Key benchmark indices edged lower in choppy trade during the last trading session of the week today, 22 November 2013. The Nifty settled at a tad below the psychological 6,000 mark, having swung alternately above and below that mark in late trade. The barometer index, the S&P BSE Sensex, shed 11.66 points or 0.06%, up 79.72 points from the day's low and off 170.73 points from the day's high. The market breadth, indicating the overall health of the market, turned negative from positive in late trade. In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Index heavyweight Reliance Industries settled marginally lower after seeing high volatility. Index heavyweight and cigarette major ITC dropped in choppy trade. ONGC surged after the company's wholly owned subsidiary ONGC Videsh (OVL) after market hours on Thursday, 21 November 2013, announced that it has on 20 November 2013 signed Memorandum of Understanding (MOU) with Petrovietnam to promote the joint cooperation in hydrocarbon sector in Vietnam, India and other countries. Bajaj Auto extended intraday losses in late trade. Ambuja Cements and ACC rose after Ambuja Cements after market hours on Thursday, 21 November 2013, announced that it has received shareholders' approval to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore and the amalgamation of Holcim (India) with it.
Bank stocks fell in volatile trade after the Reserve Bank of India (RBI) on Thursday, 21 November 2013, said it would focus on the monitoring of banks' asset quality and help improve the poor debt recovery process in the country.
A bout of initial volatility was witnessed as key benchmark indices edged higher on firm Asian stocks. Key benchmark indices trimmed initial gains and hit fresh intraday low in morning trade. Volatility continued as key benchmark indices regained strength after trimming intraday gains in mid-morning trade. Volatility continued as key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade. Volatility ruled the roost as key benchmark indices once again pared gains in mid-afternoon trade. Immense volatility was witnessed during the last one hour of trade.
The S&P BSE Sensex shed 11.66 points or 0.06% to settle at 20,217.39, its lowest closing level since 13 November 2013. The index fell 91.38 points at the day's low of 20,137.67 in late trade, its lowest level since 10 October 2013. The index jumped 159.07 points at the day's high of 20,388.12 in early afternoon trade.
The CNX Nifty lost 3.60 points or 0.06% to settle at 5,995.45, its lowest closing level since 13 November 2013. The index hit a low of 5,972.80 in intraday trade. The index hit a high of 6,049.60 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in late trade. On BSE, 1,263 shares declined and 1,166 shares gained. A total of 168 shares were unchanged.
The BSE Mid-Cap shed 0.13%, underperforming the Sensex. The BSE Small-Cap index rose 0.05%, outperforming the Sensex.
The total turnover on BSE amounted to Rs 1713 crore, lower than Rs 1812 crore on Thursday, 21 November 2013.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
Index heavyweight and cigarette major ITC fell 0.98% to Rs 309.60. The stock hit a high of Rs 316.90 and low of Rs 307.60.
Dabur India rose 0.56%. The company during market hours said that its board of directors has effective today, 22 November 2013, by way of passing resolutions by circulation and subject to the approval by the shareholders of the company, resolved increase in the investment limit for foreign institutional investors (FIIs) upto 30% of the paid-up equity share capital of the company.
Dabur India said after market hours on Thursday, 21 November 2013, that it has agreed to purchase the business undertaking (including manufacturing facility and all assets and liabilities relatable to the said facility) situated at Plot no. 16, Sector -2, IIE, Pantnagar, Uttarakhand, on a going concern basis from Northern Aromatics (Dabur's existing vendor) on a slump sale basis for a total consideration of Rs 15 crore. This facility will be used to manufacture food products, ayurvedic medicines and cosmetics, Dabur India said. Agreement to sell in this respect has been executed on 18 November 2013, the company said in a statement.
United Spirits (USL) gained after the company during market hours today, 22 November 2013, said that credit rating agency ICRA has upgraded the rating on the term loans, fund based facilities, non-fund based facilities and fixed deposits of the company. The stock jumped 4.81%.
ICRA said that the revision in the ratings takes into account correction in the debt servicing track record of the company post infusion of equity by Relay BV (an indirect wholly owned subsidiary of Diageo Plc) during May 2013. The ratings derive comfort from the 25.02% stake acquisition and the subsequent gaining of management control in USL by Relay BV (an indirect wholly owned subsidiary of Diageo Plc -- rated A3/Stable by Moody's). ICRA believes that, with the said change in management control, USL is likely to benefit from the business synergies, improved financial flexibility and expected improvement in governance structure. Further, implementation of Diageo's global best practices, capital management measures and focus on value growth are likely to aid USL in improving its operating performance going forward. ICRA however notes that given significant repayment obligations in relation to its operating accruals, USL's ability to achieve timely refinancing would remain critical in the near term. Further, large debt-funded capital expenditure plans are likely to maintain pressure on the company's debt coverage metrics in the medium term; however, the same likely to derive support in the event of divestment of Whyte & Mackay (W&M) assets.
