As a steep slide in global crude oil prices stoked fears about deflation and as the prospect of Greece dropping the euro weighed on global equity markets, key equity benchmark indices in India registered heavy losses. Key indices extended losses in late trade, with the barometer index, the S&P BSE Sensex, falling below the psychological 27,000 level. Frontline stocks witnessed steep losses. The Sensex and the 50-unit CNX Nifty, both, hit their lowest closing level in almost three weeks. All the 12 sectoral indices on BSE declined. The market breadth indicating the overall health of the market was quite weak, with more than three losers for every gainer on BSE. The Sensex dropped 854.86 points or 3.07% to settle at 26,987.46. The BSE Mid-Cap and BSE Small-Cap indices shed 2.95% each. A number of side counters slumped, with quite a few stocks registering losses ranging from 5% to 20% on BSE.
Shares of oil exploration and production firms declined after a steep decline in global crude oil prices. Hindustan Unilever advanced on reports that a foreign investment bank has upgraded the stock to buy from hold and also raised its target price for the stock. Pharma stocks declined. Metal and mining stocks dropped. Castrol India rose as falling crude oil prices will result in lower raw material costs for the company. Among other side counters, Gujarat State Petronet scaled record high. IT stocks declined. Bank stocks also edged lower.
Meanwhile, growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015.
Global crude oil prices tumbled to 5-1/2-year low amid continuing concerns about a global supply glut. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In overseas markets, energy stocks led losses in European stocks as crude oil prices continued to drop after a steep selloff overnight. Asian stocks tumbled after overnight sharp slide in US stocks triggered by another plunge in oil prices and concerns about the political situation in Greece. US stocks were clobbered yesterday, 5 January 2015, in an indiscriminate sell-off triggered by a renewed plunge in crude oil prices and surging dollar, which left the Dow Jones Industrial Average and the S&P 500 with their worst losses since October.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks witnessed a carnage.
Brent crude futures continued to drop after a steep selloff overnight amid continuing concerns about a global supply glut.
The S&P BSE Sensex lost 854.86 points or 3.07% to settle at 26,987.46, its lowest closing level since 17 December 2014. The index tumbled 905.26 points at the day's low of 26,937.06 in late trade. The index declined 143.39 points at the day's high of 27,698.93 in early trade.
The CNX Nifty lost 251.05 points or 3% to settle at 8,127.35, its lowest closing level since 17 December 2014. The index hit a low of 8,111.35 in intraday trade. The index hit a high of 8,327.85 in intraday trade.
The BSE Mid-Cap index fell 311.43 points or 2.95% to settle at 10,235.74. The BSE Small-Cap index fell 333.99 points or 2.95% to settle at 10,986.22. The decline in both these indices was lower than the Sensex's decline in percentage terms.
Ybrant Digital (down 11.38%), Risa International (down 10.06%), Tikal Finance (down 9.99%), Sulabh Engineers & Services (down 9.96%), Himachal Futuristic Communications (down 7.34%), Indiabulls Real Estate (down 7.17%), Dewan Housing Finance Corporation (down 6.8%), Hindustan Construction Company (down 6.74%), Arvind (down 6.68%) and Housing Development and Infrastructure (down 6.49%) were the top losers from the BSE Mid-Cap index.
Sical Logistics (down 11.61%), Spice Mobility (down 9.91%), Ahmednagar Forgings (down 9.59%), S V Global Mill (down 9.38%), Jayaswal Neco Industries (down 9.02%), Essel Propack (down 8.81%), Ajmera Realty & Infra India (down 8.62%), Triveni Engineering & Industries (down 8.32%), Cressanda Solutions (down 8%) and D B Realty (down 7.93%) were the top losers from the BSE Small-Cap index.
The market breadth indicating the overall health of the market was quite weak, with more than three losers for every gainer on BSE. 2,281 shares declined and 617 shares rose. A total of 57 shares were unchanged.
