Amid speculation that the European Central Bank (ECB) will announce plans for a quantitative-easing program later in the global day, key equity benchmark indices in India registered modest gains. A bout of volatility was witnessed in late trade as the benchmark indices bounced back after trimming intraday gains. The rebound in late trade materialized after Finance Minister Jaitley reportedly said at an event in Davos, Switzerland that the government has a roadmap to cut down fiscal deficit to below 3% of GDP in next few years. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on intraday basis as well as on closing basis. The Sensex moved past the psychological 29,000 level for the first time in its history. The Sensex rose 117.16 points or 0.41% to settle at 29,006.02. The market breadth indicating the overall health of the market was negative.
There are expectations that inflows from foreign funds into India will rise if the European Central Bank (ECB) boosts monetary stimulus for the euro zone economy after a monetary policy review later in the global day. The ECB is widely expected to announce a government-bond-buying program aimed at spurring Europe's ailing economy.
Shares of pharmaceutical companies were mixed. Sesa Sterlite rose after the company said its subsidiary Bharat Aluminium Company (BALCO) has received approval from the Chattisgarh State Pollution Control Board and other clearances for starting its Korba's based 1200 megawatts (MW) power plant. ITC extended yesterday's slide triggered by the company's disappointing Q3 December 2014 results. Shares of private sector banks were mixed. Shares of public sector banks dropped.
Foreign portfolio investors (FIIs) bought shares worth a net Rs 2128.90 crore from the secondary equity markets yesterday, 21 January 2015, as per data from the National Securities Depository (NSDL).
In overseas markets, European shares were mixed. Asian shares edged higher after China's central bank injected 50 billion yuan ($8 billion) of liquidity into the financial system. US stocks eked out small gains yesterday, 21 January 2015, on speculation the European Central Bank (ECB) will unveil a government-bond-buying program aimed at spurring Europe's ailing economy.
Canada's central bank, the Bank of Canada, delivered a shock interest-rate cut after a monetary policy review yesterday, 21 January 2015, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth.
In the foreign exchange market, the rupee edged lower against the dollar on speculation the Reserve Bank of India intervened to stem the currency's advance.
Brent crude futures edged higher in volatile trade as traders braced for the outcome of the European Central Bank meeting.
The S&P BSE Sensex rose 117.16 points or 0.41% to settle at 29,006.02, a record closing high for the index. The index jumped 171.55 points at the day's high of 29,060.41 in mid-morning trade, a lifetime high for the index. The index rose 3.37 points at the day's low of 28,892.23 in mid-afternoon trade.
The Nifty gained 31.90 points or 0.37% to settle at 8,761.40, a record closing high for the index. The index hit a high of 8,774.15 in intraday trade, a lifetime high for the index. The index hit a low of 8,727 in intraday trade.
The BSE Mid-Cap index gained 8 points or 0.07% to settle at 10,710.24. The BSE Small-Cap index advanced 26.62 points or 0.23% to settle at 11,449.50. Both theses indices underperformed the Sensex.
Among sectoral indices on BSE, the BSE Consumer Durables index (down 0.96%), the S&P Bankex index (up 0.37%), BSE Oil & Gas index (down 0.77%), BSE Power index (up 0.22%), and BSE FMCG index (up 0.2%), outperformed the Sensex. The BSE Metal (up 0.67%), BSE IT index (up 0.45%), BSE Capital Goods index (up 1.12%), BSE Teck index (up 0.42%), the BSE Auto index (up 0.72%), BSE Healthcare index (up 1.69%), and BSE Realty index (up 0.54%) outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,574 shares declined and 1,347 shares gained. A total of 112 shares were unchanged.
The total turnover on BSE amounted to Rs 3543 crore, lower than turnover of Rs 4482.10 crore during the previous trading session.
Shares of private sector banks were mixed. City Union Bank (down 1.78%), Yes Bank (down 0.05%), Federal Bank (down 0.48%), edged lower. HDFC Bank (up 0.13%), ICICI Bank (up 0.23%), IndusInd Bank (up 0.53%) and Axis Bank (up 3.3%), edged higher.
Kotak Mahindra Bank declined 0.06%.
