Trading for the week began on an upbeat note as key benchmark indices surged as crude oil prices dropped after the US and five other world powers agreed with Iran on Sunday, 24 November 2013, to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program and ensuring the country's Islamist government doesn't rush to develop atomic weapons. The 50-unit CNX Nifty regained the psychological 6,000 mark. The barometer index, the S&P BSE Sensex, garnered 387.69 points or 1.92%, up 278.42 points from the day's low and off 21.07 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Indian stocks snapped three-day falling trend today, 25 November 2013. The Sensex had declined 673.43 points or 3.22% in three trading days to settle at 20,217.39 on Friday, 22 November 2013, from a recent high of 20,890.82 on 19 November 2013. The index has fallen 559.44 points or 2.64% in November so far (till 25 November 2013). The Sensex has garnered 1,178.37 points or 6.07% in calendar 2013 so far (till 25 November 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,156.37 points or 18.09%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 716.45 points or 3.36%.
Coming back to today's trade, bank stocks rose across the board. Capital goods stocks surged. Siemens jumped after the company said at the time of announcement of Q4 and year ended 30 September 2013 (FY 2013) results after trading hours on Friday, 22 November 2013, that the company's order inflow rose 7% in FY 2013 over FY 2012. PSU OMCs rose as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Shares of upstream oil firms rose as concerns about subsidy sharing burden eased as oil prices dropped. Shares of offshore oil services providers rallied.
Metal and mining stocks edged higher. IT major and index heavyweight Infosys dropped in choppy trade. Auto stocks gained across the board. Ambuja Cements and ACC, both, edged higher after Ambuja Cements received shareholders' approval at an extraordinary general meeting (EGM) on Saturday, 23 November 2013, to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore, and for the subsequent amalgamation of Holcim (India) with it. Realty stocks rose.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month November 2013 series to December 2013 series. The near month November 2013 derivatives contract expire on Thursday, 28 November 2013.
Concerns over India's fiscal deficit and current account deficit eased as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit as the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation.
Iran and six world powers clinched a deal on Sunday, 24 November 2013, curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war. Aimed at ending a long festering standoff, the interim pact between Iran and the United States, France, Germany, Britain, China and Russia won the critical endorsement of Iranian clerical Supreme Leader Ayatollah Ali Khamenei. US President Barack Obama said the deal struck after marathon, tortuous and politically charged negotiations cut off Tehran's possible routes to a nuclear bomb. But Israel, Iran's arch-enemy, denounced the agreement as an "historic mistake". Iran's oil exports will be held to about 1 million barrels a day under sanctions that remain in force after the deal. The six-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, leaves in place banking and financial measures that have hampered its crude exports. Sanctions on sales of refined products also remain, while Iran gains access to $4.2 billion in oil revenue frozen in foreign banks, the White House said. As part of the deal, the European Union (EU) will lift a ban on insurance for tankers transporting Iranian oil, making it easier for the Persian Gulf nation's six remaining customers to take delivery. The EU will continue to prohibit crude imports from Iran.
The S&P BSE Sensex garnered 387.69 points or 1.92% to settle at 20,605.08, its highest closing level since 20 November 2013. The index jumped 408.76 points at the day's high of 20,626.15 in late trade. The index rose 109.27 points at the day's low of 20,326.66 in early trade.
The CNX Nifty garnered 119.90 points or 2% to 6,115.35, its highest closing level since 20 November 2013. The index hit a high of 6,123.50 in intraday trade. The index hit a low of 6,035.95 in intraday trade.
The total turnover on BSE amounted to Rs 1826 crore, higher than Rs 1731.07 crore on Friday, 22 November 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,435 shares gained and 1,015 shares fell. A total of 166 shares were unchanged.
The BSE Mid-Cap index rose 1.13% and the BSE Small-Cap index gained 0.97%. Both the indices underperformed the Sensex.
The BSE Capital Goods index (up 3.82%), the BSE Bankex (up 3.63%), the BSE Realty index (up 2.28%), the BSE PSU index (up 2.26%), the BSE FMCG index (up 2.1%), the BSE Auto index (up 2.05%), outperformed the Sensex.
