Investors cheered the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate as key equity benchmark indices surged. But, the benchmark indices pared strong intraday gains towards the fag end of the trading session as European stocks reversed intraday gains after Switzerland's central bank the Swiss National Bank shocked global markets by ditching its currency ceiling against the euro and cutting its deposit rate to negative 0.75%. Nevertheless, the strong gains for the trading session took the barometer index, the S&P BSE Sensex, past the psychological 28,000 level. The Sensex attained its highest closing level in more than five weeks. The 50-unit CNX Nifty attained its highest closing level in almost six weeks. The Sensex advanced 728.73 points or 2.66% to settle at 28,075.55. The market breadth indicating the overall health of the market was positive. The BSE Mid-Cap index garnered 1.21%. The BSE Small-Cap index garnered 1.01%.
The RBI surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review today, 15 January 2015, morning. Reacting to the RBI's surprise rate cut, the finance ministry today, 15 January 2015, said that along with other policy actions already taken by the government and other that are under its consideration, the RBI move represents one more step towards reviving investment and realizing India's medium term growth potential.
State-run United Bank of India announced a 25 basis points reduction in its base rate after the RBI's surprise repo rate cut. The bank cut its base rate to 10% from 10.25% with effect from 1 February 2015.
Realty, auto and bank stocks surged after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015. Bajaj Auto advanced after announcing Q3 December 2014 results. Shares of oil exploration & production (E&P) companies rose. BPCL advanced after Madhya Pradesh Chief Minister Shivraj Singh Chauhan met Minister for Chemical and Fertilizers Anant Kumar and Dharmendra Pradhan, Minister of State (I/C), Petroleum and Natural Gas yesterday, 14 January 2015, to discuss the expansion of capacity of a refinery set up under a joint venture between BPCL and Oman Oil Corporation at Bina in Madhya Pradesh. Cement shares extended gains registered during the previous trading session.
In overseas markets, European stocks reversed intraday gains after Switzerland's central bank the Swiss National Bank shocked global markets by ditching its currency ceiling against the euro and cutting its deposit rate to negative 0.75%. Asian stocks rose after India cut interest rates. US stocks fell in choppy trading session yesterday, 14 January 2015, after surprisingly weak December retail sales data, which cast doubt on the pace of economic growth in the world's biggest economy.
In the foreign exchange market, the rupee strengthened past 62 against the dollar after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015.
Brent crude futures edged lower, reversing some of the big rally in prices recorded yesterday, 14 January 2015.
The BSE Sensex advanced 728.73 points or 2.66% to settle at 28,075.55, its highest closing level since 8 December 2014. The index jumped 847.79 points at the day's high of 28,194.61 in late trade. The index rose 356.88 points at the day's low of 27,703.70 in early trade.
The CNX Nifty advanced 216.60 points or 2.62% to settle at 8,494.15, its highest closing level since 5 December 2014. The index hit a high of 8,527.10 in intraday trade. The index hit a low of 8,380.55 in intraday trade.
The BSE Mid-Cap index advanced 126.78 points or 1.21% to settle at 10,598.69. The BSE Small-Cap index rose 113.02 points or 1.01% to settle at 11,314.10. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,720 shares advanced and 1,174 shares declined. A total of 112 shares were unchanged.
The total turnover on BSE amounted to Rs 4293 crore, higher than Rs 3205.62 crore yesterday, 14 January 2015.
Among sectoral indices on BSE, the S&P BSE Bankex index (up 3.29%) and BSE Realty index (up 7.99%) outperformed the Sensex. The BSE Auto index (up 2.13%), BSE Consumer Durables index (up 1.11%), BSE Capital Goods index (up 2.4%), BSE FMCG index (up 1.35%), BSE Healthcare index (up 0.44%), BSE IT index (up 0.53%), BSE Metal index (up 0.98%), BSE Oil & Gas index (up 2.01%), BSE Power index (up 2.1%), and BSE Teck index (up 0.68%) underperformed the Sensex.
Realty stocks surged after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015. Oberoi Realty (up 1.56%), Housing Development and Infrastructure (HDIL) (up 18.59%), Unitech (up 8.01%), DLF (up 10.39%), Anant Raj (up 8.8%), Godrej Properties (up 3.98%), Prestige Estates (up 11.46%), and Sobha (up 6.92%) edged higher.
Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Bank shares rose after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015. Among private sector banks, ICICI Bank (up 4.6%), Axis Bank (up 2.57%), IndusInd Bank (up 1.68%), Kotak Mahindra Bank (up 0.59%) and HDFC Bank (up 2.56%), edged higher.
Yes Bank rose 3.3% at Rs 812.80 after the bank said before market hours that the Board of Directors of the bank at its meeting held yesterday, 14 January 2015, approved the proposal to seek approvals from the regulators for setting up Asset Management Business and Primary Dealership business considering that the bank has established a distribution network of 600 branches as of 31 December 2014 across metro, urban, semi-urban and rural centers with a pan India distribution presence spreading across all states and union territories of the country. With a view to complete the overall bouquet of financial products to its customer franchise, the bank plans to set up an Asset Management Company (AMC), primarily to channelize the savings of retail investors in equity and debt capital markets. This will complement the bank's retail liabilities strategy, strengthen multi-product customer engagement and also allow the bank to leverage its distribution network for customer acquisition. The bank will simplify and integrate "manufacturing to distribution" of equity and debt investment products for all its customers.
The AMC will complement Yes Securities brokerage business which has now stabilized its operations and is rapidly growing its business footprint. The AMC will also complement the bank's retail strategy and help in leveraging existing infrastructure to provide the necessary retail thrust. This will allow the bank to build a holistic wealth management proposition for its customers and enable the bank to strengthen traction witnessed in building retail market share on the back of its savings account proposition.
Separately, with respect to news item captioned "Yes Bank in talks to buy Deutsche Mutual Fund", the bank clarified during market hours that as a part of the setting up of the AMC, the bank will be open to evaluating acquisition opportunities as well. There is no development of material consequence on any acquisition plans in any business as on date, Yes Bank said.
Among public sector banks, State Bank of India (up 4.28%), Union Bank of India (up 5.02%), Andhra Bank (up 3.45%), Syndicate Bank (up 3.68%), Canara Bank (up 4.1%), Bank of India (up 3.23%), Dena Bank (up 2.36%), Punjab National Bank (up 3.35%), and Bank of Baroda (up 2.08%) edged higher.
United Bank of India rose 3.69% at Rs 43.55 after the state-run bank said during market hours that the Asset Liability Management Committee of the bank has announced reduction in the base rate of the bank from 10.25% to 10% effective from 1 February 2015.
Auto stocks rose after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015. Mahindra & Mahindra (M&M) (up 3.1%), Hero MotoCorp (up 1.55%), Escorts (up 1.33%), Ashok Leyland (up 2.12%), Tata Motors (up 2.33%), Eicher Motors (up 1.96%), Maruti Suzuki India (up 3.04%), and TVS Motor Company (up 2.5%) edged higher. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Bajaj Auto rose 2.3% at Rs 2,417.95. The stock hit a high of Rs 2,435 and a low of Rs 2,359.25. Bajaj Auto's net profit fell 4.78% to Rs 861.24 crore on 10.24% growth in total income from operation (net) to Rs 5657.17 crore in Q3 December 2014 over Q3 December 2013. Bajaj Auto's EBITDA (earnings before interest, taxation, depreciation and amortization) before mark-to-market (MTM) loss and CSR spend rose 9.89% to Rs 1200 crore in Q3 December 2014 over Q3 December 2013. EBITDA margin stood at 21.1% in Q3 December 2014, unchanged from the level in the corresponding previous year period. Bajaj Auto's non-operational income fell 57.05% to Rs 95.27 crore in Q3 December 2014 over Q3 December 2013. The company's cash and cash equivalents as on 31 December 2014 stood at Rs 7568 crore, lower than Rs 8313 crore as on 30 September 2014. The result was announced during market hours today, 15 January 2015.
Index heavyweight and cigarette maker ITC rose 2.76% at Rs 358. The stock hit high of Rs 359.90 and low of Rs 350.95.
Capital goods stocks advanced. Alstom T&D India (up 0.16%), ABB (up 0.33%), Thermax (up 0.52%), Siemens (up 1.75%), and L&T (up 3.61%) edged higher.
Bharat Heavy Electricals rose 0.26% at Rs 268.55. The stock hit a high of Rs 275.70 and a low of Rs 265. The company said during market hours today, 15 January 2015, that it has bagged a contract worth Rs 1202 crore from Karnataka Power Corporation for setting up a combined cycle power plant in Karnataka on engineering, procurement and construction basis, involving supply and commissioning of a fuel-efficient state-of-the-art advanced-class gas turbine (GT). Karnataka Power Corporation is owned by the Karnataka state government. Significantly, with this order, Bhel has contracted 242 GTs including 22 advanced-class GTs. Bhel said that another 3,100 megawatts of projects are presently under construction by the company at Bellary, Yeramarus and Edlapur in Karnataka.
