Weakness continued on the bourses in afternoon trade. The market breadth indicating the overall health of the market was negative. The barometer index, the S&P BSE Sensex, was currently off 147.59 points or 0.54% at 27,358.87. Meanwhile, the Union Cabinet at a meeting today, 24 December 2014, reportedly approved issuance of ordinances to implement coal and insurance reforms as the government was unable to get the Insurance Bill and Coal Bill passed during the winter session of parliament which concluded yesterday, 23 December 2014.
Key indices edged lower today, 24 December 2014, 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. Investors are concerned that higher US rates will strengthen the dollar and cause inflows into emerging markets to slow.
Shares of private sector banks were mixed. Shares of most public sector banks gained. Shares of companies operating insurance business edged higher on reports that the Union Cabinet at a meeting today, 24 December 2014, approved issuing an ordinance to raise foreign investment ceiling the insurance sector.
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 13:21 IST, the S&P BSE Sensex was down 147.59 points or 0.54% at 27,358.87. The index fell 169.71 points at the day's low of 27,336.75 in afternoon trade, 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 42.70 points or 0.52% at 8,224.30. 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 23.40 points or 0.23% at 10,082.69. The BSE Small-Cap index was up 16.76 points or 0.15% at 10,907.20. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was negative. On BSE, 1,349 shares fell and 1,214 shares rose. A total of 125 shares were unchanged.
Shares of companies operating insurance business edged higher on reports that the Union Cabinet at a meeting today, 24 December 2014, approved the ordinances to raise the overseas investment limit in insurance. Bajaj Finserv (up 0.86%), Reliance Capital (up 3%), Max India (up 2.45%), Aditya Birla Nuvo (up 1.22%), State Bank of India (up 0.21%), Religare Enterprise (up 0.61%) and ICICI Bank (up 0.44%), edged higher. HDFC declined 1.58%.
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.
It may be recalled that the Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
Shares of private sector banks were mixed. Kotak Mahindra Bank (down 0.37%), City Union Bank (down 1.53%), Axis Bank (down 0.34%), ING Vysya Bank (down 0.68%), and HDFC Bank (down 0.8%), edged lower. Yes Bank (up 0.67%). Federal Bank (up 0.38%), and IndusInd Bank (up 0.12%) edged higher.
Shares of most public sector banks gained. Union Bank of India (up 1.23%), Syndicate Bank (up 0.37%), Canara Bank (up 1.1%), Dena Bank (up 0.35%), and Bank of India (up 0.29%), edged higher. Andhra Bank (down 0.11%), Punjab National Bank (down 0.27%), Bank of Baroda (down 0.03%), and Indian Bank (down 1.78%), edged lower.
The Ministry of Finance today, 24 December 2014, said that Prime Minister Narendra Modi will interact with bankers during two day Bankers Retreat called 'Gyan Sangam' to be held in Pune on 2nd and 3rd January, 2015 to prepare a blue print of reform action plan for banking sector. The objectives of this retreat are to create a platform for formal and informal discussions around the issues which are important for banking sector reform.
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 63.47, 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 20 cents at $61.49 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.
Meanwhile, the Union Cabinet at a meeting today, 24 December 2014, reportedly approved issuance of ordinances to implement coal and insurance reforms. The move comes after a month-long parliament session that ended yesterday, 23 December 2014, failed to vote on a bill to raise the cap on foreign investment in insurance companies to 49% from 26%, and another piece of legislation to overhaul the troubled coal sector. An ordinance is a provision to enact laws outside a Parliament session and has the same force and effect as an act of Parliament. It stays valid for six months within which Parliament has to ratify it for it to become a law. India's president would also need to sign off the decree.
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 1.98%.
Trading in US index futures indicated that the Dow could gain 6 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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