ING Vysya Bank fell 0.02% to Rs 978.05. The stock hit high of Rs 987.05 and low of Rs 955.85. The private sector bank's net profit fell 12.93% to Rs 145.69 crore on 13.8% increase in total income to Rs 1693.30 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours yesterday, 21 January 2015. Provisions and contingencies jumped 167.31% to Rs 61.51 crore in Q3 December 2014 over Q3 December 2013. Provisions and contingencies rose 23.86% to Rs 61.51 crore in Q3 December 2014 over Q2 September 2014.
On absolute basis, the bank's gross non-performing assets (NPAs) before technical write off edged up to Rs 764.01 crore as on 31 December 2014, from Rs 635.84 crore as on 30 September 2014 and Rs 582.69 crore as on 31 December 2013. The ratio of gross NPA to gross advances edged up to 1.86% as on 31 December 2014, from 1.59% as on 30 September 2014 and 1.68% as on 31 December 2013. The ratio of net NPA to net advances edged up to 0.66% as on 31 December 2014, from 0.42% as on 30 September 2014 and 0.21% as on 31 December 2013.
Kotak Mahindra Bank and ING Vysya Bank have announced amalgamation of ING Vysya with Kotak in the ratio of 725 shares of Kotak for every 1,000 shares of ING Vysya.
Shares of public sector banks dropped. Indian Bank (down 2.01%), Punjab and Sind Bank (down 1.85%), UCO Bank (down 1.58%), Syndicate Bank (down 1.55%), Andhra Bank (down 1.71%), Allahabad Bank (down 1.88%), Canara Bank (down 0.86%), Punjab National Bank (down 1.39%), Bank of India (down 1.26%), United Bank of India (down 0.83%), Bank of Maharashtra (down 1.71%), IDBI Bank (down 1.31%), State Bank of India (down 0.44%), Dena Bank (down 1.09%), and Union Bank of India (down 0.26%), edged lower.
Bank of Baroda fell 0.74% to Rs 223.90. The stock turned ex-split today, 22 January 2015, for 5-for-1 stock split.
Corporation Bank declined 4.37% to Rs 74.25. The stock turned ex-split today, 22 January 2015, for 5-for-1 stock split.
NMDC fell 1.01% on reports that the government has sought expression of interest from reputed merchant bankers for divesting 10% stake in the state-run iron ore miner.
Sesa Sterlite rose after the company said its subsidiary Bharat Aluminium Company (BALCO) has received approval from the Chattisgarh State Pollution Control Board and other clearances for starting its Korba's based 1200 megawatts (MW) power plant. The stock was up 0.88%.
Meanwhile, in its clarification with reference to the news item appearing in the newspaper captioned "Sterlite to restart mining in Goa in 2 weeks", Sesa Sterlite after trading hours yesterday, 21 January 2015, said that the Goa state government vide its order dated 15 January 2015 has revoked its earlier order dated 10 September 2012 vide which mining was temporarily suspended. Sesa Sterlite further said that the company has received approval for renewal of all its iron ore mining leases in Goa and that the company expects to resume mining in near future once the entire process for resumption of mining, i.e. execution of leases including registration, environment clearance and other approvals/consents is approved by the state government and other regulatory bodies.
Reliance Industries (RIL) fell 2.22%. RIL today, 22 January 2015, announced the pricing of $1 billion 4.125% Senior Unsecured Notes due 2025. The notes have been priced at 240 basis points over the 10-year US Treasury Note, at a price of 98.998 to yield 4.249%. The notes will be denominated in US dollars and will bear fixed interest of 4.125% p.a., with interest payable semi-annually in arrears and shall rank pari passu with all other unsecured and unsubordinated obligations of the company. The funds will be utilized for the company's ongoing capital expenditure, RIL said.
ITC extended yesterday's slide triggered by the company's disappointing Q3 December 2014 results. The stock was down 0.17% at Rs 352. The stock hit a high of Rs 359.60 and a low of Rs 348.90. ITC's net profit rose 10.46% to Rs 2635 crore on 2.47% growth in total income from operations (net) to Rs 8942.59 crore in Q3 December 2014 over Q3 December 2013. Segment wise results showed that sales of the cigarette division rose 0.62% to Rs 4141.94 crore in Q3 December 2014 over Q3 December 2013. Sales of the FMCG business jumped 11.37% to Rs 2314.12 crore in Q3 December 2014 over Q3 December 2013. ITC announced the third quarter results during market hours yesterday, 21 January 2015.
