Metal and banking stocks led the rally as key benchmark indices surged to record high after International Monetary Fund (IMF) yesterday, 19 January 2015, said India's economy will be world's fastest-growing major economy in the year through March 2017. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit lifetime high on intraday basis as well on closing as well. Shares of index heavyweights ITC, HDFC, Reliance Industries (RIL), Infosys, ICICI Bank, HDFC Bank and L&T edged higher. The Sensex surged 522.66 points or 1.85% to settle at 28,784.67. The market breadth indicating the overall health of the market was positive. Asian and European stocks edged higher.
FMCG stocks witnessed selling pressure. Infosys gained after Emirates Islamic Bank selected Infosys Finacle Islamic Banking solution. Banks stocks rose on renewed buying. Kotak Mahindra Bank rose after strong Q3 results. Metal and mining shares rose after the latest data showed China's GDP grew 7.3% in Q4 December 2014, a tad higher than market expectations. Sesa Sterlite rose on reports that the company expects to restart iron ore mining in Goa within two weeks.
While the IMF trimmed its global growth forecast for this year and the next year, the fund said that the growth forecast is broadly unchanged for India as weaker external demand is offset by the boost to the terms of trade from lower oil prices and a pickup in industrial and investment activity after policy reforms. IMF estimates India's growth accelerating to 6.5% in the fiscal year through March 2017.
Foreign portfolio investors (FIIs) bought shares worth a net Rs 417.01 crore from the secondary equity markets yesterday, 19 January 2015, as per data from the National Securities Depository (NSDL).
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude futures reversed intraday losses.
In overseas markets, European stocks advanced on speculation the European Central Bank will announce quantitative easing this week aimed at spurring Europe's ailing economy. Asian stocks rose after the latest data showed China's GDP grew 7.3% in Q4 December 2014, a tad higher than market expectations.
The S&P BSE Sensex surged 522.66 points or 1.85% to settle at 28,784.67, a record closing high for the index. The index jumped 567.28 points at the day's high of 28,829.29 in late trade, a lifetime high for the index. The index rose 62.84 points at the day's low of 28,324.85 in opening trade.
The CNX Nifty jumped 144.90 points or 1.69% to settle at 8,695.60, a record closing high for the index. The index hit a high of 8,707.90 in intraday trade, a lifetime high for the index. The index hit a low of 8,574.50 in intraday trade.
The BSE Mid-Cap index rose 46.79 points or 0.44% to settle at 10,727.81. The BSE Small-Cap index gained 46.41 points or 0.41% to settle at 11,446.27. Both these indices underperformed the Sensex.
Among sectoral indices on BSE, the BE Metal index jumped 3.03%, outperforming the Sensex. The BSE Auto index (up 0.7%), BSE Healthcare index (up 0.43%), BSE Oil & Gas index (up 1.33%), BSE Consumer Durables index (down 0.07%), BSE Capital Goods index (up 0.45%), BSE Power index (down 0.02%), the S&P Bankex index (up 1.84%), BSE IT index (up 0.41%), BSE FMCG index (up 1.69%), BSE Teck index (up 0.63%) and BSE Realty index (up 1.2%) underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,563 shares advanced and 1,409 shares declined. A total of 117 shares were unchanged.
The total turnover on BSE amounted to Rs 3487.72 crore, higher than turnover of Rs 3275 crore during the previous trading session.
Metal and mining shares rose after the latest data showed China's GDP grew 7.3% in Q4 December 2014, a tad higher than market expectations. China is the world's largest consumer of copper, steel, and aluminium.
Among mining stocks, NMDC (up 2.55%), Ashapura Minechem (up 0.38%), Hindustan Copper (up 0.7%), MOIL (up 0.254%), Coal India (up 0.78%) and Neyveli Lignite Corporation (up 0.52%), edged higher.
Among metal stocks, Tata Steel (up 4.5%), Hindalco Industries (up 3%), National Aluminium Company (up 1.27%), Jindal Steel & Power (up 2.57%), JSW Steel (up 2.97%), and Steel Authority of India (up 1.24%) edged higher. Bhushan Steel fell 0.57%.
