Amid divergent trend among the various index components, key equity indices eked out small gains. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, rose 46.34 points or 0.17% to settle at 28,121.89. The Sensex and the 50-unit CNX Nifty, both, hit their highest closing level in six weeks. European and Asian stocks fell as the fallout from Switzerland scrapping its euro cap extended into a second day. Trading in US index futures indicated a weak opening of US stocks later in the global day today, 16 January 2015.
Union Bank of India joined United Bank of India in cutting base rate after a surprise reduction in repo rate announced by the Reserve Bank of India (RBI) yesterday, 15 January 2015, morning. 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 yesterday, 15 January 2015, and stated that easing of inflationary pressures provided headroom for a shift in the monetary policy stance.
Capital goods stocks rose. TCS dropped after reporting disappointing growth in services revenue in Q3 December 2014. Shares of PSU OMCs declined. PSU bank stocks declined. Realty stocks reversed gains. FMCG shares advanced.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years.
Foreign portfolio investors bought shares worth a net Rs 1738.24 crore yesterday, 15 January 2015, as per provisional data.
In overseas markets, European and Asian stocks fell as the fallout from Switzerland scrapping its euro cap extended into a second day. US stocks edged lower in a volatile trading session yesterday, 15 January 2015, after the Swiss National Bank stunned global markets by cutting its currency cap with the euro.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Global crude oil prices took a breather from a selloff after the International Energy Agency said a price recovery might be in sight.
The S&P BSE Sensex rose 46.34 points or 0.17% to settle at 28,121.89, its highest closing level since 5 December 2014. The index jumped 100.55 points at the day's high of 28,176.10 in mid-afternoon trade. The index fell 130.24 points at the day's low of 27,945.31 in early trade.
The 50-unit CNX Nifty rose 19.65 points or 0.23% to settle at 8,513.80, its highest closing level since 5 December 2014. The index hit a high of 8,530.75 in intraday trade. The index hit a low of 8,452.25 in intraday trade.
The total turnover on BSE amounted to Rs 4111 crore, lower than Rs 4305.55 crore yesterday, 15 January 2015.
The BSE Mid-Cap index rose 34.42 points or 0.32% to settle at 10,633.11, outperforming the Sensex. The BSE Small-Cap index fell 4.17 points or 0.04% to settle at 11,309.93, underperforming the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,552 shares declined and 1,373 shares rose. A total of 102 shares were unchanged.
TCS dropped after reporting disappointing growth in services revenue in Q3 December 2014. The stock was off 0.71% at Rs 2,527. The stock hit high of Rs 2,545 and low of Rs 2,484. The company's consolidated net profit rose 1.6% to Rs 5328 crore on 2.9% growth in revenue to Rs 24501 crore in Q3 December 2014 over Q2 September 2014. The result hit the market after market hours yesterday, 15 January 2015. TCS' consolidated operating profit rose 3.7% to Rs 6586 crore in Q3 December 2014 over Q2 September 2014.
TCS said that growth in Q3 December 2014 was driven by industries like Telecom, Hi Tech and Life Sciences. Europe led growth, driven by the investments made in that market, while North America also grew during the quarter, TCS said. Among emerging markets, Latin America and MEA registered strong growth, it added. Among service lines, Global Consulting, Asset Leveraged Solutions, Infrastructure Services and Assurance Services were the leaders, TCS said in a statement.
Wipro declined 0.79%. The company said after market hours that as per international Financial Reporting Standards (IFRS) consolidated net profit rose 9% to Rs 2190 crore on 6% rise in total revenues to Rs 11900 crore in Q3 December 2014 over Q3 December 2013.
GAIL (India) fell 0.76% at Rs 424.55. The stock hit a high of Rs 427 and a low of Rs 419.75. The company announced after market hours that there was an incident of fire on the DESU - Maruti pipeline of GAIL (India) near Venkateswara College, Dhaulakuan, New Delhi around 9.45 IST today. The incident occurred due to a third party drilling activity without prior permission taken by the agency from GAIL, in spite of the pipeline warning markers located in close proximity to the site .
Immediately on receiving the information, GAIL's pipeline sectionizing valves were closed by remote operation from the regional control room. With the support of Delhi Fire services and IGL Fire Tenders, the fire was extinguished by 11.10 IST. The Army Supply Corps located in the vicinity also rendered support. There have been no casualties. However, the fire damaged a couple of vehicles parked nearby. Because of the incident, some CNG stations of IGL may get affected temporarily and efforts are being made to restore gas supply at the earliest. Restoration work of the pipeline has already started GAIL said.
