Volatility continued as key benchmark indices regained positive terrain and hit fresh intraday high in early afternoon trade soon after the data showed annual rate of inflation based on the wholesale price index (WPI) sharply eased and remained static or witnessed zero growth in November 2014. The barometer index, the S&P BSE Sensex, was currently up 13.96 points or 0.05% at 27,364.64. The market breadth indicating the overall health of the market was negative. Realty stocks declined. PSU bank stocks gained.
Foreign portfolio investors sold shares worth a net Rs 864.96 crore during the previous trading session on Friday, 12 December 2014, as per provisional data.
The Sensex and the 50-unit CNX Nifty, had, both hit 6-1/2-week at the onset of the trading session on weak Asian stocks.
On the macro front, WPI eased to 0.0% (provisionally) for the month of November, 2014 as compared to 1.77% (provisional) for the previous month and 7.52% during the corresponding month of the previous year. Data on WPI was released during market hours. Industrial production declined 4.2% in October 2014, compared with 2.8% (revised) increase in September 2014, due to a 2.5% decline in the manufacturing sector in October 2014. Meanwhile, the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. Data on both industrial production and CPI was released after trading hours on Friday, 12 December 2014.
In overseas markets, Asian stocks edged lower after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week.
At 12:20 IST, the S&P BSE Sensex was up 13.96 points or 0.05% at 27,364.64. The index rose 24.55 points at the day's high of 27,375.23 in early afternoon trade. The index lost 245.64 points at the day's low of 27,105.04 in early trade, its lowest level since 30 October 2014.
The CNX Nifty was up 5.75 points or 0.07% at 8,229.85. The index hit a high of 8,237.in intraday trade. The index hit a low of 8,152.50 in intraday trade, its lowest level since 30 October 2014.
The BSE Mid-Cap index was up 2.12 points or 0.02% at 10,108.60, underperforming the Sensex. The BSE Small-Cap index was off 1.79 points or 0.02% at 11,066.69, with the fall lower than the Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,406 shares fell and 1, 077 shares rose. A total of 97 shares were unchanged.
Realty stocks declined. DLF (down 1.18%), D B Realty (down 0.65%), Housing Development & Infrastructure (HDIL) (down 1.1%), Phoenix Mills (down 3.78%), Anant Raj (down 0.94%), Parsvnath Developers (down 1.1%), Oberoi Realty (down 0.51%) and Prestige Estates (down 0.21%), edged lower. Sobha (up 0.7%), Unitech (up 1.19%), and Godrej Properties (up 0.53%) gained.
PSU bank stocks gained. State Bank of India (SBI) (up 0.79%), Canara Bank (up 1.02%), Union Bank of India (up 0.12%), Bank of India (up 0.63%), Punjab National Bank (up 0.92%) Syndicate Bank (up 0.16%), Indian Overseas Bank (up 0.08%), Andhra Bank (up 0.23%), Oriental Bank of Commerce (up 0.96%), Dena Bank (up 0.08%), and Indian Bank (up 1.79%), gained.
The Union Cabinet chaired by the Prime Minister, Narendra Modi, on 10 December 2014, gave its approval for allowing Public Sector Banks (PSBs) to raise capital to meet their additional capital requirements under BASEL-III by diluting Government holding upto 52% in a phased manner. Out of 27 PSBs, Government of India controls 22 through majority holding. In the remaining 5 banks, SBI holds majority stake. These 27 PSBs control 70% of total branches, deposits and credit in the Indian banking system. Gol has regularly been infusing incremental capital in PSBs. Basel-Ill capital adequacy norms will be fully phased in and applicable by 31 March 2019. Capital requirements of banks have increased under Basel-Ill. If the PSBs are permitted to bring down GOI holding to 52% in a phased manner, they can raise upto Rs 160825 crore from the market.
OnMobile Global rose 3.24% to Rs 74.95 the company said board in meeting held on 11 December 2014 approved buyback of shares at a price not exceeding Rs 86 per share for an aggregate amount not exceeding Rs 49 crore. The maximum buyback price of Rs 86 is 14.36% premium to the ruling market price. The board has further resolved that the buy-back period shall in any case close within six months from date of opening of the offer. The buyback shall be from the open market through stock exchange methodology.
