Key benchmark indices eked out small gains after witnessing immense volatility during the last one hour of the trading session as traders rolled over positions in the futures & options (F&O) segment from the near month December 2013 series to January 2014 series. The December 2013 derivatives contracts expired today, 26 December 2013. The market breadth, indicating the overall health of the market, was strong. The barometer index, the S&P BSE Sensex, garnered 41.88 points or 0.2%, up 61.45 points from the day's low and off 61.26 points from the day's high.
Shares of a number of small-cap and mid-cap companies surged. There has been renewed buying interest in small-cap and mid-cap stocks since the past few days. The latest trigger for the rally in small-cap and mid-cap stocks has been 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.
The Sensex has risen 282.66 points or 1.36% in this month so far (till 26 December 2013). The Sensex has garnered 1,647.88 points or 8.48% in calendar 2013 so far (till 26 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,625.88 points or 20.78%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 409.15 points or 1.9%.
Coming back to today's trade, auto stocks declined. Shares of two-wheeler makers dropped. Capital goods stocks rose on renewed buying. Shares of power generation and power distribution companies edged higher. Index heavyweight Reliance Industries (RIL) dropped. Dr Reddy's Laboratories reversed direction after hitting record high in early trade.
AXIS Bank rose after the government said that the Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of AXIS Bank for increase in foreign investment ceiling in the bank to 62% from 49%, subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank. Shares of Bosch, known for its technology prowess in the automotive market, surged. IT stocks rose after an upbeat report on US durable-goods orders. Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears.
The market edged higher in early trade on firm Asian stocks. Key benchmark indices retained positive zone in morning trade. The Sensex extended gains and hit fresh intraday high in mid-morning trade. Key benchmark indices were off the day's high in early afternoon trade. The Sensex 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 giving away a lion's part of intraday gains in mid-afternoon trade. Immense volatility was witnessed during the last one hour of the trading session as the key benchmark indices regained positive terrain, soon after reversing intraday gains.
The S&P BSE Sensex garnered 41.88 points or 0.2% to settle at 21,074.59, its highest closing level since 23 December 2013. The index jumped 103.14 points at the day's high of 21,135.85 in late trade. The index fell 19.57 points at the day's low of 21,013.14 in late trade.
The CNX Nifty advanced 10.50 points or 0.17% to 6,278.90, its highest closing level since 23 December 2013. The index hit a high of 6,302.75 in intraday trade. The index hit a low of 6,259.45 in intraday trade, its lowest level since 20 December 2013.
The BSE Small-Cap index gained 1.15% and the BSE Mid-Cap index rose 0.41%. Both these indices outperformed the Sensex.
Atlanta (up 19.89%), Opto Circuits (up 19.87%), Electrosteel Steels (up 19.54%), Gitanjali Gems (up 17.06%), Triveni Engineering & Industries (up 13.5%), Accelya Kale Solutions (up 12.44%), Indoco Remedies (up 11.81%), Lanco Infratech (up 10.51%), Hindustan Construction Company (up 10.22%) and Alok Industries (up 8.9%) were among the major gainers from the BSE Small-Cap index.
Suzlon Energy (up 9.07%), Balkrishna Industries (up 7.63%), Karnataka Bank (up 7.37%), WABCO India (up 6.67%), Indian Bank (up 6.39%), FDC (up 5.36%), Bajaj Electricals (up 4.79%), Jain Irrigation Systems (up 4.53%), Dena Bank (up 4.41%) and Essar Ports (up 4.23%) were among the major gainers from the BSE Mid-Cap index.
The total turnover on BSE amounted to Rs 1926 crore, lower than Rs 2052.20 crore on Tuesday, 24 December 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,629 shares gained and 901 shares fell. A total of 130 shares were unchanged.
The S&P BSE Power index (up 1.06%), the S&P BSE Consumer Durables index (up 0.88%), the S&P BSE PSU index (up 0.66%), the S&P BSE Bankex (up 0.53%), the S&P BSE Metal index (up 0.5%), the S&P BSE Teck index (up 0.32%), the S&P BSE IT index (up 0.32%), the S&P BSE Capital Goods index (up 0.23%) outperformed the BSE Sensex
The S&P BSE FMCG index rose 0.2%, matching Sensex's gain. The S&P BSE Oil & Gas index (up 0.05%), the S&P BSE Realty index (down 0.15%), the S&P BSE Healthcare index (down 0.3%) and the S&P BSE Auto index (down 0.46%) underperformed the BSE Sensex.
Among the 30-share Sensex pack, 16 stocks declined and rest of them rose.
Index heavyweight and cigarette major ITC rose 0.5% at Rs 320.50. The stock hit a high of Rs 321.10 and low of Rs 318.