China's production of crude steel, an indicator of its industrial demand, fell to its slowest pace of growth on record last year, according to data released by the National Statistics Bureau today, 20 January 2015. Output of the metal rose just 0.9% from 2013 to 822.7 million metric tons, underscoring how China's vast steel complex, which produces half the world's steel, has fallen to Beijing's push for a cleaner, consumption-led economy.
Meanwhile, India's Minister of Steel and Mines Narendra Singh Tomar yesterday, 19 January 2015, said that simplification and transferability brought in the MMDR Act, 1957 through the Mines and Minerals (Development and Regulation) (Amendment) Ordinance, 2015 will attract private investment in the mining sector. Addressing a meeting of mines ministers and secretaries from across the country, Tomar said that the ordinance is a revolutionary step in revival of mining sector in the country, hitherto stagnated due to various reasons. He added that the classification of minerals will lead to their better scientific exploration and with more power to the states mining process will be expedite. Citing the example of falling levels of iron ore production in the country, Tomar urged state governments to revive mining in all earnestness. Mining ministers and secretaries from different states expressed optimism over the amendments, and offered constructive suggestions for its implementation on the ground level, the Ministry of Mines said in a statement. It was agreed that delays in environment and forest clearances had to be resolved by MoEF for providing unhindered support in growth of mining.
Sesa Sterlite rose 5.62%. According to reports, the company expects to restart iron mining in Goa within two weeks as it waits for environment clearance and clarity on dumping waste outside the lease area. The Goa state government last week revoked its 2012 order that had halted the over 60-year-old-mining industry in the state. The new order will pave the way for the resumption of mining activities in Goa, pending the lifting of the ban imposed by the Ministry of Environment and Forests, according to media reports.
With reference to the news captioned "Corp Affair Ministry, I-T Department oppose Sesa Sterlite Merger", Sesa Sterlite after trading hours today, 20 January 2015, said that a Special Leave Petition (SLP) challenging the Scheme of Amalgamation & Arrangement ('Scheme') under Sections 391-394 of the Companies Act, 1956, was heard yesterday, 19 January 2015, by the Supreme Court and the court has fixed the matter for final disposal on 28 April 2015. The scheme was implemented in August 2013 and the company is defending the matter in the Supreme Court.
The SLC filed separately by the Commissioner of Income Tax (CIT), Goa and Ministry of Corporate Affairs have been clubbed together. The Ministry of Corporate Affairs had filed the SLP on the ground that the scheme is against public policy.
Hindustan Zinc rose 0.75%. The company's net profit rose 38.11% to Rs 2379.37 crore on 20.42% rise in total income to Rs 4665.29 crore in Q3 December 2014 over Q3 December 2013. The result hit the market after market hours on Monday, 19 January 2015.
The increase in revenue in Q3 December 2014, was driven by higher zinc LME and lead & silver metal volumes, partly offset by lower silver price and refined zinc volume. EBITDA rose 14% to Rs 2089 crore in Q3 December 2014 over Q3 December 2013 as a result of better revenues and lower cost of production.
Sindesar Khurd mine expansion is proceeding better than planned, although Rampura Agucha underground shaft project is behind schedule. The board has approved deepening of the open cast mine by 50 metres which will extend mine life to FY 2019-20 and ensure a stable transition from open pit to underground at Rampura Agucha. The pre-stripping work will start in the current quarter, Hindustan Zinc said.
TCS fell 0.41%. The company announced after market hours that it has been selected by Virgin Atlantic Airways (VAA), one of the UK's leading airlines, to provide fully managed services to transform and optimise its IT processes, applications and infrastructure.
Banking stocks rose after the Reserve Bank of India (RBI) yesterday, 19 January 2015, said that it has decided to allow commercial banks to review the base rate methodology after three years from date of its finalization instead of the current periodicity of five years. Accordingly, banks may change their base rate methodology after completion of prescribed period with the approval of their Board of Directors/Asset Liability Management Committee (ALCO), the RBI said in a notification issued to commercial banks. Banks will, however, not be allowed to change their methodology during the review cycle.
The RBI further said that for the purpose of computing the base rate, commercial banks will have the freedom to calculate cost of funds either on the basis of average cost of funds or on marginal cost of funds or any other methodology in vogue, which is reasonable and transparent provided it is consistent and made available for supervisory review/scrutiny as and when required, the RBI said.
