Trading for the week and the month began on a subdued note. The barometer index, the S&P BSE Sensex regained the psychological 29,000 level after alternately moving below and above that level. Nevertheless, the Sensex and the 50-unit CNX Nifty, both, settled at over one week low. The Sensex fell 60.68 points or 0.21% to settle at 29,122.27. The market breadth indicating the overall health of the market was positive.
India's fiscal deficit reached 100.2% of Budget Estimate (BE) in nine months ended December 2014 to Rs 5.32 lakh crore, highlighting tight financial position of the central government. It was 95% of BE in corresponding period last year.
Index heavyweight and cigarette major ITC dropped. Shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories advanced after US Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). Aviation stocks rallied after steep cut in jet fuel price. Bajaj Auto dropped after weak sales in January 2015. Maruti Suzuki India rose after strong sales in January 2015. Tata Motors advanced after decent sales in January 2015. Ashok Leyland rose after reporting good sales figures in January 2015. Mahindra & Mahindra fell after reporting weak auto and tractor sales in January 2015. Tech Mahindra advanced after strong Q3 earnings. Grasim Industries fell after muted growth in Q3 net profit. Coal India edged lower.
Earlier, the barometer index, the S&P BSE Sensex and CNX Nifty, both, drifted lower to hit over one week low.
Foreign portfolio investors sold shares worth a net Rs 771.55 crore on Friday, 30 January 2015, as per provisional data.
In the overseas markets, European equities edged lower today, 2 February 2015 in choppy trade. Asian equity markets were mixed today, 2 February 2015. US stocks declined on Friday, 30 January 2015 with benchmarks down for a second month, after data showed US economic growth slowed sharply in the fourth quarter and Russia's central bank unexpectedly cut is benchmark interest rate.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures declined amid speculation that the biggest strike at US refineries since 1980 will curtail crude processing in the world's leading consumer nation and worsen a global supply glut.
The S&P BSE Sensex fell 60.68 points or 0.21% to settle at 29,122.27, its lowest closing level since 22 January 2015. The index fell 224.43 points at the day's low of 28,958.52 in afternoon trade, its lowest level since 22 January 2015. The index rose 85.18 points at the day's high of 29,268.13 in mid-afternoon trade.
The CNX Nifty fell 11.50 points or 0.13% to settle at 8,797.40, its lowest closing level since 22 January 2015. The index hit a low of 8,751.10 in intraday trade, its lowest level since 22 January 2015. The index hit a high of 8,840.80 in intraday trade.
The BSE Mid-Cap index rose 60.54 points or 0.56% to settle at 10,799.13. The BSE Small-Cap index rose 127.58 points or 1.13% to settle at 11,456.84. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,622 shares gained and 1,288 shares fell. A total of 130 shares were unchanged.
The total turnover on BSE amounted to Rs 4157 crore, higher than Rs 4050.15 crore during previous trading session on Friday, 30 January 2015.
Among sectoral indices on BSE, the S&P BSE Healthcare index (down 0.23%), the S&P BSE Metal index (down 0.47%), the S&P BSE Oil & Gas index (down 0.54%) and the S&P BSE FMCG index (down 1.77%) underperformed the Sensex. The S&P BSE Capital Goods index (up 1.25%), the S&P BSE IT index (up 1%), the S&P BSE Consumer Durables index (up 0.94%), the S&P BSE Teck index (up 0.55%), the S&P BSE Auto index (up 0.46%), the S&P BSE Power index (up 0.37%), the S&P BSE Bankex (up 0.29%) and the S&P BSE Realty index (up 0.24%) outperformed the Sensex.
Index heavyweight and cigarette major ITC dropped 1.97% to Rs 361.35. The stock hit high of Rs 368.90 and low of Rs 359.45.
Reliance Industries (RIL) shed 0.8%. RIL has applied for payments banking license. RIL will be the promoter and State Bank of India (SBI) will be the joint venture partner with equity investment of upto 30%, RIL and State Bank of India (SBI) jointly announced after market hours today, 2 February 2015.
