A bout of volatility was witnessed as key benchmark indices reversed intraday gains in mid-afternoon trade. The losses for the benchmark indices were very small. The barometer index, the S&P BSE Sensex, was currently off 9.33 points or 0.03% at 28,168.55. The market breadth indicating the overall health of the market was positive.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 656.37 crore yesterday, 17 November 2014, as per provisional data. Finance Minister Arun Jaitley yesterday, 17 November 2014, said that he is in touch with various state governments and most of the contentious issues on the implementation of the Goods and Service Tax (GST) have already been resolved. Jaitley said that the targets fixed for disinvestment in the current financial year are quite ambitious one but he hopes to achieve that or reach near the same.
Sun Pharmaceutical Industries slipped on reports that the company has recalled 68,000 bottles of the antidepressant Effexor in the US, in the second recall of the drug this year. Shares of Reliance Anil Dhurubhai Ambani Group companies were in demand. Shares of jewellery firms fell on reports the Reserve Bank of India and the finance ministry are considering fresh curbs on gold imports.
Earlier, key benchmark indices had struck record high in morning trade after witnessing initial volatility.
In overseas markets, European stocks rose before a decision by Japanese Prime Minister Shinzo Abe to add stimulus for the Japanese economy. Japanese stocks led gains in Asian markets following reports that Abe will today, 18 November 2014, announce plans to put off a sales-tax increase and call a snap election after data yesterday, 17 November 2014, showed the Japanese economy entered recession.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude futures fell as investors weighed the likelihood of an output cut by OPEC when the group meets next week amid signs of weakening global demand.
At 14:15 IST, the S&P BSE Sensex was down 9.33 points or 0.03% at 28,168.55. The index fell 57.93 points at the day's low of 28,119.95 in mid-afternoon trade. The index jumped 104.97 points at the day's high of 28,282.85 in morning trade, a record high for the index.
The CNX Nifty was down 5.80 points or 0.07% at 8,424.95. The index hit a low of 8,407.25 in intraday trade. The index hit a high of 8,454.50 in intraday trade, a record high for the index.
The market breadth indicating the overall health of the market was positive. On BSE, 1,598 shares gained and 1,354 shares fell. A total of 110 shares were unchanged.
The BSE Mid-Cap index was up 20.55 points or 0.2% at 10,268.25. The BSE Small-Cap index was up 69.45 points or 0.61% at 11,407.41. Both these indices outperformed the Sensex.
Sun Pharmaceutical Industries slipped on reports that the company has recalled 68,000 bottles of the antidepressant Effexor in the US, in the second recall of the drug this year. The stock was off 1.2%. In both cases, the drug was manufactured at the Indian generic drug maker's plant in Halol in Gujarat and were recalled after they failed to dissolve as they should in quality tests, according to reports.
The development comes as Sun Pharma looks to complete its $3.2 billion acquisition of Ranbaxy Laboratories. Ranbaxy has struggled to remove export restrictions on its manufacturing facilities in India, leaving it with only one plant able to manufacture drugs for the lucrative US market. Ranbaxy's inability to solve its quality issues led to its sale by Japanese parent Daiichi Sankyo Co. in April.
Shares of Reliance Anil Dhurubhai Ambani Group companies were in demand. Reliance Communications (up 8.13%), Reliance Capital (up 3.85%), Reliance Infrastructure (up 2.29%) and Reliance Power (up 1.84%) edged higher.
Shares of jewellery firms fell on reports the Reserve Bank of India and the finance ministry are considering fresh curbs on gold imports. Shree Ganesh Jewellery House (down 0.96%), Gitanjali Gems (down 0.26%), Tribhovandas Bhimji Zaveri (down 2.23%), Tara Jewels (down 2.11%), Titan Company (down 0.7%) and PC Jeweller (down 1.69%), declined.