The ratings continue to factor USL's established position as one of the largest spirits maker globally (by volumes), its wide distribution network, the company's strong product portfolio across segments, flavors and price points supporting future growth prospects and favorable demand outlook supporting USL's long term revenue growth. While the company's margins in the past have been impacted on account of volatility in key input prices (extra neutral alcohol and glass), ICRA notes that the company's investments in backward integration are likely to aid in achieving better supply security and improvement in margins, albeit over the medium term. The ratings also take into account USL's focus on strengthening its presence in other emerging markets and premium brands which are expected to add to USL's revenues and margins going forward. However, increasing competitive intensity in the domestic market and highly regulated nature of the industry are likely to restrict the same to an extent, ICRA said. Going forward, USL's ability to ease its debt maturity profile, improve its operating accruals and enhance its debt protection metrics would remain key rating sensitivities, ICRA said.
Index heavyweight Reliance Industries shed 0.06% to Rs 847.60 in volatile trade. The stock hit a high of Rs 856.15 and low of Rs 840.10.
Oil exploration stocks gained as US crude oil futures traded near the highest price in three weeks after applications for unemployment benefits in the US declined, signaling a sustained economic recovery in the world's biggest oil consumer. US crude oil futures for January delivery were at $95.16 a barrel in electronic trading on the New York Mercantile Exchange, down 28 cents. It rose $1.59, or 1.7%, to settle at $95.44 on Thursday, 21 November 2013, the highest close for a front-month contract since 31 October 2013. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.
ONGC advanced 3.05%. ONGC's wholly owned subsidiary ONGC Videsh (OVL) after market hours on Thursday, 21 November 2013, announced that it has on 20 November 2013 signed Memorandum of Understanding (MoU) with Petrovietnam to promote the joint cooperation in hydrocarbon sector in Vietnam, India and other countries. This MoU is in furtherance to the agreement signed between OVL and Petrovietnam on 12 October 2011. Under the MoU, Petrovietnam has offered 5 blocks to OVL. OVL would assess these blocks and if these are of interest, it would make a proposal to Petrovietnam.
ONGC said that Vietnam is one of the focus countries for OVL where it would like to acquire stakes in oil and gas assets depending on techno-commercial viability.
Cairn India advanced 3.15%. The company before market hours today, 22 November 2013, said that a meeting of the board of directors of the company will be held on 26 November 2013 to consider the proposal for buy back of equity shares of the company.
Shares of public sector oil marketing companies reversed intraday fall. BPCL (up 1.01%), HPCL (up 0.25%) and Indian Oil Corporation (up 1.03%) gained.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Tata Power Company shed 0.13%. The company after market hours announced the signing of a Memorandum of Understanding (MoU) with the Ministry of Industry and Trade, Government of Vietnam for developing the Long Phu 2 Power Project in Soc Trang Province of Vietnam. The MoU has been signed to develop a thermal power plant, which will utilize imported coal, Tata Power said in a statement. In accordance with the MoU, Tata Power will carry out feasibility studies for developing this power project on build, own and transfer basis. The Long Phu 2 Power Project is Tata Power's first coal based project outside India. Tata Power was awarded the Long Phu 2 Power Project by the Government of Vietnam based on the pre-feasibility studies earlier this year.
Bank stocks fell in volatile trade after the Reserve Bank of India (RBI) on Thursday, 21 November 2013, said it would focus on the monitoring of banks' asset quality and help improve the poor debt recovery process in the country. The focus on asset quality comes as bad debts at Indian banks have nearly doubled since 2009 to 4.2% of total loans at the end of September, while debt restructuring is also at a record high. The RBI said the situation required "priority attention".
RBI has advised banks to put in place mechanisms for early detection of signs of distress and to use early warning signals to avoid non-performing loan. It has also advised banks to strengthen information sharing, making it compulsory to receive and share information on borrowers before loans are approved. The central bank also cited an urgent need to speed up operations at fast-track government courts for lenders that deal with cases involving the recovery of debt called Debt Recovery Tribunals and Asset Reconstruction Companies.
ICICI Bank fell 0.17% to Rs 1,028. ICICI Bank early this week said that the bank acting through its Dubai branch, priced an issuance of 5.5 year fixed rate notes of an aggregate principal amount of $750 million. The notes were sold under the Rule 144A/Reg S format. The notes carry a coupon of 4.8% and were offered at an issue price of 99.609.
HDFC Bank rose 0.84%.
State Bank of India slipped 0.96%
Union Bank of India fell 1.16%. The state-run bank during market hours today, 22 November 2013, said it has raised additional capital to the extent of Rs 2000 crore by issue of Basel III compliant Unsecured Redeemable Non-Convertible Tier II Bonds (Series XVII-A). The bonds are rated "AAA/Stable" by CRISIL. The bonds carry fixed coupon rate of 9.8% per annum payable annually having a tenor of 10 years.
