwan were off 0.11% to 0.49%. Key benchmark indices in Singapore, Japan and China were up 0.38% to 0.76%.
China's international payments were largely balanced in the third quarter with a surplus in the current account offsetting a deficit in the capital account, the latest data showed. China's current-account surplus in the three months ended September rose to $81.5 billion, compared with a revised surplus of $73.4 billion in the second quarter, the country's foreign-exchange regulator said. The nation had a capital and financial account deficit of $81.6 billion in the third quarter, indicating net outflows of investment funds, the State Administration of Foreign Exchange said. The latest data are initial estimates and will likely be revised later.
Trading in US index futures indicated that the Dow could fall 58 points at the opening bell today, 30 October 2014. US stocks closed with slight losses on Wednesday, 29 October 2014, after the Federal Reserve ended its stimulative monthly bond-buying program and expressed confidence in US economic prospects.
The Federal Reserve on Wednesday, 29 October 2014, ended its monthly bond purchase program and signaled confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy. "The Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability," the central bank's policy committee said in a statement following a two-day meeting. The timing and pace of rate hikes would depend on incoming economic data, the Fed said.
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