Key benchmark indices eked out small gains after witnessing high volatility during the last one hour or so of the trading session. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled at over 1-1/2 week high. Shares of a number of small-cap and mid-cap companies rose for the second day in a row, boosted by stock market regulator Securities and Exchange Board of India's (Sebi) announcement on 19 December 2013 that it has decided to rationalize the rules on trading of thinly-traded stocks. BSE Small-Cap and Mid-Cap indices rose more than 1% each, with both these indices outperforming the Sensex. The Sensex garnered 21.31 points or 0.1%, off 106.86 points from the day's high and up 41.91 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Indian stocks edged higher for the second day in a row today, 23 December 2013. The Sensex has garnered 392.41 points or 1.89% in two trading sessions from a recent low of 20,708.62 on 19 December 2013. The Sensex has risen 309.10 points or 1.49% in this month so far (till 23 December 2013). The Sensex has garnered 1,674.32 points or 8.62% in calendar 2013 so far (till 23 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,652.32 points or 20.93%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 382.71 points or 1.78%.
Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Realty stocks extended Friday's gains as ICICI Bank joined State Bank of India and HDFC by cutting interest on home loans. Metal and mining stocks extended Friday's gains. Shares of biotechnology major Biocon surged. Index heavyweight and cigarette major ITC rose in volatile trade. Among IT stocks, HCL Technologies hit record high. Wipro hit 52-week high. Infosys dropped after the company after trading hours on Friday, 20 December 2013, announced the changes to the board of directors of the company.
Shares of state-run oil marketing companies rose after hiking petrol and diesel prices. L&T gained after the company said it is in discussions with a large global institutional investor for a proposed acquisition of a stake in L&T's subsidiary viz. L&T Infrastructure Development Projects.
The market edged higher in early trade on firm Asian stocks. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their highest level in almost two weeks. A bout of volatility was witnessed as key benchmark indices recovered from lower level after trimming initial gains in morning trade. The Sensex hovered in positive terrain in mid-morning trade. The Sensex trimmed gains in early afternoon trade. Key benchmark indices moved in a narrow range in positive zone in afternoon trade. A bout of volatility was witnessed as key benchmark indices recovered from lower level after paring intraday gains in mid-afternoon trade. High volatility was witnessed during the last one hour or so of the trading session as key benchmark indices regained positive terrain after slipping into the red.
The market may remain volatile this week, which is a truncated trading week, as traders roll over positions in the futures & options (F&O) segment from the near month December 2013 series to January 2014 series. The near month December 2013 derivatives contract expire on Thursday, 26 December 2013. The stock market remains closed on Wednesday, 25 December 2013, on account of Christmas.
The S&P BSE Sensex garnered 21.31 points or 0.1% to settle at 21,101.03, its highest closing level since 11 December 2013. The index jumped 128.17 points at the day's high of 21,207.89 in early trade. The index shed 20.60 points at the day's low of 21,059.12 in late trade.
The CNX Nifty garnered 10.25 points or 0.16% to 6,284.50, its highest closing level since 11 December 2013. The index hit a high of 6,317.50 in intraday trade. The index hit a low of 6,266.95 in intraday trade.
The S&P BSE Mid-Cap index garnered 81.62 points or 1.26% to settle at 6,584.11. The BSE Small-Cap index gained 75.50 points or 1.2% to settle at 6,367.46. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2024 crore, lower than Rs 2210.78 crore on Friday, 20 December 2013.
The S&P BSE Realty index (up 3.16%), the S&P BSE Metal index (up 1.52%), the S&P BSE Capital Goods index (up 1.3%), the S&P BSE PSU index (up 1.05%), the S&P BSE Power index (up 0.93%), the S&P BSE Bankex (up 0.8%), the S&P BSE Consumer Durables index (up 0.77%), the S&P BSE Oil & Gas index (up 0.55%), the S&P BSE Healthcare index (up 0.39%), the S&P BSE FMCG index (up 0.3%), and the S&P BSE Auto index (up 0.23%), outperformed the BSE Sensex.
