Trading for the week began on a positive note, with investors giving thumbs up to a strong performance of Bharatiya Janata Party (BJP) in assembly elections. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on intraday as well as closing basis. The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro development leader -- Narendra Modi -- would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade. The market sentiment was also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. The Sensex garnered 329.89 points or 1.57%, up 43.78 points from the day's low and off 157.32 points from the day's high. In the foreign exchange market, the rupee edged higher against the dollar.
Indian stocks rose for the third day in a row today, 9 December 2013. The Sensex had gained 617.71 points, or 2.98% in three trading sessions from a recent low of 20,708.71 on 4 December 2013. The Sensex has gained 534.49 points, or 2.57% in this month so far (till 9 December 2013). The Sensex has garnered 1,899.71 points or 9.78% in calendar 2013 so far (till 9 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,877.71 points or 22.22%.
Coming back to today's trade, shares of engineering and construction major L&T scaled 52-week high. Bank stocks rose across the board. Jindal Steel & Power tumbled after the Congress party's rout in assembly elections. Shares of shipping companies rose after the Baltic Dry Index, which tracks rates to ship dry commodities, gained 1.45% on Friday, 6 December 2013.
Cement stocks edged higher. Shares of power generation and power distribution companies extended recent gains on strong demand from investors for the follow-on public offer of state-run Power Grid Corporation of India (PGCIL) last week. Maruti Suzuki India rose on reports that the company will increase car prices from January 2014 due to rising input costs. Shares of PSU OMCs rose as gains in rupee against the dollar helped eased worries about high cost of crude oil imports. Some realty stocks also gained. The market breadth, indicating the overall health of the market, was negative.
The BJP has secured emphatic victory in assembly elections in Madhya Pradesh and Rajasthan, a narrower one in Chhattisgarh and emerged as the single largest party in a hung Delhi assembly, giving the party and its leader Narendra Modi confidence and momentum going into next year's general elections. Aam Aadmi Party, which confounded skeptics to win 28 seats in the 70-member Delhi assembly, denied BJP, which won 31 seats, an outright victory. Congress's debacle has also fortified the perception of Narendra Modi-led BJP being the frontrunner for 2014 Lok Sabha elections. Counting of votes for assembly elections in Rajasthan, Delhi, Madhya Pradesh and Chattisgarh took place on Sunday, 8 December 2013.
Meanwhile, the counting of elections for the 40-member Mizoram Assembly which is underway showed that the Congress is heading towards forming a government in the state. The Congress party won in 23 seats and was leading in 8 seats so far.
The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, 6 December 2013, as per provisional data from the stock exchanges.
The S&P BSE Sensex garnered 329.89 points or 1.57% to settle at 21,326.42, a record closing high. The index jumped 487.21 points at the day's high of 21,483.74 in early trade, surpassing its previous record high of 21,321.53 of 3 November 2013. The index rose 286.11 points at the day's low of 21,282.64 in mid-morning trade.
The CNX Nifty garnered 104 points or 1.66% to settle at 6,363.90, a record closing high. The index hit a high of 6,415.25 in intraday trade, surpassing its previous record high of 6,357.10 of 8 January 2008. The index hit a low of 6,345 in intraday trade.
The total turnover on BSE amounted to Rs 2215 crore, higher than Rs 1846.02 crore on Friday, 6 December 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,310 shares dropped and 1,201 shares rose. A total of 179 shares were unchanged.
The BSE Mid-Cap rose 0.48% and the BSE Small-Cap index gained 0.39%. Both these indices underperformed the Sensex.
The S&P BSE Capital Goods index (up 3.14%), the S&P BSE Bankex (up 2.93%), the S&P BSE Realty index (up 2.61%), the S&P BSE PSU index (up 1.76%), the S&P BSE Oil & Gas index (up 1.71%) and the S&P BSE Power index (up 1.59%) outperformed the BSE Sensex.
The S&P BSE Auto index (up 1.37%), the S&P BSE Metal index (up 0.73%), the S&P BSE Teck index (up 0.7%), the S&P BSE IT index (up 0.54%), the S&P BSE FMCG index (up 0.21%), the S&P BSE Healthcare index (up 0.17%) and the S&P BSE Consumer Durables index (down 0.11%) underperformed the BSE Sensex.
