Thursday, February 12, 2015
Subdued start! Data interpretation time for market
It is a capital mistake to theorize before one has data. Insensibly one begins to twist facts to suit theories, instead of theories to suit facts. - Sir Arthur Conan Doyle
The market managed to hold on to gains for the last two days minimizing any sentiment damage following the BJP drubbing in New Delhi elections. For now the Aam Aadmi Party says it will not contest assembly elections in other states. With political events as good as over as the market is concerned, the focus will now shift to the Union budget.
For the day a lot of attention could be on macro data. The government has changed the base year for calculating CPI to 2012 from 2010 and the first monthly estimate of retail inflation using the new series will be out today. GDP numbers were revised recently. The rebasing has caused some amount of confusion and bewilderment among economists. There are significant interpretational issues for the new series too. No immediate impact of higher growth estimates are expected on either the fiscal or monetary policy. Industrial production (IIP) data for December 2014 will also be released today.
The outlook is a subdued start. The global indices are on a lull. Eurozone finance ministers could not really solve their differences with Greece. The ministers will now meet on Monday. Greece wants to overhaul 30% of its bailout obligations while EU ministers want Greece to abide by existing terms. Greece's government says conditions of the 240bn bailout have impoverished Greece.
US stocks ended flat. Asian markets are mixed with Japan's Nikkei 1.5% higher while Hong Kong's Hang Seng index and Chinas Shanghai are marginally lower.
The much-feared general anti avoidance rules (GAAR) could be deferred by about two years so that business sentiment is allowed to improve in India but will need to be rolled out in some form or the other by 2017, in sync with the international framework on preventing treaty abuse that's been accepted by the G20, says a report.
In a relief for Jindal Steel and Power Ltd (JSPL) and its promoter Naveen Jindal, Delhi High Court directed a technical committee to review its own decision to change the end-use of two coal blocks earlier allotted to the company and removing the mines from the auction.
The Board of Directors of Grasim Industries Limited approved the proposed merger of Aditya Birla Chemicals (India) Limited ("ABCIL"), an Aditya Birla Group Company with Grasim. The swap ratio approved by the Board is 1 (one) share of Rs. 10 each of Grasim for every 16 (sixteen) shares of Rs. 10 each of ABCIL. Grasim will issue 14.62 Lakh new shares, which will increase its share capital to Rs. 93.31 crore.
Shares of Wockhardt surged after the company reported 14% increase in consolidated net profit at Rs 347 crore for the third quarter ended December 31, 2014 (Q3).
Shares of NCC Ltd hit 20% upper circuit at Rs76 after reporting rise in its consolidated net profit at Rs 25.57 crore for the third quarter ended December 31, 2014.
Ricoh India has smartly moved higher to hit 20% upper circuit in the early noon deals after investors quickly picked-up shares of the company on the back of strong Q3 numbers.
Shares of Alok Industries Ltd will be in focus after the company has posted a net profit of Rs. 258.60 mn for the quarter ended December 31, 2014 as compared to Rs. 982.90 million for the quarter ended December 31, 2013.
Fortis Healthcare scaled 20% to end at 52-week high of Rs 138.90. During the trading session, the stock had touched a low of Rs 117. Rakesh Jhunjhunwala bought 34,85,075 shares of Fortis Healthcare through bulk deal on the BSE.