Crompton Greaves rose 1.73% at Rs 188.05. The company after market hours yesterday, 14 January 2015, in a clarification with regard to news item titled "Temasek eyes fan biz of Crompton Greaves", said that it has no information regarding the rumoured news mentioned in the news item.
Cement shares extended gains registered during the previous trading session. UltraTech Cement (up 5.96%), ACC (up 2.49%), and Ambuja Cements (up 3.5%) and Shree Cement (up 7.7%) edged higher.
Grasim Industries rose 2.79% at Rs 3,668. Grasim Industries has exposure to cement industry through its subsidiary UltraTech Cement.
The Ministry of Mines early this week said that the government has promulgated the Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015 on 12 January 2015. The Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015 amends certain provisions of the MMDR Act, 1957. The Ministry of Mines said that the promulgation of the ordinance became necessary to address the emergent problems in the mining industry. Essentially, through the Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015, the government intends to remove discretion in grant of mineral concessions. Henceforth, all mineral concessions would be through auctions, thereby bringing in greater transparency and removing of discretion. Unlike in the 1957 Act, there would be no renewal of any mining concession. The tenure of the mineral concession has been increased from the existing 30 years to 50 years. Thereafter, the mining lease would be put up for auction (and not for renewal as in the earlier system).
Shares of oil exploration & production (E&P) firms edged higher. Reliance Industries (up 3.54%), Oil India (up 0.52%), Cairn India (up 1.96%), and ONGC (up 0.64%) edged higher.
BPCL rose 1.49% at Rs 661.85 after Madhya Pradesh Chief Minister Shivraj Singh Chauhan met Minister for Chemical and Fertilizers Anant Kumar and Dharmendra Pradhan, Minister of State (I/C), Petroleum and Natural Gas yesterday, 14 January 2015, to discuss the expansion of capacity of a refinery set up under a joint venture between BPCL and Oman Oil Corporation at Bina in Madhya Pradesh. The stock rose . The capacity of the refinery is proposed to be enhanced from 6 MMTPA to 7.8 MMTPA by 2018 at estimated cost of Rs 3500 crore, in the first phase. The capacity of the refinery is proposed to be enhanced to 15 MMTPA in second phase at an estimated cost of Rs 18000-20000 crore for which pre feasibility studies will be undertaken in 3 months, the Ministry of Petroleum & Natural Gas said in a statement yesterday, 14 January 2015. During the meeting the state government was requested to provide additional incentives like interest free loan and exemption from CST and entry tax etc. for the proposed expansions, the statement said.
Housing finance major Housing Development & Finance Corporation jumped 7.16% at Rs 1,201.60 after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015.
Telecom stocks gained. Idea Cellular (up 0.78%) and Reliance Communications (up 3.85%) gained. Mahanagar Telephone Nigam (down 1.4%) edged lower.
Bharti Airtel rose 0.81% at Rs 349.15. The company during market hours today, 15 January 2015, announced that it has successfully integrated yuMobile customers into its network. The process which started in August 2014 has seen the 2.55 million yuMobile customers successfully integrated into the Airtel network. Airtel now consolidates its position as the second largest mobile operator in Kenya with a combined customer base of over 8 million and a 26.6% customer market share.
Bharti Airtel said that yuMobile customers will retain their existing mobile numbers, continue to enjoy their yuMobile services including Ksh3 yuMobile calls to other networks, free yuMobile-toyuMobile calls, SMS rates at Ksh1 yuMobile-to-yuMobile and Ksh2 yuMobile to other networks and valued added services.
Tata Teleservices (Maharashtra) rose 1.2% at Rs 10.14. In a clarification with regard to news item titled Tata Tele hits upper circuit on deal news", the company after market hours today, 15 January 2015, said that the news article referred relates to Tata Sons getting approval from RBI for buying stake of NTT DoCoMo INC., in Tata Teleservices. The company said that since the article does not pertain to Tata Teleservices (Maharashtra), the management is not in a position to offer comments thereon.