The total turnover on BSE amounted to Rs 3127 crore, higher than Rs 2729.17 crore on yesterday, 5 January 2015.
All the 12 sectoral indices on BSE were in the red. The S&P BSE Consumer Durables index (down 3.09%), the S&P BSE Power index (down 3.13%), the S&P BSE Capital Goods index (down 3.24%), the S&P BSE Metal index (down 3.49%), the S&P BSE Realty index (down 3.66%), the S&P BSE Oil & Gas index (down 4.17%) underperformed the Sensex
The S&P BSE FMCG index (down 1.44%), the S&P BSE Teck index (down 2.39%), the S&P BSE IT index (down 2.53%), the S&P BSE Auto index (down 2.65%), the S&P BSE Healthcare index (down 2.67%) and the S&P BSE Bankex (down 3.03%) outperformed the Sensex.
Metal and mining stocks dropped. Sesa Sterlite (down 5.39%), JSW Steel (down 4.21%), Tata Steel (down 5.2%), Steel Authority of India (Sail) (down 5.15%), NMDC (down 4.71%), Hindustan Copper (down 4.71%), National Aluminium Company (down 3.54%), Hindustan Zinc (down 0.33%), Jindal Steel & Power (down 6.94%) and Hindalco Industries (down 2.48%) edged lower.
IT stocks declined. CMC (down 3.7%), TCS (down 3.35%), Infosys (down 1.76%), Wipro (down 2.47%), Oracle Financial Services Software (down 2.82%), Tech Mahindra (down 0.95%), and HCL Technologies (down 1.98%) edged lower.
Shares of oil exploration and production (E&P) firms declined after a steep decline in global crude oil prices. ONGC (down 6.06%), Cairn India (down 3.53%), Oil India (down 4.6%) and Reliance Industries (down 5.03%) edged lower. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms.
Castrol India rose 2.13% as falling crude oil prices will result in lower raw material costs for the company.
Gujarat State Petronet jumped 4.3% to Rs 127.40 after scaling a record high of Rs 135.65 in intraday trade.
Tata Motors fell 4.6% at Rs 500. Jaguar Land Rover (JLR) yesterday, 5 January 2015, said its US sales rose 2% to 7,437 units in December 2014 over December 2013. US sales of the Jaguar brand rose 9% to 1,683 units in December 2014 over December 2013. US sales of the Land Rover brand declined 0.17% to 5,754 units in December 2014 over December 2013. JLR's US sales rose 0.41% to 67,238 units in calendar year 2014 over the calendar year 2013. The Land Rover brand established an all-time annual high for US sales of 51,465 units in calendar year 2014.
SML Isuzu surged 5% after the company's sales surged 62.57% to 1,073 vehicles in December 2014 over December 2013. The company announced the monthly sales data after market hours on Monday, 5 January 2015.
Hindustan Unilever (HUL) rose 1.35% at Rs 771 on reports that a foreign investment bank has upgraded the stock to buy from hold and also raised its target price for the stock.
Godrej Consumer Products (GCPL) fell 1.26%. GCPL during market hours today, 6 January 2015, announced that it has entered into an agreement with Frika Hair (Pty), for the acquisition of 100% equity stake in its hair extensions business in South Africa. Frika Hair (Pty) enjoys a premium position in the South African market. It has particular strengths in the Western Cape, Eastern Cape and Gauteng, and is the market leader in key accounts in organised retail. In 2014, net sales of the company was approximately ZAR 73 million. This acquisition helps GCPL in consolidating its presence in the hair extensions market in South Africa, GCPL said in a statement.
Commenting on the acquisition, Vivek Gambhir, Managing Director, GCPL, said that with its quality range of premium hair extensions, the Frika range of hair extensions provides a strong complementary addition to the company's Darling masstige portfolio. He said that this acquisition reflects the company's continued commitment to scaling up its presence in Africa and providing African consumers with a wide range of superior quality products at affordable prices. GCPL's Africa business currently has annualised revenue of $200 million. The acquisition is in line with GCPL's global 3 x 3 strategy, targeting strong regional assets in the emerging world.
