Key indices snap seven-day losing streak

Advance estimates from the statistics ministry showing strengthening economic recovery in the current year and the latest data showing a strong economic expansion in Q3 December 2014 helped key equity benchmark indices register decent gains in what was an extremely choppy trading session. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, garnered 128.23 points or 0.45% to settle at 28,355.62. The index jumped 406.33 points at the day's high of 28,633.72 in mid-morning trade. The barometer index fell 182.90 points at the day's low of 28,044.49 in early trade.

The high volatility for Indian stocks materialized on a day when election trends showed a landslide victory for the Aam Aadmi Party (AAP) and setback for the Bharatiya Janata Party (BJP) in assembly elections in Delhi.

Bank stocks edged higher on renewed buying. HDFC Bank advanced after the bank said it has allotted 1.87 crore equity shares to eligible qualified institutional buyers aggregating to Rs 2000 crore through qualified institutional placement. Index heavyweights Infosys and ICICI Bank edged higher. Index heavyweights HDFC, Reliance Industries and TCS declined.

Cement shares advanced. Mangalore Refinery and Petrochemicals (MRPL) rose after the company said that its board of directors at a meeting yesterday, 9 February 2015, approved acquiring a major stake in ONGC Mangalore Petrochemicals (OMPL). Adani Enterprises rose after the company said that it signed a memorandum of understanding to jointly set up India's largest solar park of 10,000 megawatts in Rajasthan. Hindalco Industries rose after its overseas subsidiary, Novelis Inc, reported strong earnings in Q3 December 2014 yesterday, 9 February 2015. ABB India surged after strong Q4 earnings.

On the macro front, according to the advance estimates of National Income, 2014-15 released by Ministry of Statistics & Programme Implementation after trading hours yesterday, 9 February 2015, India's Gross Domestic Product (GDP) growth is likely to accelerate to 7.4% in 2014-15, from 6.9% growth in 2013-14 and 5.1% growth in 2012-13.

On the political front, election trends showed that the Aam Aadmi Party (AAP) was heading for a landslide victory in Delhi assembly elections and that the party will form the next government in the state. As per the status available so far, AAP won 65 seats and the party was leading in 2 seats. The Bharatiya Janata Party (BJP) won 3 seats. The counting of votes of Delhi assembly elections is underway. A party needs 36 seats to form government in the 70-member Delhi assembly. The vote share for the AAP was 54.3%, far ahead of BJP's 32.2%.

AAP leader Arvind Kejriwal, an anti-corruption activist turned politician, is set to become Delhi's chief minister for the second time.

Prime Minister Narendra Modi reportedly said on Twitter that he spoke to Kejriwal, congratulated him on the win and assured him of the central government's complete support in the development of Delhi.

Foreign portfolio investors sold shares worth a net Rs 629.87 crore into the secondary equity market yesterday, 9 February 2015, as per data from Central Depository Services. Domestic institutional investors (DIIs) bought shares worth a net Rs 469.55 crore yesterday, 9 February 2015, as per provisional data.

Key indices witnessed high intraday volatility today, 10 February 2015. After extending gains in mid-morning trade, key benchmark indices pared gains later. Benchmark indices slipped into the red from green in mid-afternoon trade. Key indices soon staged a strong intraday rebound later. Earlier, the Sensex and the 50-unit CNX Nifty had, both, bounced after hitting 3-1/2-week low at the onset of the trading session.

In overseas markets, Asian and European stocks were mixed. US stocks fell yesterday, 9 February 2015, dragged down by a sell-off in European markets, as investors were unnerved by the deepening standoff between Greece and its creditors.

In the foreign exchange market, the rupee edged higher against the dollar.

Brent crude oil futures edged lower after the International Energy Agency (IEA) said the United States will remain the world's top source of oil supply growth until to 2020.

Key indices snapped seven day losing streak today, 10 February 2015.

The S&P BSE Sensex advanced 128.23 points or 0.45% to settle at 28,355.62, its highest closing level since 6 February 2015. The index jumped 406.33 points at the day's high of 28,633.72 in mid-morning trade. The index fell 182.90 points at the day's low of 28,044.49 in early trade, its lowest level since 16 January 2015.

