Key benchmark indices edged higher in choppy trading session on the back of small gains in European stocks and further fall in crude oil prices. However, the gains for the key indices were small. The barometer index, the S&P BSE Sensex, garnered 45.82 points or 0.17% to settle at 26,360.11. Some progress was made on proposed goods and services tax (GST) after the empowered committee of state finance ministers on Wednesday, 20 August 2014, reportedly decided the common threshold for levy of GST. The market breadth indicating the overall health of the market was positive. Metal and mining stocks declined after the Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, yesterday, 20 August 2014, approved the revision of rates of royalty and dead rent of all major minerals. PSU OMCs surged as crude oil prices fell. Shares of jewellery retailers rallied with Titan Company scaling a record high after a foreign brokerage upgraded the stock to overweight from equal-weight.
Bank stocks rose after Finance Minister Arun Jaitley reportedly said today, 21 August 2014, that the government was working to tighten up risk management in the banking sector. Axis Bank rose after the bank said its Board of Directors at a meeting held today, 21 August 2014, approved issuance of long term bonds/non-convertible debentures upto Rs 6000 crore on a private placement basis. Kotak Mahindra Bank scaled record high after the bank said a promoter group firm sold a 0.2% stake in the bank to comply with the central bank's guidelines on equity holding in local banks. L&T rose in volatile trade after the company said its construction division won new orders worth Rs 1832 crore from across various business segments in July and August 2014. Shares of power generation and power distribution companies edged lower.
FMCG stocks were mixed. Dr Reddy's Laboratories fell on reports that the company is in talks with a US regulator over allegations it violated packaging rules for some prescription drugs sold there between 2008 and 2012. Cement stocks declined.
Key indices had regained positive zone in afternoon trade after reversing intraday gains. Earlier, key indices had surged in mid-morning trade after a bout of initial volatility.
In overseas markets, European stocks edged higher after initial volatility as investors largely ignored a mixed bag of purchasing managers indexes from the region. Asian stocks dropped after a preliminary survey showed that manufacturing activity in China weakened in August to a three-month low.
The S&P BSE Sensex rose 45.82 points or 0.17% to settle at 26,360.11, its highest closing level since 19 August 2014. The index jumped 150.51 points at the day's high of 26,464.80 in mid-morning trade. The index fell 51.77 points at the day's low of 26,262.52 in afternoon trade, its lowest level since 18 August 2014.
The CNX Nifty rose 15.80 points or 0.2% to settle at 7,891.10, its highest closing level since 19 August 2014. The index hit a high of 7,919.65 in intraday trade. The index hit a low of 7,855.95 in intraday trade, its lowest level since 18 August 2014.
The total turnover on BSE amounted to Rs 3273 crore, higher than Rs 3125.21 crore on Wednesday, 20 August 2014.
The market breadth indicating the overall health of the market was positive. On BSE, 1,685 shares gained and 1,337 shares fell. A total of 98 shares were unchanged.
The BSE Mid-Cap index garnered 44.21 points or 0.48% to settle at 9,320.55. The BSE Small-Cap index garnered 34.99 points or 0.34% to settle at 10,298.50. Both these indices outperformed the Sensex.
The S&P BSE Consumer Durables index (up 3.78%), the S&P BSE Bankex (up 1.18%), the S&P BSE Auto index (up 0.79%), the S&P BSE Capital Goods index (up 0.65%), the S&P BSE Oil & Gas index (up 0.51%), the S&P BSE Healthcare index (up 0.26%) and the S&P BSE FMCG index (up 0.2%) outperformed the Sensex.
The S&P BSE IT index (down 0.13%), the S&P BSE Teck index (down 0.18%), the S&P BSE Power index (down 0.99%), the S&P BSE Metal index (down 1.35%) and the S&P BSE Realty index (down 1.91%) underperformed the Sensex.
FMCG stocks were mixed. Britannia Industries (down 1.01%), Hindustan Unilever (down 0.37%), Marico (down 0.15%), and Tata Global Beverages (down 0.76%) declined. Nestle India (up 0.39%), Colgate-Palmolive (India) (up 1.23%), Dabur India (up 2.09%), Godrej Consumer Products (up 3.05%) rose.
Index heavyweight and cigarette major ITC rose 0.29% to Rs 346. The stock hit high of Rs 349.15 and low of Rs 344.40.