Index heavyweight Reliance Industries (RIL) fell 1.08% to Rs 886.50. The stock hit high of Rs 897.40 and low of Rs 882.
ONGC rose 2.31%. The company said during market hours that ONGC Videsh has temporarily suspended its oilfield operations in South Sudan. ONGC Videsh (OVL) is operating in two producing assets in South Sudan through its Joint Operating Companies viz. Greater Pioneer Operating Company (GPOC) and SUDD Petroleum Operating Company (SPOC) with Participating Interest (PI) of 25% and 24.125% respectively. GPOC is producing close to 37,000 bopd (OVL share 9,250 bopd) from Block 1,2,4 and SPOC is producing close to 4,600 bopd (OVL share 1,100 bopd) from Block 5A. While the partners of OVL in GPOC are CNPC, Petronas and Nilepet, in SPOC OVL has partnership with Petronas and Nilepet.
Following the deteriorating security situation in the country from 15 December 2013, the Joint Operating Companies decided to temporarily shut down the operations in its oilfields. The shutdown was executed methodically as per its standard shutdown procedure, ensuring safety of personnel/equipments and smooth resumption of operation immediately after normalization of the security situation. Following the shutdown, the production from the oilfields was completely stopped from 22 December 2013, ONGC said.
Due to the adverse security situation, OVL in coordination with the Indian Embassy in South Sudan has evacuated all its 11 personnel posted in South Sudan. Other partners of OVL in the assets have also evacuated most of its personnel from the country, ONGC said.
OVL is closely monitoring the security situation in the country and is in constant interaction with its partners in the assets and the Indian Embassy at Juba. Operations will be resumed once the situation is normalized, ONGC said in a statement.
OVL is a wholly-owned subsidiary of ONGC.
Shares of state-run oil marketing companies (PSU OMCs) edged higher on reports that the oil ministry has decided to move a Cabinet note for a higher increase in diesel price - in line with the Rs 5 raise recommended by the Kirit Parikh committee. The Parikh committee, which had filed its report towards the end of October, had also suggested a Rs 250 a cylinder increase in the price of domestic cooking gas and Rs 4 a litre in kerosene oil, with immediate effect. BPCL (up 1.83%), and Indian Oil Corporation (up 1.02%) gained. HPCL fell marginally by 0.04%.
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.
On 20 December 2013, PSU OMCs hiked the petrol price by 41 paise a litre, excluding local sales tax or VAT, 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, excluding local sales tax or VAT, due to a hike in dealers' commission.
Auto stocks declined. Tata Motors (down 0.81%), M&M (down 0.77%) and Maruti Suzuki India (down 0.21%) declined.
Shares of two-wheeler makers also dropped. Bajaj Auto (down 2.52%) and Hero MotoCorp (down 2.01%) fell.
Capital goods stocks rose on renewed buying. ABB (up 0.98%), Bhel (up 1.51%), BEML (up 1.67%), and Siemens (up 1.77%) rose.
But, Larsen & Toubro (L&T) fell 0.47%, with the stock reversing intraday gains. L&T Finance Holdings rose 1.08%. L&T early this week said it has completed the sale of 1.71 crore shares aggregating to 1% stake of L&T Finance Holdings on 23 December 2013 to comply with the minimum public shareholding requirement. L&T's total shareholding in L&T Finance Holdings now stands at 81.5%. Stock market regulator Securities & Exchange Board of India (Sebi) has made it mandatory for a minimum public holding of 25% in all listed companies. For state-run companies, a minimum 10% public holding has been made mandatory.
L&T on 20 December 2013 said that 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.
Thermax fell 0.04% to Rs 696.05, with the stock reversing direction after hitting 52-week high of Rs 715.95 in intraday trade.
IL&FS Transportation Networks rose 0.34% to Rs 133.05 after the firm approved the allotment of 12.64 crore rated listed fully paid-up cumulative non-convertible compulsorily redeemable preference shares on private placement basis. The announcement was made after market hours on Tuesday, 24 December 2013.
IL&FS Transportation Networks (ITNL) said that the Committee of Directors approved the allotment of 12.64 crore rated listed fully paid-up cumulative non-convertible compulsorily redeemable preference shares (CNCRPS) of Rs 10 each at a premium of Rs 10 per share on a private placement basis on Monday, 23 December 2013. The aforesaid CNCRPS were listed on the BSE effective from Tuesday, 24 December 2013. The company had already issued 20 crore unrated, unlisted fully paid up cumulative redeemable preference shares of Rs 10 each at a premium of Rs 10 per share on a private placement basis on 26 September 2013. With the aforesaid allotment the company has issued 32.64 crore preference shares of Rs 10 each as of date, ITNL said.