Bajaj Holdings & Investment (BHIL) fell 1.69% at Rs 1,470.65. The stock hit a high of Rs 1,545 and a low of Rs 1,461.80. The company's consolidated net profit fell 4.45% to Rs 472 crore in Q3 December 2014 over Q3 December 2013. The result was announced after market hours today, 15 January 2015. BHIL, with a sizeable pool of cash and cash equivalents, is essentially an investment company, holding as on 31 December 2014, strategic stakes of 31.49% in Bajaj Auto and 39.29% in Bajaj Finserv, the results of which are consolidated with BHIL.
On standalone basis, BHIL's profit on sale of investments (net) dropped 51.85% to Rs 13 crore in Q3 December 2014 over Q3 December 2013. BHIL said that the company chose to hold on to most of its equity portfolio and therefore profit on sale of investments was lower in Q3 December 2014 when compared to the corresponding previous year period. Improving economic environment signals accelerated growth potential in the equity market and hence the company chose to hold on to most of its equity portfolio in Q3 December 2014, BHIL said.
Bajaj Finserv rose 1.96% at Rs 1,287 after consolidated net profit rose 23.6% to Rs 347.37 crore on 36.7% increase in total income to Rs 1905.34 crore in Q3 December 2014 over Q3 December 2013. The result hit the market after trading hours yesterday, 14 January 2015. Bajaj Finserv said that the company intends to transfer by way of sale, at an arm's length price, its wholly-owned subsidiary viz. Bajaj Financial Solutions together with its wholly-owned subsidiary, to Bajaj Finance, also a subsidiary of the company, to carry on, through the former the business of housing finance. The said sale has been approved by the board of directors in their meeting held yesterday, 14 January 2015, Bajaj Finserv said.
SpiceJet rose 3.04% at Rs 18.65. The company after market hours today 15 January 2015, said that its board of directors at a meeting held today, 15 January 2015, inter-alia, taken on record the proposal of the principal shareholder and promoter, Mr. Kalanithi Maran and KAL Airways Private Limited to transfer the ownership, management and control of the company to Mr. Ajay Singh pursuant to a scheme of reconstruction and revival for the takeover of ownership, management and control of the company to be filed before the Ministry of Civil Aviation, Government of India. The board has further directed the company to take further steps to implement and undertake all necessary steps in this regard.
PC Jeweller jumped 5.42% at Rs 234.40 after the company announced that has been designated as nominated agency under paragraph 4A.4 of Foreign Trade Policy 2009-14 (RE-2012), by the Additional Director General of Foreign Trade (CLA), Ministry of Commerce & Industry, Department of Commerce, New Delhi, vide certificate dated 7 January 2015. This permission makes the company eligible for direct import of precious metals (gold/silver/platinum) for domestic business, the company said.
Kridhan Infra surged 19.91% at Rs 68.65. The company during market hours today, 15 January 2015, said that the company through its subsidiary KH Foges Pte, has won three orders aggregating to SG$ 26.3 million (Rs 124 crore) in Singapore.
Key indices snapped two-day losing streak today, 15 January 2015. The Sensex had fallen 238.45 points or 0.86% in the preceding two trading sessions to settle at 27,346.82 yesterday, 14 January 2015, from a recent high of 27,585.27 on 12 January 2015. The Sensex has gained 576.13 points or 2.09% in this month so far (till 15 January 2015). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 746.82 points or 2.59%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,112.43 points or 40.63%.
In the foreign exchange market, the rupee strengthened past 62 against the dollar after the Reserve Bank of India's (RBI) surprise announcement of a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled review today, 15 January 2015. The partially convertible rupee was hovering at 61.98, compared with its close of 62.19 during the previous trading session.
Brent crude futures edged lower, reversing some of the big rally in prices recorded yesterday, 14 January 2015. Brent for February settlement, which expires today, 15 January 2015, was off $1.54 a barrel at $47.15 a barrel. The contract had jumped $2.10 a barrel or 4.5% to settle at $48.69 a barrel during the previous trading session. Brent for March settlement was off $1.50 a barrel at $48.36 a barrel.