Bank stocks declined. Punjab National Bank (down 4.84%), Axis Bank (down 3.4%), ICICI Bank (down 4.45%), Bank of India (down 5.15%), Canara Bank (down 2.89%), Yes Bank (down 3.19%), IndusInd Bank (down 2.24%), State Bank of India (down 4.03%), Federal Bank (down 1.79%), and HDFC Bank (down 1.66%) edged lower.
ING Vysya Bank fell 1.33%. Shares of Kotak Mahindra Bank were off 0.98%. In its clarification to a news item captioned "ING Vysya staff worry about merger", ING Vysya Bank during market hours today, 6 January 2015, said that there has been some misreporting in certain sections of the media where Kotak Mahindra Bank management has been inaccurately quoted stating that in the merged entity ING Vysya Bank employees would get pension but this would not be linked to dearness allowance. ING Vysya Bank further said that Kotak Mahindra Bank has stated that all protection related to employees has already been captured in the scheme of amalgamation involving the proposed merger of Kotak Mahindra Bank and ING Vysya Bank, which upon approval by RBI, Kotak Mahindra Bank shall fully standby and is obliged to comply with including sections related to employees' job security, wages, pension including dearness allowance linked adjustments, provident fund, gratuity etc. Kotak would like to start with a good faith constructive approach that secures all employees and creates growth for all stakeholders including employees after the RBI order.
Bank of Baroda fell 3.61% at Rs 1,055.95. The state-run bank during market hours today, 6 January 2015, said it has decided to raise funds by way of private placement of BASEL III compliant AT-1 Bonds of Rs 1000 crore for augmenting Tier-1 capital of the bank.
Max India fell 2.54%. The company after trading hours yesterday, 5 January 2015, announced that Bupa, the international healthcare group, proposes to increase its stake in Max Bupa Health Insurance (Max Bupa) to 49% from current 26%. Following the Insurance Laws Amendment Ordinance 2014 receiving legislative assent in the 2015 Budget Session of Parliament, Bupa, the international healthcare group, proposes to increase its stake in Max Bupa from 26% to 49%, Max Bupa said in a statement issued after trading hours today, 5 January 2015.
Max Bupa, a leading Indian standalone private health insurer, is a joint venture between Max India, which owns 74% of Max Bupa, and Bupa, the UK-headquartered global healthcare group, which owns 26%. Commenting on the decision to increase Bupa's stake in Max Bupa, David Fletcher, Managing Director of International Development Markets at Bupa said that this decision underlines Bupa's commitment to the Indian health insurance market and represents a major milestone in the development of Max Bupa.
Rahul Khosla, Managing Director, Max India said that Bupa's intention to increase its stake in Max Bupa is testimony to the huge opportunity for health insurance in India and Max India's reputation in successfully managing joint ventures. Max Bupa will stand to benefit from Bupa's expertise in areas such as under-writing health risks and product innovation, Khosla said.
Pharma stocks declined. Glenmark Pharmaceuticals (down 3.96%), Wockhardt (down 5.74%), Piramal Enterprises (down 0.83%), Sun Pharmaceutical Industries (down 2.04%), Ranbaxy Laboratories (down 2.37%), Divis' Laboratories (down 3.88%), Cipla (down 3.13%), Dr Reddy's Laboratories (down 2.76%), and Cadila Healthcare (down 2.32%) edged lower.
