Key benchmark indices edged higher, with market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 26 December 2013. Gains in Asian and European stocks also boosted sentiment on the domestic bourses. The barometer index, the SP BSE Sensex, and the 50-unit CNX Nifty, both, attained their highest closing level in more than two weeks. The Sensex garnered 118.99 points or 0.56%, off close to 40 points from the day’s high and up about 80 points from the day’s low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks gained for the second day in a row today, 27 December 2013. From a recent low of 21,032.71 on 24 December 2013, the Sensex has risen 160.87 points or 0.76% in two trading sessions. The Sensex has risen 401.65 points or 1.93% in this month so far (till 27 December 2013). The Sensex has garnered 1,766.87 points or 9.09% in calendar 2013 so far (till 27 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,744.87 points or 21.46%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 290.16 points or 1.35%.
Coming back to today’s trade, IT stocks rose after the latest data showed US jobless claims fell last week. Infosys and HCL Technologies hit record high and Wipro hit 52-week high. Index heavyweight and cigarette major ITC rose. Shares of two-wheeler makers declined. Pharma stocks gained.
Asian and European stocks edged higher on Friday, 27 December 2013, as improved economic data sent US stocks surging overnight.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 26 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 785.10 crore from the secondary equity markets on Thursday, 26 December 2013, as per the data from the Securities Exchange Board of India (Sebi).
The SP BSE Sensex garnered 118.99 points or 0.56% to settle at 21,193.58, its highest closing level since 10 December 2013. The index jumped 160.55 points at the day’s high of 21,235.14 in mid-afternoon trade. The index gained 38.66 points at the day’s low of 21,113.25 in early trade.
The CNX Nifty garnered 34.90 points or 0.56% to 6,313.80, its highest closing level since 10 December 2013. The index hit a high of 6,324.90 and a low of 6,289.40 in intraday trade.
The BSE Mid-Cap index rose 0.26% and the BSE Small-Cap index gained 0.13%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1820 crore, lower than Rs 1941.19 crore on Thursday, 26 December 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,384 shares gained and 1,170 shares fell. A total of 150 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 0.58% to Rs 321.80. The stock hit high of Rs 323.65 and low of Rs 320.
Pharma stocks gained. Cipla (up 1.73%), Dr Reddy’s Laboratories (up 0.34%), Lupin (up 0.04%), Ranbaxy Laboratories (up 0.46%) and Sun Pharmaceutical Industries (up 1.03%) gained.
IT stocks rose after the latest data showed US jobless claims fell last week. US is the biggest outsourcing market for the Indian IT firms. Tech Mahindra rose 1.78%. TCS rose 2.98%.
Wipro rose 1.89% to Rs 558, which was the day’s high and also a 52-week high of the counter.
Infosys rose 1.41% to Rs 3,565 after hitting record high of Rs 3,570 in intraday trade.
HCL Technologies gained 0.8% to Rs 1,256.20 after hitting record high of Rs 1,261.40 in intraday trade.
Shares of Polaris Financial Technology surged after the Securities Appellate Tribunal (SAT) quashed and set aside a Securities and Exchange Board of India (Sebi) order that barred Polaris Financial Technology chairman Arun Jain from market activities on charges of insider trading. The stock jumped 4.3%. Jain filed an appeal before the appellate body. A 23 December SAT order said, “In view of peculiar facts of present case, without going into the merits of the case and without giving any reasons, impugned order dated October 9, 2012 may be set aside.” It may be recalled that Sebi had in October 2012 barred Jain from market activities on charges of insider trading for a period of two years. The incident dates back to 2000.
FMCG stocks rose on renewed buying. Britannia Industries (up 1.08%), Colgate-Palmolive (India) (up 0.52%), Godrej Consumer Products (up 1.87%), Hindustan Unilever (up 0.9%) and Marico (up 1.22%) edged higher.
Apollo Hospitals Enterprise jumped 6.18%. Mahindra Mahindra Financial Services rose 0.84%. These two stocks have been included for trading in the futures options (FO) segment of the National Stock Exchange (NSE) starting today, 27 December 2013. The FO lot size of Apollo Hospitals Enterprise has been set at 250, whereas the lot size of Mahindra Mahindra Financial Services has been fixed at 1,000.