Reliance Industries (RIL) shed 0.45%. The company announced after market hours on Wednesday, 20 August 2014, that it is implementing a project to source 1.5 million metric tonne per annum (MMTPA) of Ethane from US to feed its crackers in India. Reliance's investments in Shale Gas and its existing crackers portfolio in India are a natural fit for sourcing Ethane from North America and shipping it to India to attain long term feedstock competitiveness. The Shale Gas industry in North America has grown exponentially in the past 5 years. As a result Ethane has become the dominant feedstock for crackers replacing liquids
RIL has now executed storage and capacity agreements for liquefaction and export of ethane with a North American Terminal, which is expected to commence operations in the second half of 2016, the company said in a statement. For the purpose of transporting liquefied ethane to India in a safe and cost efficient manner, RIL has ordered six state-of-the-art Very Large Ethane Carriers (VLECs) which will be the largest vessels ever built in the world. The ships are expected to be delivered starting last quarter of 2016 in synchronisation with the readiness of terminal in North America.
RIL is also building a world-scale receiving and storage facility in India for liquefied ethane and pipeline to deliver ethane to the company's crackers. RIL will be upgrading its crackers to maximize cracking of Ethane, have maximum operational flexibility and capability to optimize feed stocks with complete control of supply chain. The project will significantly improve the long term competitiveness of the company's cracker portfolio through dedicated feedstock, enhanced margins, higher capacity and end to end integration, RIL said in a statement.
PSU OMCs surged as crude oil prices fell. HPCL (up 4.68%), BPCL (up 2.76%) and Indian Oil Corporation (IOC) (up 3.97%) gained. Lower crude oil prices will decrease under recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
The under-recovery on High Speed Diesel (HSD) applicable for second fortnight of August 2014, effective from 16 August 2014, will go up to Rs 1.78 per litre. This was Rs 1.33 per litre during first fortnight of August 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the second fortnight of August 2014 will be Rs 32.98 per litre (Rs 32.98 per litre in first fortnight) and Rs 447.87 per cylinder (Rs 447.87 per cylinder in first fortnight) respectively. Effective from 16 August 2014, PSU OMCs are incurring combined daily under-recovery of about Rs 230 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is higher than Rs 226 crore daily under-recoveries during first fortnight of August. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14.
Dr Reddy's Laboratories fell 1.52%. As per reports, Dr Reddy's Laboratories is in talks with a US regulator over allegations it violated packaging rules for some prescription drugs sold there between 2008 and 2012. In a US stock exchange filing this week, Dr Reddy's reportedly said that the US government's Consumer Product Safety Commission (CPSC) planned to seek civil penalties against the company for allegedly violating rules intended to prevent children from ingesting harmful substances. The company said any unfavourable outcome could result in significant liabilities and added that it disagreed with the allegations.
Claris Lifesciences jumped 3.56% after the company said it has received the MHRA approval for its newly commissioned plant. The announcement was made before market hours today, 21 August 2014. Claris Lifesciences announced that it received the MHRA approval for its newly commissioned plant (plant 2). This will help in enhancing capacities to grow in the regulated markets, especially the European Union.
L&T rose in volatile trade after the company said its construction division won new orders worth Rs 1832 crore from across various business segments in July and August 2014. The stock gained 0.75% at Rs 1,529. The scrip hit high of Rs 1,536.70 and low of Rs 1,507.65. The company said during market hours its construction division won new orders worth Rs 1832 crore from across various business segments in July and August 2014.
Bharti Airtel shed 0.94% as the stock turned ex-dividend today, 21 August 2014, for total dividend of Rs 3.43 per share. Bharti Airtel had on 13 August 2014 declared an interim dividend of Rs 1.63 per share for the year ending 31 March 2015. Bharti Airtel had on 29 April 2014 declared dividend of Rs 1.80 per share for the year ended 31 March 2014.
TCS shed 0.18%. TCS today, 21 August 2014, said that its TCS BaNCS customer, National Employment Savings Trust (NEST) in the UK, has crossed the 1 million member mark. TCS made the announcement after market hours today, 21 August 2014. TCS is NEST's IT solutions partner and scheme administrator. NEST was established under UK law as part of the UK government's workplace pension reforms that require all UK employers to enroll their eligible workforce into a qualifying workplace pension scheme and make contributions along with the employee contribution component.
Metal and mining stocks declined after the Cabinet Committee on Economic Affairs, chaired by the Prime Minister Narendra Modi, yesterday, 20 August 2014, approved the revision of rates of royalty and dead rent of all major minerals. Bhushan Steel (down 5%), Steel Authority of India (down 3.17%), Tata Steel (down 1.85%), JSW Steel (down 1.64%), Sesa Sterlite (down 1.83%), Hindalco Industries (down 1.473%), Jindal Steel & Power (down 1.05%), Hindustan Zinc (down 1.47%), and NMDC (down 1.05%) edged lower. With this decision, the royalty to mineral rich states would increase by 41% from Rs 9406 crore (2011-12) to Rs 13274 crore (estimated), a government statement said.