From the 30-share Sensex pack, 26 stocks rose and only four fell.
Index heavyweight and cigarette maker ITC rose 0.45% at Rs 313.05. The scrip hit high of Rs 317.50 and low of Rs 310.95.
Colgate-Palmolive (India) rose 0.18%, with the stock reversing intraday fall. The stock turned ex-dividend today, 9 December 2013, for second interim dividend of Rs 9 per share for the year ending 31 March 2014 (FY 2014).
Pidilite Industries fell 0.51%. The company today, 9 December 2013, said that the entire outstanding 600 Secured Redeemable Non-Convertible Debentures (NCDs-Series I) aggregating to Rs 60 crore were duly redeemed on the maturity date which was 5 December 2013.
Index heavyweight Reliance Industries (RIL) rose 1.24% at Rs 878. The scrip hit high of Rs 888 and low of Rs 876.55.
Oil & Natural Gas Corporation (ONGC) advanced 3.33%. The board of directors of ONGC at its meeting held on Friday, 6 December 2013, declared interim dividend of Rs 5 per share for the year ending 31 March 2014 (FY 2014).
Shares of PSU OMCs rose as gains in rupee against the dollar helped eased worries about high cost of crude oil imports. BPCL (up 0.58%), HPCL (up 4.95%) and Indian Oil Corporation (up 1.46%) gained. PSU OMCs source majority of their crude oil requirement through imports.
The three public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and IOC -- suffer revenue loss or under recoveries on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Essar Oil rose 0.54% after the company said that it has issued and allotted 8.38 crore equity shares of Rs 10 each (face value) fully paid-up, to the promoter company, Essar Energy Holdings (EEHL) on exercise of option by EEHL to convert its entire holding of foreign currency convertible bonds (FCCBs) aggregating to $262 million into equity shares. This includes issue and allotment of 3.88 crore equity shares of Rs 10 each at a premium of Rs 128 per share, aggregating to Rs 138 per share to EEHL on conversion of 1,150 FCCBs aggregating to $115 million which were issued on 15 June 2010 and allotment of 4.50 crore equity shares of Rs 10 each at a premium of Rs 143 per share, aggregating to Rs 153 per share to EEHL on conversion of 1,470 FCCBs aggregating to $147 million which were issued on 9 July 2010.
L&T advanced 3.69% to Rs 1,137 after hitting 52-week high of Rs 1,152.40 in intraday trade.
Jindal Steel & Power (JSPL) tumbled after the Congress party's rout in assembly elections. JSPL chairman Naveen Jindal is a member of parliament representing the ruling Congress party. The stock lost 5.84% to Rs 267. The stock hit a high of Rs 289.90 and low of Rs 265.10.
Bank stocks rose across the board. AXIS Bank (up 1.59%), ICICI Bank (up 5.16%) and HDFC Bank (up 1.69%) gained.
Induslnd Bank rose 3.86%. The bank said during market hours today, 9 December 2013, that it has opened a new branch in Aliganj area of Lucknow. Induslnd Bank now has nine branches in Lucknow district and overall forty nine branches in the state of Uttar Pradesh. The bank also announced its plans to further strengthen its presence and customer reach in Uttar Pradesh.
Among PSU bank stocks, State Bank of India, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank rose 1.21% to 2.78%.
Shares of state-run Canara Bank jumped 4.1% to Rs 277 after the bank's Chairman and Managing Director R.K. Dubey said in an interview to a news agency that he expects the bank's asset quality to improve by 20-30 basis points by March 2014 on the back of the bank's focus on aggressive debt collections and better monitoring of performing accounts.
Auto stocks rose on renewed buying. Tata Motors (up 0.12%), M&M (up 2.26%), Ashok Leyland (up 1.23%), Bajaj Auto (up 1.24%), and Hero MotoCorp (up 0.86%) gained.
Maruti Suzuki India surged 4.06% on reports that the company will increase car prices from January 2014 due to rising input costs. Maruti Suzuki India on 2 December 2013, said its total sales declined 10.7% to 92,140 units in November 2013 over November 2012. Domestic sales dropped 5.9% to 85,510 units in November 2013 over November 2012. Exports slumped 46.2% to 6,630 units in November 2013 over November 2012.