The CNX Nifty rose 39.20 points or 0.46% to settle at 8,565.55, its highest closing level since 6 February 2015. The index hit a high of 8,646.25 in intraday trade. The index hit a low of 8,470.50 in intraday trade, its lowest level since 16 January 2015.

The BSE Mid-Cap index rose 39.49 points or 0.38% to settle at 10,381.76. The BSE Small-Cap index shed 12.53 points or 0.11% to settle at 10,899.01. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 3763 crore, higher than turnover of Rs 2957.04 crore during the previous trading session.

The market breadth indicating the overall health of the market was negative. On BSE, 1,402 shares fell and 1,333 shares rose. A total of 110 shares were unchanged.

Among sectoral indices on BSE, the S&P BSE Auto index (up 1.75%), BSE Bankex index (up 1.76%), BSE Consumer Durables index (up 1.46%), BSE Capital Goods index (up 0.65%), BSE Metal index (up 1.68%), and BSE Power index (up 1.26%), outperformed the Sensex. The BSE FMCG index (up 0.18%), BSE Healthcare index (down 0.1%), BSE IT index (down 0.74%), BSE Oil & Gas index (down 0.94%), BSE Realty index (up 0.24%), and BSE Teck index (down 0.65%), underperformed the Sensex.

Index heavyweight Reliance Industries (RIL) fell 1.63% at Rs 882.70. The stock hit a high of Rs 905 and a low of Rs 862.40.

Another index heavyweight HDFC declined 2.05% at Rs 1,244.80. The stock hit a high of Rs 1,293.60 and a low of Rs 1,232.70.

Bank stocks advanced. Bank of Baroda (up 2.05%), Yes Bank (up 2.51%), Bank of India (up 1.46%), ICICI Bank (up 3.34%), State Bank of India (up 2.65%), ING Vysya Bank (up 1.45%), IndusInd Bank (up 2.02%), and Kotak Mahindra Bank (up 1.4%) edged higher. Axis Bank (down 0.01%), Canara Bank (down 0.65%) and Federal Bank (down 1.81%), edged lower.

HDFC Bank rose 1.48% at Rs 1,055.60. HDFC Bank during market hours today, 10 February 2015 said that the share allotment committee of the bank, at its meeting held today, 10 February 2015, approved allotment of 1.87 crore equity shares to eligible qualified institutional buyers (QIBs) at the issue price of Rs 1,067 per share aggregating to Rs 2000 crore pursuant to the QIP. The committee also approved allotment of 6.6 crore equity shares underlying the ADRs (1 ADR representing 3 underlying equity shares) to JP Morgan Chase Bank NA as depository pursuant to the ADR offering.

Punjab National Bank fell 0.06% at Rs 166.70. The stock hit a high of Rs 173 and a low of Rs 164.50. The bank said during market hours that the bank has raised Rs 1000 crore Long term Bonds at an annual coupon of 8.23% on Private Placement basis on 9 February 2015 through five arrangers.

DLF rose 0.41% to Rs 157.95. The stock hit high of Rs 161 and low of Rs 148. DLF's consolidated net profit fell 9.29% to Rs 131.79 crore on 19.7% decline in total income to Rs 2079.82 crore in Q3 December 2014 over Q3 December 2013. The company announced Q3 results after market hours yesterday, 9 February 2015. DLF's earnings before interest, taxation, depreciation and amortization (EBITDA) fell 20% to Rs 918 crore in Q3 December 2014 over Q3 December 2013.

In a post-result statement, DLF said that the company witnessed continued interest from actual users in the super luxury & luxury segment during the quarter. The company expects sales volume of residential products to reach normal volumes in the next 12-18 months. Rental business which is a leading indicator of demand continues to grow at targeted pace, DLF said. The realty major said that the outlook in the office leasing business is much better given the current demand-supply situation. As rate of inflation abates, further reduction of interest rates will lead to better GDP growth rates leading to more demand in both the residential and commercial segments of real estate, DLF said. DLF further said that the company remains committed to its medium term goals as articulated in February 2013 although the timelines of its implementation have been adversely impacted due to slower GDP growth and uncertainties due to the Sebi (Securities & Exchange Board of India) restrictions.