The S&P BSE Teck index (down 0.83%) and the S&P BSE IT index (down 0.98%) underperformed the BSE Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,594 shares gained and 918 shares fell. A total of 170 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 1.21% to Rs 319 in volatile trade. The stock hit a high of Rs 319.55 and low of Rs 315.
Index heavyweight Reliance Industries (RIL) rose 0.04% to Rs 894.05. The stock hit high of Rs 908.35 and low of Rs 890.50.
IT shares were mixed. Tata Consultancy Services (TCS) shed 0.49%. Tech Mahindra fell 0.56%.
HCL Technologies rose 0.7% to Rs 1,245. The stock hit record high of Rs 1,259.80 in intraday trade.
Wipro rose 0.72% to Rs 552.90. The stock hit a 52-week high of Rs 557 in intraday trade.
Infosys dropped 2.5% after the company announced after market hours on Friday, 20 December 2013, changes to the board of directors of the company. Mr. V. Balakrishnan has conveyed his intention to resign as a member of the board and from the services of the company. The resignation is effective 31 December 2013.
Mr. N. R. Narayana Murthy, Executive Chairman said, "Bala has been an early adopter and a keen anchor-builder of Infosys. It is difficult to imagine Infosys without Bala's passion, commitment, and intellect. The Board and every Infoscion thank Bala for his wonderful contribution and wish him great success in his future endeavors."
Mr. S. D. Shibulal, Chief Executive Officer and Managing Director said, "Bala during his two decades of association with Infosys, has played a pivotal role in building the finance function and has been a key driver behind all of our achievements in areas of investor relations and corporate governance. Over the last few years, he has also provided leadership to BPO, Finacle, India Business Unit, Global Immigration and most recently, to Lodestone. I would like to wish him the very best in all his future endeavors."
Balakrishnan said, "I have enjoyed every moment of my stint at Infosys and it was a great learning experience. While my heart will always be with Infosys my mind wants to do something beyond Infosys. I thank all my colleagues who supported and encouraged me during my career at Infosys. I wish Infosys all the very best in its future endeavors."
Infosys also said that the Nominations and Governance Committee of the company has recommended the induction of Mr. U. B. Pravin Rao as a Whole-time Director of the company. Mr. Pravin Rao is currently a Member of the Executive Council, Senior Vice President and Global Head-Retail, Consumer Packaged Goods, Logistics and Life Sciences. Mr. Rao also serves as a Member of the Board of Infosys Lodestone. Mr. Rao is also the Director of the Infosys Leadership Institute (ILI). Mr. Rao holds a degree in electrical engineering from Bangalore University, India.
Welcoming Mr. Pravin Rao, Mr. N. R. Narayana Murthy, Executive Chairman said, "I am very happy that Pravin will be joining the Board. I have worked with Pravin closely and have benefited immensely from his wisdom. My congratulations to him."
The Nominations and Governance Committee of the company has also recommended the induction of Ms. Kiran Mazumdar-Shaw as an Independent Member of the Board. Ms. Kiran Mazumdar-Shaw is the Chairman & Managing Director of Biocon, a biotechnology company based in Bangalore, India. Welcoming Ms. Shaw, Mr. N. R. Narayana Murthy, Executive Chairman said, "Kiran is a well-recognized and respected corporate leader. She will bring immense value to the board. I am honored to welcome her to our Board."
Bank stocks rose across the board. Shares of ICICI Bank gained 0.99%. ICICI Bank on Saturday, 21 December 2013, said it has cut its home loan rates for new customers by 15 basis points or 0.15 percentage points, as a part of a special scheme. It will be valid till 31 January 2014. Under the scheme, the bank will offer home loans up to Rs. 75 lakh at an interest rate of 10.25%, while loans above Rs. 75 lakh will be charged 10.50%.
