Key benchmark indices dropped in choppy trade as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The Sensex lost 210.03 points or 1%, up close to 20 points from the day's low and off about 150 points from the day's high. The market breadth, indicating the overall health of the market, was weak. The rupee fell and bonds yields rose after retail inflation spiked, raising bets of a rate hike at the RBI's policy meeting next week.
Indian stocks dropped for the fourth-day in a row today, 13 December 2013. The Sensex has lost 610.84 points or 2.86% in four trading sessions from a recent high of 21,326.42 on 9 December 2013. The Sensex has fallen 76.35 points, or 0.36% in this month so far (till 13 December 2013). The Sensex has garnered 1,288.87 points or 6.63% in calendar 2013 so far (till 13 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,266.87 points or 18.72%. From a record high of 21,483.74 hit on Monday, 9 December 2013, the Sensex is off 786.16 points or 3.57%.
Coming back to today's trade, bank stocks declined as a sharp uptick in consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Capital goods pivotals declined as higher interest rates could put spanner in the works a likely revival of investment cycle. Shares of two wheeler makers declined.
The S&P BSE Sensex lost 210.03 points or 1% to settle at 20,715.58, its lowest closing level since 4 December 2013. The index fell 232.94 points at the day's low of 20,692.67 in late trade. The index declined 58.44 points at the day's high of 20,867.17 in opening trade.
The CNX Nifty lost 68.65 points or 1.1% to settle at 6,168.40, its lowest closing level since 4 December 2013. The index hit a low of 6,161.40 and a high of 6,208.60 in intraday trade.
The BSE Mid-Cap index fell 1.26% and underperformed the Sensex. The BSE Small-Cap index declined 0.95% and outperformed the Sensex.
The total turnover on BSE amounted to Rs 1741 crore, lower than Rs 1835.49 crore on Thursday, 12 December 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,575 shares fell and 883 shares rose. A total of 152 shares were unchanged.
From the 30-share Sensex pack, 22 stocks fell and rest rose.
Tata Motors rose 2.68% to Rs 370.25 on bargain hunting after the stock fell 8.19% in the preceding three trading sessions to Rs 360.60 on Thursday, 12 December 2013, from a recent high of Rs 392.75 on 9 December 2013.
Shares of Tata Motors had lost 4.55% to Rs 360.60 on Thursday, 12 December 2013, on reports that the company's British luxury car unit Jaguar Land Rover (JLR) has increased its capital expenditure and R&D spends guidance for the year ending 31 March 2015 (FY 2015). JLR has reportedly indicated an investment of 3.5 to 3.7 billion pounds in R&D and capital expenditure for FY 2015, which is substantially higher than the company's guidance of investment of 2.7 billion pounds for the current financial year ending March 2014. The increased capital investment would be towards development of new products in new and existing segments and investment in new powertrains and technologies to meet customer and regulatory requirements.
JLR's retail sales jumped 25% to 37,403 units in November 2013 over November 2012. Retail sales of the Jaguar brand jumped 55% to 6,244 units in November 2013 over November 2012. Retail sales of the Land Rover brand rose 20% to 31,159 units in November 2013 over November 2012. JLR announced the retail sales data on 11 December 2013.
Mahindra & Mahindra (M&M) rose 0.61%. The company after market hours on Thursday, 12 December 2013, announced that it would be raising the prices of its passenger as well as its commercial vehicles by up to 2%. The price hike will be effective from 1 January 2014. The price increase is primarily due to rising materials, input and freight costs, M&M said.
Commenting on the price hike, Pravin Shah, Chief Executive, Automotive Division, M&M, said: "We have been holding back prices for a while but now it has become necessary to raise them to partly compensate the increase in materials, input and freight costs. As always, Mahindra remains committed to its customers".
Shares of two wheeler makers declined. Bajaj Auto (down 2.24%) and Hero MotoCorp (down 2.98%) declined.
Capital goods pivotals declined as higher interest rates could put a spanner in the works a likely revival of investment cycle. Bhel (down 4.06%) and L&T (down 1.54%) declined.
