Key benchmark indices extended losses in morning trade tracking weakness in Asian markets and weak closing of US markets on Friday, 30 January 2015. The barometer index, the S&P BSE Sensex was off 105.48 points or 0.36% at 29,077.47. The market breadth indicating the overall health of the market was strong.
India's fiscal deficit reached 100.2% of Budget Estimate (BE) in nine months ended December 2014 to Rs 5.32 lakh crore, highlighting tight financial position of the central government. It was 95% of BE in corresponding period last year.
Shares of Sun Pharmaceutical Industries and Ranbaxy Laboratories advanced after US Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). Bajaj Auto dropped after weak sales in January 2015. Thermax advanced after strong Q3 earnings. Divi's Laboratories slipped after muted growth in Q3 net profit. Exide Industries edged higher after strong Q3 results.
Foreign portfolio investors sold shares worth a net Rs 771.55 crore on Friday, 30 January 2015, as per provisional data.
In the overseas markets, Asian equity markets were lower today, 2 February 2015 as data showing China's manufacturing sector remaining in a poor state dampened investors' spirit.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures declined amid speculation that the biggest strike at US refineries since 1980 will curtail crude processing in the world's leading consumer nation and worsen a global supply glut.
At 10:18 IST, the S&P BSE Sensex was down 105.48 points or 0.36% at 29,077.47. The index fell 158.03 points at the day's low of 29,024.92 in morning trade. The index fell 24.38 points at the day's high of 29,158.57 in early trade.
The CNX Nifty was down 28.30 points or 0.32% at 8,780.60. The index hit a low of 8,772.15 in intraday trade. The index hit a high of 8,808.10 in intraday trade.
The BSE Mid-Cap index was up 45.02 points or 0.42% at 10,783.61. The BSE Small-Cap index was up 63.53 points or 0.56% at 11,392.79. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,255 shares gained and 740 shares fell. A total of 66 shares were unchanged.
Sun Pharmaceutical Industries (up 2.05%) and Ranbaxy Laboratories (up 2.75%) edged higher. Sun Pharma and Ranbaxy Laboratories before market hours today, 2 February 2015 announced that the US Federal Trade Commission (FTC) has completed its review of the proposed acquisition of Ranbaxy by Sun Pharma and has granted early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 (HSR Act). The early termination of the waiting period under the HSR Act satisfies one of the essential conditions to the closing of the Ranbaxy acquisition, the statement from Sun Pharma and Ranbaxy said.
Sun Pharma and Ranbaxy also announced that the FTC accepted a proposed consent agreement pursuant to which, Sun Pharma and Ranbaxy have agreed to divest Ranbaxy's interests in generic minocycline tablets and capsules to an external third party.
Aviation stocks advanced after aviation turbine fuel (ATF), or jet fuel, price was cut by a steep 11.3% on 1 February 2015. Spicejet (up 4.05%) and Jet Airways (India) (up 3.79%) edged higher.
Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices.
Bajaj Auto fell 1.89% at Rs 2,344.10. Bajaj Auto during market hours today, 2 February 2015 said that its total sales declined 9% to 2.88 lakh units in January 2015 over January 2014. Motorcycles sales fell 12% to 2.46 lakh units in January 2015 over January 2014. Sales of commercial vehicles rose 14% to 41,791 units in January 2015 over January 2014. Exports rose 4% to 1.42 lakh units in January 2015 over January 2014.
Exide Industries rose 0.78% at Rs 187.60. Exide Industries' net profit rose 25.42% to Rs 97.23 crore on 19.18% growth in total income to Rs 1559.89 crore in Q3 December 2014 over Q3 December 2013. The result was announced on Saturday, 31 January 2015.
Divi's Laboratories fell 2.6% at Rs 1,697.15. Divi's Laboratories' net profit rose 0.91% to Rs 221 crore on 14.8% growth in total income to Rs 791 crore in Q3 December 2014 over Q3 December 2013. The result was announced on Saturday, 31 January 2015.
During Q3 December 2014, the company registered a forex gain of Rs 11 crore. There was a forex loss of Rs 5 crore in Q3 December 2013.
Divi's Laboratories said it has capitalized fixed assets aggregating to Rs 143 crore in Q3 December 2014.
Thermax rose 2.92% at Rs 1,179. Thermax's net profit rose 14.34% to Rs 76.20 crore on 11.28% growth in total income to Rs 1153.65 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours on Friday, 30 January 2015.