The Reserve Bank of India (RBI) and the finance ministry are reportedly considering fresh curbs on gold imports as inbound shipments of the yellow metal surged four times to $4.18 billion in October 2014 over October 2013, according to reports. The increase in gold imports will widen the trade deficit, which in turn will make the current account deficit (CAD) swell. Curbs on gold were introduced by former finance minister P Chidambaram to contain the CAD, which had touched a record high of $88.2 billion or 4.8% of gross domestic product in 2012-13. However, in May this year, some of those restrictions were eased after imports came down and the CAD narrowed to 1.7% in 2013-14.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.77, compared with its close of 61.74 during the previous trading session.
Brent crude futures fell as investors weighed the likelihood of an output cut by OPEC when the group meets next week amid signs of weakening global demand. Brent for January settlement was off 19 cents to $79.12 a barrel. The contract had lost 10 cents to settle at $79.31 yesterday, 17 November 2014.
Oil ministers from the Organization of the Petroleum Exporting Countries (OPEC) are scheduled to meet in Vienna on 27 November 2014 to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015.
Finance Minister Arun Jaitley yesterday, 17 November 2014, said that he is in touch with the various state governments and most of the contentious issues on the implementation of the Goods and Service Tax (GST) have already been resolved. The Finance Minister was delivering the Key Note Address at the Citi's Investor Summit: India - Poised for Higher Growth. Jaitley said there are two areas including liquor and petroleum products where the state governments want to have taxation authority. Jaitley said two state governments want entry tax and octroi to be kept-out of the purview of the GST. The Finance Minster said that all these issues will be sorted-out soon. Jaitley said he will apprise the Empowered Committee of State Finance Ministers' about the draft Constitution Amendment Bill on GST before introducing the same in parliament. Jaitley said that the targets fixed for disinvestment in the current financial year are quite ambitious one but he hopes to achieve that or reach near the same. He said that road shows in this regard are being held in many parts of the world.
The Finance Minister said that inflation, especially food inflation has moderated in last few months and global fuel prices have also come down. Therefore, if RBI which is highly professional organization in its wisdom decides to bring down the cost of capital, it will give a good fillip to the Indian economy, Jaitley said.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 2 December 2014. The central bank aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
Meanwhile, a joint statement issued today, 18 November 2014, during Prime Minister Narendra Modi's official visit to Australia from 16-18 November 2014 stated that Australian Prime Minister Tony Abbott and Modi agreed to expedite progress towards early conclusion of the administrative arrangements to implement the Civil Nuclear Agreement signed between Australia and India during Abbott's visit to India in September. Australian supply of uranium in coming years will enhance India's energy security, the joint statement stated.
European stocks rose today, 18 November 2014, adding to the previous session's gains sparked by comments from European Central Bank (ECB) President Mario Draghi that raised the prospects of further stimulus steps. Key benchmark indices in UK, France and Germany were up 0.03% to 0.26%.
European Central Bank President Mario Draghi explicitly cited government-bond buying as a policy tool officials could use to stimulate the economy if the outlook worsens. He was speaking during quarterly testimony to lawmakers at the European Parliament yesterday, 17 November 2014.
Japanese stocks led gains in Asian markets today, 18 November 2014, on reports that Japanese Prime Minister Shinzo Abe will today, 18 November 2014, announce plans to put off a sales-tax increase and call a snap election after data yesterday, 17 November 2014, showed the Japanese economy entered recession. Key benchmark indices in Japan, Indonesia, Singapore and South Korea and were up 0.56% to 2.18%. Key benchmark indices in Hong Kong, China and Taiwan were off 0.28% to 1.13%.
Deputy policy chief of Japan's ruling Liberal Democratic Party reportedly said that the Japanese government will order the creation of an economic stimulus package.
A two-day monetary policy meeting of the Bank of Japan concludes tomorrow, 19 November 2014. At the last meeting on 31 October 2014, the Japanese central bank stepped up its already aggressive easing to prevent deflation from budding again.
Indonesia's central bank Bank Indonesia will hold an extraordinary meeting today, 18 November 2014, after the government yesterday, 17 November 2014, announced an increase in the price of subsidized fuel by roughly a third.
Trading in US index futures indicated a flat opening of US stocks today, 18 November 2014. Most US stocks ended higher yesterday, 17 November 2014, as deal activity worth $100 billion and hopes of more European stimulus offset concerns about overseas growth after Japan's economy slipped into recession.
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