Separately, the company during market hours today, 16 January 2015, said that the company, Andhra Pradesh Gas Distribution Corporation (APGDC), GDF SUEZ and Shell have signed two separate memorandum of understanding (MoU) for a floating LNG terminal in Kakinada Deep Water Seaport in Kakinada, Andhra Pradesh. The first MoU is between APGDC, GDF SUEZ and Shell and supports the development of the terminal. APGDC, GDF SUEZ and Shell will have 48%, 26% and 26% equity in the project respectively. The second MoU is between GAIL (India), GDF SUEZ and Shell and covers both the sourcing of LNG and the marketing of the regasified LNG from the terminal. GAIL (India), GDF SUEZ and Shell will have 48%, 26%, and 26% equity in the project respectively.
The Kakinada LNG terminal will use a state-of-the-art Floating Storage and Regasification Unit (FSRU) with a peak capacity of 5 million tonnes per annum (mtpa) with the provision to double the capacity. The proposed terminal will use high-end technology and will be one of the first of its kind in India.
APGDC has been established as a joint venture company by state government of Andhra Pradesh and GAIL Gas, with 50% equity each. The objective of the APGDC is to establish the regional gas pipeline distribution network and to develop city gas distribution in various major cities within Andhra Pradesh and to develop infrastructure for import of natural gas in the eastern coast, to make Andhra Pradesh a gas driven economy.
FMCG shares advanced. Godrej Consumer Products (up 4.43%), Nestle India (up 2.33%), Hindustan Unilever (up 2.28%), Colgate-Palmolive (India) (up 0.84%), and Dabur India (up 0.94%), edged higher. Britannia Industries declined 0.5%.
Realty stocks reversed gains. Oberoi Realty (down 0.81%), Godrej Properties (down 0.52%), DLF (down 0.75%) and Sobha (down 0.21%) edged lower. Unitech (up 0.89%), Housing Development and Infrastructure (HDIL) (up 2.88%), Anant Raj (up 0.66%), Prestige Estates (up 2.26%) edged higher.
Tata Steel lost 0.44%. Tayo Rolls said after market hours that the Committee of the board of directors of the company at their meeting held on 16 January 2015, have allotted 5 lakh 8.50% non-cumulative redeemable preference shares of Rs 100 each to Tata Steel on preferential basis.
Shares of private sector banks were mixed. Federal Bank (down 1.21%), Yes Bank (down 1.21%), and Kotak Mahindra Bank (down 0.29%) declined. HDFC Bank (up 0.9%), ICICI Bank (up 0.35%), and IndusInd Bank (up 0.07%), edged higher.
Axis Bank gained 0.03% to Rs 514.30 on strong Q3 result. The stock hit high of Rs 521.80 and low of Rs 513. The bank's net profit rose 18.43% to Rs 1899.76 crore on 15.85% rise in total income to Rs 10928.81 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours.
Axis Bank's provisions and contingencies jumped 150.45% to Rs 507.15 crore in Q3 December 2014 over Q3 December 2013. Provisions and contingencies declined 30.05% to Rs 507.15 crore in Q3 December 2014 over Q2 September 2014. The bank said that it held provision coverage of 78% as on 31 December 2014, as a proportion of gross NPAs, including prudential write-offs. The provision coverage before accumulated write-offs was 87%.
On absolute basis, gross non-performing assets (NPAs) edged up to Rs 3901.59 crore as on 31 December 2014, from Rs 3613.10 crore as on 30 September 2014 and Rs 3008.20 crore as on 31 December 2013. The ratio of gross NPAs to gross advances was unchanged at 1.34% as on 31 December 2014, from 1.34% as on 30 September 2014, and rose from 1.25% as on 31 December 2013. The ratio of net NAPs to net advances was unchanged at 0.44% as 31 December 2014, from 0.44% as on 30 September 2014 and rose from 0.42% as on 31 December 2013.
CASA (Current and Savings Account) and retail term deposits constituted 78% of the bank's total deposits as on 31 December 2014.
Axis Bank said that the bank is well capitalised with a healthy Capital Adequacy Ratio (CAR). Under Basel III, Total CAR & Tier I CAR (including the net profit for 9 months ended December 2014) stood at 15.64% & 12.44% respectively.
Axis Bank also said during market hours that the board of directors of the bank at its meeting held today, 16 January 2015, has approved issuance of long term bonds/non-convertible debentures upto Rs 15000 crore on a private placement basis. The approval of shareholders of the bank in terms of the provisions of Companies Act 2013 is proposed to be obtained by way of postal ballot.