The payments bank will leverage SBI's nationwide distribution network and risk management capabilities alongwith the substantial investments made by RIL in its retail and telecom businesses, the two companies said in a press release. It will deploy state-of-the-art technology, build scalable infrastructure and create extensive branch and business correspondent network in order to provide last-mile access and intuitive user experience to all sections of society, the press release added.
Besides promoting financial inclusion by providing banking and transaction services to unbanked, underbanked and small businesses, the partners see formation of the payments bank as an opportunity to lead and co-create an eco-system to provide accessible, simple and affordable banking solutions, digitize payments and act as catalyst towards a cashless society and democratise banking and payment services through massive adoption and low transaction costs, the joint press release indicated.
Indian Oil Corporation (IOC) fell 2.51%. The company's board of directors at its meeting held on 29 January 2015 approved two projects. The first project involves laying of Paradip-Hyderabad Product Pipeline. The product pipeline is proposed for evacuation of the products from the upcoming Paradip Refinery to storage depots in Andhra Pradesh and Telangana. The pipeline having a length of 1150 kms would have a capacity of 4.5 MMTPA. The pipeline with allied facilities is estimated to cost Rs 2789 crore and would be completed in a period of 36 months after receipt of statutory clearances, IOC said.
The second project involves construction of 0.6 MMTPA LPG Import Facility at Paradip and augmentation of Paradip-Haldia-Durgapur LPG Pipeline. In order to meet the deficit of LPG supply in eastern sector, the Corporation would construct 0.6 MMTPA LPG Import facility at Paradip at an estimated cost of Rs. 690 crore, IOC said. In addition, the existing Paradip-Haldia-Durgapur LPG Pipeline would be augmented and extended to Patna and Muzaffarpur to ensure smooth supply of LPG in the region. The pipeline augmentation and extension is estimated to cost Rs 1823 crore. The project would be completed within 36 months from the date of statutory approvals, the company said.
Tata Motors rose 1.32%. Tata Motors during market hours today, 2 February 2015 said that its total commercial and passenger vehicles sales (including exports) rose 5% to 42,582 units in January 2015 over January 2014. Domestic sales of Tata commercial and passenger vehicles rose 5% to 38,621 units in January 2015 over January 2014. Sales of commercial vehicles in the domestic market remained flat at 25,574 units in January 2015 over a year ago. Sales of light commercial vehicles (LCVs) declined 18% to 14,301 units in January 2015 over January 2014. Sales of medium & heavy commercial vehicles (M&HCV) rose 38% to 11,273 units in January 2015 over January 2014. Exports rose 4% to 3,961 units in January 2015 over January 2014.
Ashok Leyland rose 0.68% after the company said its total sales rose 36% to 10,639 units in January 2015 over January 2014. The announcement was made during trading hours today, 2 February 2015. Sales of medium and heavy commercial vehicle (M&HCV) surged 45% to 8,005 units in January 2015 over January 2014. Sales of light commercial vehicles (LCV) rose 14% to 2,634 units in January 2015 over January 2014.
Mahindra & Mahindra (M&M) fell 1.35%. M&M during market hours today, 2 February 2015 said that its auto sales declined 6% to 39,930 units in January 2015 over January 2014. Domestic sales fell 8% to 37,045 units in January 2015 over January 2014. Sales of passenger vehicles (Uvs & Verito) fell 5% to 18,804 units in January 2015 over January 2014. Four-wheelers commercial vehicle sales declined 14% to 12,919 units in January 2015 over January 2014. Three-wheeler sales fell 4% to 4,526 units in January 2015 over January 2014. Exports rose 22% to 2,885 units in January 2015 over January 2014.
Speaking on the monthly performance, Pravin Shal, Chief Executive, Automotive Division, M&M said, The first month of 2015 has not been encouraging as the effect of withdrawal of excise duty subsidy is clearly evident. Unfortunately, the segmented recovery which we were witnessing over the last couple of months has been impacted with the excise duty change. We do hope that the upcoming Budget has some positive news for the auto sector. At Mahindra we are happy with the performance of our exports as well as our Trucks & Bus Division.
Separately, M&M during market hours today, 2 February 2015 said that its total tractor sales fell 26% to 14,913 units in January 2015 over January 2014. Domestic sales declined 29% to 13,852 units in January 2015 over January 2014. Exports rose 47% to 1,061 units in January 2015 over January 2014.