RBI also said that banks should have a board approved policy delineating the components of spread charged to a customer. It should be ensured that any price differentiation is consistent with bank's credit pricing policy, the RBI said. The central bank further said that a bank's internal pricing policy must spell out the rationale for, and range of, the spread in the case of a given category of borrower, as also, the delegation of powers in respect of loan pricing.
RBI further said that the spread charged to an existing borrower should not be increased except on account of deterioration in the credit risk profile of the customer or change in the tenor premium. Any such decision regarding change in spread on account of change in credit risk profile should be supported by a full-fledged risk profile review of the customer, the RBI said.
Among public sector banks, Union Bank of India (up 1.05%), Syndicate Bank (up 0.66%), Allahabad Bank (up 1.36%), State Bank of India (up 1.58%), Vijaya Bank (up 0.2%), Central Bank of India (up 2.54%), Punjab and Sind Bank (up 0.93%), IDBI Bank (up 1%), Punjab National Bank (up 0.75%), Canara Bank (up 1.21%), UCO Bank (up 0.61%), Andhra Bank (up 0.11%), Bank of Baroda (up 0.26%), Corporation Bank (up 4.31%), and Dena Bank (up 0.42%), edged higher. Bank of India (down 0.64%), United Bank of India (down 0.35%), Bank of Maharashtra (down 0.23%), and Indian Bank (down 0.07%) declined.
Among private sector banks, City Union Bank (up 1.38%), Yes Bank (up 4.05%), HDFC Bank (up 1.76%), ICICI Bank (up 1.7%), IndusInd Bank (up 1.22%) and ING Vysya Bank (up 0.49%), edged higher. Federal Bank declined 1.13%..
Kotak Mahindra Bank rose 0.32% to Rs 1,393.45. The stock hit a high of Rs 1,401.30 and a low of 1,384 in intraday trade. The bank's net profit rose 36.63% to Rs 464.52 crore on 20.15% growth in total income to Rs 2994.20 crore in Q3 December 2014 over Q3 December 2013. The Q3 result was announced during market hours today, 20 January 2015.
Kotak Mahindra Bank's (KMBL) net interest income (NII) rose 16% to Rs 1060 crore in Q3 December 2014 over Q3 December 2013.
The banks' ratio of net non-performing assets (NPAs) to net advances stood at 0.97% as on 31 December 2014, compared with 1% as on 30 September 2014 and 1.1% as on 31 December 2013. The bank's ratio of gross NPAs to gross advances stood at 1.87% as on 31 December 2014, compared with 1.89% as on 30 September 2014 and 2.01% as on 31 December 2013.
Provisions and contingencies declined 57.09% to Rs 29.92 crore in Q3 December 2014 over Q3 December 2013. The bank's provision coverage ratio on NPAs as on 31 December 2014 was at 56.82%.
Kotak Mahindra Bank said that the shareholders of the bank and the shareholders of ING Vysya Bank have approved the amalgamation of ING Vysya with Kotak in the ratio of 725 shares of Kotak for every 1,000 shares of ING Vysya. The amalgamation is subject to the approval of the Reserve Bank of India (RBI) under the Banking Regulation Act, the Competition Commission of India and such other regulatory approvals as may be required, Kotak Mahindra Bank said. The amalgamation would be effective from 1 April 2015 or such other date as may be fixed mutually by ING Vysya and Kotak and sanctioned by the RBI, Kotak Mahindra Bank said.
Axis Bank gained 4.33% to Rs 551.55 after hitting record high of Rs 554.75 in intraday trade. The bank said during market hours that the board of directors of the bank at its meeting held on 16 January 2015 has reappointed Shikha Sharma as Managing Director and CEO of the bank for a further period of three years with effect from 1 June 2015 i.e. for the period 1 June 2015 to 31 May 2018. The re-appointment is subject to approval of the Reserve Bank of India and the shareholders of the bank.
Housing finance major HDFC was up 5.81% at Rs 1,247. The stock hit record high of Rs 1,257.75 in intraday trade.
India's largest cigarette maker by sales ITC rose 3.59% to Rs 371.25. The stock hit a high of 371.85 and low of Rs 358.40.
Tata Motors rose 3.78% to Rs 559.10 after hitting record high of Rs 561.60 in intraday trade.
