Firmness continued on the bourses in mid-afternoon trade as Europeans stocks edged higher in early trade there. The barometer index, the S&P BSE Sensex, was currently up 212.08 points or 0.78% at 27,310.25. The market breadth indicating the overall health of the market was positive. Foreign portfolio investors (FPIs) bought shares worth a net Rs 785.61 crore yesterday, 29 October 2014, as per provisional data. Global credit rating agency Moody's Investors Service today, 30 October 2014, said that the Government of India's and the Reserve Bank of India's recent economic, fiscal and financial measures will, if successfully implemented, sustain higher GDP growth and address some of the constraints on India's sovereign credit profile.
Maruti Suzuki India hit record high after reporting strong Q2 results. Index heavyweight and cigarette maker ITC gained. Many FMCG stocks gained.
In overseas markets, European stocks rose as latest corporate results beat forecasts and as the Federal Reserve judged the US economy strong enough to end its asset-purchase program. Asian stocks dropped after the US Federal Reserve after a monetary policy review yesterday, 29 October 2014, announced its decision to end the last round of its recession-era bond buying program.
In the foreign exchange market, the rupee edged lower against the dollar on speculation fund flows to emerging markets will slow as the US Federal Reserve moves closer to raising interest rates after ending its asset-purchase program.
Brent crude oil prices edged lower after previous day's sharp rise triggered by weekly data showing that US crude stockpiles rose less than expected last week.
A sustained rise during the trading session took the Sensex to a record high and the 50-unit CNX Nifty to its highest level in more than 7 weeks in afternoon trade as investors cheered the government's decision announcing relaxation of foreign direct investment (FDI) in property development and construction sector. The decision to relax norms on FDI in the in property development and construction sector comes close on the heels of the government's announcement of deregulation of diesel prices on 18 October 2014.
Indian stocks may remain volatile during the last one hour or so of trade as traders roll over positions in the futures & options (F&O) segment from the near month October 2014 series to November 2014 series. The near month October 2014 derivatives contracts expire today, 30 October 2014.
At 14:17 IST, the S&P BSE Sensex was up 212.08 points or 0.78% at 27,310.25. The index jumped 260.68 points at the day's high of 27,358.85 in afternoon trade, a record high. The index fell 9.52 points at the day's low of 27,088.65 in early trade.
The CNX Nifty was up 66.90 points or 0.83% at 8,157.35. The index hit a high of 8,167.20 in intraday trade, its highest level since 9 September 2014. The index hit a low of 8,085.20 in intraday trade.
The BSE Mid-Cap index was up 38.95 points or 0.4% at 9,689.24. The BSE Small-Cap index was up 48.74 points or 0.45% at 10,839.20. Both these indcies underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,465 shares rose while 1,288 shares declined. A total of 124 shares were unchanged.
Maruti Suzuki India rose 1.3% to Rs 3247 after company reported strong Q2 results. The stock hit record high of Rs 3,261 in intraday trade. The stock hit low of Rs 3173.95 so far during the day. The company's net profit rose 28.69% to Rs 862.54 crore on 18.24% rise in total income to Rs 12497.03 crore in Q2 September 2014 over Q2 September 2013. Growth in domestic sales and cost reduction initiatives by the company contributed significantly to bottomline growth during Q2 September 2014.
The company's board of directors has recommended an increase in the foreign institutional investors' (FII) limit to 40%, broadly the level of public shareholding in the company. Reserve Bank of India (RBI) has put restriction on further purchases of shares of Maruti by FIIs. RBI had on 3 Mar 2014 notified that the foreign share holding under portfolio investment scheme in Maruti Suzuki India had reached the trigger limit of 22% and therefore fresh purchases of equity shares of this company would be allowed only after obtaining prior approval of the Reserve Bank of India.
Maruti's board also approved dividend payment guidelines in which it said company would endeavour to keep the dividend payout ratio, except for reasons to be recorded, within the range of 18% to 30%.
Many FMCG stocks gained. Colgate Palmolive (India) (up 0.41%), Dabur India (up 1.93%), Godrej Consumer Products (up 3.56%), Hindustan Unilever (HUL) (up 0.81%) Nestle India (up 0.48%), and Tata Global Beverages (up 0.22%) gained.
Index heavyweight and cigarette maker ITC gained 0.7% to Rs 357. The stock hit high of Rs 357.40 and low of Rs 351.45 so far during the day.
MphasiS lost 2.07% after consolidated net profit fell 8.34% to Rs 160.20 crore on 1.69% decline in net sales to Rs 1464.87 crore in the quarter ended 30 September 2014 over the quarter ended 30 June 2014. MphasiS' Direct channel revenue declined by 2.1% sequentially or 3.3% net of rupee depreciation, impacted by slowdown in the US mortgage industry and one-time revenue reversals in India Government business, the company said. Operating margins stood at 13% impacted by certain one-time revenue reversals and sales expenditure, MphasiS said in statement.
