Key benchmark indices pared entire losses in mid-afternoon session amid sharp recovery tracking positive sentiment in European markets. The barometer index, the S&P BSE Sensex and the CNX Nifty, both, hit intraday high. The Sensex advanced past the psychological 29,000 level after falling below that level earlier in the day. The Sensex was currently up 32.45 points or 0.11% at 29,215.40. The market breadth indicating the overall health of the market was positive. The BSE Small Cap index was up 1.03%.
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.
Cement shares declined. Grasim Industries fell after muted growth in Q3 net profit. Mahindra & Mahindra fell after reporting weak auto and tractor sales in January 2015. UPL surged after strong Q3 earnings.
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 were higher today, 2 February 2015 as investors watch Greece's attempts to negotiate a new debt deal with its European partners. 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.
At 14:15 IST, the S&P BSE Sensex was up 32.45 points or 0.11% at 29,215.40. 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 was up 4.50 points or 0.05% at 8,813.40. 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 was up 80.88 points or 0.75% at 10,819.47. The BSE Small-Cap index was up 116.45 points or 1.03% at 11,445.71. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,565 shares gained and 1,175 shares fell. A total of 110 shares were unchanged.
Mahindra & Mahindra (M&M) fell 0.44% at Rs 1,257.50. 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.
Cement shares declined. UltraTech Cement (down 1.81%), ACC (down 0.85%), and Shree Cement (down 0.53%) edged lower. Ambuja Cement (up 0.44%) edged higher.
Grasim Industries fell 1.26% at Rs 3,834.60. 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.
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.
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.
UPL surged 5.43% at Rs 388. 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.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.78, 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 $1.30 a barrel at $51.69 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 were higher on Monday as investors watch Greece's attempts to negotiate a new debt deal with its European partners. Key indices in Germany, France, and UK were up 0.4% to 0.63%.
Asian equity markets were mixed today, 2 February 2015. Key indices in China, Hong Kong, Japan, and Indonesia were off 0.05% to 2.53%. Key indices in Taiwan, South Korea, and Singapore were up 0.18% to 0.67%.
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 52 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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