Shares of pharmaceutical companies were mixed. Ranbaxy Laboratories (up 3.69%), Sun Pharmaceutical Industries (up 3.50%), Wockhardt (up 1.84%), Cipla (up 1.74%), Lupin (up 1.35%), Glenmark Pharmaceuticals (up 1.18%), Aurobindo Pharma (up 0.89%) and Strides Arcolab (up 0.23%), edged higher. GlaxoSmithKline Pharmaceuticals (down 0.17%), Piramal Healthcare (down 0.24%), IPCA Laboratories (down 0.31%), Cadila Healthcare (down 0.54%) and Divi's Laboratories (down 1.21%), edged lower.
Dr Reddy's Laboratories (DRL) rose 1.01%. DRL's wholly owned subsidiary Aurigene Discovery Technologies and Curis Inc. after trading hours in India today, 22 January 2015, announced that they have entered into an exclusive collaborative agreement focused on immune-oncology and selected precision oncology targets. The collaboration provides for inclusion of multiple programs, with Curis having the option to exclusively license compounds once a development candidate is nominated within each respective program. The partnership draws from each company's respective areas of expertise, with Aurigene having the responsibility for conducting all discovery and preclinical activities, including Investigational New Drug (IND)-enabling studies and providing Phase 1 clinical trial supply, and Curis having responsibility for all clinical development, regulatory and commercialization efforts worldwide, excluding India and Russia, for each program for which it exercises an option to obtain a license.
The first two programs under the collaboration are an orally-available small molecule antagonist of programmed death ligand-1 (PD-L1) in the immuno-oncology field and an orally-available small molecule inhibitor of Interleukin-1 receptor-associated kinase 4 (IRAK4) in the precision oncology field. Curis expects to exercise its option to obtain exclusive licenses to both programs and file IND applications for a development candidate from each in 2015.
In connection with the transaction, Curis has agreed to issue to Aurigene approximately 17.1 million shares of its common stocks, or 19.9% of its outstanding common stock immediately prior to the transaction, in partial consideration for the rights granted to Curis under the collaboration agreement. The shares to be issued to Aurigene will be subject to a lock-up agreement until 18 January 2017, with a portion of the shares being released from such lock-up in equal installments between now and such date.
The agreement provides that the two companies will collaborate exclusively in immuno-oncology for an initial period of approximately two years, with the option for Curis to extend the broad immuno-oncology exclusivity.
In addition, Curis has agreed to make a payment of up to $52.5 million per program to Aurigene for the first two programs, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any. For the third and fourth programs, Curis has agreed to make a payment of up to $50 million per program, including $42.5 million per program for approval and commercial milestones, plus specified approval milestone payments for additional indications, if any. For any program thereafter, Curis has agreed to make payment of up to $140.5 million per program, including $87.5 million per program in approval and commercial milestones, plus specified approval milestone payments for additional indications, if any.
Curis has agreed to pay Aurigene royalties on any net sales ranging from high single digits to 10% in territories where it successfully commercializes products and will also share in amounts that it receives from sublicensees depending upon the stage of development of the respective molecule.
Aurobindo Pharma was up 1.06%. With respect to news article titled "Aurobindo, Actavis recall Gabapentin capsules," Aurobindo Pharma clarified during trading hours that its US subsidiary, Aurobindo Pharma USA Inc voluntarily recalled a batch of Gabapentine Capsules USP 300mg, 100-count bottles in November 2014, as the product lot was found to contain some empty capsules. The recall did not have any material impact on the company's financials, Aurobindo Pharma said. The company further said that that Actavis Pharma Manufacturing is a different entity and has no association or connection with Aurobindo Pharma.
Cairn India rose 0.27%. The company's consolidated net profit fell 53.2% to Rs 1349.64 crore on 19.76% decline in total income to Rs 4020.57 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours today, 22 January 2015.