Dish TV India lost 2.79% after the company reported a net loss of Rs 15.07 crore in Q2 September 2014, higher than net loss of Rs 8.53 crore in Q2 September 2013. Dish TV India's total income rose 10.8% to Rs 689.36 crore in Q2 September 2014 over Q2 September 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 4.4% to Rs 162.30 crore in Q2 September 2014 over Q2 September 2013. Festival driven, higher selling and distribution expenses resulted in the EBITDA margin being marginally lower at 24.1% in Q2 September 2014 compared to 24.5% in Q2 September 2013. Average revenue per user (ARPU) increased to Rs 172 in Q2 September 2014 from Rs 170 in Q2 September 2013.
Meanwhile, the provisional data released by the stock exchanges after trading hours on Wednesday, 29 October 2014, showed that foreign portfolio investors (FPIs) bought shares worth a net Rs 785.61 crore on that day.
In the foreign exchange market, the rupee edged lower against the dollar on speculation fund flows to emerging markets will slow as the US Federal Reserve moves closer to raising interest rates after ending its asset-purchase program. The partially convertible rupee was hovering at 61.48, compared with its close of 61.36 during the previous trading session.
Brent crude oil prices edged lower after previous day's sharp rise triggered by weekly data showing that US crude stockpiles rose less than expected last week. Brent crude for December delivery was off 56 cents at $86.56 a barrel. The contract had gained $1.09 a barrel to settle at $87.12 a barrel during the previous trading session.
The Union Cabinet yesterday, 29 October 2014, announced relaxation of rules for foreign investment in property development and construction. 100 percent foreign direct investment (FDI) under automatic route will be permitted in the construction development sector. In case of development of serviced plots, there is no condition of minimum land. In case of construction-development projects, a minimum floor area will be 20,000 sq. meters. The investee company will be required to bring minimum FDI of $5 million within six months of commencement of the project. Subsequent tranches of FDI can be brought till the period of ten years from the commencement of the project or before the completion of the project, whichever expires earlier. The investor will be permitted to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure.
Global credit rating agency Moody's Investors Service today, 30 October 2014, said that the Government of India's and the Reserve Bank of India's recent economic, fiscal and financial measures will, if successfully implemented, sustain higher GDP growth and address some of the constraints on India's sovereign credit profile. Moody's points out that these measures are incremental rather than radical. However, together, the various measures will harness India's economic advantages of size, diversity and a deep pool of labor and savings. They will also improve its investment climate, and allow the economy to reap the benefits of lower global commodity prices and international financial flows seeking real investment assets, Moody's said. Higher investment and lower macro-economic imbalances could sustain growth rates of around 7.5% in India over the next 5-10 years. Such a result would be significantly higher than the 5%-6% growth Moody's expects for India in 2015, the rating agency said.
However, given the early days and the incremental nature of policy change, Moody's expects that it will take several quarters for an improvement in quantitative and qualitative credit metrics to crystallize.
European stocks edged higher today, 30 October 2014, as latest corporate results beat forecasts and as the Federal Reserve judged the US economy strong enough to end its asset-purchase program.. Key benchmark indices in France, Germany and UK were up 0.05% to 0.77%.
Asian stocks declined today, 30 October 2014, after the US Federal Reserve after a monetary policy review yesterday, 29 October 2014, announced its decision to end the last round of its recession-era stimulus program. Key benchmark indices in Indonesia, Singapore, South Korea, Hong Kong and Taiwan were off 0.01% to 0.49%. Key benchmark indices in Japan and China were up 0.67% to 0.76%.
China's international payments were largely balanced in the third quarter with a surplus in the current account offsetting a deficit in the capital account, the latest data showed. China's current-account surplus in the three months ended September rose to $81.5 billion, compared with a revised surplus of $73.4 billion in the second quarter, the country's foreign-exchange regulator said. The nation had a capital and financial account deficit of $81.6 billion in the third quarter, indicating net outflows of investment funds, the State Administration of Foreign Exchange said. The latest data are initial estimates and will likely be revised later.
Trading in US index futures indicated that the Dow could gain 45 points at the opening bell today, 30 October 2014. US stocks closed with slight losses on Wednesday, 29 October 2014, after the Federal Reserve ended its stimulative monthly bond-buying program and expressed confidence in US economic prospects.
The Federal Reserve on Wednesday, 29 October 2014, ended its monthly bond purchase program and signaled confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy. "The Committee continues to see sufficient underlying strength in the broader economy to support ongoing progress toward maximum employment in a context of price stability," the central bank's policy committee said in a statement following a two-day meeting. The timing and pace of rate hikes would depend on incoming economic data, the Fed said.
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