A sharp slide in global crude oil prices overnight and data showing continuation of buying of Indian stocks by foreign portfolio investors boosted sentiment as key benchmark indices edged higher on the last trading session of the week. High volatility was witnessed during the latter part of the trading session as benchmark indices regained positive zone after slipping into the red from green for a brief period in mid-afternoon trade. The barometer index, the S&P BSE Sensex, regained the psychological 28,000 level. The Sensex was provisionally up 82.54 points or 0.3% to 28,023.18. The market breadth indicating the overall health of the market was positive.
Global crude oil prices witnessed a sharp slide overnight. Indian government's decision last month to decontrol diesel prices and a sharp decline in global crude oil prices recently would reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. The latest data showed that inflation based on the wholesale price index eased further last month. The data comes close on the heels of another data this week showing easing of consumer price index last month.
Foreign portfolio investors bought shares worth a net Rs 690.61 crore yesterday, 13 November 2014, as per provisional data.
Steel stocks led gains in metal stocks. PSU OMCs edged higher on overnight steep decline in crude oil prices. ONGC advanced ahead of Q2 results. State Bank of India (SBI) edged higher in volatile trade after announcing strong Q2 results. DLF advanced after decent Q2 numbers. Sun Pharmaceutical Industries dropped amid volatility after Q2 results. Cipla dropped after weak Q2 numbers.
In overseas markets, European stocks edged lower as a slide in oil-related stocks offset data showing the euro area's two largest economies returned to growth in the third quarter. Asian stocks rose after the Dow Jones Industrial Average attained record closing high yesterday, 13 November 2014.
In the foreign exchange market, the rupee edged lower against the dollar, weighed down by dollar demand from state-run banks and sharp gains in the greenback versus major currencies.
Brent crude futures edged higher after a steep slide during the preceding trading session.
As per provisional closing, the S&P BSE Sensex was up 82.54 points or 0.3% to 28,023.18. The index jumped 152.59 points at the day's high of 28,093.23 in late trade. The index lost 27.74 points at the day's low of 27,912.90 in early trade.
The CNX Nifty was up 32.05 points or 0.38% at 8,389.90, as per provisional closing. The index hit a high of 8,400.65 in intraday trade. The index hit a low of 8,346.80 in intraday trade.
The BSE Mid-Cap index was 52.64 points or 0.52% at 10,154.81. The BSE Small-Cap index was up 57.85 points or 0.52% at 11,217.39. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,569 shares gained and 1,461 shares fell. A total of 118 shares were unchanged.
The total turnover on BSE amounted to Rs 3443 crore, lower than Rs 3531.93 crore yesterday, 13 November 2014.
PSU OMCs edged higher on overnight steep decline in crude oil prices. BPCL (up 0.53%) and Indian Oil Corporation (up 2.92%) gained. Lower crude oil prices will reduce under recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of LPG and kerosene at government controlled prices. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. The government has already deregulated pricing of petrol and diesel.
The government yesterday, 13 November 2014, announced increase in excise duty on petrol and diesel by Rs 1.50 per litre each.
HPCL rose 2.29% at Rs 554.20. The company reported 166.59% surge in net profit to Rs 850.21 crore on 0.35% fall in total income to Rs 51964 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014.
GAIL (India) rose 2.48% at Rs 489. The company during market hours today, 14 November 2014, said that the company along with state gas companies of Turkmenistan, Afghanistan and Pakistan have established a company that will build, own and operate the planned 1,800-kilometer Turkmenistan-Afghanistan-Pakistan-India (TAPI) natural gas pipeline. State concern Turkmengas, Afghan Gas Enterprise, Inter State Gas Systems and GAIL will own equal shares of the company, TAPI Pipeline Company (TPCL), GAIL (India) said in a statement. TPCL has been incorporated as a special purpose vehicle (SPV) in the Isle of Man, a British Crown dependency, located in the Irish Sea. This SPV would be responsible for finance, design, construction, operation and maintenance of the TAPI pipeline, GAIL (India) said in a statement.