Shares of power generation and power distribution companies edged higher. GVK Power & Infrastructure (up 5.6%), Tata Power Company (up 4.41%), Power Grid Corporation of India (up 0.36%), Torrent Power (up 3.18%), and Reliance Power (up 1.82%) gained. NTPC fell 0.04%. Reliance Infrastructure dropped 1.65%.
Adani Power rose 3.66%. The company said during market hours that a meeting of the board of directors of the company will be held on 28 December 2013, inter alia, to consider and approve demerger of transmission line business of the company and other incidental matters.
HDFC Bank rose 1.74%. The bank announced after market hours on Tuesday, 24 December 2013, that the board of directors of the bank at its meeting held on Tuesday, 24 December 2013, has appointed Mr. Paresh Sukthankar as the Deputy Managing Director of the bank for a period of 3 years from 24 December 2013 to 23 December 2016 subject to the approval of the shareholders and Reserve Bank of India. Mr. Sukthankar currently holds 6.87 lakh equity shares of the bank, HDFC Bank said.
HDFC Bank also said that it has appointed Mr. Kaizad Bharucha as an Additional Director and as an Executive Director of the bank for a period of 3 years from 24 December 2013 to 23 December 2016 subject to the approval of the shareholders and Reserve Bank of India. Mr. Bharucha currently holds 7.66 lakh equity shares of the bank, HDFC Bank said.
AXIS Bank rose 1.28%. The government today, 26 December 2013, said that the Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of AXIS Bank for increase in foreign investment ceiling in the bank to 62% from 49%, subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of Rs 7250 crore (approximately) in the country, a government statement said.
The Reserve Bank of India had in November 2013 restricted further purchases of equity shares of AXIS Bank by foreigners after total foreign holding in the bank through Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)/American Depository Receipt (ADR)/Global Depository Receipts (GDRs) reached the trigger limit. RBI had allowed further purchases of AXIS Bank shares by foreigners only after obtaining the central bank's prior approval. FII holding in AXIS Bank stood at 43.37% as on 30 September 2013.
Dhanlaxmi Bank rose 1.25% to Rs 40.50 after the bank said it has allotted 1.75 crore equity shares at Rs 38.25 per share aggregating to Rs 67.22 crore to qualified institutional buyers through qualified institutional placement. The announcement was made during trading hours today, 26 December 2013.
Allahabad Bank rose 2.79% to Rs 95.80 after the bank said it has allotted 4.45 crore equity shares at Rs 89.72 per share to the Government of India on preferential allotment basis. The announcement was made before market hours today, 26 December 2013.
Allahabad Bank today, 26 December 2013 said that the shareholders of the bank through a special resolution at an extraordinary general meeting held on Tuesday, 24 December 2013, approved the issue and allotment of equity shares on preferential basis to the Government of India (GoI) against capital infusion of Rs 400 crore in the bank and raising of capital of upto Rs 320 crore through qualified institutional placement (QIP) in such a manner that the shareholding of GoI in the bank will not fall below 55.24% of the total paid-up capital of the bank.
IT stocks rose after an upbeat report on US durable-goods orders. US is the biggest outsourcing market for the Indian IT firms. HCL Technologies (up 0.56%), Infosys (up 1.22%), and Wipro (up 1.35%) gained.
TCS fell 0.62% to Rs 2,098. The stock hit a high of Rs 2,117 and low of Rs 2,090.
Dr Reddy's Laboratories fell 1.97% to Rs 2,490. The stock reversed direction after hitting record high of Rs 2,554 in early trade.
Grasim Industries gained 0.86%. The company said at the fag end of trading session on Tuesday, 24 December 2013, that the operations of the company's chemical plant at Vilayat in Gujarat have resumed. The company has also commenced the operations of the downstream Epoxy Plant at Vilayat. The full capacity at both these plants will be achieved in a phased manner, Grasim said. The company had announced on 7 October 2013 that operations of the company's chemical plant were suspended due to unexpected floods affecting the plant/power supply.
MTNL gained 2.61%. The Union Cabinet today, 26 December 2013, approved the erstwhile all categories (Group A, B, C & D) of employees of the government absorbed in MTNL and who have opted for combined service may be given similar treatment in the matter of payment of pensionary benefits as available to the absorbed employees of BSNL. Accordingly, consequential amendments to the Central Civil Services (Pension) Rules, adjustments in respect of Government pension liability previously discharged by MTNL and proposed change in methodology in pension contribution as per FR-116 upto 31 December 2005 on the maximum of the IDA pay-scales and with effect from 1 January 2006 on the actual pay drawn in the IDA pay-scales will be made.