Bank stocks declined as a sharp uptick in consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. AXIS Bank (down 0.39%), ICICI Bank (down 3.76%), HDFC Bank (down 1.4%), and Yes Bank (down 3.91%), dropped.
Syndicate Bank fell 2.35% to Rs 87.40. The bank after market hours on Thursday, 12 December 2013, said it has fixed minimum issue price at Rs 88.36 per share for the proposed issue of 2.26 crore equity shares of face value of Rs 10 each aggregating to Rs 200 crore to Government of India (GoI) by way of preferential allotment basis. The bank will hold an Extraordinary General Meeting of the shareholders on 10 January 2014. The Government of India (GoI) currently holds 66.17% stake in Syndicate Bank (as per the shareholding pattern as on 30 September 2013).
State-run Oriental Bank of Commerce declined 2.93% to Rs 209. The bank today, 13 December 2013, said that the bank has allotted 80.87 lakh equity shares at issue price (including premium) of Rs 185.47 per share aggregating about Rs 150 crore to Government of India on preferential basis. As a result, the Government of India's holding in the bank has increased to 59.13% from 58%.
State Bank of India (SBI) shed 1.96% to Rs 1743.60. The bank after market hours on Thursday, 12 December 2013, said that the Executive Committee of Central Board (ECCB) of the bank at its meeting held on Thursday, 12 December 2013, has accorded its approval to fix the issue price at Rs 1,782.74 per share of face value of Rs 10, including a premium of Rs 1772.74 per share, and accordingly, to issue 1.12 crore equity shares on preferential basis to Government of India (Gol) for a consideration of about Rs 2000 crore.
The price for preferential issue has been arrived at in accordance with the Sebi (Issue of Capital and Disclosure Requirements) Regulations, 2009, taking into consideration 29 November 2013 as the relevant date, SBI said.
The GoI currently holds 62.31% stake in SBI (as per the shareholding pattern as on 30 September 2013).
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank dropped 2% to 4.09%.
Index heavyweight and cigarette major ITC slipped 0.54% to Rs 315.05 in volatile trade. The stock hit a high of Rs 317.50 and low of Rs 312.70.
Sun Pharmaceutical Industries fell 0.74% to Rs 571/10 in volatile trade. The stock hit a high of Rs 579.50 and low of Rs 569.55. The company after market hours on Thursday, 12 December 2013, announced that the US FDA has granted its subsidiary final approval for its Abbreviated New Drug Application (ANDA) to market a generic version of Cymbalta, Duloxetine Delayed-Release Capsules USP, 20 mg, 30 mg and 60 mg. Duloxetine Delayed-Release Capsules USP, 20 mg, 30 mg and 60 mg are therapeutic equivalents of Eli Lilly & Company's Cymbalta Delayed-Release Capsules. These Capsules have annual sales of approximately $5.5 billion in the US. Duloxetine Delayed-Release Capsules USP are indicated for the treatment of major depressive disorder (MDD), generalized anxiety disorder (GAD) and diabetic peripheral neuropathic pain (DPNP).
Sun Pharma's subsidiary, being one of the first-to-file ANDAs for generic Cymbalta with a para IV certification, is eligible for shared 180-day marketing exclusivity in the US.
Ranbaxy Laboratories dropped 1.26%. The company after trading hours on Thursday, 12 December 2013, said that its foreign promoter -- Daiichi Sankyo Company, Japan -- has confirmed that it has no intention to delist Ranbaxy shares from Indian bourses.
Cipla declined 0.87% and Dr Reddy's Laboratories dropped 0.04%.
Aurobindo Pharma rose 3.99% after the company said it has received the final approval from USFDA to manufacture and market Duloxetine Hydrochloride Delayed-Release Capsules in 3 strengths in the United States. The announcement was made during trading hours today, 13 December 2013.
Aurobindo Pharma said it has received the final approval from the US Food & Drug Administration (USFDA) to manufacture and market Duloxetine Hydrochloride Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base) which was earlier tentatively approved.
Duloxetine Hydrochloride Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base) are the generic equivalent of Eli Lilly & Company's Cymbalta Delayed-Release Capsules 20mg (base), 30mg (base) and 60mg (base). Duloxetine Hydrochloride Delayed-Release Capsules are indicated for the treatment of for the treatment of major depressive disorder (MDD) and falls under the Neurological (CNS) therapeutic category. According to IMS data, the market size of the product is estimated to be $5.4 billion for the twelve months ended September 2013.