Commenting on the monthly performance, Rajesh Jejurikar, Chief Executive, Farm Equipment and Two Wheeler Division, M&M said, We have registered a sale of 13,852 units during January 2015. The tractor industry has been going through a de-growth caused by reduced Kharif crop production and lower mandi prices. However at Mahindra, we have seen a positive trend in exports which have grown by 47% during January 2015.
Maruti Suzuki India rose 0.73%. The company's total sales rose 13.9% to 1.16 lakh units in January 2015 over January 2014. Domestic sales rose 9.3% to 1.05 lakh units in January 2015 over January 2014. Exports jumped 88.9% to 11,047 units in January 2015 over January 2014.
Eicher Motors rose 1.48%. The company before market hours today, 2 February 2015 said that its subsidiary VE Commercial Vehicles' total sales rose 25.1% to 3,262 units in January 2015 over January 2014. Domestic sales rose 25.1% to 2,905 units in January 2015 over January 2014. Exports rose 24.8% to 357 units in January 2015 over January 2014.
Separately, Eicher Motors during market hours today, 2 February 2015 said that its total motorcycles sales rose 43% to 28,927 units in January 2015 over January 2014. Exports rose 82% to 770 units in January 2015 over January 2014.
Bajaj Auto fell 1.65%. Bajaj Auto during market hours today, 2 February 2015 said that its total sales declined 9% to 2.88 lakh units in January 2015 over January 2014. Motorcycles sales fell 12% to 2.46 lakh units in January 2015 over January 2014. Sales of commercial vehicles rose 14% to 41,791 units in January 2015 over January 2014. Exports rose 4% to 1.42 lakh units in January 2015 over January 2014.
TVS Motor Company lost 7.09% after the company reported muted growth in total vehicles sales in January 2015 over January 2014. The announcement was made during trading hours today, 2 February 2015.
TVS Motor Company said its total vehicles sales rose 1.23% to Rs 1.88 lakh units in January 2015 over January 2014. The company said it witnessed planned production cuts due to annual maintenance and Pongal holidays in its major plants during the month of January 2015.
Total exports fell 13.32% to 25,029 units in January 2015 over January 2014. Two wheeler exports fell 17.95% to 19,232 units in January 2015 over January 2014.
Total two wheeler sales increased 1.08% to 1.81 lakh units units in January 2015 over January 2014. Domestic two wheeler sales grew by 4% to 1.62 lakh units in January 2015 over January 2014. Scooters sales of the company grew by 24% to 56,032 units in January 2015 over January 2014. Motorcycles sales grew by 7% to 69,949 units in January 2015 over January 2014. Three-wheeler sales of the company registered an increase of 5% to 7,082 units in January 2015 over January 2014.
Exide Industries jumped 5.94%. Exide Industries' net profit rose 25.42% to Rs 97.23 crore on 19.18% growth in total income to Rs 1559.89 crore in Q3 December 2014 over Q3 December 2013. The result was announced on Saturday, 31 January 2015.
Coal India fell 1.54%. Coal during market hours today, 2 February 2015 reported production and offtake performance figures for January 2015. The actual production of Coal India and subsidiary companies was 93% of targeted production at 46.60 million tonnes in January 2015. The actual offtake was 88% of targeted offtake at 44.09 million tonnes in January 2015.
Meanwhile, the government successfully completed divestment of 10% stake in the state-run coal major through the stock exchanges mechanism on Friday, 30 January 2015. As against the total offer size of 63.16 crore shares of Coal India, total bids received were for a quantity of 67.5 crore shares across all categories. The oversubscription to the total quantity was around 5%. The CIL disinvestment has attracted the largest ever participation by foreign institutional investors in a Government Offer for Sale (OFS), according to a statement issued by the finance ministry after trading hours on Friday, 30 January 2015. With this divestment, the Government of India's (GoI) stake in CIL would come down to 79.65%, from 89.65%. The GoI has raised Rs 22557.63 crore from the CIL disinvestment.