Based on the approval for payment of pensionary benefits to the erstwhile government employees absorbed in MTNL who have opted for combined pension in the same manner as in BSNL, necessary amendments in Rule 37-A of CCS (Pension) Rules, 1972 to include MTNL along with BSNL, will be issued and adjustments in respect of Government pension liability previously discharged by MTNL will be done within three months, a government statement said. The government said that this would help to resolve the long pending MTNL pension issue. The proposal entails an estimated recurring expenditure of approximately Rs 500 crore per annum besides adjustments in respect of Government pension liability previously discharged by MTNL. This decision would give benefit to approximately 43,000 employees of Delhi and Mumbai.
Bosch jumped 7.82% to Rs 10,630 after hitting record high of Rs 11,500 in intraday trade.
Amtek India surged 10.65% after the company said it has entered into an agreement to acquire substantial business interests of Germany based Kuepper Group through its 100% subsidiaries. The announcement was made after market hours on Tuesday, 24 December 2013. The Kuepper Group is engaged in the business of iron and aluminium casting and integrated machining, having 5 manufacturing units across Germany and Hungary. The transaction closing is subject to fulfillment of certain conditions, Amtek India said.
Sugar stocks rose after the Cabinet Committee on Economic Affairs (CCEA) today, 26 December 2013, approved the guidelines for financial assistance to the sugar industry for payment of cane price arrears. The expenditure for the scheme will be met fully from the Sugar Development Fund (SDF). The Central Government will provide an interest subvention upto 12%, at a simple rate of interest, for the additional working capital loans to the sugar undertakings, equivalent to last three sugar seasons excise duty, cess and surcharge on sugar (including notional equivalence for exports or availed Cenvat), to be provided by the banks. The sugar undertakings with loans classified non performing assets (NPA) by the banks will also be eligible for the loans, provided the concerned state governments give guarantee for their new loans. The interest subvention would be for total loan duration of 5 years, including 2 years moratorium period. No interest subvention will be provided for the period of default in the principal repayments. The loans would be meant exclusively for effecting cane price payments by the sugar mills.
Bajaj Hindusthan (up 2.76%), Balrampur Chini Mills (up 0.54%) and Shree Renuka Sugars (up 1.76%) gained.
In the foreign exchange market, the rupee edged lower against the dollar on broad-based gains in dollar. The partially convertible rupee was hovering at 62.16, compared with its close of 61.79/80 on Tuesday, 24 December 2013. Indian financial markets were closed on Wednesday, 25 December 2013, on account of Christmas.
European stock markets were closed on Thursday, 26 December 2013, for Christmas holidays.
Asian stocks edged higher on Thursday, 26 December 2013, led by Japanese stocks after the yen fell to a five-year low against the dollar. Key benchmark indices in Taiwan, Japan, and Singapore were up 0.21% to 1.03%. South Korea's Kospi dropped 0.11%. Stock markets in Hong Kong and Indonesia were shut for holidays.
In mainland China, the Shanghai Composite fell 1.58%, ending a three-day recovery as investors reacted negatively to a lack of additional cash injections from the central bank, used last week to calm a spike in interbank lending rates that has eroded investor confidence.
China's ruling Communist Party reportedly unveiled on Wednesday a five-year plan to fight pervasive graft, with particular attention on corruption that triggers protests or happens in the course of economic reforms.
China's economy this year is likely to expanded 7.6%, compared with the government's 7.5% target, a News Agency in China reportedly said, citing a report by the State Council.
The minutes of the Bank of Japan's Nov. 20-21 board meeting released on Wednesday, 25 December 2013, showed that not all members were convinced that the country's growth was on a long-term upward trend. One member said that the recent deceleration in real gross domestic product growth could signal a downward shift in the economy's trend.
The consumer confidence index in South Korea stayed at 107 in December, unchanged from November, the nation's central bank said in a statement today, 26 December 2013.
Trading in US index futures indicated that the Dow could advance 52 points at the opening bell on Thursday, 26 December 2013. The US stock market was closed on Wednesday, 25 December 2013, for Christmas. US stocks ended higher on Tuesday, 24 December 2013, with the Dow Jones Industrial Average and the S&P 500 rising to record closes after an upbeat report on durable-goods orders. Investors welcomed Tuesday's durable-goods report showing that orders for big-ticket US items, such as aircraft and transportation equipment, rose 3.5% last month.
In a separate report, US home prices rose 8.2% in October from the same month last year, according to the Federal Housing Finance Agency. Prices rose 0.5% from September.
Rising mortgage rates did not affect the sales of new single-family homes much, according to US Commerce Department data released on Tuesday. Sales declined 2.1% in November to a seasonally adjusted annual rate of 464,000, down from a rate of 474,000 in October, which was the fastest pace since July 2008.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
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