Market breadth turns negative from positive

After a range bound movement in negative zone in mid-morning trade, key benchmark indices extended losses in early afternoon trade. The market breadth indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was currently off 101.85 points or 0.37% at 27,404.61.

Cement stocks rose on reports that the Union Cabinet today, 24 December 2014, approved the ordinances to facilitate coal mine auctions. Shares of public sector oil marketing companies fell on higher oil prices and weakening rupee.

Meanwhile, foreign portfolio investors (FPIs) sold shares worth a net Rs 444.93 crore yesterday, 23 December 2014, as per provisional data.

In overseas markets, Asian stocks edged higher after positive US economic news powered Wall Street shares to a record overnight. In US yesterday, 23 December 2014, the Dow Jones Industrial Average closed above 18,000 for the first time ever and the S&P 500 notched up its 51st record close of the year, underscoring confidence in the strength of the US economy.

In the foreign exchange market, the rupee edged lower against the dollar after data showing the fastest US economic growth in more than a decade bolstered the case for the US Federal Reserve to raise interest rates in the world's biggest economy.

Brent crude oil futures edged lower, giving up some of the previous session's gains, as the dollar held near its highest level in nearly nine years on strong US economic data.

Indian stocks may remain volatile today, 24 December 2014, as traders roll over positions in the futures & options (F&O) segment from December 2014 series to January 2015 series. The near month December 2014 derivatives contracts expire today, 24 December 20014. The stock market remains closed tomorrow, 25 December 2014, on account of Christmas.

At 12:21 IST, the S&P BSE Sensex was down 101.85 points or 0.37% at 27,404.61. The index fell 163.66 points at the day's low of 27,342.80 in early afternoon session, its lowest level since 19 December 2014. The index rose 64.79 points at the day's high of 27,571.25 in morning session.

The CNX Nifty was down 30.95 points or 0.37% at 8,236.05. The index hit a low of 8,221.20 in intraday trade, its lowest level since 19 December 2014. The index hit a high of 8,286.40 in intraday trade.

The BSE Mid-Cap index was up 25.67 points or 0.26% at 10,084.96. The BSE Small-Cap index was up 24.31 points or 0.22% at 10,914.75. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,277 shares fell and 1,165 shares rose. A total of 107 shares were unchanged.

Aurobindo Pharma down 1.43% on media buzz that AstraZeneca has filed a patent infringement case against Aurobindo Pharma and Aurobindo Pharma USA. The action relates to an abbreviated new drug application (ANDA) filed by Aurobindo Pharma with the US Food and Drug Administration (FDA) for approval to market 2.5 mg and 5 mg saxagliptin hydrochloride tablets generic versions of AstraZeneca's Onglyza drug product prior to the expiration of the US patent, reports said.

Shares of public sector oil marketing companies fell on higher oil prices and weakening rupee. Indian Oil Corporation (down 2.33%), HPCL (down 1.62%) and BPCL (down 1.42%), edged lower.

Increase in global crude oil prices will raise under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at government controlled prices. A weak rupee also raises the cost of imports. The government has already freed pricing of petrol and diesel.

GAIL (India) was off 1.07%. Coal India (CIL) (up 0.61%) and Rashtriya Chemicals and Fertilizers (RCF) (up 0.3%), edged higher.

In a significant step towards augmenting the domestic urea capacity, GAIL (India), Coal India (CIL), Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corporation of India (FCIL) today, 24 December 2014, signed joint ventures agreements (JVAs) to set up an integrated coal gasification cum fertilizer and ammonium nitrate complex at Talcher in Odisha. The project is of strategic importance for the country as it aims to make breakthrough for an alternative source of feedstock in the form of abundantly available coal from domestic sources, the Ministry of Petroleum & Natural Gas said in a statement.

Cement stocks rose on reports that the Union Cabinet today, 24 December 2014, approved the ordinances to facilitate coal mine auctions. With Coal Mines Bill yet to be cleared by the Parliament, the government re-promulgated the ordinance, reports added. The winter session of Parliament ended yesterday, 23 December 2014, with the government unable to get key legislative reforms bills passed. The opposition parties targeted Prime Minister Narendra Modi's government on a plethora of issues from black money to religious conversions during the winter session. While only the Lok Sabha passed the Coal Bill, the government was unable to get the Insurance Bill passed in Lok Sabha and Rajya Sabha during the winter session.

The Coal Mines (Special Provisions) Bill that was moved to replace an ordinance issued earlier was passed by the Lok Sabha in the winter session but it could not be taken up in the Rajya Sabha. The government promulgated the Coal Mines (Special Provisions) Ordinance, 2014, in October to facilitate coal block auctions after the Supreme Court cancelled 204 coal blocks in September. The bill provides for the allocation of coal mines and vesting of the right, title and interest in and over land and mine infrastructure, together with mining leases, to successful bidders and allottees through a transparent bidding process.

India Cements (up 2.99%), The Ramco Cement (up 2.57%), Saurastra Cement (up 2.31%), JK Lakshmi Cement (up 2.24%), HeidelbergCement India (up 1.74%), Prism Cement (up 1.42%), ACC (up 1.2%), Mangalam Cement (up 0.56%) and Dalmia Cement (Bharat) (up 0.45%), edged higher. Shree Cement was down 1.23%

UltraTech Cement (up 4.43%) and Jaiprakash Associates (up 3.84%), edged higher. UltraTech Cement's board of directors at its meeting held yesterday, 23 December 2014, approved acquisition of two cement units of Jaiprakash Associates in Madhya Pradesh viz. integrated cement plant with clinker capacity of 2.1 mtpa and cement grinding capacity of 2.6 mtpa at Bela, Madhya Pradesh (MP), integrated cement plant with clinker capacity of 3.1 MTPA and cement grinding capacity of 2.3 MTPA at Sidhi, MP, and 180 MW TPP of which 25 MW is situated at Bela and 155 MW at Sidhi.