State Bank of India (SBI) rose 0.81%. A day after RBI governor Raghuram Rajan decided to hold rates, SBI on 19 December 2013 slashed home loan rates by up to 35 basis points for new borrowers and has unveiled a further discount of 5 basis points for women customers. Loans of up to Rs 75 lakh would be available to fresh borrowers at 10.15% against the existing rate of 10.50%. For women borrowers, the rate of interest after an additional concession of 0.05% would be 10.10% for home loans of up to Rs 75 lakh. With regard to loans of above Rs 75 lakh, the new rate would be 10.30%. For women borrowers it is 10.25%.
Among other PSU bank stocks, Canara Bank (up 4.4%), Union Bank of India (up 4.43%), Bank of India (up 1.97%), Bank of Baroda (up 0.57%) and Punjab National Bank (up 4.46%) gained.
Andhra Bank rose 2.3% to Rs 62.20 after the bank said it has allotted 3 crore equity shares at Rs 66.59 per share for a consideration of about Rs 200 crore to the Government of India on preferential allotment basis. The announcement was made before market hours today, 23 December 2013.
HDFC Bank shed 0.32%. The bank on 18 December 2013 said that it has filed an application with the Foreign Investment Promotion Board (FIPB) seeking approval for increasing foreign shareholding limit in the bank in accordance with the now prevailing guidelines as the total foreign shareholding in the bank (FII and FDI) has crossed 49%.
The Reserve Bank of India had recently notified that the foreign shareholding through Foreign Institutional Investors (FIIs)/Non Resident Indians (NRI)/Persons of Indian Origin (PIO)/Foreign Direct Investment (FDI)/ADRs/GDRs in HDFC Bank has crossed the overall limit of 49% of its paid-up capital and that no further purchases of shares of HDFC Bank would be allowed through stock exchanges in India on behalf of FII/NRI/PIO/FDI/ADRs/GDRs.
Total foreign shareholding in the bank as on 13 December 2013 was 52.18% of its paid-up capital. This includes investments through the FDI route in ADRs/GDRs of 17.01% which were raised in accordance with the then applicable guidelines, and other foreign holdings made under the FII route of 35.17%. Necessary approval from the shareholders is in place for FII investments up to 49%, HDFC Bank said in a statement.
The Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 7.75% after a monetary policy review on 18 December 2013, contrary to market expectations of a 25 basis point increase. The central bank said its decision to keep the repo rate unchanged was a close call. The RBI warned that if the expected softening of food inflation does not materialise and translate into a significant reduction in headline inflation in the next round of data releases, or if inflation excluding food and fuel does not fall, the central bank will act, including on off-policy dates if warranted, so that inflation expectations stabilise and an environment conducive to sustainable growth takes hold. The Reserve Bank of India's policy action on those dates will be appropriately calibrated, the central bank said.
The Reserve Bank of India last week released on its website a Discussion Paper on 'Early Recognition of Financial Distress, Prompt Steps for Resolution and Fair Recovery for Lenders: Framework for Revitalising Distressed Assets in the Economy'. The Discussion Paper outlines a corrective action plan that will incentivize early identification of problem cases, timely restructuring of accounts which are considered to be viable, and taking prompt steps by banks for recovery or sale of unviable accounts.
With the slowdown of the Indian economy, a number of companies/projects are under stress. As a result, the Indian banking system has seen increase in NPAs and restructured accounts during the recent years. Not only do financially distressed assets produce less than economically possible, they also deteriorate quickly in value, the central bank said in a statement. Therefore, there is a need to ensure that the banking system recognises financial distress early, takes prompt steps to resolve it, and ensures fair recovery for lenders and investors, the RBI said. 'Improving the system's ability to deal with corporate distress and financial institution distress by strengthening real and financial restructuring as well as debt recovery' has been indicated by the Governor, RBI as one of the five pillars on which Reserve Bank of India's developmental measures will be built for improving the financial system over the next few quarters. This Discussion Paper is a step in that direction, the RBI said.