Bank stocks were mixed ahead of RBI's monetary policy review tomorrow, 3 February 2015. Bank of India (up 2.64%), Kotak Mahindra Bank (up 2.96%), Canara Bank (up 2.69%), Axis Bank (up 5.62%), HDFC Bank (up 0.64%), IndusInd Bank (up 0.88%), ING Vysya bank (up 3.64%), Federal Bank (up 2.15%), and Punjab National Bank (up 1.26%) edged higher. Yes Bank (down 3.39%), Bank of Baroda (down 3%), ICICI Bank (down 2.37%) and State Bank of India (down 0.32%) edged lower.
The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review on 15 January 2015, citing easing of inflationary pressures in the economy. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from 4.4% in November 2014. Over the long term, the RBI aims to restrict consumer price inflation to 4%, within a two-per-cent band.
Indian Bank fell 0.03%. Indian Bank's net profit rose 4.92% to Rs 277.52 crore on 5.08% growth in total income to Rs 4321.46 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 2 February 2015.
Sun Pharmaceutical Industries (up 1.42%) and Ranbaxy Laboratories (up 2.26%) edged higher. Sun Pharma and Ranbaxy Laboratories before market hours today, 2 February 2015 announced that the US Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The early termination of the waiting period under the HSR Act satisfies one of the essential conditions to the closing of the Ranbaxy acquisition, the statement from Sun Pharma and Ranbaxy said.
Sun Pharma and Ranbaxy also announced that the FTC accepted a proposed consent agreement pursuant to which, Sun Pharma and Ranbaxy have agreed to divest Ranbaxy's interests in generic minocycline tablets and capsules to an external third party.
Lupin fell 2.12%. Lupin during market hours today, 2 February 2015 said that it has received final approval for its Vancomycin Hydrochloride Capsules, 125 mg and 250 mg from the United States Food and Drugs Administration (FDA) to market a generic version of ANI Pharmaceuticals, Inc's Vancocin capsules 125 mg and 250 mg strengths. Lupin Pharmaceuticals Inc. (LPI), the company's US subsidiary would commence marketing the product shortly. Lupin's Vancomycin capsules 125 mg and 250 mg are the AB rated generic equivalent of ANI Pharmaceuticals Inc's Vancocin capsules and are indicated for the treatment of C. difficile-associated diarrhea and also for the treatment of enterocolitis caused by Staphylococcus aureus (including methicillin-resistant strains). Vancocin Capsules had annual sales of $164.2 millino in the US (IMS MAT September, 2014), Lupin said.
Divi's Laboratories fell 3.35%. Divi's Laboratories' net profit rose 0.91% to Rs 221 crore on 14.8% growth in total income to Rs 791 crore in Q3 December 2014 over Q3 December 2013. The result was announced on Saturday, 31 January 2015.
During Q3 December 2014, the company registered a forex gain of Rs 11 crore. There was a forex loss of Rs 5 crore in Q3 December 2013.
Divi's Laboratories said it has capitalized fixed assets aggregating to Rs 143 crore in Q3 December 2014.
Grasim Industries fell 1.86%. Grasim Industries' consolidated net profit rose 0.6% to Rs 334 crore on 13% growth in net revenue to Rs 8036 crore in Q3 December 2014 over Q3 December 2013. The result was announced on Saturday, 31 January 2015.
Grasim Industries' profit before interest, depreciation, and taxation (PBIDT) rose 10% to Rs 1260 crore in Q3 December 2014 over Q3 December 2013.
Grasim Industries said that the implementation of growth plans has led to a significant capacity increase in both the VSFand cement businesses. At the Greenfield VSF project at Vilayat, 99K TPA capacity has been commissioned during the year, Grasim Industries said. With acquisition of Jaypee cement units in Gujarat, the cement capacity increased by 4.8 million tonnes per annum (MTPA), it said. Cement grinding capacity of 1.4 MTPA went on-stream in Karnataka, Grasim added. 182,500 TPA caustic soda plant and 51,500 TPA epoxy plant commissioned last year are also being ramped up. Consequently, company's financial performance has been encouraging, Grasim Industries said in a statement.
Grasim Industries said that it has maintained its profit after tax (PAT) in Q3 December 2014 even after providing for additional interest and depreciation cost on the acquired cement units. The company is on track to ramp up the operations and achieve targeted efficiencies at these units as anticipated, to deliver planned profitability, Grasim Industries said in a statement.