Events: Bank of England Quarterly Inflation Report; BOE's Governor Carney speech, India's Cumulative Industrial Output (Dec); Manufacturing Output (Dec); Industrial Output (Dec)
Results Watch: Bank of India, Reliance Capital, BHEL, Coal India, Procter & Gamble Hygiene & Health Care, CESC, Oil and Natural Gas Corporation, Shipping Corporation, Page Industries, Gujarat Mineral Development Corporation, Neyveli Lignite Corporation, Gujarat Gas, Hindalco Industries, Glaxosmithkline Pharma, Max India, MRF, Sadbhav Engineering, Gitanjali Gems, Cipla Ltd, Indraprastha Gas, Tata Communications, Indiabulls Real Estate, Amtek Auto, Sobha Ltd, MTNL, Bajaj Electricals, Finolex Cables, Future Retail, Ahmednagar Forgings, Ahluwalia Contracts, Elder Pharma, Jindal Stainless, Advent Computer, Cosmo Ferrites, Cravatex, Capital Trade Links, Datamatics Global Services, DFL Infrastructure, Dhanlaxmi Bank, Aagam Capital, ACE Software Exports, ACI Infocom, Adarsh Mercantile, Adhunik Industries, ADI Finechem, Allied Digital Services, Aris International, Aravali Securities, Aplab, Anjani Synthetics, Amtek India, Almondz Global Securities, Allcargo Logistics, Aksh Optifibre, Bajaj Steel Industries, BAG Films, Bafna Pharma, ATN International, Asian Tea, Asahi India, BNR Udyog, BN Rathi Securities, Bliss GVS Pharma, Blue Circle Services, Blazon Marbles, Black Rose Industries, Birla Precision Technologies, Bharat Rasayan, Bedmutha Industries, Bal Pharma, BLB Ltd, BP Capital, Bombay Rayon Fashions, Bright Brothers, BSEL Infrastructure Realty, Cantabil Retail India, Carnation Industries, Claris Lifesciences, Disa India, Eureka Industries, Ecoplast, Dollex Industries, Dynamic Portfolio Management, Fertilizers & Chemicals Travancore, FIEM Industries, Gillette India, GG Dandekar Machine Works, Garware Polyester, Garware Synthetics, Global Infratech & Finance, GFL Financials India, GMM Pfaudler, Globus Constructors & Developers, Gontermann-Peipers (India), Goldiam International, Gold Coin Health Foods, Gokak Textiles, Gujarat Containers, GPT Infraprojects, Gol Offshore, Hisar Metal, Hindustan Wires, Hindustan Everest Tools, Hinafil India, Hella India Lighting, Himadri Chemicals, Hisar Spinning Mills, Hi-Tech Gears, Hitech Plast, Hittco Tools, Honda Siel Power, HP Cotton, Hubtown Ltd, Hariyana Ship Breakers, HRB Floriculture, ISMT Ltd, ISF Ltd, IO System, International Conveyors, Integra Garments, Insta Finance, Innocorp, Infinite Computer, Indsoya, J Kumar Infraprojects, Jayant Agro-Organics, Jaidka Industries, ISF Ltd, ISMT Ltd, Jackson Investments, JMD Telefilms, Joonktollee Tea, Kachchh Minerals, Kaiser Corporation, Kemp Company, Kallam Spinning Mills, Kesoram Industries, Khoobsurat Ltd, Lanco Infratech, Lahoti Overseas, KNR Constructions, KMF Builders, Kilburn Engineering, Kinetic Engineering, Kilitch Drugs, Kilburn Office Automation, KIFS Financial Services, Mafatlal Industries, Mangalam Timber Products, Mahaan Foods, Magnum Ventures, Lotus Chocolate, Moschip Semiconductor Technology, Moryo Industries, Mold-tek Technologies, Mahalaxmi Rubtech, Mega Corporation, Modern Steels, Mcdowell Holdings, Mayur Uniquoters, Nu Tek India, Nutech Global, Nrb Bearings, National Oxygen, Newtime Infrastructure, North Eastern Carrying Corporation Ltd, Nda Securities, NCC Finance, Mukta Arts, Oswal Agro Mills, Ojas Asset Reconstruction, Orissa Minerals Development, Orient Press, Ravi Kumar Distilleries, Rasi Electrodes, Rander Corporation, Quasar India, Quantum Build-Tech, Purshottam Investofin, Punjab Communications, Shri Aster Silicates, Shrenuj, Scope Industries (India), Savera Industries, Royal India Corporation, Steelco Gujarat, Simplex Industries, Shriram EPC, Suchitra Finance and Triveni Engineering.
Trends in FII flows: The FIIs were net sellers of Rs3.71bn in the cash segment on Wednesday. The domestic institutional investors (DIIs) were the net buyers of Rs1.47bn, as per the provisional figures released by the NSE.