JSW Steel fell 0.04%. The company said during market hours today, 9 December 2013, that its crude steel production rose 28% to 10.72 lakh tonnes in November 2013 over November 2012. Production of flat rolled products rose 13% to 8.31 lakh tonnes in November 2013 over November 2012. Production of long rolled products fell 14% to 1.44 lakh tonnes in November 2013 over November 2012. The figures for the corresponding period in the previous year are on a pro forma basis after giving effect to the merger of JSW ISPAT Steel with JSW Steel.
Shares of power generation and power distribution companies extended recent gains on strong demand from investors for the follow-on public offer of state-run Power Grid Corporation of India (PGCIL) last week. GVK Power & Infrastructure (up 1.1%), NTPC (up 2.72%), Reliance Infrastructure (up 1.41%), Adani Power (up 0.74%), and Reliance Power (up 1%) gained.
Power Grid Corporation of India (PGCIL) rose 2.22% to Rs 101.10, on strong response from investors to the company's follow-on public offer (FPO). The FPO which closed on Friday, 6 December 2013, was subscribed 6.74 times. The FPO received bids for a total 530.12 crore shares, compared with 78.70 crore shares on offer, as per NSE data.
After the successful divestment, the Government of India's holding in PGCIL will come down to 57.89% from the present level of 69.42%.
Tata Power Company gained 0.96%. The company after market hours on Friday, 6 December 2013, said that the coal handling plant at Coastal Gujarat Power (CGPL), Mundra had an occurrence of fire in the coal conveyor gallery on 14 November 2013. Coal feeding to the plant was impacted due to fire and the repair works that followed. Restoration of the impact of fire on conveyor was achieved on 20 November 2013, Tata Power said. The company has processed the insurance claim as per coverage, Tata Power said.
Bharti Airtel rose 1.46%. The company today, 9 December 2013, said it will invest over Rs 4000 crore in Punjab over the next five years to expand services and contribute to the Punjab state government's digital inclusion agenda. Airtel and the state government of Punjab have signed an agreement on the sidelines of the Progressive Punjab Investors Summit, under which Airtel will take its high speed 4G LTE services to all towns and villages across Punjab and put the state on the data superhighway, Bharti Airtel said in a statement. Airtel launched Punjab's first 4G LTE services in Chandigarh Tri-City in March 2013, making it one of the first States in India to experience the world-class technology. As part of an agreement with the Punjab state government, Bharti Airtel will lay an additional 10,000 km of optic fiber across Punjab and expand its 4G footprint to cover most of the state's population over the next few years. This will provide a major boost to growth of broadband services in rural areas and enable delivery of services such e-governance, e-education, e-health and much more, the company said. In particular, it will provider fillip to the growth of the digital economy in the state and support businesses as well as the government, it said.
In addition, Airtel will invest in its existing 2G mobile operations, Wire-line & DSL Broadband, DTH services, M-Commerce Services offering in the state. It will also expand its Enterprise Services offerings that provide end-to-end technology solutions to Corporates and SMEs.
Mr. Sunil Bharti Mittal, Chairman and Group CEO, Bharti Enterprises said: "Airtel has been at the forefront of Punjab's telecom growth story and we are delighted to be a partner in Government of Punjab's vision to build a digitally inclusive state. Just like the mobile phone connected millions across Punjab, this high speed data connectivity initiative will further empower people with information and services available at the touch of a screen. I am confident that this initiative will make Punjab a model state for rest of the country".
Airtel launched mobile services in Punjab in 2002 and is the largest mobile operator in the state with over 7.2 million customers. Till date, it has invested over Rs 4800 crore in its operations in the state and its mobile network covers all 162 towns and 12,750 villages, reaching 94% of the population. The company's distribution network across Punjab spans 50,000 retailers and its operations provide direct and indirect employment opportunities to over 65,000 people across the state, Bharti Airtel said in a statement.
Cement stocks rose on renewed buying. Ambuja Cement (up 4.54%) and ACC (up 5.31%) surged.