Grasim Industries' subsidiary UltraTech Cement has entered into a definitive agreement to acquire 2 units of Jaiprakash Associates in Satna cluster having a capacity of 4.9 MTPA with 180 megawatts (MW) power plants. This will propel the cement business capacity in India from about 60 MTPA to about 65 MTPA. On completion of brownfield expansion under implementation, the domestic capacity will increase to about 71 MTPA in 2016, Grasim Industries said. The units proposed to be acquired have surplus clinker capacity to augment cement capacity by a further 1.8 to 2.5 MTPA with investments in grinding units, Grasim Industries said in a statement.
Grasim Industries said that the transaction is subject to the approval of shareholders and creditors, sanction to the scheme of arrangement by the High Courts, approval of the Competition Commission of India and other statutory approvals.
With regard to the future business outlook Grasim Industries said that the VSF sector will continue to face head winds for some more time due to the over capacity and sharp reduction in price of cotton and polyester. The slowdown in new capacity additions in China should lead to an improvement in industry utilization which augurs well for the company, Grasim said. The focus on cost optimisation will continue relentlessly, it added. The new plant at Vilayat with higher share of speciality product should help in facing the challenge, Grasim Industries said in a statement.
In cement, demand growth in the long term is likely to be over 8%, Grasim said. The key drivers will be revival of infrastructure projects supplemented by regulatory reforms and improvement in housing demand with the interest rate cut, Grasim added. The company with its existing and proposed capacity is well placed to benefit from the accelerated growth in the sector, Grasim Industries said in a statement.
With additional capacity coming on stream in both the businesses, the company will further consolidate its leadership position, Grasim said. The company is well-poised to benefit from the expected upturn in the economy, it added.
In exchange of the above business, UltraTech shall issue non-convertible debentures worth Rs 4538 crore and non-convertible preference shares worth Rs 10 lakh and shall take over Rs 626.50 crore of debt and negative working capital of Rs 160.50 crore, Grasim Industries said in a statement.
IT stocks advanced. HCL Technologies (up 5.79%), Wipro (up 3.18%), TCS (up 1.11%), Oracle Financial Services Software (up 0.56%) edged higher.
Tech Mahindra rose 0.34%. On a consolidated basis, Tech Mahindra's net profit rose 11.9% to Rs 805 crore on 4.8% increase in revenue to Rs 5752 crore in Q3 December 2014 over Q2 September 2014. Tech Mahindra said that net profit includes special adjustment of Rs 28.50 crore of half year ended 30 September 2014 profits of Mahindra Engineering Services (MESL) in Q3 December 2014 numbers. The Q3 result was announced after market hours on Friday, 30 January 2015. Tech Mahindra's operating profit (earnings before interest, taxation, depreciation and amortization) {EBITDA} rose 5.7% to Rs 1160 crore in Q3 December 2014 over Q2 September 2014.
Tech Mahindra's board of directors at its meeting held today, 30 January 2015, has considered and approved for issue of one bonus equity share for every one equity share and also approved 2-for-1 stock split.
"Our continued focus on operational excellence is yielding tangible results for our stakeholders." said Vineet Nayyar, Executive Vice Chairman, Tech Mahindra.
Infosys fell 0.54%. Infosys during market hours today, 2 February 2015 announced a research agreement with Cornell University's School of Hotel Administration. As part of this one-year partnership, Infosys will join the School of Hotel Administration's Center for Hospitality Research (CHR) advisory board.
IDFC rose 2.47%. IDFC during market hours today, 2 February 2015 in a clarification with regard to news item titled "IDFC Likely To Pick Up Stake in Future Group's Payment Bank" said that IDFC has neither made any investment nor made any firm commitment to invest in the payment bank of the future group unconditionally. However, IDFC and Mr. Biyani are coming together to build an alliance, to facilitate which, IDFC may acquire a small equity stake in Future's payment bank, subject to its receiving a license from the RBI and subject to IDFC's own internal Board approvals, IDFC said.
UPL surged 7%. UPL's consolidated net profit rose 12.16% to Rs 249.28 crore on 13.49% growth in total income to Rs 3060.76 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 2 February 2015.
