Sensex, Nifty register small losses after hitting record high

Amid divergent trend among various constituents of the index, key benchmark indices registered small losses. Earlier, the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, had, both struck record high in morning trade after witnessing initial volatility. The Sensex shed 14.59 points or 0.05% to settle at 28,163.29. The market breadth indicating the overall health of the market was positive.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 754.56 crore from secondary equity market yesterday, 17 November 2014. 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.

Sugar shares surged. Capital goods stocks edged higher. Realty stocks declined. Shares of Reliance Anil Dhirubhai Ambani (ADA) group edged higher. Shares of jewellery firms declined. Shares of insurance companies advanced. Telecom stocks rose across the board on reports Defence Ministry and Telecom Ministry will coordinate to resolve spectrum issue.

Aurobindo Pharma edged higher after issuing a clarification with regard to its capital expenditure plans. Ranbaxy Laboratories dropped after media reports suggested that the company has sued the US Food and Drug Administration (FDA) for revoking approvals granted to the firm to launch copies of two drugs including AstraZeneca Plc's heartburn pill Nexium. Reliance Industries rose after its unit Reliance Jio Infocomm (RJIL) signed syndicated term loan facilities aggregating to $1.5 billion.

In overseas markets, European stocks rose amid signs that the European Central Bank is still on track to take new steps to tackle low inflation. 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. Abe later announced that his government will delay by 18 months the planned increase in sales tax. Abe also said that he will dissolve the lower house of parliament on 21 November 2014. Abe has called for a snap election to be held in December.

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

Brent crude futures reversed initial losses as speculation increased that OPEC could cut output at its meeting next week.

The S&P BSE Sensex shed 14.59 points or 0.05% to settle at 28,163.29, its lowest closing level since 14 November 2014. 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 declined 4.85 points or 0.06% to settle at 8,425.90, its lowest closing level since 14 November 2014, 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 BSE Mid-Cap index advanced 27.60 points or 0.27% to settle at 10,275.30. The BSE Small-Cap index rose 105.20 points or 0.93% to settle at Rs 11,443.16. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,743 shares gained and 1,366 shares fell. A total of 97 shares were unchanged.

Among sectoral indices on BSE, the S&P BSE Consumer Durables index (down 0.54%), BSE FMCG index (down 0.24%), BSE Healthcare index (down 0.21%), BSE IT index (down 0.75%), BSE Oil & Gas index (down 0.3%), BSE Realty index (down 0.6%), and BSE Teck index (down 0.15%) underperformed the Sensex. The S&P BSE Auto index (up 0.55%), BSE Bankex index (up 0.3%), BSE Capital Goods index (up 1.61%), BSE Metal index (up 0.99%), and BSE Power index (up 1.33%) outperformed the Sensex.

Capital goods stocks advanced. Crompton Greaves (up 4.62%), Bharat Heavy Electricals (up 2.01%), Siemens (up 1.8%), L&T (up 1.79%), Thermax (up 0.65%), Alstom T&D India (up 0.42%), and ABB (up 0.42%) gained.

Punj Lloyd surged 4.97% at Rs 40.15 after the company said it has secured EPC highway contract worth Rs 666 crore from the Ministry of Road Transport & Highways for 90.586 kilometers of the Asian Highway network. The company made the announcement during market hours today, 18 November 2014.

PSU OMCs declined. BPCL (down 0.79%), HPCL (down 2.09%) and Indian Oil Corporation (down 1.12%) declined.

Realty stocks dropped. Sobha Developers (down 2.51%), D B Realty (down 2.15%), Housing Development & Infrastructure (down 1.35%), Oberoi Realty (down 0.93%), DLF (down 0.36%) and Unitech (down 0.24%) declined.

Infosys fell 0.76% at Rs 4,176.90. The company announced during trading hours today, 18 November 2014, that the Catholic Education Commission of Victoria has selected the company as a strategic partner to design and implement a new cloud-based administration and technology platform.

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 1.94% at Rs 865.35. 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.