Aurobindo now has a total of 188 abbreviated new drug application (ANDA) approvals (163 final approvals including 7 from Aurolife Pharma LLC and 25 tentative approvals) from USFDA.
Elder Pharmaceuticals and Torrent Pharmaceuticals, both, dropped in choppy trade after the two pharmaceutical companies announced separately that Torrent Pharmaceuticals has entered into a definitive binding agreement with Elder to acquire Elder's branded domestic formulations business in India, and Nepal (India business) for a consideration of Rs 2004 crore. Shares of Elder Pharmaceuticals tanked 8.17% to Rs 298.30. Shares of Torrent Pharmaceuticals lost 4.04% to Rs 479.50. The announcement was made during trading hours today, 13 December 2013.
Elder's India business comprises a portfolio of over 30 brands with market leading products across the women's healthcare, pain management, wound care and neutraceuticals therapeutic segments.
The India business is being sold as a going concern on a slump sale basis, and the transaction will also involve the transfer of employees engaged in sales, marketing and operations of the India business. Under the proposed transaction, Elder will continue to manufacture and supply the products at its existing manufacturing facilities for Torrent for a period of three years, the company said in a statement.
Torrent would fund the acquisition value through a mix of internal accruals and bank debt. Elder's existing brand equity in the areas of women healthcare and pain management will help Torrent strengthen its position in the Indian market expanding into these fast growing areas.
"This path breaking domestic consolidation by Torrent addresses our recent challenges and will significantly help Elder de-leverage its balance sheet. We will now focus and grow our in-licensing, anti-infectives and exports business." said Alok Saxena, Managing Director and CEO, Elder.
"The transaction is a strategic fit for Torrent and will strengthen its core prescription-based business. This acquisition strengthens our position in the women healthcare, pain-management and vitamins/nutrition segments by enhancing and accelerating market access. It is also expected to enable cost and revenue synergies in Torrent's domestic formulations business." said Mr. Sudhir Mehta, Chairman, Torrent Group.
The transaction has been approved by the boards of directors of both companies. The transaction is subject to customary conditions precedent including shareholder approval and applicable regulatory approvals and is expected to close in the first half of 2014, the companies said.
Reliance Power (RPower) declined 2.27%. The company during market hours today, 13 December 2013, said that the second 660 megawatts (MW) of the 3,960 MW Sasan Ultra Mega Power Project (UMPP) has commenced power generation. The unit has commenced power generation in shortest of just about a month from boiler light up, RPower said in a statement. This was made possible by adopting innovative commissioning methods, RPower said. With this unit, RPower's power generation capacity has increased to 3,205 MW which includes 3,120 MW of thermal capacity and 85 MW of renewal energy based capacity. The balance four units are in advanced stage of construction and will be commissioned over the next few months, RPower said.
The Sasan UMPP is the largest integrated power plant and coal mining project in the world. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project.
Metal and mining stocks extended their recent losses. Jindal Steel & Power (down 1.03%), Sail (down 0.58%), Sesa Sterlite (down 1.41%), JSW Steel (down 1.07%), Tata Steel (down 0.72%), Hindalco Industries (down 1.9%), Hindustan Zinc (down 2.44%), NMDC (down 0.86%) National Aluminum Company (down 2.71%) and Hindustan Copper (down 2.11%) declined.
Realty stocks edged lower as a sharp uptick in consumer price inflation raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. Purchases of both residential and commercial property are largely driven by finance. DLF (down 3.46%), HDIL (down 3.41%), Sobha Developers (down 1.83%), Unitech (down 1.8%) and D B Realty (down 2.09%) declined.
Bharti Airtel shed 0.76% to Rs 321.05. Bharti Airtel and Reliance Jio Infocomm (Reliance Jio) early this week announced a comprehensive telecom infrastructure sharing arrangement under which they will share infrastructure created by both parties. This will include optic fibre network - inter and intra city, submarine cable networks, towers and internet broadband services and other such opportunities identified in the future. The cooperation is aimed at avoiding duplication of infrastructure, wherever possible, and to preserve capital and the environment. This will also provide redundancy in order to ensure seamless services to customers of the respective parties.