Cipla rose 1.53% at Rs 639.30 after the company after market hours yesterday, 9 February 2015 said that its wholly owned subsidiary, Cipla (EU), UK, has entered into a joint venture (JV) agreement with Cipla's existing business partners in Morocco - Societe Marocaine De Cooperation Pharmaceutique (Cooper Pharma) and the Pharmaceutical Institute (PHI). This JV will enable Cipla to establish a front-end presence in Morocco's pharmaceutical market, becoming the launch vehicle for Cipla's portfolio while leveraging the commercial strengths of partners. The initial focus of the JV shall be respiratory and neurology products and it shall also invest in setting up a manufacturing facility in Morocco. As per the agreement, Cipla (EU) will hold 60% stake in the JV, while Cooper Pharma and PHI shall together hold 40% stake. Cipla (EU)'s expected investment in cash in the JV is estimated at up to $15 million, Cipla said in a statement. The transaction remains subject to conditions precedent and applicable regulatory approvals, Cipla added.

Cadila Healthcare rose 2.6% at Rs 1,513.95 after consolidated net profit rose 51.59% to Rs 281.91 crore on 16.72% increase in total income to Rs 2199.47 crore in Q3 December 2014 over Q3 December 2013. The announcement was made during trading hours today, 10 February 2015. During the quarter, the company's business in the US registered a growth of 42% and emerging markets business grew by 23%. During the quarter, the company filed 5 additional ANDAs (Abbreviated New Drug Application) with the US Food and Drug Administration (US FDA) taking the cumulative ANDA filings to 255, Cadila Healthcare said in a statement.

Cement shares advanced. Ambuja Cements (up 1.46%), and UltraTech Cement (up 0.93%) edged higher. Shree Cement (down 0.19%) and Jaiprakash Associates (down 2.45%) edged lower.

Grasim Industries rose 3.02% at Rs 3,820. Grasim Industries has exposure to cement industry through its subsidiary UltraTech Cement.

ACC rose 3.42% to Rs 1,561.45. ACC after market hours today, 10 February 2015, said that limestone mining operations have resumed at the captive mines of the company's Chaibasa cement plant in Jharkhand in terms of the recent Mines and Minerals (Development and Regulations) Ordinance 2015. Earlier, ACC had on 10 October 2014 announced temporary suspension of mining operations at its Chaibasa and Bargarh cement plants pursuant to a judgement of the Supreme Court under deemed extension of second and subsequent renewals of mining leases.

Mangalore Refinery and Petrochemicals (MRPL) rose 1.75% at Rs 55.20 after the company said that its board of directors at a meeting on 9 February 2015, approved acquiring a major stake in ONGC Mangalore Petrochemicals (OMPL). MRPL was holding 3% of the paid up equity of OMPL, which has been increased to 46% by purchasing fully paid up equity shares from individual shareholders, MRPL said in a statement. MRPL is a subsidiary of the state-run ONGC, which held 71.63% stake in MRPL as at 31 December 2014.

Meanwhile, ONGC said in a separate announcement said that it already holds 46% of paid up share capital of OMPL. Consequently, subsequent to the acquisition of 43% stake in OMPL by MRPL as above, OMPL has now become a subsidiary of ONGC.

Shares of ONGC fell 0.36% at Rs 354.95. The stock hit a high of Rs 359.25 and a low of Rs 351.20.

Adani Enterprises rose surged 4.1% at Rs 634.75 after the company said during market hours that it signed a memorandum of understanding (MoU) to jointly set up India's largest solar park of 10,000 megawatts (MW) in Rajasthan. AEL and Rajasthan Renewable Energy Corporation will form a joint venture to set up the solar park, which will include generation projects and a manufacturing unit for solar module, parts and equipment, AEL said in a statement. The solar park will produce clean and green energy of approximately 16644 million units, the company said.

Adani Ports and Special Economic Zone (APSEZ) advanced 5.6% at Rs 317 after the company commissioned a bulk terminal at Tuna Tekra, Kandla Port. The announcement was during market hours today, 10 February 2015. APSEZ said that the company has commissioned a bulk terminal at Tuna Tekra, Kandla Port, with an annual handling capacity of over 20 million tonne in a record time of 24 months.

Hindalco Industries rose 1.88% at Rs 149.20 after its overseas subsidiary, Novelis Inc, reported strong earnings in Q3 December 2014 yesterday, 9 February 2015. Novelis Inc. reported a 253.85% jump in net profit to $46 million in Q3 December 2014 over Q3 December 2013.