In the foreign exchange market, the rupee edged lower against the dollar, tracking losses for most Asian currencies against the dollar. The partially convertible rupee was hovering at 62.69, compared with its close of 62.29 during the previous trading session.
Brent crude futures bounced back after hitting 5-1/2-year low of $60.28 earlier in the session, as traders began pricing in expectations of improving manufacturing data to be published later this week. Brent for January settlement was up 51 cents at $62.36 a barrel. The contract had lost $1.83 a barrel or 2.9% to settle at $61.85 during the previous trading session on Friday, 12 December 2014, the lowest closing level since July 2009. Brent for February settlement was up $1.03 a barrel to 62.80 a barrel.
WPI eased to 0.0% (provisionally) for the month of November, 2014 as compared to 1.77% (provisional) for the previous month and 7.52% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 0.67% compared to a build up rate of 6.70% in the corresponding period of the previous year. For the month of September, 2014, the final WPI remained unchanged at its provisional level of 2.38% as reported on 14 October 2014.
Index of industrial production (IIP) declined, at a sharpest pace in three-years, contracting 4.2% in October 2014 compared with 2.8% (revised) increase in September 2014. The manufacturing sector's output dipped to 2.5% in October 2014, recording largest decline in last five-and-half years. The decline in the industrial production was entirely contributed by the manufacturing sector. Lesser number of working days in October 2014 mainly led to sharp decline in manufacturing sectors output.
The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 4.4% in November 2014 from 5.5% in October 2014, driven by a sharp decline in inflation for food articles. The corresponding provisional inflation rates for rural area were 4.1% and urban area also 4.7% as against 5.5% and 5.6% for October 2014.
Meanwhile, the Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. 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.
The Lok Sabha on Friday, 12 December 2014, passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year. The challenge for the government now will be to find support for the bill in the Rajya Sabha where it's in a minority.
Asian stocks edged lower today, 15 December 2014, after a sharp setback for US stocks on Friday, 12 December 2014. US stocks tumbled on Friday, 12 December 2014, as the sustained drop in oil prices revived growth concerns. Key indices in China, Hong Kong, Singapore, Indonesia, South Korea, Hong Kong and Taiwan were off 0.04% to 1.57%.
Japanese Prime Minister Shinzo Abe's coalition cruised to a big election win on Sunday, 14 December 2014, ensuring he will stick to reflationary economic policies and a muscular security stance, but record low turnout pointed to broad dissatisfaction with his performance.
Confidence of Japan's large manufacturers declined in the fourth quarter as a recession offset a boost from a weaker yen, underlining the economic challenges facing Prime Minister Shinzo Abe after his election win. The Tankan's big manufacturer index slipped to 12 in December from 13 in September Bank of Japan today, 15 December 2014.
Meanwhile, large parts of central Sydney were in lockdown today, 15 December 2014, after at least one gunman took hostages in a cafe and placed an Islamic flag in the window, sparking concerns a terrorist attack was under way. Authorities sealed off surrounding streets, evacuated people from buildings, and suspended several rail routes into and out of the city after the incident began around 9:45 a.m. at the Lindt Chocolate Cafin Martin Place in the heart of the business district.
Trading in US index futures indicated that the Dow could gain 44 points at the opening bell today, 15 December 2014. US stocks sank on Friday, 12 December 2014, as oil prices continued to slide. The US Senate on Saturday, 12 December 2014, passed a $1.1 trillion spending bill that lifts the threat of a government shutdown as Congress attempts to wrap up a two-year legislative session marked by bitter partisanship and few major accomplishments. The Senate's 56-40 vote sends the measure to President Barack Obama, who is expected to sign it into law before federal spending authority expires at midnight.
A two-day meeting of Federal Open Market Committee (FOMC) to discuss monetary policy review starts tomorrow, 16 December 2014. The policy meeting will be keenly watched for any hints on the timing of interest rate increases in the world's biggest economy. It remains to be seen whether Federal Reserve officials would signal a rate hike by dropping their assurance that rates will stay low for a considerable time.
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