Capital goods pivotals were mixed. LT rose 0.49%.
State-run power equipment major Bharat Heavy Electricals (Bhel) dropped 0.83%. The company after trading hours on Thursday, 26 December 2013, said it has bagged an order for the supply of Turbine Generator (TG) Package for 2×500 MW TPS at Neyveli. The order valued at Rs 1023 crore has been secured by Bhel from Neyveli Lignite Corporation (NLC) for NLC’s upcoming 1,000 MW Neyveli New Thermal Power Project at Neyveli, Tamil Nadu. Bhel’s scope of work under the contract includes manufacture, supply, erection, testing and commissioning of Steam Turbine Generators Auxiliaries along with associated civil works.
Auto stocks were mixed. Tata Motors (up 0.26%) and MM (up 0.57%) gained. Ashok Leyland (down 2.07%) and Maruti Suzuki India (down 0.9%) declined.
Hindustan Motors rose 1.13% after the company on Thursday, 26 December 2013, at its 71st annual general meeting announced business restructuring plans. Hindustan Motors (HM) said that it is putting in all efforts to strengthen the company through restructuring.
Speaking after the company’s 71st annual general meeting, Mr. Uttam Bose, Managing Director and CEO, Hindustan Motors said, “HM remains fully committed to its revival plan. Slowdown in the economy, especially in the auto sector has affected HM too. In addition, we have had operational challenges in terms of cash flow problems for the company. Under these circumstances, it is becoming extremely challenging to manage daily operations”.
Mr. Bose said that as decided earlier, HM needs to restructure its business by demerging its Uttarpara and Chennai plants as the product portfolio and customer segment of these two units are very different. The company is seeking potential strategic/financial investors for both the units. It is already in talks with some of them. However, the potential partners, too, have specific needs and are interested in either of the two units, not both, he said.
Mr. Bose further said that the company is facing challenges in executing its revival strategy. In view of the delay in the demerger scheme awaiting the High Court’s sanction, the company is initiating divestment of the Chennai plant to meet the goal. In the interim period, the company plans to have a working arrangement for the Chennai plant. HM is in discussions with different entities involved and hopes for strong support from the West Bengal government which is equally interested in reviving Hindustan Motors. “We have a common objective in reviving the organisation and bringing it back to black”, he asserted.
During the 18-month period under review, beginning April 2012 and ending September 2013, HM incurred a loss of Rs 71.20 crore as compared to a loss of Rs 29.96 crore in FY 2011-12. The company’s accumulated losses have exceeded its net worth at the completion of the financial year ended 30 September 2013. The company will take necessary steps to comply with the legal requirements, the statement said.
Hindustan Motors’ board of directors at a meeting held on Thursday, 26 December 2013, inter alia approved the withdrawal of the petition filed before the High Court at Calcutta for sanction of scheme of arrangement between the company and Hindustan Motor Finance Corporation and their respective shareholders due to various developments and changes which have taken place without the scheme having come into effect since its filing.
The board approved the entering into a working arrangement with Hindustan Motor Finance Corporation (HMFCL), subject to necessary approvals, if any, whereby HMFCL will be entitled to use and operate Chennai Car Plant of the company at Adigathur in Tamil Nadu and to use its infrastructural facilities thereat.
The board further approved divesting of the whole or substantially the whole or part of Chennai Car Plant of the company at Adigathur, Kadambathur in the District Tiruvallur in Tamil Nadu which is engaged in the business of manufacture and trading of passenger vehicles like Cedia, Pajero, Pajero sport, Montero and Outlander brands of passenger Cars and spare parts of the same in technical collaboration with Mitsubishi Motors Corporation, Japan and also engaged in contract manufacturing of vehicles for Isuzu Motors India as a going concern, subject to necessary approvals and consents of the shareholders, lenders, authorities and other concerned parties, in such manner and on such terms and conditions as may be mutually agreed between the company and any interested party.