Reliance Industries' (RIL) rose 2.14% to Rs 898.70. The stock hit high of Rs 903.75 and low of Rs 878.60. The stock had risen 1.25% to settle at Rs 879.85 yesterday, 19 January 2015. RIL's consolidated net profit fell 4.5% to Rs 5256 crore on 20.4% decline in revenue to Rs 96330 crore in Q3 December 2014 over Q3 December 2013. The result hit the market after market hours on Friday, 16 January 2015. RIL attributed the decline in revenue in Q3 December 2014 to a sharp fall in benchmark oil price.
Infosys gained after Emirates Islamic Bank selected Infosys Finacle Islamic Banking solution. The stock rose 1.18%. Emirates Islamic Bank, a leading Sharia-compliant banking institution in the Middle East has selected Infosys Finacle Islamic Banking solution to power its operations. The announcement was made during market hours today, 20 January 2015.
FMCG stocks witnessed selling pressure. Marico (down 1.99%), Dabur India (down 1.51%), Godrej Consumer Products (down 0.82%), Bata India (down 0.73%), Colgate-Palmolive (India) (down 0.69%), Nestle India (down 0.34%), Procter & Gamble Hygiene & Health Care (down 0.10%), Tata Global Beverages (down 0.06%) and GlaxoSmithKline Consumer Healthcare (down 0.02%) edged lower.
Hindustan Unilever was up 0.59% to Rs 898.10. The stock had tumbled yesterday, 19 January 2015, after the company reported muted sales volume growth at the time of announcing Q3 December 2014 results.
Key equity benchmark indices edged higher for the fourth day in a row today, 20 January 2015. From a recent low of 27,346.82 on 14 January 2015, the Sensex has gained 1,437.85 points or 5.25% in four trading sessions. The Sensex has gained 1,285.25 points or 4.67% in this month so far (till 20 January 2015). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,821.55 points or 44.18%.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.715, compared with its close of 61.705 during the previous trading session.
Brent crude futures reversed intraday losses. Brent crude futures reversed intraday losses. Brent for March settlement was up 5 cents at $48.89 a barrel. The contract declined $1.33 a barrel or 2.65% to settle at $48.84 a barrel during the previous trading session.
The International Monetary Fund (IMF) yesterday, 19 January 2015, downgraded global growth outlook for this year and the next as it downgraded its outlook for more than a dozen of the world's largest economies. The IMF said global growth would be 0.3 percentage point lower this year and next than it had previously expected. It now expects the world economy to expand 3.5% this year and 3.7% in 2016. Sliding oil prices will give global growth a brief jolt, but the benefits won't be strong enough to keep the world economy out of a deepening long-term rut, the IMF said.
European stocks edged higher today, 20 January 2015, on speculation the European Central Bank (ECB) will announce quantitative easing this week aimed at spurring Europe's ailing economy. Key benchmark indices in UK, France and Germany were up by 0.03% to 0.74%.
German business sentiment rose for the third consecutive month in January, spurred by a weaker euro and low oil prices in the eurozone's biggest economy, according to the ZEW indicator gauging the business climate and current conditions. The ZEW sentiment indicator rose to 48.4 points, the highest reading since February 2014. The data follows a reading of 34.9 in December, after just 11.5 in November.
The governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review on Thursday, 22 January 2015. The ECB may introduce a large-scale bond-buying program on 22 January 2015.
French President Franis Hollande yesterday, 19 January 2015, said in a speech to business leaders at the ys Palace that he expects the ECB to announce that it will buy sovereign debt a move that he said will provide significant liquidity to the European economy and create a movement that is favorable to growth.
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 on Sunday, 25 January 2015. 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 markets rose today, 20 January 2015, after China reported its economy had not slowed as far as many had feared, a rare glint of brightness amid gloom over the global outlook. Key benchmark indices in China, Indonesia, Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.27% to 2.07%.
China's National Bureau of Statistics said the economy grew 7.4% last year and 7.3% in the October-December 2014 quarter. Beijing had targeted 7.5% growth for last year.
China's industrial output rose 7.9% in December and China's retail sales jumped 11.9% last month, the latest data showed.
Trading in US index futures indicated that the Dow could advance 52 points at the opening bell today, 20 January 2015. The US stock market was closed yesterday, 19 January 2015, for Martin Luther King, Jr. Day holiday.
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