The TAPI pipeline will export up to 33 billion cubic meters of natural gas a year from Turkmenistan to Afghanistan, Pakistan, and India over 30 years. Turkmenistan has the world's fourth-largest proven gas reserves, and the pipeline will allow the landlocked country to diversify its gas export markets to the southeast. Turkmen gas in turn will provide a key new source of fuel for Afghanistan, Pakistan, and India.
ONGC rose 2.08% at Rs 393.45 ahead of Q2 September 2014 results today, 14 November 2014. ONGC's overseas subsidiary ONGC Videsh's net profit rose 9.65% to Rs 2068 crore on 12.94% growth in gross revenue from operations to Rs 11362 crore in the first half of FY 2015 over the first half of FY 2014. The net profit was higher mainly due to higher sales revenue partly offset by higher charge of depreciation, depletion & amortization, ONGC said. Gross revenue increased mainly due to increase in sales quantities in BC-10, Brazil and Block A1 and A3, Myanmar. The result was announced before market hours yesterday, 13 November 2014.
Bharat Heavy Electricals (Bhel) lost 0.16% at Rs 246.50. The stock hit high of Rs 248.70 and low of Rs 236.25. Bhel reported 72.61% drop in net profit to Rs 124.84 crore on 33.13% fall in total income to Rs 6340.14 crore in Q2 September 2014 over Q2 September 2013. The company announced Q2 results during market hours today, 14 November 2014. Bhel's order book stood at about Rs 1.03 lakh crore as on 30 September 2014.
State Bank of India (SBI) rose 2.42% at Rs 2,785. The stock hit high of Rs 2,806.45 and low of Rs 2,721.40. SBI's net profit rose 30.54% to Rs 3100.41 crore on 12.46% increase in total income to Rs 41833.36 crore in Q2 September 2014 over Q2 September 2013. The bank announced Q2 September 2014 results during trading hours today, 14 November 2014.
SBI's ratio of net non-performing assets (NPAs) to net advances stood at 2.73% as on 30 September 2014, compared with 2.66% as on 30 June 2014 and 2.91% as on 30 September 2013. The bank's ratio of gross NPAs to gross advances stood at 4.89% as on 30 September 2014, compared with 4.90% as on 30 June 2014 and 5.64% as on 30 September 2013.
The provisioning coverage ratio as on 30 September 2014 stood at 63.18%.
On consolidated basis, SBI's net profit rose 30.95% to Rs 4023.84 crore on 15.02% increase in total income to Rs 61098.67 crore in Q2 September 2014 over Q2 September 2013.
State Bank of India's board of directors at its meeting held today, 14 November 2014, has accorded its approval to the bank for raising funds by issue of equity shares from the market or Government of India, by way of Preferential Issue/QIP/FPO/Rights Issue/GDR/ADR and/or any other mode(s) or a combination(s) thereof during FY 2015 and FY 2016. The board also authorized the Committee of Directors for Capital Raising to decide on number of tranches and timing of issue(s) and the quantum thereof to raise the additional Non-Equity capital, by way of AT-1 and/or Tier II bonds in USD/INR considered as regulatory capital under Basel III guidelines, to be issued to Indian and/or overseas investors, in one or more tranches, during FY 2015 and FY 2016 through a Public offer and/or Private placement.
Steel stocks led gains in metal stocks. Among steel stocks, JSW Steel (up 2.66%) and Jindal Steel & Power (up 4.17%) gained.
Steel Authority of India jumped 7.41% at Rs 86.25. The stock hit a high of Rs 86.90 and a low of Rs 79.05. The company's net profit declined 44.97% to Rs 649.49 crore on 1.3% growth in total income to Rs 11840.64 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014.
Tata Steel rose rose 2.26% at Rs 481, with the stock extending yesterday's 0.43% gains. The company's consolidated net profit rose 36.82% to Rs 1254.33 crore on 2.03% fall in total income to Rs 36098.63 crore in Q2 September 2014 over Q2 September 2013. The bottom line was boosted by profit of Rs 1146.86 crore on sale of land at Borivali in Mumbai. The result was announced after market hours on Wednesday, 12 November 2014.