Yes Bank rose 2.32%. The bank announced during market hours that it has raised $150 million from International Finance Corporation (IFC), Washington, a member of the World Bank Group, for tenor of up to 7 years. The loan will be used by the bank to scale up its small and medium enterprise loan portfolio, Yes Bank said.
The financing package to Yes Bank includes $45 million provided through IFC's new co-lending program in addition to IFC's own account loan of $60 million, both for a period of 7 years; and another $ 45 million syndicated loan provided by Intesa Sanpaolo, Bank Muscat, Doha Bank & AKA Frankfurt for a tenor of 2 years. Yes Bank has swapped this loan with RBI through the concessional swap window offered to banks, Yes Bank said.
HDFC dropped 1.26%. The housing finance major on 19 December 2013 announced a cut of up to 50 basis points in home loan rates in its "special winter bonanza". The new rates for HDFC's home loans up to Rs 75 lakh will be 10.25 per cent per annum. "This is a limited period offer and is valid for all new applications submitted before 31 January 2014 and first disbursement taken by 28 February 2014," HDFC said in a statement.
Metal and mining stocks extended Friday's gains. Hindalco Industries (up 3.53%), JSW Steel (up 2.6%), SAIL (up 0.42%), Hindustan Copper (up 1.55%), NMDC (up 1.25%), Tata Steel (up 1.29%), National Aluminum Company (up 2.54%) and Sesa Sterlite (up 0.1%) gained. Hindustan Zinc fell 0.07%.
Electrosteel Steels surged 4.99% after the company said that the corporate debt restructuring related documents has been executed on Saturday, 21 December 2013. The announcement was made during trading hours today, 23 December 2013.
It may be recalled that Electrosteel Steels had on 30 September 2013 said that the application of the company for restructuring of its debts to the tune of Rs 6181.20 crore has been approved by corporate debt restructuring (CDR) EG under the CDR mechanism from cut off date of 1 March 2013. The term loan outstanding of non-CDR lenders amounting to Rs 611.91 crore will be outside the purview of CDR, the company said at that time.
Jindal Steel & Power jumped 5.13%. AXIS Bank replaced Jindal Steel & Power as a constituent of the S&P BSE Sensex with effect from today, 23 December 2013.
Shares of AXIS Bank gained 0.89%
Auto stocks rose, shrugging off a slight hike in petrol and diesel prices by the PSU OMCs. Tata Motors (up 0.63%) and Ashok Leyland (up 1.59%) gained. Maruti Suzuki India declined 0.16%. Mahindra & Mahindra (M&M) fell 0.44%.
Shares of two wheeler makers rose. Bajaj Auto (up 0.45%), Hero MotoCorp (up 1.3%) and TVS Motor Company (up 4.69%) gained.
PSU OMCs hiked the petrol price on Friday by 41 paise a litre following the government's decision to raise commission paid to petrol pump dealers and firming global oil rates. Simultaneously, diesel rates were increased by 10 paise per litre due to a hike in dealers' commission. The two increases, which are excluding local sales tax or VAT, were effective from midnight Friday.
Shares of state-run oil marketing companies (PSU OMCs) rose after hiking petrol and diesel prices.. BPCL (up 1%), HPCL (up 0.68%) and Indian Oil Corporation (up 1.62%) gained.
PSU OMCs hiked the petrol price on Friday, 20 December 2013, by 41 paise a litre following the government's decision to raise commission paid to petrol pump dealers and firming global oil rates. Simultaneously, diesel rates were increased by 10 paise per litre due to a hike in dealers' commission. The two increases, which are excluding local sales tax or VAT, became effective from midnight Friday.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. 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.
Capital goods stocks edged higher. Bhel (up 2.33%), BEML (up 11.41%), ABB (up 1.76%), Crompton Greaves (up 2.53%) and Siemens (up 2.49%) gained.
L&T gained 0.52% after the company said it is in discussions with a large global institutional investor for a proposed acquisition of a stake in L&T's subsidiary viz. L&T Infrastructure Development Projects. The announcement was made after market hours on Friday, 20 December 2013.
