Volatility continued as the key benchmark indices trimmed gains after reversing intraday losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 8.87 points or 0.03% at 27,359.55. The market breadth indicating the overall health of the market was weak.
PSU OMCs declined. Ranbaxy Laboratories rose after the company said it has received the regulatory approval to launch India's first NCE (New Chemical Entity), Synriam, in seven African countries.
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.
Earlier, the Sensex and the 50-unit CNX Nifty, had, both bounced back after hitting hit 6-1/2-week low at the onset of the trading session.
On the macro front, the latest data showed that the rate of inflation based on the wholesale price index (WPI) stood at zero in November 2014, compared with WPI of 1.77% in October 2014. The data comes close on the heels of another data showing a further easing of consumer price inflation last month. Meanwhile, 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. Data on both industrial production and consumer price inflation was released after trading hours on Friday, 12 December 2014.
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Meanwhile, Finance Minister Arun Jaitley will reportedly hold discussions with state finance ministers for two days starting today, 15 December 2014, in a determined bid to seal a deal on goods & services tax (GST).
In overseas markets, energy shares led recovery in European shares from initial slide as global crude oil prices rose. 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 on year-end dollar demand from importers.
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 14:16 IST, the S&P BSE Sensex was up 8.87 points or 0.03% at 27,359.55. The index rose 41.50 points at the day's high of 27,392.18 in mid-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 3.55 points or 0.04% at 8,227.65. The index hit a high of 8,242.40 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 off 23.35 points or 0.23% at 10,085.25. The BSE Small-Cap index was off 31.19 points or 0.28% at 11,037.29. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was weak. On BSE, 1,638 shares fell and 1,091 shares rose. A total of 100 shares were unchanged.
Shares of housing finance major HDFC jumped 4.36%.
Ranbaxy Laboratories rose 0.11% after the company said during market hours today, 15 December 2014, that it has received the regulatory approval to launch India's first NCE (New Chemical Entity), Synriam, in seven African countries viz. Nigeria, Uganda, Senegal, Camerron Gunea, Kenya and Ivory Coast. The product has since been launched in Uganda and will be made available in other countries towards end of January 2015, Ranbaxy said. The new drug confirms to the recommendations of World Health Organisation (WHO) for using combination therapy in malaria.
PSU OMCs declined. BPCL (down 4.01%), HPCL (down 3.25%) and Indian Oil Corporation (down 3.25%) declined. The next fuel price review from PSU OMCs is due tomorrow, 16 December 2014. PSU OMCs review fuel prices during the middle of the month and on the last day of the month based on the average imported oil price in the preceding fortnight.
Texmaco Rail & Engineering rose 0.08%. Titagarh Wagons gained 0.93%. Minister of State for Railways Manoj Sinha said in written reply to a question in Lok Sabha today, 15 December 2014, that Indian Railways is contemplating acquisition of approximately 13,162 wagons in 2014-15. Augmentation of freight stock on Indian Railways is a continuous process, Sinha said. The Railways assess the requirement of wagons and places demand for new wagons every year, he said. The average number of freight trains run daily on Indian Railways during 2012-13 was 7,421, Sinha said.
In the foreign exchange market, the rupee edged lower against the dollar on year-end dollar demand from importers. The partially convertible rupee was hovering at 62.8225, 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 36 cents at $62.21 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 7 cents a barrel to 62.93 a barrel.
On the macro front, the latest data showed that the rate of inflation based on the wholesale price index (WPI) stood at zero in November 2014, compared with WPI of 1.77% in October 2014. 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. The government announced the WPI inflation data during trading hours today, 15 December 2014.
The data comes close on the heels of another data showing a further easing of consumer price inflation last month. 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.
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.
Meanwhile, Finance Minister Arun Jaitley will reportedly hold discussions with state finance ministers for two days starting today, 15 December 2014, in a determined bid to seal a deal on goods & services tax (GST). The fiscal room created by the crash in crude oil prices has given Jaitley space to walk the extra mile in his bid to assure the state governments that they will not lose any revenue once the single levy is imposed, according to reports. The finance ministry will make a big saving in fuel subsidies after a crash in global crude oil prices over the past few months. These savings could be used to compensate states once the tax is rolled out, according to reports.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
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.
Energy shares led recovery in European stocks from initial slide today, 15 December 2014, as global crude oil prices rose. Key indices in France, Germany and UK were up 0.13% to 0.23%.
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 Hong Kong, Singapore, Indonesia, South Korea, Hong Kong and Taiwan were off 0.07% to 1.57%. China's Shanghai Composite index rose 0.52%.
China's GDP growth could decelerate to 7.1% next year on slowing property investment, according to a latest research report from China's central bank.
In Japan, 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, five hostages reportedly rescued themselves from the Lindt Chocolate Cafin Martin Place in Sydney where a man is holding people at gunpoint. 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. in the heart of the business district in Sydney.
Trading in US index futures indicated that the Dow could gain 74 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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