Its adjusted earnings before interest, tax, depreciation and amortisation (Ebitda, or operating profit) rose 16.26% to $236 million in Q3 December 2014 over Q3 December 2013. The increase was primarily driven by higher shipments as a result of strategic capacity expansions in Asia and South America, favorable product mix, and cost benefits from using recycled metal inputs.

Revenues climbed 18% to $2.8 billion in Q3 December 2014 over Q3 December 2013. Revenue growth was driven by a 5% increase in shipments of rolled aluminum products to 757 kilo tonnes for the third quarter of fiscal 2015 compared to 721 kilo tonnes in the prior year period. All four operating regions reported an increase in shipments year-over-year. Higher metal prices also contributed to the increase in revenue.

Shares of power generation and power distribution companies were mixed. Among power generation companies, JSW Energy (up 1.9%), Torrent Power (up 2.59%), and Adani Power (up 1.08%), edged higher. GVK Power & Infrastructure (down 0.53%), NTPC (down 1.15%), and NHPC (down 0.25%) edged lower.

Among power distribution companies, Power Grid Corporation of India rose 2.55% at Rs 145.

Reliance Infrastructure (up 0.57%) and Tata Power Company (up 1.69%) gained. Reliance Power (down 0.35%) edged lower.

According to the manifesto election unveiled by AAP late last month, AAP government will keep its promise of reducing electricity bills by half. It will conduct a comprehensive performance audit of discoms by the Comptroller and Auditor General of India. AAP will put Delhi's own power station at the pithead and comprehensively solve Delhi's electricity problem in long run. The party reiterated the 2013 Delhi manifesto promise of providing consumers right to choose between electricity providers. AAP will also facilitate a phased shift to renewable and alternate sources of energy like solar energy.

ABB India surged 7.39% at Rs 1,361.35. ABB India's net profit jumped 42.37% to Rs 84 crore on 1.54% growth in revenue to Rs 2238 crore in Q4 December 2014 over Q4 December 2013. The result was announced during market hours today, 10 February 2015.

ABB India attributed the increase in profits during the quarter to strong execution, enhanced productivity and cost take out programs.

ABB India's order intake rose 49.27% to Rs 2487 crore in Q4 December 2014 over Q4 December 2013.

The company's net profit rose 27.93% to Rs 229 crore on 0.14% growth in revenue to Rs 7733 crore in the year ended 31 December 2014 (FY 2014) over the year ended 31 December 2013 (FY 2013). ABB India's order intake rose 17.73% to Rs 7908 crore in FY 2014 over FY 2013.

Procter & Gamble Hygiene and Health Care jumped 5.69% at Rs 6,605.70. The stock hit a high of Rs 7,290 in intraday, which is a record high for the counter. The stock hit a low of Rs 6,281.

IT stocks were mostly lower as rupee edged higher against the dollar. Tech Mahindra (down 2.19%), TCS (down 2.87%), HCL Technologies (down 2.91%) and Wipro (down 0.78%) declined. Infosys (up 1.34%), MphasiS ()up 1.26%, and Oracle Financial Services Software (up 0.29%) edged higher. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.

The Indian IT outsourcing sector is reportedly expected to see export revenue growing 12-14% to $112 billion in the financial year ending 31 March 2016 (FY 2016), according to the National Association of Software and Services Companies (Nasscom).

Key benchmark indices today, 10 February 2015, snapped their seven-day losing streak. The Sensex had declined 1,454.38 points or 4.89% in the preceding seven trading sessions to settle at 28,227.39 yesterday, 9 February 2015, from a recent high of 29,681.77 on 29 January 2015. The Sensex has lost 827.33 points or 2.83% in this month so far (till 10 February 2015). The Sensex has risen 856.20 points or 3.11% in this calendar year so far (till 10 February 2015). The Sensex is off 1,488.54 points or 4.98% from a record high of 29,844.16 hit on 30 January 2015.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.11, compared with its close of 62.175 during the previous trading session.

Brent crude oil futures edged lower after the International Energy Agency (IEA) said the United States will remain the world's top source of oil supply growth until to 2020, defying expectations of a more dramatic slowdown in shale output growth. Brent for March settlement was off 27 cents at $58.07 a barrel. The contract had advanced 54 cents or 0.93% to settle at $58.34 a barrel during the previous trading session.