L&T Infrastructure Development Projects (L&TIDPL) has submitted an application to the Foreign Investment Promotion Board (FIPB) seeking approval in relation to a proposed foreign direct investment in L&T IDPL. Subject to completion of the due diligence processes and necessary agreement on governance and other terms of the transaction with the investor, there is a contemplation of an initial infusion of Rs 1000 crore into L&T IDPL, followed by a second tranche of Rs 1000 crore (or such higher amount as may be agreed between L&T and investor) after twelve months from the date of initial investment. The proposed transactions are subject to various factors, and may or may not be completed, and parties have not yet entered into any agreement, L&T said in a statement. In the meantime, shareholders and any other investors are reminded to exercise caution when dealing in the company's securities, pending definitive announcement(s) from the company, if any, L&T said.
L&T IDPL is primarily engaged in public-private partnership projects in India, with business interests spread across sectors involving roads and bridges, ports, metro rail, wind energy and power transmission lines. It has experience in identifying and assessing viability of projects, achieving financial closure, project management, operations and maintenance of infrastructure assets across various sectors as well as divestiture.
GMR Infrastructure (GMR) gained 4.13% after the company on Friday, 20 December 2013, said that GMR Energy on Friday, 20 December 2013 signed a joint development agreement (JDA) with the International Finance Corporation (IFC), the private sector lending arm of the World Bank, to jointly develop the prestigious Upper Marsyangdi-2 hydropower project (600 MW) in Nepal.
The 600 MW Upper Marsyangdi-2 Project is located on the Marsyangdi River, in the Manang and Lamjung districts of Nepal, which is in an advanced stage of development. The project is currently being undertaken by Mis Himtal Hydro Power Company, a subsidiary of GMR Energy, which in turn is a subsidiary of GMR Infrastructure.
The Government of Nepal has identified the proposed Upper Marsyangdi-II as one of the National Priority Projects and it is being facilitated by the Investment Board of Nepal (IBN). The project has completed all survey and investigation works, finalized the feasibility studies and has already received a majority of clearances from the Government of Nepal. The Project Development Agreement is expected to be signed early next year, GMR said in a statement.
The project aims at a total investment of around $1 billion and is targeted for commissioning by FY 2021.
NHPC rose 0.53%. The company after market hours said that a Promoters' Agreement was signed on 21 December 2013 between NHPC, Government of Odisha and Odisha Hydro Power Corporation for the formation of a joint venture company for implementation of six hydroelectric projects with an aggregate installed capacity of 1,020 megawatts (MW).
Zee Entertainment Enterprises shed 0.52%. The company after market hours on Friday, 20 December 2013, said that the Bombay High Court has, at the hearing held on Friday, 20 December 2013, approved the Scheme of Arrangement between the company and its equity shareholders for issuance of bonus preference shares to the company's equity shareholders.
Biocon jumped 6.54% to Rs 466.05 after hitting record high of Rs 473.45 in intraday trade. The company, last week, said it has entered into a licensing and collaboration agreement with Quark Pharmaceuticals, Inc. for the development of a range of small interfering RNA based novel therapeutics. The collaboration will enable Biocon to co-develop, manufacture & commercialize QPI-1007, a novel small interfering RNA (siRNA) drug candidate for ophthalmic conditions, for India and other key markets, Biocon said on 18 December 2013. Biocon will have access to Quark's innovative and proprietary siRNA technology platform that can be leveraged for the development of novel therapeutics for various unmet medical needs.
Realty stocks extended Friday's gains as ICICI Bank joined State Bank of India and HDFC by cutting interest on home loans. The reduction in home loan rates by these three major lenders could lead to a revival of interest in the real estate sector, which has been hit by high prices amid a sluggish economy. Purchases of both residential and commercial property are largely driven by finance. DLF (up 4.18%), HDIL (up 7.37%), Unitech (up 2.94%) and Sobha Developers (up 1.25%) gained.