Ranbaxy Laboratories fell 2.09% at Rs 628.75. Media reports suggested that Ranbaxy Laboratories has sued the US Food and Drug Administration (FDA) for revoking approvals granted to the firm to launch copies of two drugs including AstraZeneca Plc's heartburn pill Nexium. The FDA told Ranbaxy this month that it believed its decisions to grant the company tentative approvals for copies of Nexium and Roche AG's antiviral Valcyte were in error, after it found that Ranbaxy's plants at the time were not compliant with the FDA's manufacturing quality standards. The agency also stripped Ranbaxy of six-month market exclusivity on the launch of generic Valcyte. In the suit filed in the District Court for the District of Columbia, Ranbaxy said the FDA's move violated constitutional rights, exceeded the agency's statutory authority, and was "arbitrary, capricious, and otherwise contrary to law, according to reports.

Aurobindo Pharma rose 3.16% at Rs 1,142.30. With respect to a news item captioned "Aurobindo Pharma to spend Rs. 1,300 corore in capex", Aurobindo Pharma today, 18 November 2014, clarified that its capital expenditure (CapEx) including maintenance CapEx is expected to be around Rs 600 crore for FY 2015, which will be spread out across active pharmaceuticals ingredients (APIs) and formulations. The company said it estimates that CapEx in FY 2016 will be around Rs 600 to Rs 700 crore depending upon the cash flows and on review of CapEx needs.

Sugar shares were in demand. Simbhaoli Sugar Mills (up 19.87%), Rana Sugars (up 16.42%), Upper Ganges Sugar & Industries (up 15.1%), Oudh Sugar Mills (up 11.61%), Triveni Engineering & Industries (up 7.18%), Sakthi Sugars (up 8.72%), Dwarikesh Sugar Industries (up 7.22%), Bajaj Hindusthan (up 6.22%), Shree Renuka Sugars (up 7.2%), Empee Sugars and Chemicals (up 4.65%), Dhampur Sugar Mills (up 4.28%), Balrampur Chini Mills (up 4.59%), KCP Sugar & Industries Corporation (up 4.62%) and DCM Shriram Industries (up 4.01%) edged higher.

Reliance Industries rose 0.45% at Rs 987.75. Reliance Jio Infocomm (RJIL) has signed Syndicated Term Loan Facilities aggregating to $1.5 billion. The facility is guaranteed by Reliance Industries (RIL) and will be used to refinance the syndicated term loan facilities tied up by RJIL in 2010. The announcement was made after market hours yesterday, 17 November 2014.

Bank shares were mostly higher. Among public sector banks, Bank of India (up 0.09%), Canara Bank (up 1.01%), Union Bank of India (up 1.07%), Punjab National Bank (up 2.09%) and IDBI Bank (up 3.94%), edged higher. Bank of Baroda (down 0.55%) and State Bank of India (down 0.02%) declined.

Among private sector banks, Yes Bank (up 0.63%) and HDFC Bank (up 1.4%) edged higher. Kotak Mahindra Bank (down 2%), IndusInd Bank (down 0.7%), Axis Bank (down 0.39%) and Federal Bank (down 0.56%), edged lower.

Telecom stocks rose across the board on reports Defence Ministry and Telecom Ministry will coordinate to resolve spectrum issue. Tata Teleservices (Maharashtra) (up 3.31%), Idea Cellular (up 2.59%) and Bharti Airtel (up 1.57%) edged higher.

Defence Minister Manohar Parrikar and Telecom Minister Ravi Shankar Prasad have reportedly agreed to work in consent, coordination and synergy to resolve spectrum related issues. Based on various recommendations and agreements, the Department of Telecommunications (DoT) expects Defence ministry to clear about 165 Mhz of spectrum across frequency bands. Out of all bands, there is immediate demand for 3G spectrum in frequency band 2100 Mhz. Telecom regulator Telecom Regulatory Authority of India (TRAI) has recommended that spectrum in 2100 Mhz band, a part of which is with the Defence Ministry, should be put up for auction along with two sets of spectrum bands- 900Mhz and 1800Mhz in February next year, reports added.