UltraTech board has approved the memorandum of understanding setting out the broad terms and conditions of the proposed acquisition. The enterprise value of this acquisition has been agreed at Rs 5400 crore, UltraTech Cement said in a statement. The transaction is subject to customary due diligence, definitive agreements, and regulatory approvals as may be required.

UltraTech Cement said that this acquisition will create significant synergies and the surplus clinker will enable UltraTech to augment its cement capacity by a further 1.8 - 2.5 MTPA in addition to the 4.9 MTPA. This acquisition will enable the company to increase its presence in Satna cluster of MP, UltraTech Cement said. With this acquisition, the company's cement capacity in India will increase from about 60 MTPA to 65 MTPA and with projects underway, the capacity will stand raised to about 71 MTPA by 2016, UltraTech Cement said in a statement.

Grasim Industries, which holds majority stake in UltraTech Cement, was up 1.05%.

Ambuja Cements was up 1.28%. The company said after market hours yesterday, 23 December 2014, that the company has filed a Special Leave Petition in the Supreme Court, challenging a demand notice for Rs 248 crore arising from disallowance of a sales tax incentive availed by the company in Rajasthan for the period 2001-02 to 2008-09. Ambuja Cements said that the company had availed sales tax incentives under the incentive schemes of the Rajasthan state government for the period 2001-02 to 2008-09 pursuant to the order passed by the Board of Industrial and Financial Rehabilitation (BIFR) while sanctioning the Scheme of Rehabilitation of erstwhile Ambuja Cements Rajasthan which was subsequently merged with Ambuja Cements. Later, the Assistant Commissioner, Commercial Taxes Department, Rajasthan issued demand notices on the company for Rs 248 crores (including the interest of Rs. 134 crores) by rejecting the company's claim of availing sales tax incentives under the BIFR order. The company had subsequently filed Writ Petitions in the Jodhpur bench of the Rajasthan High Court challenging the demand notices. On 19 December 2014, the Rajasthan High Court passed an order dismissing the writ petitions filed by the company.

In the foreign exchange market, the rupee edged lower against the dollar after data showing the fastest US economic growth in more than a decade bolstered the case for the US Federal Reserve to raise interest rates in the world's biggest economy. The partially convertible rupee was hovering at 63.46, compared with its close of 63.29 during the previous trading session.

Brent crude oil futures edged lower, giving up some of the previous session's gains, as the dollar held near its highest level in nearly nine years on strong US economic data. Brent for February settlement off 39 cents at $61.30 a barrel. The contract had jumped $1.58 a barrel or 2.63% to settle at $61.69 a barrel during the previous trading session.

On the political front, the results for Jammu & Kashmir (J&K) and Jharkhand assembly polls came out yesterday, 23 December 2014, with the People's Democratic Party (PDP) emerging as the single-largest party in Jammu & Kashmir and the BJP with its ally the All Jharkhand Students Union (AJSU) getting simple majority in Jharkhand. PDP got 28 seats in Jammu & Kashmir with the BJP coming second with 25 seats in the states. With no party getty clear majority in the northern state, J&K opens up the possibility all kinds of combinations to form the new government.

Jharkhand, a state that was formed 14 years ago, got its first stable government with the BJP winning in 37 in the 81-seat assembly. It ally AJSU has won five seats giving the alliance 42 seats, one more than the required majority of 41.

Asian stocks were trading higher today, 24 December 2014, after US equities climbed to all-time high overnight as the world's biggest economy grew at the fastest pace in 11 years. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.07% to 1.24%. China's Shanghai Composite was down 1.78%.

Trading in US index futures indicated that the Dow could gain 30 points at the opening bell today, 24 December 2014. US stocks soared Tuesday, 23 December 2014, with the blue-chip Dow Jones Industrial Average smashing the psychologically important 18,000 milestone for the first time, after the US economy grew at its quickest pace in more than a decade last quarter.

The final estimate of the US gross domestic product (GDP) for the third quarter was revised up to a 5% annual pace, its quickest in 11 years, from 3.9% reported last month, on stronger consumer and business spending, Commerce Department said in its third and final estimate Tuesday.

Meanwhile, data Tuesday showed consumer spending, which accounts for nearly two-thirds of the US economy, jumped to its largest gain in three months in November as falling gasoline prices has left more discretionary income in consumers' pockets during the holiday shopping season. Consumer spending rose 0.6% last month while October was upwardly revised to a 0.3% increase, the Commerce Department said Tuesday.

Further, US consumer sentiment jumped to its highest level in nearly eight years as cheaper gasoline prices boosted consumer optimism. Consumer sentiment rose to 93.6, its highest reading since January 2007, according to the University of Michigan's final December reading.

Separate data on Tuesday painted a mixed picture on the US housing market as sales of new single-family homes fell for a second straight month in November. Sales fell 1.6% to a seasonally adjusted annual rate of 438,000 units, the Commerce Department said Tuesday. Last months figures declined 1.6% from October's report, which was revised down to 445,000 units from 458,000 units.

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