PSU bank stocks declined. State Bank of India (SBI) (down 1.39%), Canara Bank (down 0.59%), Bank of India (down 0.5%), Punjab National Bank (down 2.33%) Syndicate Bank (down 2.13%), Indian Overseas Bank (down 1.71%), Andhra Bank (down 1.11%), Oriental Bank of Commerce (down 1.91%), Dena Bank (down 1.24%) and Indian Bank (down 1.39%), declined.
Union Bank of India fell 1.05% to Rs 236.65. The stock hit high of Rs 241.50 and low of Rs 235.70. The bank after trading hours yesterday, 15 January 2015, said that it would reduce its base rate to 10% from 10.25% with effect from 27 January 2015. Interest rate on deposits in various buckets under retail and bulk deposits would also be reduced from 10 basis points (bps) to 50 bps, Union Bank of India said.
Finance Minister Arun Jaitley yesterday, 15 January 2015, said that there is an immediate need to give impetus to credit growth. Jaitley made these comments during the Pre Budget Consultative Meeting with the representatives of Banks and Financial Institutions yesterday, 15 January 2015. The Finance Minister said that credit growth, on year-on-year basis, declined to 10% in September 2014, with Public Sector Banks (PSBs) recording a growth of 7.9%. He further informed that growth in deposits also declined to 12.9% as of September 2014 from 13.7% as of March 2014.
The Reserve Bank of India (RBI) yesterday, 15 January 2015, said in a notification issued to commercial banks that banks may undertake insurance business by setting up a subsidiary/joint venture as well as undertake insurance broking/insurance agency/either departmentally or through a subsidiary subject to the conditions. The central bank said that if a bank or its group entities, including subsidiaries, undertake insurance distribution through either broking or corporate agency mode, the bank/other group entities would not be permitted to undertake insurance distribution activities, i.e., only one entity in the group can undertake insurance distribution.
Sugar stocks gained. Bajaj Hindusthan (up 0.26%) and Shree Renuka Sugars (up 0.32%) edged higher. Balrampur Chini Mills fell 0.72%. The Cabinet Committee on Economic Affairs (CCEA) today, 16 January 2015, approved the Fair and Remunerative price of sugarcane payable by sugar mills for the 2015-16 sugar season to be fixed at Rs 230 per quintal. This will be linked to a basic recovery rate of 9.5%, subject to a premium of Rs 2.42 per quintal for every 0.1 percentage point increase in recovery above that level. This decision will ensure a guaranteed price to cane growers, a government statement said.
Shares of PSU OMCs declined. BPCL (down 0.85%) and HPCL (down 1.6%) declined. Indian Oil Corporation rose 0.3%.
The Union Cabinet today, 16 January 2015, gave its approval for amending the Motor Spirit (MS) and High Speed Diesel (HSD) control order for Regulation of Supply, Distribution and Prevention of Malpractices dated 19 December 2005. The amendment will allow private biodiesel manufacturers, their authorised dealers and joint ventures (JVs) of Oil Marketing Companies (OMCs) authorized by the Ministry of Petroleum & Natural Gas (MoP&NG) as dealers and give marketing/ distribution functions to them for the limited purpose of supply of bio-diesel to consumers. Further, the investment and production conditions (as applicable) specified in the Marketing Resolution dated 8 March 2002 of MoP&NG will also be relaxed and a new clause added to give marketing rights for Bio-diesel (B100) to the private biodiesel manufacturers, their authorised dealers and JVs of OMCs authorized by the MoP&NG for direct sales to consumers. This decision will encourage the production and use of bio-diesel in the country, a government statement said.
Capital goods stocks rose. ABB (India) (up 1.1%), L&T (up 1.69%), BEML (up 3.92%), Bharat Heavy Electricals (Bhel) (up 2.18%) Crompton Greaves (up 0.16%) and Siemens (up 1.27%) gained.
NTPC rose 0.83%. The company said after market hours that it has signed a term loan agreement for Rs 10000 crore with State Bank of India. The loan has a door to door tenure of 15 years and will be utilized to part finance the capital expenditure of NTPC.
Dewan Housing Finance Corporation rose 2.94% after net profit rose 15.36% to Rs 159.65 crore on 17.30% increase in total income to Rs 1526.53 crore in Q3 December 2014 over Q3 December 2013. The result was announced during trading hours today, 16 January 2015.