Bank stocks rose after Finance Minister Arun Jaitley reportedly said today, 21 August 2014, that the government was working to tighten up risk management in the banking sector. Jaitley, in a speech, reportedly said that some recent incidents in the banking sector had been disturbing and expressed the hope that they would not be repeated.
Among PSU bank stocks, State Bank of India (SBI) (up 2.47%), Canara Bank (up 3.23%), Union Bank of India (up 7.5%), Indian Bank (up 6.47%), Bank of India (up 4.57%), Punjab National Bank (up 4.36%) Syndicate Bank (up 1.06%), Indian Overseas Bank (up 2.5%), Andhra Bank (up 2.36%), Oriental Bank of Commerce (up 2.95%) gained.
Among private sector banks, HDFC Bank (up 1.64%), IndusInd Bank (up %), Federal Bank (up 3.9%) gained. Yes Bank fell 1.64%. ICICI Bank was down marginally by 0.03%.
Kotak Mahindra Bank rose 1.96% to Rs 1,016.50 after hitting record high of Rs 1,026.90 in intraday trade. The bank said during market hours that Kotak Trustee Company, a promoter group entity of Kotak Mahindra Bank, sold 16 lakh shares or 0.2% stake of the bank today, 21 August 2014. The above sale has been undertaken pursuant to RBI's requirement to reduce the promoter shareholding in the bank, has today, 21 August 2014 said.
Axis Bank rose after the bank said its Board of Directors at a meeting held today, 21 August 2014, approved issuance of long term bonds/non-convertible debentures upto Rs 6000 crore on a private placement basis. The stock was up 0.93%.
Shares of power generation and power distribution companies edged lower. GVK Power & Infrastructure (down 2.55%), Tata Power Company (down 1.11%), NTPC (down 2.2%), NHPC (down 2.01%), Adani Power (down 0.26%), Reliance Infrastructure (down 0.86%), JSW Energy (down 2%), Power Grid Corporation of India (down 0.8%) and Reliance Power (down 1.77%) declined.
Cement stocks declined. Ambuja Cements (down 0.95%), ACC (down 0.24%), UltraTech Cement (down 2.33%) declined.
Shree Cement gained 0.81%. Shree Cement will declare its Q4 and year ended 30 June 2014 result on Monday, 25 August 2014.
Grasim Industries was off 1.61% at Rs 3,391. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Zee Entertainment Enterprises rose 0.75%. United Spirits dropped 2.06%. Zee Entertainment Enterprises will replace United Spirits in the 50-share CNX Nifty index from 19 September 2014.
Bosch rose 1.69% after the company said workers at Jaipur plant called off tool down strike from Wednesday, 20 August 2014. Workmen at Bosch's Jaipur plant had resorted to an illegal tool down strike from end of second shift of Monday, 18 August 2014, without giving any prior notice to the management. Efforts were made to resolve the matter with the union and restore normalcy. Work has resumed from second shift on 20 August 2014, the company said in a statement.
Shares of jewellery retailers rallied. Gitanjali Gems (up 7.98%), Tribhovandas Bhimji Zaveri (TBZ) (up 8.37%), Thangamayil Jewellery (up 0.54%), PC Jeweller (up 9.33%), Shree Ganesh Jewellery House (up 9.95%) and Tara Jewels (up 4.59%) surged.
Titan Company advanced 6.04% to Rs 367.15 after scaling a record high of Rs 370.40 in intraday trade after a foreign brokerage upgraded the stock to overweight from equal-weight. The foreign brokerage cited conviction in the strength of Titan Company's Tanishq jewellery brand and its potential to gain market share.
Financial Technologies (India) rose 4.70% to Rs 255 on bargain hunting after the stock tumbled 19.51% in the preceding ten trading sessions to Rs 243.55 on 20 August 2014, from a recent high of Rs 302.60 on 5 August 2014.
In the foreign exchange market, the rupee edged lower against the dollar after Federal Reserve minutes indicated that policy makers talked at their last meeting about a sooner-than-anticipated hike to US interest rates. The partially convertible rupee was hovering at 60.6825, compared with its close of 60.62 on Wednesday, 20 August 2014.
The Sensex has gained 465.14 points or 1.79% in this month so far (till 21 August 2014). The Sensex has gained 5,189.43 points or 24.51% in calendar year 2014 so far (till 21 August 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 8,911.40 points or 51.07%. The Sensex is off 170.56 points or 0.64% from record high of 26,530.67 hit on 19 August 2014.