The company’s board also approved making reference to Board of Industrial and Financial Reconstruction under Section 15 of the Sick Industrial Companies (Special Provisions) Act, 1985(SICA) as the company has, prima facie, become a sick industrial company within the meaning of Section 3(1)(o) of SICA as per the duly Audited Accounts of the company for eighteen month period ended 30 September 2013, adopted at the annual general meeting of the company held on Thursday, 26 December 2013.
Shares of two-wheeler makers declined. Bajaj Auto (down 0.72%) and Hero MotoCorp (down 0.45%) dropped.
Index heavyweight Reliance Industries (RIL) fell 1.01% to Rs 878.70. The stock hit high of Rs 893.05 and low of Rs 877.40.
Most bank stocks gained. ICICI Bank rose 0.88%. SBI rose 0.89%. HDFC Bank fell 0.04%
Union Bank of India rose 0.85%. The bank said after market hours on Thursday, 26 December 2013, that the Central Government has appointed Shri Arun Tiwari, Executive Director, Allahabad Bank, as Chairman and Managing Director of Union Bank of India, with effect from the date of his taking over charge of the post and upto 30 June 2017, i.e. the date of his superannuation or until further orders, whichever is earlier. Shri Arun Tiwari has taken charge as Chairman Managing Director of the bank on 26 December 2013.
Canara Bank fell 0.28%. The bank said during market hours that it is coming out with the issuance of Tier-II Bonds (Series-I) for Rs 1500 crore to augment capital resources. The bonds have face value of Rs 10 lakh each, with coupon of 9.73% per annum and tenure of 10 years.
AXIS Bank fell 0.38%. The Cabinet Committee on Economic Affairs (CCEA) has approved the proposal of AXIS Bank for increase in foreign investment ceiling in the bank to 62% from 49%, subject to the aggregate foreign institutional investors holding not exceeding 49% of the paid up equity share capital of the bank. The approval would result in foreign investment of Rs 7250 crore (approximately) in the country, a government statement said on Thursday, 26 December 2013.
The Reserve Bank of India had in November 2013 restricted further purchases of equity shares of AXIS Bank by foreigners after total foreign holding in the bank through Foreign Institutional Investors (FIIs)/Non-Resident Indians (NRIs)/Persons of Indian Origin (PIOs)/Foreign Direct Investment (FDI)/American Depository Receipt (ADR)/Global Depository Receipts (GDRs) reached the trigger limit. RBI had allowed further purchases of AXIS Bank shares by foreigners only after obtaining the central bank’s prior approval. FII holding in AXIS Bank stood at 43.37% as on 30 September 2013.
Most metal and mining stocks gained. Sesa Sterlite (up 0.95%), JSW Steel (up 0.82%), Hindalco Industries (up 0.7%), National Aluminum Company (up 0.4%), NMDC (up 2.12%) and Sail (up 0.49%) gained. Hindustan Zinc fell 1.15%. Tata Steel dropped 0.2%.
Adani Power declined 0.25%. A meeting of the board of directors of the company will be held on Saturday, 28 December 2013, to consider and approve a proposal for the demerger of transmission line business of the company and other incidental matters.
Multi Commodity Exchange of India (MCX) declined 4.37%. Financial Technologies (India) (FTIL) dropped 1.01%. MCX’s board of directors at a meeting held on Thursday, 26 December 2013, inter alia, decided to advise FTIL to implement FMC Order dated 17 December 2013 by reducing its stake in the company from 26% to 2% or below, within a period of 1 month hereof. The board also advised to withdraw the representation of FTIL – Mr. Miten Mehta, on MCX Board in view of FMC letter dated 26 December 2013.
Indraprastha Gas (IGL) rose 0.39%. IGL, a top natural gas distributing firm operating mainly in Delhi and its surrounding areas, has increased prices by almost 10%. The company has increased CNG (compressed natural gas) prices to a record high of Rs 50.10 per kg in Delhi and Rs 56.70 per kg in satellite towns of Noida, Greater Noida and Ghaziabad, up from Rs 45.6 and Rs 51.55, respectively. The company has also raised consumer prices of piped natural gas (PNG) to Rs 29.50 per standard cubic metre (scm) from Rs 27.50 per scm in Delhi. If a household consumes more than 30 scm of piped cooking gas in two months, then every extra unit would be at Rs 52 per scm. Due to differential tax structure in Uttar Pradesh, the applicable price of PNG to households in Noida, Greater Noida and Ghaziabad would be Rs 29 per scm.