Allahabad Bank slipped 1.13%. The state-run bank during market hours said its board of directors at its meeting held today, 22 November 2013, decided to issue equity shares aggregating up to Rs 400 crore on preferential basis to Government of India (President of India). The board also approved issue of equity shares aggregating up to Rs 320 crore by way of Qualified Institutional Placement (QIP) subject to necessary permission/approval from Government of India/Reserve Bank of India in such a way that the shareholding of Government of India will remain intact at existing shareholding of 55.24%. The bank has convened an Extraordinary General Meeting (EGM) of shareholders on 24 December 2013 for seeking their approval of the aforesaid capital issue plan.
Bajaj Auto fell 2.33% to Rs 1,890, with the stock reversing initial gain. The stock hit a high of Rs 1,947.35 and low of Rs 1,884.
Steel stocks rose on renewed buying. Tata Steel (up 3.2%), Sail (up 2.9%), Jindal Steel & Power (up 1.63%) and Bhushan Steel (up 0.5%) gained. JSW Steel fell 1.05%.
Capital goods pivotals gained on renewed buying. Bhel (up 0.64%) and L&T (up 2.28%) gained.
Auto stocks were mostly lower. Tata Motors fell 2.47% to Rs 373.10, with the stock reversing initial gain. The stock hit a high of Rs 385.95 and low of Rs 371.15.
Maruti Suzuki India shed 0.4%. M&M rose 0.1%.
Amara Raja Batteries fell 2.56% to Rs 327.30 on profit booking after the stock jumped 7.71% in the preceding five trading sessions to Rs 335.90 on 21 November 2013, from a recent low of Rs 311.85 on 13 November 2013.
Ambuja Cements rose 2.01%. ACC rose 2.06%. Ambuja Cements after market hours on Thursday, 21 November 2013, announced that it had received shareholders' approval to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore, and the amalgamation of Holcim (India) with it.
Another round of voting will take place at Ambuja Cements' extraordinary general meeting (EGM) as well as at a court-convened meeting on 23 November 2013. At the EGM, where the Ambuja Cements' board is proposing a special resolution for reduction in share capital because of the cancellation of Ambuja's shares held by Holcim (India) after the merger, the promoters can also vote.
On 25 July 2013, Holcim decided to restructure its India operations to get Ambuja Cements and ACC to work better together, saving around Rs 900 crore. In a complex deal announced at that time, Holcim planned to raise its stake in Ambuja Cements to 61.39% from just over 50%. Once the deal is completed, Ambuja will hold a 50.01% stake in ACC.
Bata India gained 4% to Rs 1,052.70 after hitting a record high of Rs 1,053 in intraday trade.
Siemens surged 4.25% ahead of its year ended 30 September 2013 results today, 22 November 2013.
Shares of Tata group organised retailer Trent jumped 7.19% to Rs 1,023.
Shares of other organised retailers also gained. Future Retail (up 0.07%) and Shoppers Stop (up 0.59%) gained.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 62.88, compared with its close of 62.93/94 on Thursday, 21 November 2013. The rupee reversed direction after it weakened past 63 against the dollar earlier during the day.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
European stocks edged lower on Friday, 22 November 2013. Key benchmark indices in UK and Germany were off 0.18% to 0.24%. In France, the CAC 40 index rose 0.14%.
Data released today, 22 November 2013, showed that German GDP growth slowed to 0.3% in the third quarter from 0.7% in the prior three-month period.
Asian stocks edged higher on Friday, 22 November 2013, as positive political and economic news from the US supported sentiment. Key benchmark indices in Taiwan, Hong Kong, Japan, Singapore and South Korea rose by 0.01% to 0.62%. Key benchmark indices in Indonesia and China fell 0.19% to 0.43%.
Bank of Japan (BOJ) Governor Haruhiko Kuroda said in parliament today, 22 November 2013, that the yen isn't excessively weak. Inflation will hit the BOJ's 2% target in the latter half of the central bank's two-year time frame and policy makers will adjust its bond-buying program as needed, he said. The central bank yesterday maintained its unprecedented monetary policy.
Trading in US index futures indicated a flat opening of US stocks on Friday, 22 November 2013. The Dow Jones Industrial Average achieved its first-ever close above 16,000 on Thursday, 21 November 2013, as US stocks rallied boosted by better-than-expected data on weekly jobless claims and as investors reconsidered their concerns about the Federal Reserve's potential reduction in its bond-buying program.
The Labor Department said weekly jobless claims fell by 21,000 to 323,000. In addition, wholesale prices dropped 0.2% last month. On the downside, the Philadelphia Fed's index of manufacturing conditions dropped to 6.5 in November.
The US Senate Banking Committee on Thursday, 21 November 2013, voted 14-8 to approve Janet Yellen as the next chairman of the Fed, sending the nomination to the full Senate for approval.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. Minutes from the Federal Reserve's October meeting released this week signaled US stimulus may be reduced in coming months. Fed Bank of St. Louis President James Bullard on Thursday, 21 November 2013, said a cutback in the US central bank's bond-purchase program is "on the table" for policy makers' December meeting.
The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy.
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