Nifty hits highest level in almost a week

Gains in European stocks and US index futures triggered upmove for key equity benchmark indices in India in mid-afternoon trade. Benchmark indices saw a sudden upmove in mid-afternoon trade after alternately moving between positive and negative zone near the flat line. The 50-unit CNX Nifty hit its highest level in almost a week. Earlier during the day, the barometer index, the S&P BSE Sensex, had hit its highest level in almost a week. The Sensex was currently up 66.65 points or 0.24% at 27,525.03. The market breadth indicating the overall health of the market was positive.

IT stocks were mixed. Infosys gained after its US based subsidiary Infosys Public Services announced that it has successfully implemented a premium billing and payments solution for L.A. Care Health Plan, the largest publicly operated health plan in the US.

Meanwhile, Prime Minister Narendra Modi yesterday, 11 January 2015, said that the government is committed to create a policy environment that is predictable, transparent and fair.

In overseas markets, European stocks edged higher as healthcare stocks rose. Asian stocks edged lower amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. US stocks fell on Friday, 9 January 2015, after December's jobs report revealed a drop in wages.

In the foreign exchange market, the rupee edged higher against the dollar as a drop in US wages last month spurred speculation the US Federal Reserve will delay an increase in interest rates.

Brent crude oil futures extended losses from the lowest level in more than 5-1/2 years after a prominent investment bank reportedly cut its oil-price projections for this year and the next. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.

Foreign portfolio investors sold shares worth a net Rs 297.99 crore during the previous trading session on Friday, 9 January 2015, as per provisional data.

Meanwhile, as per media reports, the government's revenue department is pushing the Income Tax department to include portfolio investors (FPIs) under the Minimum Alternate Tax (MAT) on their gains from stock market transactions. The Income Tax department reportedly issued show-cause notices to more than 35 foreign portfolio investors (FPIs) last month on why the concerned FPI isn't liable to pay MAT.

At 14:18 IST, the S&P BSE Sensex was up 66.65 points or 0.24% at 27,525.03. The index rose 81.17 points at the day's high of 27,539.55 in early trade, its highest level since 6 January 2015. The index declined 134.64 points at the day's low of 27,323.74 in afternoon trade.

The CNX Nifty was up 25.50 points or 0.31% at 8,310. The index hit a high of 8,311.95 in intraday trade, its highest level since 6 January 2015. The index hit a low of 8,245.60 in intraday trade.

The BSE Mid-Cap index was up 66.53 points or 0.64% at 10,492.54. The BSE Small-Cap index was up 96.25 points or 0.86% at 11,294.59. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,610 shares advanced and 1,171 shares declined. A total of 116 shares were unchanged.

IT stocks were mixed. Tech Mahindra (up 2.64%) and HCL Technologies (up 1.09%) gained. TCS (down 0.98%) and Wipro (down 0.35%) declined.

Infosys gained 1.55%. Infosys US based subsidiary Infosys Public Services during market hours today, 12 January 2015, said that the company has successfully implemented a premium billing and payments solution for L.A. Care Health Plan, the largest publicly operated health plan in the US serving more than 1.6 million members.

Shares of Infosys had jumped 5.02% during the previous trading session on Friday, 9 January 2015, after the company reported stronger-than-expected Q3 December 2014 results. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 5% to Rs 3250 crore on 3.4% increase in revenue to Rs 13796 crore in Q3 December 2014 over Q2 September 2014.

At the time of announcement of the third quarter results, Infosys said on that day that the company has maintained its guidance of 7%-9% growth in revenue in dollar terms for the year ending March 2015 (FY 2015) based on exchange rates as on 30 September 2014.

In the foreign exchange market, the rupee edged higher against the dollar as a drop in US wages last month spurred speculation the US Federal Reserve will delay an increase in interest rates. The partially convertible rupee was hovering at 62.2275, compared with its close of 62.32 during the previous trading session.

Brent crude oil futures extended losses from the lowest level in more than 5-1/2 years after a prominent investment bank reportedly cut its oil-price projections for this year and the next. Brent for February settlement was off $1.37 a barrel to $48.74 a barrel. The contract had lost 85 cents to settle at $50.11 a barrel during the previous trading session on Friday, 9 January 2015, the lowest closing since April 2009. Brent for March settlement was off $1.43 a barrel at $49.87 a barrel.

On the macro front, data to be released today, 12 January 2015, is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours today, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.

The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours today, 12 January 2015.

The Reserve Bank of India (RBI) 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 rate of inflation based the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon on Wednesday, 14 January 2015.

Prime Minister Narendra Modi yesterday, 11 January 2015, said that the government is committed to create a policy environment that is predictable, transparent and fair. Speaking at Vibrant Gujarat summit at Gandhinagar in Gujarat, Modi said that the government is putting all efforts to ensure faster and yet inclusive growth. Modi said that HSBC's latest report has identified India as the world's largest growing exporter, which is set to move from being the fourteenth to the fifth largest exporter in the world by 2030. Modi has that the government has taken far reaching decisions to ensure supply of key natural resources. He further said that the government has also amended legal provisions to facilitate availability of land. This has been done to enable development in remote areas while ensuring better returns to the farming community. Modi said that the government has put focus on building infrastructure through public and private investments. With regard to the manufacturing sector, Modi said that the government's focus is on promoting labour intensive manufacturing.

European stocks edged higher today, 12 January 2015, as healthcare stocks rose. Key indices in France, Germany and UK were up 0.39% to 1.04%.

The French economy grew only slightly in the final quarter of 2014, a business confidence survey by the Bank of France showed today, 12 January 2015. French gross domestic product expanded 0.1% in the fourth quarter from the third, the central bank said.

Meanwhile, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.

Asian stocks edged lower today, 12 January 2015, amid concern Europe's stimulus plans may not solve the euro region's economic woes and after an unexpected drop in American wages clouded the outlook for US interest rates. Key indices in South Korea, Indonesia, Singapore, China and Taiwan were off 0.19% to 1.71%. Key indices in Hong Kong and Singapore were up 0.22% to 0.45%. Japanese stock market remained close for a holiday.

Trading in US index futures indicated that the Dow could gain 70 points at the opening bell today, 12 January 2015. US stocks fell on Friday, 9 January 2015, following a two-day rally as December's jobs report gave a mixed view of the economy, with financial shares leading the way lower.

US job growth increased briskly in December, but wages posted their biggest decline in at least eight years in a sign the tightening labor market has yet to give much of a boost to workers. Nonfarm payrolls increased by 252,000 last month after an upwardly revised jump of 353,000 in November, the Labor Department said. The jobless rate fell 0.2 percentage point to a 6-1/2-year low of 5.6%, but that was mainly because people left the labor force.

The drop in labor participation and a surprise five-cent, or 0.2 percent, decrease in average hourly earnings, which nearly erased November's gains, took some shine off the otherwise upbeat report.

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