Jaiprakash Associates ended unchanged for the day at Rs 55.30. The stock was volatile. The scrip hit a high of Rs 57.85 and low of Rs 55.20. The company said during market hours today, 9 December 2013, that pursuant to the orders of the High Court of Allahabad dated 31 October 2013, the secured and unsecured creditors of Jaypee Cement Corporation (JCCL) have in their respective meetings held on Saturday, 7 December 2013, approved the scheme of arrangement, without any modification, for the sale of JCCL's Gujarat cement plant to UltraTech Cement. JCCL is a wholly owned subsidiary of Jaiprakash Associates.
Jaiprakash Associates further said that the High Court of Allahabad in its order has dispensed with the holding of the meeting of the shareholders (both equity and preference) of JCCL.
Shares of UltraTech Cement rose 2.44%.
Glenmark Pharmaceuticals edged higher after the company said its step down US-based subsidiary has launched Hydrocortisone Butyrate cream in the United States. The stock rose 1.23%. The announcement was made during trading hours today, 9 December 2013.
Glenmark Generics Inc. (GGI), USA, a subsidiary of Glenmark Generics, announced the exclusive launch of Hydrocortisone Butyrate cream USP, 0.1% in the United States. The company received approval from the United States Food and Drug Administration (US FDA) for Abbreviated New Drug Application (ANDA) for its generic version of Locoid Lipocream on 27 September 2013, Glenmark Pharmaceuticals said in a statement.
Glenmark is entitled to 180 days of exclusivity with respect to its Hydrocortisone Butyrate cream, as it is the first generic company to file an ANDA for the product, the company said. Hydrocortisone Butyrate cream is indicated for the relief of the inflammatory and pruritic manifestations of corticosteroid-responsive dermatoses in adults and the treatment of mild to moderate atopic dermatitis in patients 3 months to 18 years of age. According to IMS Health sales data for the 12 month period ended September 2013, Hydrocortisone Butyrate cream garnered annual sales of approximately $36.8 million in the United States.
Glenmark's current portfolio consists of 90 products authorized for distribution in the US marketplace and 56 ANDAs pending approval with the US FDA. In addition to these internal filings, GGI continues to identify and explore external development partnerships to supplement and accelerate the growth of the existing pipeline and portfolio, Glenmark Pharmaceuticals said.
Realty stocks gained. DLF (up 6%), HDIL (up 0.78%), Indiabulls Real Estate (up 1.53%), Oberoi Realty (up 2.88%) and Unitech (up 0.95%) gained.
McNally Bharat Engineering Company rose 1.36% after the company said it has received an order worth Rs 209.84 crore for a period of 5 years for comprehensive operation and maintenance of coal handling plant for a thermal power plant.
Future Consumer Enterprise rose 3.27% after the company said it has entered into definitive arrangement to sell its entire investment in Capital Foods on terms and conditions mentioned thereunder.
Accel Frontline was locked at 5% circuit filter at Rs 35.50 after the company said that CAC Corporation, Japan would acquire majority stake in the company. The announcement was made during market hours today, 9 December 2013.
The current promoters of Accel Frontline (AFL) announced that they have today, 9 December 2013 signed definitive agreements with CAC Corporation, Japan (CAC) to induct CAC as a strategic partner in AFL.
Under the terms of the agreements, CAC will acquire a minimum of 51% equity shareholding in AFL through purchase of equity shares from the promoters, subscription of new equity shares of the company and purchase of equity shares from public shareholders by the mandatory open offer for up to 26% of the company's fully-diluted equity capital at a price of Rs 45 per equity share.
AFL will be run as a joint venture between CAC and the current promoters of AFL who will continue to be significant owners of the company. Mr. N.R.Panicker will remain as the Executive Chairman of AFL.
As a part of the growth plans for AFL, CAC will invest in fresh equity in the company to expand its capital base. In addition, both CAC and the current promoters of AFL will provide long-term soft loans to the company to enhance AFL's long-term working capital, both the companies said in a joint press release.
The formation of the joint venture partnership is expected to provide major opportunities to both partners. While CAC will gain an immediate platform in the fast growing Indian IT services market, AFL will be able to access CAC's relationships in Japan to provide IT services with India as service hub. Also, AFL will now be able to keenly bid for providing IT infrastructure services for the major industrial corridors being built in India by leading Japanese companies.