Lupin fell 2.5%. Lupin after market hours today, 6 January 2015, announced that its US subsidiary Lupin Pharmaceuticals Inc. has launched its Valsartan Tablets USP, 40 mg, 80 mg, 160 mg and 320 mg strengths, the generic version for Novartis Pharmaceuticals Corporation's (Novartis) Diovan Tablets, 40 mg, 80 mg, 160 mg and 320 mg strengths, having received final approval from the United States Food and Drug Administration (FDA). Lupin's Valsartan Tablets 40 mg, 80 mg, 160 mg and 320 mg are the AB rated generic equivalent of Novartis's Diovan Tablets and is indicated for treatment of hypertension and heart failure. Diovan tablets had annual US sales of $2.08 billion (IMS MAT September, 2014), Lupin said.
Aurobindo Pharma lost 3.03%. Aurobindo Pharma after market hours today, 6 January 2015, announced that the company has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Valsartan Tablets USP, 40mg, 80mg, 160mg and 320mg. The product is ready for launch, Aurobindo Pharma said.
Aurobindo now has a total of 195 abbreviated new drug application (ANDA) approvals from USFDA, which includes 170 final approvals and 25 tentative approvals, the company said.
Apollo Hospitals Enterprise fell 3.18%. The company during market hours today, 6 January 2015, said that its wholly owned subsidiary Apollo Health and Lifestyle (AHLL), has successfully completed the acquisition of Nova Specialty Hospitals. AHLL is currently present in the secondary care segment through the Day Surgery & Cradle formats. Nova Specialty Hospitals is a chain of 11 short stay surgery centres which are equipped with advanced medical facilities backed by good surgical teams. These centres are designed to provide convenient facilities for patients to undergo planned surgeries. AHLL said that the combined network will clock a turnover between Rs 115 crore to Rs 125 crore for the year ending 31 March 2015 and with the group synergies that Apollo brings to the table, the management is confident of achieving break even in the next 18 to 24 months. The deal size will be in the range of Rs 135-145 crore subject to final closure, Apollo Hospitals said.
Nova Specialty Hospital's existing centres will serve as new centres under the Apollo brand name and will benefit from Apollo's legacy of expertise, clinical excellence and empathy, Apollo Hospitals said. This acquisition fits into the growth strategy of AHLL, providing a larger footprint, including in some markets where the company has no presence currently, Apollo Hospitals said in a statement.
Jubilant Life Sciences gained 3.69%. Jubilant Life Sciences after market hours yesterday, 5 January 2015, said that the company has received abbreviated new drug application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Mycophenolate Mofetil USP, 250 milligram (mg) capsules and 500 mg tablets (from its US subsidiary, Jubilant Cadista Pharmaceuticals Inc). The company also received approval for Rizatriptan tablets 5 mg and 10 mg (from its Indian subsidiary, Jubilant Generics).
Mycophenolate Mofetil is the generic version of Cellcept (of Roche), an immunosuppressant which is used to help prevent organ rejection in transplants. The current annualized US market size for Mycophenolate Mofetil USP, 250 mg capsules and 500 mg tablets as per IMS is $245 million. Rizatriptan Tablets 5 mg and 10 mg is the generic version of Maxalt (of Merck), used for the treatment of migraine. The current annualized US market size for Rizatriptan tablets 5 mg and 10 mg as per IMS is $70 million.
Meanwhile, Jubilant Life Sciences during market hours today, 6 January 2015, announced that it has received Abbreviated New Drug Application (ANDA) final approval from the US Food and Drug Administration (US FDA) for Valsartan Tablets USP, 40 mg, 80 mg, 160 mg and 320 mg, the generic version of Diovan (of Novartis), used as an anti-hypertensive. The company said it expects to launch this product immediately. The current annualized US market size for Valsartan Tablets USP, 40 mg, 80 mg, 160 mg, and 320 mg as per IMS is $2 billion.
As on 30 September 2014, Jubilant Life Sciences had a total of 781 filings for formulations of which 322 have been approved in various regions globally. This includes 72 ANDAs filed in the US and 46 Dossier filings in Europe.