Global Data: Consumer Inflation Expectation (Feb) AUD, RICS Housing Price Balance (Jan) GBP, Employment Change s.a. (Jan) AUD, Fulltime employment (Jan) AUD, Participation Rate (Jan) AUD, Part-time employment (Jan) AUD, Unemployment Rate s.a. (Jan) AUD, Machine Tool Orders (YoY) (Jan)Preliminar JPY, Consumer Price Index (YoY) (Jan) EUR, Consumer Price Index (MoM) (Jan) EUR, Harmonised Index of Consumer Prices (MoM) (Jan) EUR, Harmonised Index of Consumer Prices (YoY) (Jan) EUR, Industrial Production w.d.a. (YoY) (Dec) EUR, Industrial Production s.a. (MoM) (Jan) EUR, Unemployment Rate (MoM) (Nov) EUR, Bank of England Quarterly Inflation Report GBP, BOE Inflation Letter GBP, BOE's Governor Carney speech GBP, Cumulative Industrial Output (Dec) INR, Manufacturing Output (Dec) INR, Industrial Output (Dec) INR, New Housing Price Index (YoY) (Dec) CAD, New Housing Price Index (MoM) (Dec) CAD, Initial Jobless Claims (Feb 6) USD, Continuing Jobless Claims (Jan 30) USD, Retail Sales (MoM) (Jan) USD, Retail Sales ex Autos (MoM) (Jan) USD, Business Inventories (Dec) USD, EIA Natural Gas Storage change (Feb 6) USD, 30-Year Bond Auction USD, Food Price Index (MoM) (Jan) NZD, RBA's Governor Glenn Stevens Speech AUD, Foreign bond investment (Feb 6) JPY, Foreign investment in Japan stocks (Feb 6) JPY.
In other news in the media:
Natco Pharma, which was granted compulsory license for Bayer's cancer drug Nexavar (Sorafenib) by the Indian patent office a couple of year back , announced that its marketing partner Mylan Inc. has filed an Abbreviated New Drug Application (ANDA) for the generic version of the same US FDA. (BS)
Irish lessor Babcock and Brown Aircraft Management (BBAM) has sought the return of 6 Boeing B737 aircraft, and payments to the tune of around USD100mn from Spicejet towards several months of unpaid lease rentals (USD40mn), besides other damages like maintenance costs. (BS)
India Cements announced that its shareholders are set to get ownership of Chennai Super Kings Cricket Ltd, a new wholly owned subsidiary of India Cements. (BS)
Tech Mahindra said its sister company Mahindra Finance will become equal shareholder if the Reserve Bank clears its payment bank licence, and the company is also in talks with the World Bank Group member IFC for a partnership in the foray. (ET)
In a relief for Jindal Steel and Power Ltd (JSPL) and its promoter Naveen Jindal, Delhi High Court directed a technical committee to review its own decision to change the end-use of two coal blocks earlier allotted to the company and removing the mines from the auction. (BS)
The board of Grasim Industries approved the proposed merger of Aditya Birla Chemicals (India) with itself and has approved the swap ratio at 1 share of Grasim for every 16 shares of ABCIL. (BL)
IT services major Infosys said it has been selected by ICA Gruppen, Sweden's leading retailer, to manage its IT operations. (BL)
Reliance Industries has slapped an arbitration notice challenging oil ministrys decision to take away 814 square kilometre of its eastern offshore KG-D6 area that contained five gas discoveries. (BL)
Surana Solar Ltd has firmed up plans to enter into a new line of business for the manufacturing of LED bulbs and LED tubes of an initial capacity of 1mn units. (BL)
Tech Mahindra will build more technology development facilities in the United States and Canada and boost local hiring to tap new business opportunities linked to digital technologies. (ET)
Uttarakhand Cabinet has decided to regularise land under the category IV, provide a subsidy of Rs232m to clear the dues of private sugar mills and bring a Bill in the Assembly for providing 10% horizontal reservation to the statehood activists. (BS)
National Bank for Agriculture and Rural Development (NABARD) announced Rs 1.1tn credit plan for agriculture in Rajasthan for fiscal 2015-16, encompassing all 33 districts in the state. (ET)
The Finance Ministry has imposed definitive anti-dumping duty on sodium nitrate imports from China, EU, Ukraine and South Korea. This anti-dumping duty will be valid for a period of five years. (BL)
The Cabinet approved increasing the National Minorities Development & Finance Corporation (NMDFC)s authorised capital from Rs15bn to Rs30bn and restructuring of its shareholding pattern. (BL)
Focus on budget peps up Sensex, Nifty
The Indian equity market extended its gains for the second consecutive trading session despite the historic win by the Aam Aadmi Party in Delhi. Expectations that the BJP-government would stick to a reform-oriented Budget seems to be in the air.