Key equity benchmark indices edged higher for the sixth day in a row today, 22 January 2015. From a recent low of 27,346.82 on 14 January 2015, the Sensex has gained 1,659.20 points or 6.06% in six trading sessions. The Sensex has gained 1,506.60 points or 5.47% in this month so far (till 22 January 2015). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 9,042.90 points or 45.29%.
In the foreign exchange market, the rupee edged lower against the dollar on speculation the Reserve Bank of India intervened to stem the currency's advance. The partially convertible rupee was hovering at 61.69, compared with its close of 61.635 during the previous trading session.
Brent crude futures edged higher in choppy trade as traders braced for the outcome of the European Central Bank meeting. Brent for March settlement was up 42 cents at $49.45 a barrel. The contract had risen $1.04 a barrel or 2.17% to settle at $49.03 a barrel during the previous trading session.
Finance Minister Jaitley reportedly said at an event in Davos, Switzerland today, 22 January 2015, that the government has a roadmap to cut down fiscal deficit to below 3% of GDP in next few years. The government intends to rationalise subsidies, Jaitely said.
Meanwhile, the finance ministry yesterday, 21 January 2015, said that the fourth edition of the annual Status Paper on Government Debt which released on that day reiterates the government's commitment to keep the level of public debt within sustainable limits.
US President Barack Obama arrives on a visit to India this weekend. The US President is the chief guest for India's Republic Day celebrations in New Delhi on 26 January 2015.
European shares were mixed today, 22 January 2015, ahead of the outcome of a monetary policy review from the European Central Bank (ECB). France's CAC 40 was flat. Germany's DAX declined 0.17%. In UK, the FTSE 100 was up 0.24%.
The governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review today, 22 January 2015. The ECB may announce a large-scale bond-buying program today, 22 January 2015, aimed at spurring Europe's ailing economy. According to media reports, the ECB may announce a proposal for a quantitative-easing program of euro 50 billion ($58 billion) a month aimed at stimulating growth.
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 on Sunday, 25 January 2015. Greece is set to hold snap elections 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 shares edged higher today, 22 January 2015, after China's central bank injected 50 billion yuan ($8 billion) of liquidity into the financial system. Key benchmark indices in China, Hong Kong, Japan, Indonesia, Singapore and Taiwan were up by 0.28% to 0.7%. South Korea's Seoul Composite was off 0.02%.
China's central bank today, 22 January 2015, injected cash into the money markets using short-term instruments it hasn't used in a year, spurring speculation that further loosening of monetary policy may be on the way as the economy grows at its slowest rate in more than two decades. The People's Bank of China offered 50 billion yuan ($8 billion) of seven-day reverse repos, a short-term lending facility to commercial banks, in its open-market operation today, 22 January 2015. The move to keep the banks flush with cash comes ahead of the Lunar New Year holiday next month when demand for funds normally increases substantially as people spend on gifts and dining.
The injection of funds into the country's money markets came after the central bank yesterday, 21 January 2015, said that it rolled over three-month loans of 269.5 billion yuan ($43.5 billion) and offered 50 billion yuan of medium-term loans to designated commercial banks.
Trading in US index futures indicated that the Dow could rise 49 points at the opening bell today, 22 January 2015. The US stock market ended Wednesday's choppy trading day with modest gains, extending its winning streak to three sessions, as investors widely expect the European Central Bank to deliver on monetary stimulus at its key meeting today, 22 January 2015.
In Canada, the nation's central bank, the Bank of Canada, delivered a shock interest-rate cut after a monetary policy review yesterday, 21 January 2015, becoming the first Group of Seven country to slash rates in response to the oil-price collapse and its impact on economic growth. The Bank of Canada, which had been widely expected to hold rates steady before raising them later in the year or in early 2016, cut its benchmark overnight rate by a quarter percentage point to 0.75%the first cut to the rate since April 2009, when the economy was mired in recession. Sliding oil prices, which the central bank said it expects will recover to around $60 in the medium term, will erode growth and inflation for Canada, it said in a statement announcing the interest-rate cut. It lowered its growth forecast for the first half of 2015 to 1.5%, and to 2.1% for the full year from 2.4%.
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