IGL in a statement said the central government has cancelled all the earlier gas allocations and the revised allocations include gas from the Panna-Mukta and Tapti (PMT) fields, which costs more than gas under administered price mechanism (APM). It said the company is forced to source more quantity of market-priced imported R-LNG (re-gasified liquefied natural gas).
Delhi’s Chief Minister designate Arvind Kejriwal today, 27 Decemebr 2013, questioned the timing of the hike and assured that he will look for the reason for the same. “I will look at the files and see as to why the CNG prices have been hiked. They could have waited for 2 days,” he said. Hinting at a conspiracy against his government, Kejriwal also requested the auto drivers to give him the time of two days to ascertain the reason. “I appeal to the auto drivers not to go on strike, request them to give me 2 days time,” he said. “Will hold a meeting with the auto drivers and see what is to be done. If the price hike was imperative, then the auto fares will have to be hiked, will look at the files,” Kejriwal said.
Kejriwal and his Cabinet will be sworn-in tomorrow, 28 December 2013, at Ramleela Maidan.
Hospitality shares were in demand on hopes of increase in occupancy rates during New Year eve. Taj GVK Hotels, Hotel Leela Ventures, Indian Hotels, EIH, EIH Associated Hotels and Royal Orchid Hotel rose 0.01% to 8.62%.
In the foreign exchange market, the rupee edged higher against the dollar on global risk on sentiment. The partially convertible rupee was hovering at 61.87, compared with its close of 62.16/17 on Thursday, 26 December 2013.
European stocks rose on Friday, 27 December 2013, after US jobless claims dropped more than forecast and as markets reopen after the Christmas holiday. Key benchmark indices in France, Germany and UK were up 0.55% to 0.76%.
Asian stocks edged higher on Friday, 27 December 2013, as improved economic data sent US stocks surging overnight. Key benchmark indices in Indonesia, Japan, Taiwan, South Korea and Singapore were up 0.03% to 0.58%.
Chinese shares rose after money-market rates posted the biggest decline since February 2011. In mainland China, the Shanghai Composite Index was up 1.36%. In Hong Kong, the Hang Seng index was up 0.27%.
China data today, 27 December 2013, showed industrial companies’ profits rose 9.7% from a year earlier in November, compared with a 15.1% jump in October.
Japan’s inflation accelerated to the fastest pace since 2008 last month, bringing the rate closer to policy makers’ target while threatening to erode household spending power unless employers boost wages. Prices excluding fresh food rose 1.2% from a year earlier, the statistics bureau said today in Tokyo.
Trading in US index futures indicated that the Dow could drop 12 points at the opening bell on Friday, 27 December 2013. US stocks extended all-time highs on Thursday as a drop in jobless claims fueled optimism in the economy. Fewer Americans than projected filed applications for unemployment benefits last week, indicating the US labor market is improving. Jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21, a Labor Department report showed in Washington. US consumer confidence climbed last week to a four-month high as an improving job market and holiday discounts put Americans in the mood to shop.
US President Barack Obama on Thursday signed a compromise budget that reduces the risk of another government shutdown and a defense bill that cracks down on sexual assault in the military and smooths the path for transferring detainees from the US prison in Guantanamo Bay, Cuba. The two-year US budget agreement, negotiated by Congress earlier this month, and the National Defense Authorization Act for fiscal 2104 were among seven pieces of legislation signed by Obama, who is vacationing with his family in Hawaii. The US Senate passed the budget deal on December 18 to ease automatic spending cuts and reduce the risk of a government shutdown. It was negotiated by Democratic Senator Patty Murray of Washington state and Paul Ryan, Republican from Wisconsin, who is chairman of the House Budget Committee. The Senate approved the annual defense policy bill on December 20, one of its final actions before leaving for the Christmas break. The act authorizes a Pentagon base budget of $526.8 billion in the 2014 fiscal year. That amount will have to be reconciled early in the new year with the $498 billion agreed to in the budget deal.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world’s largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
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