Shares of Reliance Anil Dhurubhai Ambani group companies were in demand. Reliance Communications (up 9.46%), Reliance Capital (up 4.2%), Reliance Infrastructure (up 2.91%) and Reliance Power (up 2.66%) 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 2.49%), Gitanjali Gems (down 0.95%), Tribhovandas Bhimji Zaveri (down 2.33%), Tara Jewels (down 3.16%), Titan Company (down 1.03%) and PC Jeweller (down 2.78%), 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.

Shares of insurance companies advanced after Finance Minister Arun Jaitley yesterday, 17 November 2014, said he is expecting that Insurance Amendment Bill will be passed in the forthcoming winter session of parliament. He said that he is in touch with the Parliament Select Committee in this regard and will try to persuade it to give its report at the earliest. ICICI Bank (up 0.44%), Aditya Birla Nuvo (up 0.43%), and Max India (up 0.21%) gained. Housing Development Finance Corporation (down 1.9%) and Bajaj Finserv (down 0.24%) declined.

The Winter Session of Parliament, during which the Insurance Bill is likely to be taken up for discussion and passage, will begin on 24 November 2014. The Insurance Bill proposes to hike the foreign direct investment (FDI) limit in the insurance sector to 49% from 26%.

Financial Technologies (India) (FTIL) jumped 4.31% at Rs 189.90 after the company after market hours yesterday, 17 November 2014, said that the board of FT Group Investments Mauritius (FTGIPL), a wholly owned subsidiary of FTIL yesterday, 17 November 2014, approved the sale of 100% of its stake in Bourse Africa, Mauritius (together with its wholly owned subsidiary Bourse Africa Clear) to Continental Africa Holdings (CAHL), Mauritius, for $40.5 million. The entire transaction is expected to be completed within the next 210 days, FTIL said.

The Sensex has risen 297.46 points or 1.06% in this month so far (till 18 November 2014). The Sensex has gained 6,992.61 points or 33.02% in calendar year 2014 so far (till 18 November 2014). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,200.17 points or 41.07%.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.735, compared with its close of 61.74 during the previous trading session.

Brent crude futures reversed initial losses as speculation increased that OPEC could cut output at its meeting next week. Brent for January settlement was up 32 cents to $79.63 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.

Jaitley said he is expecting that Insurance Amendment Bill will be passed in the forthcoming winter session of parliament. He said that he is in touch with the Parliament Select Committee in this regard and will try to persuade it to give its report at the earliest. The Insurance Bill proposes to hike the foreign direct investment (FDI) limit in the insurance sector to 49% from 26%. A month-long Winter Session of Parliament begins on 24 November 2014.

Jaitley said he is in discussion with the members of opposition parties to make necessary procedural changes in Land Acquisition Act in order to avoid delay in the implementation of the infrastructure projects. Jaitley said that the government has taken series of measures to tackle various challenges being faced by the infrastructure sector in the country. The Finance Minister said that many more such measures are in offing in near future.

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, amid signs that the European Central Bank is still on track to take new steps to tackle low inflation. Key benchmark indices in UK, France and Germany were up 0.45% to 1.17%.

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.

German economic sentiment improved to the highest level in four months in November, easing concerns over the euro zone's largest economy, industry data showed on Tuesday. In a report, the ZEW Centre for Economic Research said that its index of German economic sentiment rose by 15.1 points to 11.5 this month from October's reading of minus 3.6. The Current Conditions Index improved to 3.3 this month from 3.2 in September, better than expectations for a decline to 1.3.

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 0.61% to 2.18%. Key benchmark indices in Hong Kong, China and Taiwan were off 0.28% to 1.13%.

Abe later announced that his government will delay by 18 months the planned increase in sales tax. The move comes after the Japanese economy unexpectedly fell into recession in the third quarter. The sales-tax increase to 10% from 8% had been scheduled to take place in October 2015. Abe also said the tax hike will not be delayed again. A previous sales-tax hike to 8% from 5% went into effect in April. Abe will dissolve the lower house of parliament on 21 November 2014 and has called for a snap election to be held in December.

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.

Trading in US index futures indicated that Dow could fall 9 points at the opening bell 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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