On macro front, according to the advance estimates of National Income, 2014-15 released by Ministry of Statistics & Programme Implementation after trading hours yesterday, 9 February 2015, India's Gross Domestic Product (GDP) growth is likely to accelerate to 7.4% in 2014-15, from 6.9% growth in 2013-14 and 5.1% growth in 2012-13. The advance estimate for 2014-15 is based on a new method of calculating GDP, which the Ministry of Statistics & Programme Implementation unveiled on 30 January 2015. The Ministry of Statistics & Programme Implementation also released GDP growth for Q3 December 2014. It said the economy expanded 7.5% in Q3 December 2014, buoyed by accelerated growth in government spending and financial services. GDP growth for Q2 September 2014 was revised upwards to 8.2% and for Q1 June 2014 the growth figure was revised upwards to 6.5%.

The Ministry of Statistics & Programme Implementation revised the way it measures GDP on 30 January 2015. It brought forward the base year used in national economy calculations by seven years to 2011-12 from 2004-05. It also switched from using production costs to market prices. Changes in the base year are made every five years.

Meanwhile, Prime Minister Narendra Modi yesterday, 9 February 2015, said that the NITI Aayog should focus on quick resolution of inter-departmental and Centre-State issues to speed up the pace of implementation of infrastructure projects in the country. He was chairing a high-level meeting on infrastructure. The Prime Minister has directed the concerned ministries to work in a mission mode towards achieving electrification of the remaining 20,000 unelectrified villages, in a clearly defined time-frame, the Prime Minister's Office (PMO) said in a statement. Modi has said that innovative solutions should be explored for ensuring total rural electrification, including solar energy, power connectivity through nearby railway infrastructure, and off-grid solutions.

The Prime Minister was informed that issues regarding coal supply to existing power plants have been resolved and not even a single power plant today faces a shortage of coal. The Prime Minister called for a fundamental change in the approach towards redevelopment of Railway stations and development of areas contiguous to railway corridors that run through major cities in the country. He directed all concerned departments of the government to work towards creating a holistic framework and environment that will be conducive for investment.

Finance Minister Arun Jaitley yesterday, 9 February 2015, said that the overall economic situation in the country is looking better and basic parameters of Indian economy are moving in the right direction. Jaitley said that current account deficit will be under control and he will try to keep fiscal deficit also within the prescribed limit. The Finance Minister said that the growth rate would be better than the last year as per the old system. The Finance Minster was making the opening remarks at the First Meeting of the Parliamentary Consultative Committee attached to his Ministry to discuss 'Suggestions for the Budget'. Jaitley's comments came before the release of the latest economic data from the Ministry of Statistics & Programme Implementation.

Regarding bringing back the black money stashed abroad, the Finance Minister said that India will soon become part of international consortium where the focus would be on automatic transfer of information which would in turn help the government in getting easy access to such foreign accounts of Indian residents.

European stocks were mixed today, 10 February 2015. Key indices in France, Germany and France were up 0.24% to 0.31%. In London, the FTSE 100 index was off 0.43%.

French Industrial output rebounded in December as production rose across the eurozone's second largest economy, the national statistics agency Insee said today, 10 February 2015. Industrial production in France rose 1.5% in December from November.

Asian stocks were mixed today, 10 February 2015. Key indices in Taiwan, Japan, Indonesia, and South Korea were off 0.3% to 0.57%. Key indices in China, Hong Kong and Singapore were up 0.03% to 1.5%.

China's consumer inflation slipped to a five-year low in January, which will likely give the central bank more scope for further policy easing. China's consumer-price index rose 0.8% in January from a year earlier, slower than a 1.5% year-over-year rise in December, data from the National Bureau of Statistics showed today, 10 February 2015.

China added funds to the financial system today, 10 February 2015, adding to seven straight weeks of injections as Beijing seeks to ease a seasonal cash squeeze and cope with a slowing economy and capital outflows. The central bank added a net 45 billion yuan ($7.2 billion) into the China's money market, on track for the longest streak of pump priming since last July.

Trading in US index futures indicated that the Dow could fall 7 points at the opening bell today, 10 February 2015. US stocks fell yesterday, 9 February 2015, dragged down by a sell-off in European markets, as investors were unnerved by the deepening standoff between Greece and its creditors.

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