The empowered committee of state finance ministers on Wednesday, 20 August 2014, reportedly decided that the common threshold for levy of goods and services tax (GST) would be kept at Rs 10 lakh in general category states and Rs 5 lakh in special category states. This means GST will be levied on all retailers and service providers with a turnover of more than Rs 10 lakh in general category states and Rs 5 lakh in special category states. The decision removes a key stumbling block in the finalisation of the GST structure and is expected to speed up the talks on implementation of the tax reform. However, significant differences still persist between the Centre and the states regarding GST, reports suggest. GST, a major indirect tax reform, will replace service tax, excise, state value-added tax and a number of other local levies.
Meanwhile, India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent dropped to below $102 a barrel as China's manufacturing growth slowed this month and as the US pledged to continue operations to stop Islamic radicals in Iraq. The October Brent crude contract was down 90 cents at $101.38 a barrel. The contract had gained 72 cents a barrel to settle at $102.28 a barrel yesterday, 20 August 2014. Brent had hit 14-month low of $101.07 a barrel early this week.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 251.36 crore on Wednesday, 20 August 2014, as per provisional data from the stock exchanges.
The Union Cabinet on Wednesday, 20 August 2014, at a meeting chaired by the Prime Minister, Narendra Modi gave its approval for Digital India - a programme to transform India into digital empowered society and knowledge economy. The programme will be implemented in phases from the current year till 2018. The Digital India is transformational in nature and would ensure that Government services are available to citizens electronically. It would also bring in public accountability through mandated delivery of government's services electronically, a Unique ID and e-Pramaan based on authentic and standard based interoperable and integrated government applications and data basis, a government statement said.
European stocks today, 21 August 2014, reversed their initial losses as investors largely ignored a mixed bag of purchasing managers indexes from the region. Key benchmark indices in UK, France and Germany were up 0.25% to 0.62%.
Retail sales in the UK rose less than expected in July, dampening optimism over the country's economic outlook, official data showed on Thursday. The UK Office for National Statistics said retail sales increased by a seasonally adjusted 0.1% last month.
The Markit flash euro zone composite output index gave back the ground it made in July, posting 52.8 in August, compared with a final reading of 53.8 in July. The headline index has now remained above the neutral 50 mark for 14 successive months. Output increased in both the manufacturing and service sectors, with service providers again reporting the sharper rate of expansion. However, rates of growth eased in both sectors. The extent of the slowing was much sharper in manufacturing, taking its rate of expansion to the weakest in the current 14 month sequence of production growth.
German services and manufacturing activity slowed in August. The preliminary reading of a Purchasing Managers Index for the two industries fell to 54.9 in August from 55.7 in July, London-based Markit Economics said. A reading above 50 indicates expansion.
French manufacturing activity contracted for a fourth month in August, signaling that the euro area's second-largest economy is unlikely to return to growth after stagnating in the first half. A Purchasing Managers Index for the manufacturing industry fell to 46.5 in August from 47.8 in July, London-based Markit Economics said today, 21 August 2014. That's the lowest level in more than a year. A composite gauge of both manufacturing and services activity rose to 50 in August, the mark that divides expansion from contraction, from 49.4 in July.
Asian shares fell today, 21 August 2014, as a disappointing survey on Chinese manufacturing stoked concerns about the regional giant. Key benchmark indices in Taiwan, Hong Kong, Indonesia, China, and South Korea were off 0.37% to 1.38%. Key benchmark indices in Japan and Singapore were up 0.01% to 0.85%.
The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index (PMI) fell to 50.3 in August from July's 18-month high of 51.7, missing forecasts.
Trading in US index futures indicated that the Dow could gain 35 points at the opening bell on Thursday, 21 August 2014. Most US stocks closed higher on Wednesday, 20 August 2014, shaking off a dip that came after Federal Reserve minutes indicated that policy makers talked at their last meeting about a sooner-than-anticipated hike to interest rates.
The minutes from the two-day meeting of the Federal Open Market Committee in late July showed that Fed officials came closer to an agreement on how to exit from the most aggressive stimulus. At that meeting, the Fed trimmed its monthly bond-buying program by an additional $10 billion. The minutes showed that some participants were increasingly uncomfortable with the committee's forward guidance on keeping its benchmark rate low for a "considerable time,". Many participants said they might have to raise borrowing costs sooner than they had anticipated. The US central bank has kept its benchmark rate at almost zero since December 2008.
Federal Reserve Chairwoman Janet Yellen will give a speech tomorrow, 22 August 2014, at the annual Fed summit in Jackson Hole, Wyo. Fed Chair Janet Yellen is reportedly expected to acknowledge during the conference that while economic data has generally been supportive, she remains concerned about slack in the labor market.
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