Among other metal stocks, Sesa Sterlite (up 1.57%), NMDC (up 2.5%), Hindustan Zinc (up 0.4%) and Hindalco Industries (up 3.69%) gained.
Hindustan Copper lost 1.61% at Rs 79.20 after net profit fell 72.24% to Rs 17.21 crore on 33.2% decline in total income to Rs 237.62 crore in Q2 September 2014 over Q2 September 2013. The company announced Q2 results after market hours yesterday, 13 November 2014.
Realty stocks advanced. Unitech (up 4.52%), Indiabulls Real Estate (up 3.28%), Oberoi Realty (up 2.91%),and Godrej Properties (up 1.85%) gained. Sobha Developers (down 0.56%) declined.
Housing Development and Infrastructure rose 0.92% at Rs 87.75 after consolidated net profit rose 35.53% to Rs 57.87 crore on 31.33% decline in total income to Rs 304.84 crore in Q2 September 2014 over Q2 September 2013.
DLF rose 1.84% at Rs 141.45 after consolidated net profit rose 9% to Rs 109.06 crore on 4% decline in total income to Rs 2135.59 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014. DLF's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 6.4% to Rs 918 crore in Q2 September 2014 over Q2 September 2013.
In a statement, DLF said that the company sees early signs of green shoots of demand emerging, especially in its luxury development-Camellias in DLF 5, Gurgaon. The company sold approx 0.20 msf of the project in Q2 September 2014 at an average realization of Rs 33,156 per sq. ft. DLF said that the company is fully geared up to ride the up-cycle with its inventory of finished valued in excess of about Rs 4000 crore, unsold inventory of launched projects under construction worth about Rs 13000 crore and future pipeline of projects worth about Rs 7000 crore, for which all approvals are in place.
Despite tough market conditions for the sector since the global financial crisis, the company has been able to create very valuable rental assets with current run rate of annuity incomes above Rs 2100, DLF said. Given the recent notifications on the REITs, it has become incumbent upon the company to re-evaluate its strategic path and options to drive sustainable, long term growth and development of the rental business, DLF said. Various options are being reviewed to harness the maximum potential, DLF said. The company is committed to create one or more sizeable REIT platform either independently or in partnership with strategic/financials partners not only to harness the growth in the market but also to unlock/part monetise the company's investment, DLF said. DLF also said that the company is gearing up for the second round of its CMBS offering, for which indicative ratings are in place. This large offering will help in improving the debt profile by reduction in interest costs and terming out the liabilities, DLF said.
The company has filed an appeal with Securities Appellate Tribunal (SAT), against the order passed by the Securities and Exchange Board of India (Sebi). SAT has provided an interim relief to the company for redeeming mutual funds to the tune of Rs 1806 crore. The next hearing is scheduled for 10 December 2014, DLF said. The company said it will defend itself to the fullest extent against any adverse findings and measures contained in the Sebi order and it has full faith in the judicial process and is confident of vindication of its stand in the near future.
Sun Pharmaceutical Industries declined 2.45% at Rs 886.30. The stock hit a high of Rs 920.10 and a low of Rs 880.85. The company after market hours yesterday, 13 November 2014, reported 15% rise in consolidated net profit to Rs 1572 crore on 13% rise in net sales/income from operations to Rs 4751 crore in Q2 September 2014 over Q2 September 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 18% to Rs 2161 crore in Q2 September 2014 over Q2 September 2013. EBITDA margin stood at 45% in Q2 September 2014, higher than 44% in Q2 September 2013.
Cipla lost 2.43% at Rs 609 after consolidated net profit declined 16.48% to Rs 299 crore on 5.9% growth in net sales to Rs 2630 crore in Q2 September 2014 over Q2 September 2013. The result was announced after market hours yesterday, 13 November 2014.
Cipla's EBITDA declined 1.58% to Rs 558 crore in Q2 September 2014 over Q2 September 2013.
In the foreign exchange market, the rupee edged lower against the dollar, weighed down by dollar demand from state-run banks and sharp gains in the greenback versus major currencies. The partially convertible rupee was hovering at 61.775, compared with its closing of 61.57 during the previous trading session.