The BSE Power index (up 1.79%), the BSE Oil & Gas index (up 1.73%), the BSE Metal index (up 1.05%), the BSE Consumer Durables index (up 0.7%), the BSE HealthCare index (up 0.44%), the BSE Teck index (up 0.07%), and the BSE IT index (down 0.05%), underperformed the Sensex.
From 30-share Sensex pack, 28 stocks rose and only two fell.
Index heavyweight and cigarette major ITC gained 2.22% to Rs 315.15.
Index heavyweight Reliance Industries rose 0.87% to Rs 851.20. The stock hit a high of Rs 856.80 and low of Rs 844.80.
Infosys shed 0.65% to Rs 3,327.60. The stock was volatile. The scrip hit a high of Rs 3,379.15 and low of Rs 3,309.50. The A block deal of 25,000 shares was executed on the scrip at Rs 3,319 per share at 12:15 IST on BSE today, 25 November 2013.
Capital goods stocks surged. ABB (up 2.68%), Bharat Earth Movers (up 1.45%), Thermax (up 1%), Crompton Greaves (up 10.06%), Bharat Heavy Electricals (up 5.66%) and L&T (up 4.06%) edged higher.
Siemens jumped 7.2% after the company said at the time of announcement of Q4 and year ended 30 September 2013 (FY 2013) results after trading hours on Friday, 22 November 2013, that the company's order inflow rose 7% to Rs 10957.30 crore in FY 2013 over FY 2012. Siemens' profit after tax fell 43.47% to Rs 194 crore on 12.29% decline in sales to Rs 11145.20 crore in the year ending 30 September 2013 (FY 2013) over the year ending 30 September 2012 (FY 2012).
The company reported a net profit of Rs 149.19 crore for Q4 September 2013 as against net loss of Rs 55.76 crore in Q4 September 2012. Total income declined 3.41% to Rs 3272.24 crore in Q4 September 2013 over Q4 September 2012. The result was announced after market hours on Friday, 22 November 2013.
In Q4 September 2013, Siemens initiated the sale and transfer of its Postal & Parcel Logistics Technologies and Airport Logistics Technologies business (both forming part of the Infrastructure and Cities Sector) to Siemens Postal Parcel & Airport Logistics, a 100% subsidiary of Siemens AG, effective from the close of business on 30 September 2013 for a consideration of Rs 128 crore and a profit of Rs 115 crore. In view of the amalgamations, current quarter figures are not comparable with corresponding quarter figures.
Commenting on the company's financial performance, Dr. Armin Bruck, MD, Siemens said: "Overall, the results were in line with the challenging economic environment. While a rise of 35% in new orders for the fourth quarter over the immediately preceding quarter is encouraging, the growth of the company is also dependent on the implementation of government policies to promote infrastructure development within the country and create an environment conducive to investment in capital goods. During the year, the company launched initiatives to optimize its cost position and productivity considering the slowdown in the economic environment".
In spite of the reduced profitability, the board of directors of the company has approved a dividend of Rs 5 per share. "This reflects our confidence in the performance of the company once there is a revival in the economic environment," added Dr. Bruck.
Shares of upstream oil firms rose as concerns about subsidy sharing burden eased as oil prices dropped. Oil India (up 1.26%), ONGC (up 3.54%) and GAIL (India) (up 1.64%) gained. Three state-run upstream oil firms -- Oil India, ONGC and GAIL (India) -- share part of the under-recoveries of state-run oil refining-cum-market firms arising from the government-imposed price caps on three key fuels -- diesel, LPG for domestic use and kerosene sold through the public distribution system.
Crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Brent crude futures for January delivery were off $2.19 a barrel or 1.97% at $108.86 a barrel. Crude oil futures fell on expectations that the deal between Iran and six world powers could lead to more crude oil hitting the global market.
Cairn India advanced 0.92%, with the stock extending Friday's gains ahead of the company's board meeting tomorrow, 26 November 2013, to consider buyback of shares.
PSU OMCs rose as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. HPCL (up 5.46%), BPCL (up 4.34%) and Indian Oil Corporation (up 2.24%) gained.
Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) 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.
Bank stocks rose across the board. ICICI Bank (up 5.28%), HDFC Bank (up 2.69%), Kotak Mahindra Bank (up 4.05%) and Yes Bank (up 1.7%) gained.
AXIS Bank gained 3.12%, with the stock extending intraday gains. Jindal Steel & Power rose 1.19%. The Bombay Stock Exchange (BSE) announced after market hours on Friday, 22 November 2013, that AXIS Bank will replace Jindal Steel & Power (JSPL) in the 30-share S&P BSE Sensex with effect from 23 December 2013.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained 1.76% to 3.81%.
Reserve Bank of India (RBI) last week 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.
Metal and mining stocks edged higher. Tata Steel (up 1.34%), Hindustan Copper (up 2.34%), NMDC (up 2.26%), National Aluminium Company (up 3.84%), Sail (up 1.45%), JSW Steel (up 1.71%), Hindustan Zinc (up 3.69%), Sesa Sterilte (up 0.29%), Hindalco Industries (up 0.21%) gained.
In mid-November 2013, China released a broad outline for structural reform of the economy. China is the world's largest consumer of copper and aluminum.
Tata Power Company rose 1.43% after the company after market hours on Friday, 22 November 2013 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.
Speaking on the occasion, Mr. Anil Sardana, CEO & MD, Tata Power said: "It gives us immense pride to announce our association with The Ministry of Industry and Trade, Government of Vietnam. We look forward to working with them on developing and building the power plant, thus contributing towards trade relations between India and Vietnam. The signing of this MoU is a significant milestone for Tata Power and we endeavour to be a significant player in the international energy market.
NHPC rose 1.42% after the company said it will commence the buyback of shares from Friday, 29 November 2013. The company made the announcement after market hours on Friday, 22 November 2013. NHPC plans to buyback around 123 crore fully paid up equity shares of Rs 10 each at a price of Rs 19.25 per share, aggregating Rs 2368 crore from the open market. The buyback offer will close on 12 December 2013.
Pfizer surged 11.7% and Wyeth jumped 13.21% after the boards of Pfizer and Wyeth on Saturday, 23 November 2013, separately approved the merger of Wyeth with Pfizer. As per the merger scheme, shareholders of Wyeth will get seven Pfizer shares for every 10 shares held in the company. Wyeth's board also announced a liberal interim dividend of Rs 145 per equity share. The board of directors of Pfizer also announced a liberal interim dividend of Rs 360 per share. The swap ratio for merger of Wyeth with Pfizer has been recommended after taking into account the payment of the interim dividend and is on a post dividend basis, the two companies said separately.
Auto stocks gained across the board. Tata Motors rose 3.16%. Maruti Suzuki India rose 2.94%. M&M rose 0.93%. Ashok Leyland advanced 1.95%.
Shares of two-wheeler makers also gained. Hero MotoCorp (up 2.21%) and Bajaj Auto (up 2.64%) rose.
Ambuja Cements rose 3.12%. ACC gained 3.24%. Ambuja Cements has received shareholders' approval at its extraordinary general meeting (EGM) held on Saturday, 23 November 2013, to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore, and for the subsequent amalgamation of Holcim (India) with it. Ninety per cent of shareholders voted in favour of Ambuja Cements buying a 24% stake in Holderind International for Rs 25.63 a share, Ambuja Cements said in a statement. On 19 November 2013, in a postal ballot voting process for approving the scheme of amalgamation between Holcim (India) and Ambuja Cements, the company had secured shareholders' approval, with 68.53% of minority shareholders voting in its favour. With this, Swiss cement maker Holcim has cleared the two hurdles of voting in the proposed restructuring of its Indian subsidiaries, Ambuja Cements and ACC, by securing a majority of the postal votes from Ambuja's minority shareholders. 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, 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.
Exide Industries fell 2.15% to Rs 111.30. The stock hit 52-week low of Rs 110.50 in intraday trade.
Bata India gained 0.56% to Rs 1,054.95. The stock hit a record high of Rs 1,071 in intraday trade.