In a separate announcement, Jubilant Life Sciences during market hours today, 6 January 2015 announced that Mr. Gurpartap Singh Sachdeva (Mr. GP Singh) has been appointed as CEO of Jubilant Pharma, a 100% wholly-owned subsidiary of Jubilant Life Sciences. Mr. Singh will have overall responsibility for the operations under Jubilant Pharma and will report to the Jubilant Pharma Board. He will be based in the United States. Prior to Jubilant, Mr. Singh had served as President of Sun Pharmaceuticals, USA and contributed to the growth of Sun's US business.
The appointment of Mr. Singh as CEO of Jubilant Pharma strengthens the management structure of the company and follows the appointment of Mr. Pramod Yadav and Mr. Rajesh Srivastava as co-CEOs of the Life Science Ingredients business of Jubilant Life Sciences, the company said.
Realty stocks declined. Oberoi Realty (down 2.58%), DLF (down 1.66%), Godrej Properties (down 2.82%), Sobha (down 4.24%) and Omaxe (down 1.14%) edged lower.
Unitech fell 5.8%. With reference to the media reports pertaining to Department of Telecom (DoT) moving Supreme Court for retaining Rs 160 crore bank guarantee given by Unitech Wireless, Unitech after market hours yesterday, 5 January 2015, clarified that Unitech has no economic interest in Unitech Wireless. Unitech has no exposure whatsoever to the telecom business, the company said.
Telecom stocks edged lower. Bharti Airtel (down 0.76%), Tata Teleservices (Maharashtra) (down 6.35%), Mahanagar Telephone Nigam (down 1.83%) and Idea Cellular (down 2.02%), and Reliance Communications (down 2.69%) edged lower. The Union Cabinet yesterday, 5 January 2015, approved the proposal of the Department of Telecom (DoT) to proceed with auction in 800, 900 & 1800 MHz bands. The Reserve price approved is Rs 3646 crore pan-India per MHZ in 800 MHz, Rs 3980 crore for 900 MHz band pan India excluding Delhi, Mumbai, Kolkatta, and J&K, and Rs 2191 crore pan India (excluding Maharashtra and West Bengal) in 1800 MHz band. The quantum of spectrum to be put to auction is 103.75 MHz in 800 MHz band in all service areas, 177.8 MHz in 17 LSAs in 900 MHz band and 99.2 MHz in 15 LSAs in 1800 MHz band. Thus a total of 380.75 MHz in 800,900 & 1800 MHz is being put to auction. Payment terms, eligibility criteria and auction objectives shall be as in the previous auction of Februay 2014, a government statement said.
The Union Cabinet also decided that intent to put 2100 MHz to simultaneous auction may be announced along with auction of other bands. Details of this will be announced later on.
Key benchmark indices fell for second day in a row today, 6 January 2015. The Sensex has declined 900.44 points, or 3.22% in two trading sessions from a recent high of 27,887.90 on 2 January 2015. The Sensex has declined 511.96 points or 1.86% in January so far (till 6 January 2015). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,706.53 points or 5.94%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7,024.34 points or 35.18%.
In the foreign exchange market, the rupee edged lower against the dollar as Indian stocks witnessed a carnage. The partially convertible rupee was hovering at 63.585, compared with its close of 63.42 during the previous trading session.
Brent crude futures continued to drop after a steep selloff overnight amid continuing concerns about a global supply glut. Brent for February settlement was off $1.27 a barrel at $51.84 a barrel. The contract had lost $3.31 a barrel or 5.9% to settle at $53.11 a barrel yesterday, 5 January 2015, its lowest settlement since 1 May 2009, amid speculation rising global output will exacerbate oil supply glut.
Growth at India's service sector activity moderated last month, according to a survey from HSBC Holdings Plc and Markit Economics released today, 6 January 2015. The seasonally adjusted HSBC India Services PMI Business Activity Index declined to 51.1 in December 2014, from 52.6 in November 2014. Both activity and new orders in India's services sector expanded in December at lower rates compared with November. Except the financial intermediation sub-sector, all other sectors saw an expansion in order books in December 2014. Pranjul Bhandari, Chief India Economist at HSBC said that growth in the financial intermediation sector is key for funding a meaningful pick-up in economic growth. As per the survey, business expectations grew quickly at service providers in December 2014, led by the hotels and restaurants sub-sector. Inflationary pressures from both input and output prices remained modest.