Bharat Forge rose 3.22%. The company during market hours today reported 108.93% surge in net profit to Rs 196.34 crore on 41.91% rise in total income to Rs 1216.88 crore in Q3 December 2014 over Q3 December 2013.
Bharat Forge's EBITDA (earnings before interest, taxes, depreciation and amortization) rose 71% to Rs 366.80 crore in Q3 December 2014 over Q3 December 2013, benefitting from improved product mix and operating leverage. EBITDA margin was reported at 30.6% in Q3 December 2014 compared with 25.8% in Q3 December 2013.
Power Grid Corporation of India' (PGCIL) fell 0.2%. PGCIL's board of directors approved investment worth about Rs 5000 crore for five of its projects.
Berger Paints India fell 2.94%. On a consolidated basis, the company's net profit fell 0.18% to Rs 82.13 crore on 8.49% increase in total income to Rs 1126.23 crore in Q3 December 2014 over Q3 December 2013. The Q3 result was announced after market hours on Friday, 30 January 2015.
Thermax rose 0.38%. Thermax's net profit rose 14.34% to Rs 76.20 crore on 11.28% growth in total income to Rs 1153.65 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours on Friday, 30 January 2015.
The company's operating revenue rose 13% to Rs 1147 crore in Q3 December 2014 over Q3 December 2013.
Thermax's order intake declined 10.03% to Rs 1228 crore in Q3 December 2014 over Q3 December 2013. The drop in order booking is attributable to the domestic segment where enquiry inflow and finalisation remained subdued, the company said in a statement.
Aditya Birla Nuvo (ABNL) shed 0.42%. Shares of Idea Cellular fell 0.81%. ABNL during market hours today, 2 February 2015 said that the company has today, 2 February 2015 submitted an application to the Reserve Bank of India (RBI) for obtaining license for setting-up "Payments Bank", in accordance with the Guidelines for Licensing of Payments Bank issued by RBI on 27 November 2014. As per the proposed structure, ABNL will be the Promoter of Payments Bank holding 51% equity capital. Idea Cellular (Idea), an Aditya Birla Group company where ABNL is largest promoter shareholder, will be holding balance 49% equity capital.
The Board of Directors of ABNL has also approved that equity participation of Idea may be increased up to 60%, if permitted from time to time with approval of regulatory bodies as applicable.
Aviation stocks advanced after aviation turbine fuel (ATF), or jet fuel, price was cut by a steep 11.3% on 1 February 2015. Spicejet (up 3.6%) and Jet Airways (India) (up 1.89%) edged higher.
Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices.
JSW Energy rose 2.68%. On consolidated basis, JSW Energy's net profit rose 87.03% to Rs 380.19 crore on 10.03% growth in total income to Rs 2418.44 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 2 February 2015.
Alstom T&D India fell 0.62%. Alstom T&D India during market hours today, 2 February 2015 said it has successfully commissioned the Rajya Vidyut Prasaran Nigams (RVPN) 765 kv substation in Anta.
The Sensex had gained 1,683.53 points or 6.12% in January 2015. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 9,159.15 points or 45.88%. The Sensex is off 721.89 points or 2.41% 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 in choppy trade. The partially convertible rupee was hovering at 61.8650, compared with its close of 61.8750 during the previous trading session on Friday, 30 January 2015.
Brent crude oil futures declined amid speculation that the biggest strike at US refineries since 1980 will curtail crude processing in the world's leading consumer nation and worsen a global supply glut. Brent for March settlement was off 67 cents at $52.32 a barrel. The contract had jumped $3.86 a barrel or 7.85% to settle at $52.99 a barrel during the previous trading session on Friday, 30 January 2015.
Data released during market hours today, 2 February 2015 signalled sustained growth of India's manufacturing economy at the start of 2015, with output and new orders rising simultaneously for the fifteenth consecutive month in January. Despite falling from December's two-year record of 54.5 to 52.9, the headline HSBC India Purchasing Managers' Index - a seasonally adjusted indicator designed to give an accurate overview of manufacturing operating conditions - remained consistent with a solid improvement in business conditions in January.