Commenting on the current market situation, Amar Ambani, Head of research IIFL, said, "After going through a short term corrective phase, the pre-budget rally seems to have resumed again. Although markets had a testing time in the past week, positive macro outlook and expectations that the reform agenda will continue despite the thumping win by the Aam Aadmi Party (AAP) seems to have soothed nerves. Investors will have to watch how events unfold in Greece."
The Sensex opened with a positive gap of 94 points at 28,450, and went on to rally to a high of 28,619 led by strong gains in banking, infrastructure and metal shares.
Select index heavyweights like - Larsen & Toubro, Reliance Industries, Axis Bank and ICICI Bank, contributed almost 75 per cent of the day's gains. The BSE Sensex ended higher for the second straight trading session, up 178 points at 28,534, while the four heavyweights mentioned contributed 132 points to the BSE index today.
The NSE Nifty jumped to a high of 8,652, and settled with a gain of 62 points at 8,627.
The India VIX (Volatility) index dropped nearly 3.2 per cent to 20.525.
The broader market ended the day on a dazzling note - the CNX Midcap and the Smallcap indexes soared 2 per cent each to 12,685 and 5,429, respectively.
The breadth too was fairly positive with more than two advancing shares for every single declining stock. Out of 1,693 stocks traded on the NSE, 1,015 advanced and 480 declined today.
Among sectors - the CNX Metal and the Infrastructure indices surged 1.7 per cent each to 2,520 and 3,127, respectively. The Bank Nifty rallied a per cent to 18,929.
Elsewhere in the world, markets were mostly subdued as they await the outcome from the crucial extraordinary meeting in Brussels. The Euro Zone finance ministers are scheduled to meet later in the day to discuss the Greece debt crisis.
Hong Kong's Hang Seng index was down 0.9 per cent at 24,315, the Nikkei shed 0.3 per cent at 17,653. The Shanghai Composite index was up 0.5 per cent at 3,158.
In Europe, the FTSE 100 and the DAX were trading on a flat note at 6,824 and 10,735 as of 1530 hrs IST. The CAC 40 was down 0.5 per cent at 4,669.
Back to the Indian markets, Jindal Steel was the major gainer in the Nifty 50 stocks. The stock soared nearly 7 per cent to Rs. 152.
Tech Mahindra, Axis Bank, NTPC and Asian Paints surged around 3 per cent each to Rs. 2,845, Rs. 570, Rs. 141 and Rs. 845, respectively.
BPCL, Larsen & Toubro and Reliance Industries gained around 2.5 per cent each.
Bank of Baroda, Maruti Suzuki and Tata Steel advanced around 2 per cent each at Rs. 180, Rs. 3,461 and Rs. 364, respectively.
Lupin, Hindustan Unilever, Hero MotoCorp, Dr. Reddy's and UltraTech Cement were the other major gainers.
On the other hand, ONGC slipped nearly 3 per cent to Rs. 345, and BHEL shed 2.3 per cent at Rs. 255.
Zee Entertainment and Cairn India were the other notable losers, down over a per cent each.
In the broader market stocks like - Fortis Healthcare, NCC, Ricoh India, Ashok Alco Chemical, Sarup Industries and TCI Finance were locked at their respective 20 per cent upper circuit limits.
Pipavav Defence zoomed over 17 per cent to Rs. 64.60. HCC, BEML, Syndicate Bank, GMR Infrastructure, Gruh Finance, Aurobindo Pharma, Ess Dee Aluminium, Walchandnagar Industries, Punjab Chemicals, ENIL and Astra Microwave were some of the major gainers.
As many as 34 stocks hit the 52-week high today. 3M India, ABB India, Bajaj Corp, Adani Enterprises, Emami, Fortis Healthcare, Hindustan Zinc, Jubilant Foodworks, OCL India, Siemens, Take Solutions, UPL and Wockhardt were some of the prominent names.
A total of 25 stocks registered fresh 52-week low today. Notable stocks were - Bharati Shipyard, Gujarat NRE Coke, Jindal Cotex, Jaiprakash Power Ventures, Mukta Arts, Parenteral Drugs, Ruchi Infrastructure and Selan Exploration.
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