Brent crude futures edged higher after a steep slide during the preceding trading session. Brent for January settlement was up 43 cents at $77.92 a barrel. The contract had lost $3.63 a barrel to settle at $77.49 a barrel yesterday, 13 November 2014.
Indian government yesterday, 13 November 2014, announced increase in excise duty on petrol and diesel by Rs 1.50 per litre each. The hike in excise duty on the two transportation fuels will help boost government's revenue. The government's decision last month to decontrol diesel prices and a sharp decline in global crude oil prices recently would reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
The annual rate of inflation based on wholesale price index (WPI) eased to 1.77% in October from 2.38% in September 2014, data released from the government today, 14 November 2014, showed. Meanwhile, the rate of WPI inflation for August 2014 was revised upwards to 3.85% from 3.74% reported earlier.
The easing of WPI inflation comes close on the heels of another data which showed easing of consumer price inflation. The annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 5.52% in October 2014, from 6.46% in September 2014, data released by the government on 12 November 2014 showed. The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
European stocks edged lower today, 14 November 2014, as a slide in oil-related stocks offset data showing the euro area's two largest economies returned to growth in the third quarter. Key indices in Germany and UK were off 0.06% to 0.21%. In France, the CAC 40 index was up 0.22%.
Germany's gross domestic product rose 0.1% in the three month through September after shrinking a revised 0.1% in the second quarter, the Federal Statistics Office in Wiesbaden said today, 14 November 2014. The French economy grew 0.3% after contracting 0.1% in the April-June period.
According to survey of economic forecasters released yesterday, 13 November 2014, by the European Central Bank (ECB), inflation in the eurozone is expected to remain super low for the remainder of this year and accelerate only gradually in the next two years, according to a survey of economic forecasters. According to the quarterly survey, consumer prices are expected to grow just 0.5% this year, down from the August forecast of a 0.7% rise. Next year, the inflation rate is expected to come in at 1% followed by 1.4% in 2016. These rates are far below the ECB's inflation target of just below 2% over the medium term. Over a longer five-year horizon, the inflation rate is expected to be closer to the ECB's objective, at 1.8%. That compares with a 1.9% rate forecast in the previous survey.
Forecasters surveyed by the ECB also marked down their projections for economic growth over the next two years. Economists expect gross domestic product growth of 0.8% this year, down from 1% in the August round of forecasts. GDP is expected to expand 1.2% next year and 1.5% in 2016, which were also below the August projections.
Asian stocks edged higher today, 14 November 2014, after the Dow Jones Industrial Average attained record closing high yesterday, 13 November 2014. Key indices in Hong Kong, Japan, Taiwan, Indonesia and Singapore were up 0.02% to 0.56%. Key indices in China and South Korea were off 0.26% to 0.78%.
A trading program linking Hong Kong's stock market with Shanghai's will open on Monday, 17 November 2014. China will waive capital gains tax for foreign investors buying mainland through the Connect, according to a statement released by China's Finance Ministry today, 14 November 2014.
Trading in US index futures indicated that the Dow could gain 27 points at the opening bell today 14 November 2014. US stocks eked out small gains yesterday, 13 November 2014. The Dow Jones Industrial Average gyrated between gains and losses, but ended the session at a fresh record high -- recording its 25th record closing high this year.
In US, more workers quit their jobs in September as hires reached their highest level in nearly seven years, the Labor Department said yesterday, 13 November 2014. Hires increased to a seasonally adjusted 5 million, a level last seen in December 2007. Quits rose to a seasonally adjusted 2.8 million in September from 2.5 million in the previous month, data showed.
Federal Reserve Chair Janet Yellen yesterday, 13 November 2014, said that the growing globalization of financial markets requires the Federal Reserve to understand how economic developments in other nations may affect the US economy. Yellen said the Fed needs better insights into things such as global capital flows to achieve its domestic objectives of maximum employment and price stability. Yellen's remarks came at the start of a two-day conference sponsored by the Fed, the European Central Bank and the Federal Reserve Bank of New York.
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