India's fiscal deficit reached 100.2% of Budget Estimate (BE) in nine months ended December 2014 to Rs 5.32 lakh crore, highlighting tight financial position of the central government. It was 95% of BE in corresponding period last year. The rise in fiscal deficit was mainly due to subdued revenue collection. The net tax revenue collection in April-December was Rs 5.46 lakh crore 55.8% of BE, lower from 58.6% during the same period last year.
Total receipts during the nine months of FY15 was Rs 7.04 lakh crore, a 55.7% of the target, lower than 57.7% collected in corresponding period 2013-14.
Plan expenditure of the government during the period was Rs 3.53 lakh crore, 61.3% of BE and non-Plan expenditure was Rs 8.84 lakh crore or 72.4% of BE.
The government is committed to contain fiscal deficit at its targeted 4.1% of the total GDP by the end of 31 March 2015. The fall in global oil prices has helped the government curb oil subsidy to oil marketing companies. Also, the 10% stake-sale in Coal India has already netted the government Rs 22,600 crore. Moreover, the government has approved base price of Rs 3705 crore per megahertz for 3G spectrum which will fetch it Rs 17,500 crore. This combined with the proceeds from 2G spectrum sale, the government aims to net over Rs 1 lakh crore.
Meanwhile, data released by the Ministry of Statistics & Programme Implementation after trading hours on Friday, 30 January 2015, showed that the Indian economy witnessed a strong recovery in the fiscal year ended 31 March 2014 (FY 2014). Based on a new series of national accounts with revision in base year from 2004-05 to 2011-12, India's gross domestic product (GDP) expanded 6.9% in FY 2014 compared with 5.1% expansion in FY 2013. Based on the previous data, the GDP grew 4.7% in FY 2014, from 4.5% expansion in FY 2013. Changes in the base year are made every five years. The dramatic revision could shake up the way the current trajectory of India's economy is perceived both at home and abroad. It also remains to be seen if the revised data will influence the Reserve Bank of India's (RBI) future monetary policy decisions. The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review on 15 January 2015, citing easing of inflationary pressures in the economy. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from 4.4% in November 2014. Over the long term, the RBI aims to restrict consumer price inflation to 4%, within a two-per-cent band. The sixth bi-monthly monetary review from the RBI is scheduled tomorrow, 3 February 2015.
European equities edged lower today, 2 February 2015 in choppy trade. Key indices in France and UK were off 0.03% to 0.06%. In Germany, the DAX rose 0.35%.
Manufacturing activity in the eurozone remained close to stagnation in January, while businesses cut their prices at the sharpest rate in over 18 months. Data firm Markit said today, 2 February 2015 its purchasing managers index rose to 51 in January from 50.6 in December. A reading below 50 indicates activity is declining, while a reading above that level indicates it is increasing.
Asian equity markets were mixed today, 2 February 2015. Key indices in China, Hong Kong, Japan, and Indonesia were off 0.09% to 2.56%. Key indices in Taiwan, South Korea, and Singapore were up 0.18% to 0.95%.
The HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, inched up to a final reading of 49.7 in January from 49.6 in December, HSBC Holdings PLC said today, 2 February 2015. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates an expansion.
China's official manufacturing purchasing managers index fell to a weaker-than-expected 49.8 in January from 50.1 in December, its first dip below 50 since September 2012. The data for the official purchasing managers' indexes was released by the National Bureau of Statistics yesterday, 1 February 2015. A reading below 50 indicates contraction from the previous month, while anything above that shows expansion.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell today, 2 February 2015. US stocks declined on Friday, 30 January 2015 with benchmarks down for a second month, after data showed US economic growth slowed sharply in the fourth quarter and Russia's central bank unexpectedly cut is benchmark interest rate. US economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006. Gross domestic product expanded at a 2.6% annual pace after the third quarter's spectacular 5% rate, the Commerce Department said in its first GDP snapshot on Friday, 30 January 2015.
Meanwhile, Russia's central bank has surprised financial markets and sent the rouble tumbling by cutting its key interest rate to soften the blows from falling oil prices and western sanctions. The main interest rate was cut to 15% from 17%, just weeks after the central bank had raised the interest rate in the hope of preventing the rouble's collapse.
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