Meanwhile, the Union Cabinet yesterday, 5 January 2015, approved the proposal of the Department of Telecom to proceed with auction in 800, 900 & 1800 MHz bands in February 2015. A government statement said that the estimated revenues from the auction is Rs 64840 crore of which Rs 16000 crore is expected to be realized in the current financial year.
The Prime Minister's Office (PMO) after trading hours yesterday, 5 January 2015, said that Prime Minister Narendra Modi has appointed economist Arvind Panagariya as Vice Chairman of NITI Aayog (National Institution for Transforming India). Economist Bibek Debroy and former secretary of defence research and development V.K. Saraswat have been appointed as two full-time members of NITI Aayog. The government had last week announced the setting up of NITI Aayog as replacement for the Planning Commission.
Energy stocks led losses in European stocks today, 6 January 2015, as crude oil prices continued to drop after a steep selloff overnight. Key indices in UK and France were off 0.07% to 1.27%. Germany's DAX rose 0.04%.
The euro zone economy ended 2014 with its worst quarter for over a year as further price cutting failed to significantly drive up business activity, adding pressure on the European Central Bank (ECB) to act. Markit's final December Composite Purchasing Managers' Index (PMI), based on surveys of thousands of companies across the region and seen as a good indicator of growth, missed an earlier flash reading of 51.7, coming in at 51.4.
In Greece, uncertainties over the status of Greece including a 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. A radical left opposition party is leading in opinion polls ahead of the vote on promises to raise wages, increase government jobs and persuade the euro area to write off some Greek debt.
French consumer confidence in December jumped to its highest level since June 2012, latest data showed. Consumer confidence index edged up to 90 in December, from 88 in November.
Asian markets were sharply lower today, 6 January 2015, after stocks on Wall Street declined overnight following the relentless fall in oil prices. Key indices in Japan, Hong Kong, Singapore, Taiwan, Singapore, South Korea and Indonesia were off 0.98% to 3.02%. China's Shanghai Composite index rose 0.03%.
The HSBC China services purchasing managers index rose to 53.4 in December from 53 in November, HSBC Holdings PLC said today, 6 January 2015, pointing to economic resilience outside the nation's factory sector. A reading above 50 indicates month-over-month expansion while a level below that points to contraction.
The HSBC Hong Kong Purchasing Managers Index rose to the expansion mode of 50.3 in December, the first time in five months, signaling a slight improvement in the city's operating conditions. HSBC today, 6 January 2015, said that December's manufacturing PMI rose from 48.8 in November, helped by the increase of new business and output, despite the continued fall of new orders from China. A reading below 50 indicates a contraction in manufacturing, while a reading above that indicates an expansion. December's reading is the first month the PMI is above 50 since July, when it was 50.4.
Trading in US index futures indicated that the Dow could fall 23 points at the opening bell today, 6 January 2015. US stocks fell sharply yesterday, 5 January 2015, with the S&P 500 extending losses into a fourth session, as energy companies took it on the chin as the price of oil fell to its lowest since April 2009.
The Fed will release minutes of the Federal Open Market Committee (FOMC) meeting held on 16 and 17 December 2014 tomorrow, 7 January 2015. The Fed minutes may shed light on policy makers' views on the appropriate timing of the first interest-rate increase since 2006 and the conditions that would prompt them to tighten policy. At the two-day meeting in December, the FOMC had said it would be patient on the timing of an increase, replacing an earlier pledge to keep borrowing costs low for a "considerable time".
The US Labor Department reports monthly payroll data for December 2014 on Friday, 9 January 2015.
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