The company's operating revenue rose 13% to Rs 1147 crore in Q3 December 2014 over Q3 December 2013.
Thermax's order intake declined 10.03% to Rs 1228 crore in Q3 December 2014 over Q3 December 2013. The drop in order booking is attributable to the domestic segment where enquiry inflow and finalisation remained subdued, the company said in a statement.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.8875, compared with its close of 61.8750 during the previous trading session on Friday, 30 January 2015.
Brent crude oil futures declined amid speculation that the biggest strike at US refineries since 1980 will curtail crude processing in the world's leading consumer nation and worsen a global supply glut. Brent for March settlement was off $1.39 a barrel at $51.60 a barrel. The contract had jumped $3.86 a barrel or 7.85% to settle at $52.99 a barrel during the previous trading session on Friday, 30 January 2015.
India's fiscal deficit reached 100.2% of Budget Estimate (BE) in nine months ended December 2014 to Rs 5.32 lakh crore, highlighting tight financial position of the central government. It was 95% of BE in corresponding period last year. The rise in fiscal deficit was mainly due to subdued revenue collection. The net tax revenue collection in April-December was Rs 5.46 lakh crore 55.8% of BE, lower from 58.6% during the same period last year.
Total receipts during the nine months of FY15 was Rs 7.04 lakh crore, a 55.7% of the target, lower than 57.7% collected in corresponding period 2013-14.
Plan expenditure of the government during the period was Rs 3.53 lakh crore, 61.3% of BE and non-Plan expenditure was Rs 8.84 lakh crore or 72.4% of BE.
The government is committed to contain fiscal deficit at its targeted 4.1% of the total GDP by the end of 31 March 2015. The fall in global oil prices has helped the government curb oil subsidy to oil marketing companies. Also, the 10% stake-sale in Coal India has already netted the government Rs 22,600 crore. Moreover, the government has approved base price of Rs 3705 crore per megahertz for 3G spectrum which will fetch it Rs 17,500 crore. This combined with the proceeds from 2G spectrum sale, the government aims to net over Rs 1 lakh crore.
Meanwhile, data released by the Ministry of Statistics & Programme Implementation after trading hours on Friday, 30 January 2015, showed that the Indian economy witnessed a strong recovery in the fiscal year ended 31 March 2014 (FY 2014). Based on a new series of national accounts with revision in base year from 2004-05 to 2011-12, India's gross domestic product (GDP) expanded 6.9% in FY 2014 compared with 5.1% expansion in FY 2013. Based on the previous data, the GDP grew 4.7% in FY 2014, from 4.5% expansion in FY 2013. Changes in the base year are made every five years. The dramatic revision could shake up the way the current trajectory of India's economy is perceived both at home and abroad. It also remains to be seen if the revised data will influence the Reserve Bank of India's (RBI) future monetary policy decisions. The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review on 15 January 2015, citing easing of inflationary pressures in the economy. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India rose to 5% in December 2014 from 4.4% in November 2014. Over the long term, the RBI aims to restrict consumer price inflation to 4%, within a two-per-cent band. The sixth bi-monthly monetary review from the RBI is scheduled tomorrow, 3 February 2015.
Asian equity markets were lower today, 2 February 2015 as data showing China's manufacturing sector remaining in a poor state dampened investors' spirit. Key indices in China, Hong Kong, Japan, South Korea, and Indonesia were off 0.11% to 1.16%. Key indices in Taiwan and Singapore were up 0.09% to 0.54%.
The HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, inched up to a final reading of 49.7 in January from 49.6 in December, HSBC Holdings PLC said today, 2 February 2015. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates an expansion.
Trading in US index futures indicated that the Dow could gain 31 points at the opening bell today, 2 February 2015. US stocks declined on Friday, 30 January 2015 with benchmarks down for a second month, after data showed US economic growth slowed sharply in the fourth quarter and Russia's central bank unexpectedly cut is benchmark interest rate. US economic growth slowed sharply in the fourth quarter as weak business spending and a wider trade deficit offset the fastest pace of consumer spending since 2006. Gross domestic product expanded at a 2.6% annual pace after the third quarter's spectacular 5% rate, the Commerce Department said in its first GDP snapshot on Friday, 30 January 2015.
Meanwhile, Russia's central bank has surprised financial markets and sent the rouble tumbling by cutting its key interest rate to soften the blows from falling oil prices and western sanctions. The main interest rate was cut to 15% from 17%, just weeks after the central bank had raised the interest rate in the hope of preventing the rouble's collapse.
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