Realty stocks were in demand. DLF (up 3.57%), Indiabulls Real Estate (up 2.99%), HDIL (up 5.66%), D B Realty (up 2.66%) and Unitech (up 2.99%) gained.
Shares of offshore oil services providers rallied. Aban Offshore (up 20%), Dolphin Offshore (up 11.52%), GOL Offshore (up 16.67%), Deep Industries (up 6.33%), and Jindal Drilling (up 12.32%) jumped.
The government will launch the auction of the next round of oil and gas blocks under New Exploration Licensing Policy (NELP) in January 2014 as it looks to attract foreign investors to boost domestic production. DGH (Directorate General of Hydrocarbons) has carved out about 86 blocks, for which necessary clearances are being taken from the ministries concerned, reports suggest. During the previous nine rounds, the ministry awarded 254 blocks for exploration of oil and gas.
DIC India hit an upper circuit limit of 20% at Rs 282.80 on BSE after the company's promoter proposed a voluntary delisting offer. The company made the announcement after market hours on Friday, 22 November 2013. DIC India informed exchanges that its promoter DIC Asia Pacific has proposed to delist shares of DIC India from all the stock exchanges. The promoter is proposing to acquire the remaining 25.92 lakh equity shares, or 28.25% stake in DIC India at an indicative offer price of Rs 260 per share.
The company said it will use the reverse book building process to delist shares of the company and shareholders are free to tender their shares at a price higher than the indicative offer price.
Meanwhile in a separate announcement, the company said that DIC Asia Pacific has fixed a floor price of Rs 174 per share for the proposed delisting offer.
Valecha Engineering rose 5.53% after the company said it has won a Rs 176.29-crore contract from NHPC for civil work of a tunnel in Himachal Pradesh. The company made the announcement after market hours on Friday, 22 November 2013. With the award of the project, the tunnelling segment constitutes 10% of the order book of the company, Valecha Engineering said. It said as the company moves ahead it is focusing on getting an appropriate project mix involving leading edge infrastructure technologies. This will achieve a de-risked business model and increase operational growth, the company said.
In the foreign exchange market, the rupee edged higher against the dollar as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. India imports majority of its crude oil requirements. The partially convertible rupee was hovering at 62.50, compared with its close of 62.87/88 on Friday, 22 November 2013. The Reserve Bank of India on Friday, 22 November 2013, conditionally extended the deadline for banks to swap dollars raised through overseas borrowings at discounted rates, further bolstering the local currency. Indian banks now have until 31 December 2013 to avail themselves of the central bank's offer of concessional swaps for dollars raised through overseas debt, compared with the previous deadline of 30 November 2013, as long as the funds have been committed by the end of this month, the RBI said in a statement after market hours on Friday, 22 November 2013.
Bond prices rose as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped eased after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit because the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation. The yield on the most traded new 10-year federal paper, 8.83% GS 2023, was hovering at 8.7527%, lower than its close of 8.7828% on Friday, 22 November 2013. Bond yield and bond prices are inversely related.
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 rose on Monday, 25 November 2013, as Iran agreed to limit its nuclear program and as investors awaited a report on US pending-home sales. Key benchmark indices in France, Germany and UK were up 0.25% to 0.82%.
Asian stocks rose on Monday, 25 November 2013, as Iran agreed to limit its nuclear program. Key benchmark indices in Taiwan, Indonesia, Japan, Singapore and South Korea rose by 0.25% to 1.54%.
China's Shanghai Composite fell 0.47% in choppy trade. Hong Kong's Hang Seng shed 0.05%. China's declared intent to protect an air zone encompassing islands that are disputed with Japan escalated tensions between Asia's largest economies, risking damage to a resurgence in trade. China announced an air defense identification zone in the East China Sea effective Nov. 23 and said its military will take "defensive emergency measures" if aircraft enter the area without reporting flight plans or identifying themselves. Japan lodged a complaint as the US and South Korea expressed concern about China's actions.
Trading in US index futures indicated that the Dow could advance 58 points at the opening bell today, 25 November 2013. US stocks rose on Friday, 22 November 2013, with the S&P 500 index closing above 1,800 for the first time and extending gains into a seventh consecutive week.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. 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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