Commenting on the development Mr Akihiko Sako, President and CEO of CAC Corporation said "We at CAC Corporation are excited about this Joint Venture with the Promoters of Accel Frontline, which is a leading name in the IT services business in India, with an established presence in overseas markets such as USA, Japan, the UAE and Singapore. CAC Corporation is one of the oldest software development companies in Japan started way back in 1966. As part of our globalization plan, we are looking at India, not only as a market, software, which can help our customers in different parts of the world. So this JV partnership will achieve the twin objectives of serving our Japanese clients operating in India and leveraging Accel's capability for software development services to serve our global customers."
Commenting on the development Mr. N. R. Panicker, Chairman of AFL said "This is an important milestone for Accel Frontline coming two years after the promoters had bought back a controlling stake in the company from British Telecom in August, 2011. We have been looking at various avenues to grow our international business more rapidly. The Joint Venture with CAC Corporation will help us to achieve this goal. CAC Corporation's prominent presence in Japan and their client base in USA, the UK and other countries will give us cross-selling opportunities with our service offerings."
Shares of shipping companies rose after the Baltic Dry Index, which tracks rates to ship dry commodities, gained 1.45% on Friday, 6 December 2013. Great Eastern Shipping Company (up 0.63%), Shipping Corporation of India (up 10.36%), Mercator (up 4.88%), Varun Shipping Company (up 7.67%) and Essar Shipping (up 1.83%) gained. The Baltic Dry Index (BDI) is widely followed by analysts, money managers, shipping companies and investors because it provides benchmark rates for transporting dry bulk commodities such as iron ore, coal, and grain across water.
In the foreign exchange market, the rupee edged higher against the dollar after strong performance of Bharatiya Janata Party (BJP) in assembly elections. The partially convertible rupee was hovering at 61.14, compared with its close of 61.41/42 on Friday, 6 December 2013.
On macro front, 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 28 January 2014.
European stocks reversed initial gains on Monday, 9 December 2013, on speculation that upbeat US job data could lead to the US Federal Reserve reducing monetary stimulus for the US economy earlier that previously thought. Key benchmark indices in France and UK shed 0.24% to 0.3%. Germany's DAX rose 0.07%.
Asian stocks rose on Monday, 9 December 2013, after better-than-forecast growth in US jobs and Chinese exports boosted investor confidence cuts to Federal Reserve stimulus won't derail the global economic recovery. Key benchmark indices in China, Taiwan, Indonesia, South Korea, Japan and Hong Kong rose 0.05% to 2.29%. Singapore's Straits Times fell 0.02%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
China today reported inflation slowed more than estimated last month, after data yesterday showed export growth helped swell the nation's trade surplus to $33.8 billion, the widest since January 2009. The consumer-price index rose 3 percent from a year earlier, the National Bureau of Statistics said today in Beijing.
China's trade surplus widened last month to the largest in more than four years as exports exceeded estimates. The surplus of $33.8 billion was the biggest since January 2009, data from the General Administration of Customs showed yesterday in Beijing. Outbound shipments rose 12.7% from a year earlier, while import gained 5.3%.
Japan's growth slowed more than an initial estimate in the third quarter while the country posted an unexpected deficit in its broadest trade gauge in October, underscoring headwinds to Prime Minister Shinzo Abe's efforts to cement a recovery. Gross domestic product expanded an annualized 1.1% from the previous quarter when it rose 3.6%, the Cabinet Office said today in Tokyo, lower than a preliminary reading of 1.9%. Japan's current account registered a 128 billion yen ($1.2 billion) shortfall, the first deficit since January, according to the finance ministry.
Trading in US index futures indicated that the Dow could fall 6 points at the opening bell on Monday, 9 December 2013. US stocks surged on Friday, 6 December 2013, after the latest data showed American employers added more jobs than forecast and the jobless rate dropped to the lowest since 2008. The 203,000 increase in payrolls in November followed a revised 200,000 advance in October, Labor Department figures showed. The US jobless rate fell to 7%, showing progress in the labor market that will help provide a spark for the US economy. Another report showed consumer confidence rose more than forecast in December to the highest level in five months, easing concern about household spending heading into the holiday-shopping season. The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the strongest since July, from 75.1 in November.
Investors are keeping a close watch on economic data in the United States as the Federal Reserve monitors the pace of recovery to gauge when it will begin to reduce monetary stimulus for the US economy, which has been aimed at encouraging growth. 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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