Shares of Motherson Sumi Systems extended Thursday's gains triggered by the company's announcement that the Register of Members & Share Transfer Books of the company will remain closed on 24 December 2013 for the purpose of 1:2 bonus share issue. The stock was up 0.09%.
In the foreign exchange market, the rupee edged lower against the dollar and fell below 62 level after two sets of economic data released after market hours on Thursday, 12 December 2013, which showed a spike in consumer price inflation in November and a worse-than-expected contraction in industrial production in October. The partially convertible rupee was hovering at 62.125, compared with its close of 61.81/82 on Thursday, 12 December 2013.
Bond prices fell as a sharp uptick in consumer price inflation in November 2013 raised the likelihood of the Reserve Bank of India (RBI) hiking its main lending rate viz. the repo rate at a monetary policy review next week. The yield on 10-year federal paper 8.83% GS 2023 was hovering at 8.9111%, higher than its close of 8.8498% on Thursday, 12 December 2013. Bond yield and bond prices are inversely related.
Provisional annual inflation rate based on all India general consumer price index (CPI) (combined) rose 11.24% in November 2013 as compared to 10.17% (final) in October 2013. The data was announced after market hours on Thursday, 12 December 2013.
Index of industrial production (IIP) declined 1.8% in October 2013, against 2% growth in the previous month September 2013. The decline in the output of manufacturing sector at 2% and mining sector at 3.5% mainly led to decline in IIP for October 2013. Meanwhile, the marginal 1.3% growth in the electricity generation restricted further dip in industrial production during October 2013.
The IIP growth for the month of September 2013 has been retained unchanged at 2%, while the growth for the month of July 2013 has been scaled down to 2.6% from 2.8% reported at first revision. However, the final growth rate for July 2013 is similar to the provisional level of 2.6%. The data was announced after market hours on Thursday, 12 December 2013.
The government will unveil data on inflation based on the wholesale price index (WPI) for November 2013 on Monday, 16 December 2013. WPI is seen easing a bit at 6.9% in November 2013, from 7% in October 2013, as per the median estimate of a poll of economists carried out by Capital Market.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
European stocks rose on Friday, 13 December 2013, after a report showed US retail sales in November 2013 beat market expectations and after US House of Representatives on Thursday, 12 December 2013, passed a federal budget plan. Key benchmark indices in UK, France and Germany were up 0.15% to 0.31%.
Asian markets edged higher in choppy trade on Friday, 13 December 2013, after a report showed US retail sales in November 2013 beat market expectations and after US House of Representatives on Thursday, 12 December 2013, passed a federal budget plan. Key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were up 0.12% to 0.4%. Key benchmark indices in China, Indonesia and South Korea were off 0.26% to 0.89%.
The Bank of Japan (BoJ), which buys more than 7 trillion yen ($67.6 billion) of Japanese Government Bonds (JGBs) every month in its bid to stoke inflation, holds a two-day monetary policy meeting on 19 and 20 December 2013.
Trading in US index futures indicated that the Dow could advance 39 points at the opening bell on Friday, 13 December 2013. US stocks dropped on Thursday, 12 December 2013, sending the Standard & Poor's 500 Index to a one-month low, as improving economic data spurred speculation the Federal Reserve will cut stimulus as early as next week.
Data showed retail sales rose more than forecast in November as Americans bought cars and took advantage of discounts going into the holiday-shopping season. Sales increased 0.7 percent in November from the previous month, the most since June, the Commerce Department figures showed. A separate report indicated applications for unemployment benefits jumped last week from an almost three-month low.
The US House of Representatives on Thursday passed the first bipartisan federal budget in four years, which would ease $63 billion in automatic spending cuts and avert another government shutdown. The legislation now heads to the Senate. The House voted 332-94 for the $1.01 trillion compromise budget crafted by Senator Patty Murray and Representative Paul Ryan, the chairman of a special bipartisan panel. President Barack Obama said he'll sign the final measure.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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