The Reserve Bank of India (RBI) surprised financial markets by announcing a cut in its main lending rate viz. the repo rate by 25 basis points in an unscheduled monetary policy review today, 15 January 2015. The RBI said inflationary pressures as measured by changes in the consumer price index have been easing since July 2014. To some extent, lower than expected inflation has been enabled by the sharper than expected decline in prices of vegetables and fruits since September, ebbing price pressures in respect of cereals and the large fall in international commodity prices, particularly crude oil. Crude prices, barring geo-political shocks, are expected to remain low over the year, RBI Governor Dr. Raghuram G Rajan said in a statement. Weak demand conditions have also moderated inflation excluding food and fuel, especially in the reading for December, Rajan said. Rajan further said that the government has reiterated its commitment to adhering to its fiscal deficit target. These factors have significantly reduced the momentum of inflation, compensating for the widely anticipated ending of favourable base effects, Rajan said. Households' inflation expectations have adapted and both near-term and longer-term inflation expectations have eased to single digits for the first time since September 2009. These developments have provided headroom for a shift in the monetary policy stance, Rajan said.
Inflation outcomes have fallen significantly below the 8% targeted by January 2015, the RBI said. On current policy settings, inflation is likely to be below 6% by January 2016, Rajan said. The RBI Governor said that further easing of monetary policy will be dependent on data that confirms continuing disinflationary pressures. Also critical would be sustained high quality fiscal consolidation as well as steps to overcome supply constraints and assure availability of key inputs such as power, land, minerals and infrastructure. The latter would be needed to ensure that potential output rises above the projected pick-up in growth in coming quarters so as to contain inflation, Rajan said.
The RBI's next monetary policy review is scheduled on 3 February 2015.
Reacting to the RBI's surprise rate cut, the finance ministry today, 15 January 2015, said that the rate cut will provide a fillip to the economy directly by increasing the private sector's ability and willingness to spend. It should also help indirectly by improving balance sheet of the corporate sector and banks, facilitating an increase in the demand for and supply of credit, the Ministry of Finance said in a statement. The finance ministry further stated that along with other policy actions already taken by the government and other that are under its consideration, this move represents one more step towards reviving investment and realizing India's medium term growth potential.
European stocks reversed intraday gains today, 15 January 2015, after Switzerland's central bank the Swiss National Bank shocked global markets by ditching its currency ceiling against the euro and cutting its deposit rate to negative 0.75%. Key benchmark indices in France and UK were off 0.38% to 0.46%. In Germany, the DAX index was up 0.2% .
Switzerland's central bank Swiss National Bank today, 15 January 2015, said it is scratching its minimum exchange rate of 1.20 Swiss francs to the euro. The Swiss National Bank adopted the currency cap in 2011 to protect the country's economy, but said in a statement that "enforcing and maintaining the minimum exchange rate for the Swiss franc against the euro is no longer justified", given the depreciation of the euro against the dollar has caused the Swiss franc to weaken. In its announcement, the central bank also cut the interest rate on certain sight deposit account balances to negative 0.75%, and lowered its target range for the three-month Libor range to minus 0.25% to minus 1.25%, from 0.25% to minus 0.75%.
European Central Bank (ECB) President Mario Draghi said in an interview to Germany's Die Zeit newspaper published yesterday, 14 January 2015, that the bank didn't have many options left to expand its monetary policy, an indication that officials are moving toward the launch of purchases of government bonds issued by eurozone countries.
The European Court of Justice yesterday, 14 January 2015, issued an interim decision that allows the European Central Bank to go ahead with a bond-buying program known as Outright Monetary Transactions (OMT) with certain conditions.
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 rose today, 15 January 2015, after India cut interest rates. Key benchmark indices in China, Indonesia, Singapore, Hong Kong, South Korea, and Japan were up 0.03% to 3.52%. Taiwan's Taiwan Weighted Average was off 0.16%.
In Japan, Bank of Japan Governor Haruhiko Kuroda reportedly said that a falloff in demand after an increase in the sales tax in April was diminishing, an indication that the economy may be getting over the sluggishness that pushed it into recession.
In China, the latest data showed that Chinese banks issued 697.3 billion yuan ($112.5 billion) worth of new loans in December, down from 852.7 billion yuan in November. Total social financing, a broader measurement of credit in the economy, rose to 1.69 trillion yuan in December from 1.15 trillion yuan in November. China's foreign exchange reserves stood at $3.84 trillion at the end of December, down from $3.89 trillion at the end of September.
Trading in US index futures indicated that the Dow could slide 101 points at the opening bell today, 15 January 2015. US stocks fell yesterday, 14 Janaury 2015, as a deepening commodities rout and an unexpected drop in American retail sales fueled concern over growth.
US retail sales dropped 0.9% in December, the biggest slide since January 2014, following a 0.4% gain in November that was smaller than previously estimated, according to the Commerce Department.
Powered by Capital Market - Live News