Key indices extended gains for the second day in a row today, 16 January 2015. From a recent low of 27,346.82 on 14 January 2015, the Sensex has gained 775.07 points or 2.83% in two trading sessions. The Sensex has gained 622.47 points or 2.26% in this month so far (till 16 January 2015). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 700.48 points or 2.43%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,158.77 points or 40.86%.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 62.005, compared with its close of 62.065 during the previous trading session.
Global crude oil prices took a breather from a selloff after the International Energy Agency said a price recovery might be in sight. Brent for March settlement was up $1.52 a barrel at $49.79 a barrel. The contract had fallen $1.59 a barrel or 3.18% to settle at $48.27 a barrel during the previous trading session.
On macro front, India's merchandise export declined 3.8% to $25.4 billion in December 2014 over December 2013. Meanwhile, merchandise imports also declined 4.8% to $34.83 billion in December 2014. Thus, the trade deficit narrowed to 10-month low of $9.4 billion in December 2014, while nearly halving from $16.86 billion in November 2014. Trade data was announced after market hours yesterday, 15 January 2015.
Meanwhile, the Ministry of Commerce & Industry today, 16 January 2015, said that some Japanese companies are seriously contemplating their future investment plans in India amounting to about Rs 75000 crore over the next 2-3 years. Also, the issues related to the state government of Rajasthan concerning Japanese trading firm Sojitz Corp, working for Dedicated Freight Corridor (DFC), has been resolved, the Ministry of Commerce & Industry said. The government has set up Japan Plus, a special management team to facilitate Japanese investors.
European stocks declined today, 16 January 2015, as the fallout from Switzerland abandoning the franc's cap extended into a second day. Key indices in France, Germany and UK were off 0.04% to 0.4%.
In its stunning move yesterday, 15 January 2015, the Swiss National Bank dumped its long-standing minimum exchange rate of 1.20 Swiss francs to the euro, as the cap on the franc appeared increasingly indefensible in the face of the weakening euro.
Europe edged closer to deflation in December, as consumer prices across the European Union's 28 members fell for the first time since records began in 1997. The bloc's statistics agency on Friday confirmed that consumer prices in the 18 countries that share the euro were 0.2% lower than in the same month of 2013. But new figures showed that prices also fell by in the EU as a whole, by 0.1%.
In Germany, the latest data showed that inflation in Germany weakened in December, confirming its preliminary estimates for the previous month. The steep fall in prices in Germany, Europe's largest economy, supports mounting expectations in financial markets that the European Central Bank will announce large purchases of government bonds at its next policy meeting on Jan. 22, to avert a debilitating slide into deflation. The annual rate of inflation in Germany, measured according to common European Union standards, was 0.1% in December, while prices also rose 0.1% on the month, the Federal Statistics Office said, confirming its preliminary figures published earlier this month. Consumer prices, measured according to national standards, were unchanged on the month and rose 0.2% on the year, also unchanged from the preliminary data, the statistics office Destatis said. Energy continued to keep prices under downward pressure. In annual comparison, energy prices were 6.6% lower in December 2014 than a year earlier, Destatis said.
Meanwhile, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
Asian stocks fell today, 16 January 2015, as the market turmoil sparked by Switzerland abandoning the franc's cap extended into a second day. Key benchmark indices in Singapore, Hong Kong, Taiwan, South Korea, Indonesia and Japan were off 0.29% to 1.43%. China's Shanghai Composite rose 1.2%.
China's central bank the People's Bank of China today, 16 January 2015, said it would lend 50 billion yuan ($8.1 billion) to banks at discounted rates to allow them to re-lend the money to farmers and small businesses - areas of the economy that are usually short of cash.
China's foreign direct investment (FDI) rose an annual 1.7% last year, although the pace slowed from 2013 as a cooling economy and shifting drivers of growth weighed on offshore investment flows. China attracted a record $119.56 billion from foreign investors last year compared to $117.6 billion in 2013, the Ministry of Commerce said in a statement.
Trading in US index futures indicated that the Dow could slide 66 points at the opening bell today, 16 January 2015. US stocks suffered their fifth-straight session of declines yesterday, 15 January 2015, under pressure from disappointing earnings and worries about global economic growth.
On economic data front, more Americans unexpectedly filed applications for unemployment benefits last week, indicating companies let go of seasonal workers following the holidays. Jobless claims climbed by 19,000 to 316,000 in the week ended 10 January 2015, the most since early September, from a revised 297,000 in the prior period, a Labor Department report showed.
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