Dewan Housing Finance Corporation (up 19.82%), Amtek India (up 9.95%), Rajesh Exports (up 9.11%), Great Eastern Shipping Company (up 7.61%), Kailash Auto Finance (up 7.18%), Indiabulls Housing Finance (up 6.83%), Shipping Corporation of India (up 6.39%), Jaypee Infratech (up 6.29%), Arvind (up 6.08%) and Mahindra Holidays & Resorts India (up 5.42%), were among the top gainers from the BSE Mid-Cap index.
MTNL (up 11.43%), Gammon Infrastructure Projects (up 10.81%), Piramal Glass (up 9.86%), SKS Microfinance (up 9.7%), Ashapura Minechem (up 9.61%), Sanwaria Agro Oils (up 9.5%), Sharon Bio-Medicine (up 8.98%), Jindal Saw (up 8.6%), Welspun Corp (up 8.6%) and Time Technoplast (up 8.3%) were among the top gainers from the BSE Small-Cap index.
Sebi after trading on Thursday, 19 December 2013, said it has rationalized the periodic call auction mechanism by modifying how it classifies illiquid stocks. A stock would now be classified as illiquid if its average daily turnover is less than Rs 2 lakh in the previous two quarters and if it is classified as illiquid at all the exchanges where it is traded. Earlier, a stock was classified to be illiquid if its average daily trading volume in a quarter was less than 10,000, the average daily number of trades was less than 50 in a quarter and if it was classified as illiquid by all the exchanges where it traded.
Henceforth, call auctions will not apply to shares where a company is profitable in at least two of the past three years and not more than 20% of promoters' shareholding is pledged in the latest quarter and the book value is three times or more than the face value. The new rules also exclude companies with a market capitalisation of at least Rs 10 crore or which have paid a dividend in at least two of the past three years.
From now, stock exchanges will determine the number of call auction sessions for illiquid stocks. Exchanges will, however, have at least two sessions in a trading day, with one uniform closing session across the exchanges. So far, periodic call auction sessions of one hour each were conducted throughout trading hours, with the first session starting at 9:30 IST.
In foreign exchange market, rupee strengthened past 62 against the dollar. The partially convertible rupee was hovering at 61.96, compared with its close of 62.04/05 on Friday, 20 December 2013. The rupee rose on global risk on sentiment.
Reserve Bank of India (RBI) governor Dr Raghuram Rajan said the central bank had decided to keep rates on hold even before the high consumer price and retail inflation data for November were released. Rajan was speaking to a television channel in an interview. The RBI surprised markets last week by keeping interest rates on hold despite data showing consumer prices in November posted their biggest annual rise on record -- 11.24% -- while wholesale inflation hit a 14-month high.
European stocks edged higher on Monday, 23 December 2013, after the International Monetary Fund said it is raising its growth outlook for the US economy. Key benchmark indices in UK, Germany and France were up 0.01% to 0.45%.
Asian stocks edged higher on Monday, 23 December 2013, after data showed faster-than-estimated economic growth in the US and after the International Monetary Fund said it's raising its outlook for the world's largest economy. Key benchmark indices in China, Hong Kong, Taiwan, Singapore and South Korea rose 0.24% to 0.7%. In Indonesia, Jakarta Composite was off 0.14%. Japanese markets were shut for a holiday.
Trading in US index futures indicated that the Dow could advance 54 points at the opening bell on Monday, 23 December 2013. US stocks rallied Friday, lifting the Dow Jones Industrial Average and the S&P 500 to record levels, after a government report showed the economy grew at its fastest pace in two years last quarter.
The rate of US growth in the third quarter was faster than previously estimated as consumers stepped up spending on services such as health care and companies invested more in software. Gross domestic product climbed at a 4.1% annualized rate, the strongest since the final three months of 2011 and up from a previous estimate of 3.6%, Commerce Department figures showed on Friday, 20 December 2013.
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