Sunday, December 21, 2014
Key benchmark indices ended on a flat note in the week ended Friday, 19 December 2014. Market slumped in the first three trading sessions of the week as prospects of higher interest rates in the United States and a sharp fall in global crude oil prices weighed on sentiment. Losses were, however, wiped off in the last two trading sessions of the week driven by a broad-based rally, mirroring gains in global equity markets, triggered by signals from the Federal Open Market Committee that the US central bank isn't in a hurry to raise interest rates in the United States. The barometer index, the S&P BSE Sensex, reclaimed the psychological 27,000 mark after slipping below that level during the week. Small and mid-cap shares tumbled in a broad-based sell off.
The S&P BSE Sensex rose 21.16 points or 0.08% to 27,371.84. The 50-unit CNX Nifty rose 1.10 points or 0.01% to 8,225.20.
The S&P BSE Mid-Cap index fell 108.19 points or 1.07% to 10,000.41. The S&P BSE Small-Cap index fell 146.27 points or 1.32% to 10,922.21. Both these indices underperformed the Sensex.
Trading for the week kicked off on a negative note. After moving in a relatively narrow range during the trading session, key benchmark registered small losses on Monday, 15 December 2014. The S&P BSE Sensex declined 31.12 points or 0.11% to settle at 27,319.56. The CNX Nifty declined 4.50 points or 0.05% to settle at 8,219.60.
A further slide in global crude oil prices, a sharp rise in Russian interest rates and weakness in Asian stocks triggered by data showing a further slowdown in China's manufacturing sector sent key equity benchmark indices in India tumbling on Tuesday, 16 December 2014. November trade data showing weakness on India's external front also hit sentiment on the domestic bourses adversely. The S&P BSE Sensex fell 538.12 points or 1.97% to settle at 26,781.44. The CNX Nifty fell 152 points or 1.85% to settle at 8,067.60.
Prospects of higher interest rates in the United States and a further fall in global crude oil prices weighed on sentiment as key equity benchmark indices in India edged lower in volatile trade on Wednesday, 17 December 2014. The S&P BSE Sensex fell 71.31 points or 0.27% to settle at 26,710.13. The CNX Nifty fell 37.80 points or 0.47% to settle at 8,029.80.
Indian stocks surged in a broad based rally on Thursday, 18 December 2014, mirroring gains in global equity markets triggered by signals from the Federal Open Market Committee that the US central bank isn't in a hurry to raise interest rates in the United States. The S&P BSE Sensex rose 416.44 points or 1.56% to settle at 27,126.57. The CNX Nifty rose 129.50 points or 1.61% at 8,159.30.
Mirroring gains in global stocks, key equity benchmark indices edged higher on Friday, 19 December 2014. The S&P BSE Sensex rose 245.27 points or 0.9% to settle at 27,371.84. The CNX Nifty gained 65.90 points or 0.81% to settle at 8,225.20.
Among the 30 Sensex shares, 16 rose and the remaining shares declined.
State-run Bharat Heavy Electricals (Bhel) was the biggest gainer last week. The stock jumped 4.80% to Rs 258.85.
Mortgage financing major HDFC rose 4.19% to Rs 1,115.05.
State-run oil explorer ONGC rose 3.67% to Rs 349.30. ONGC's board at its meeting held on Friday, 12 December 2014 notified of the three discoveries made recently; one in deepwater Krishna Godavari Basin, off the east coast of the country, one in Mumbai offshore Basin, off the west coast of the country and one in Cauvery basin in the southern onland part of the country. The announcement was made after market hours on Friday, 12 December 2014.
Meanwhile, ONGC's board of directors also approved interim dividend of Rs 5 per share for the year ending 31 March 2015. The record date for the same has been fixed as 17 December 2014, ONGC said.
Minister of State for Finance Jayant Sinha said in written reply to a question in the Lok Sabha on Friday, 12 December 2014, that as per the Action Plan of 2014-15 on disinvestment, the government intends to sell 5% stake in ONGC during the current fiscal year. The government had already approved selling 5% stake in ONGC in September 2014.
IT shares firmed up after the Indian rupee declined past the 63 mark against the dollar. Infosys (up 3.24%), TCS (up 2.17%) and Wipro (up 1.26%), edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
IT stocks also rose after US-based IT major Accenture on Thursday, 18 December 2014, raised its outlook for net revenue growth for the year ending 31 August 2015 after reporting strong Q1 results.
NTPC rose 1.77%. NTPC after trading hours on Wednesday, 18 December 2014, announced that a meeting of the board of directors of the company will be held on 23 December 2014, inter alia, to consider a proposal for issuing bonus debentures to the shareholders of the company. NTPC said it is keen to reward its shareholders for their continued support as the company has entered its 40th year of operations. These bonus debentures may be issued through a scheme of arrangement under Section 391-394 of Companies Act, 1956, subject to approval of the board of directors of the company and receipt of requisite approvals under applicable laws, NTPC said.
Hindalco Industries fell 2.74%. With respect to news titled "Special Court rejects closure & orders CBI to further investigate the coal scam involving Hindalco," Hindalco Industries clarified on Tuesday, 16 December 2014, that the Central Bureau of Investitaion (CBI) as per the direction of the Supreme Court is investigating coal allocations made to various companies including Hindalco. CBI is directly reporting to the Special Court. While the CBI has given its closure report, the court has asked for further investigation on few specific aspects, Hindalco said. As the matter is between the CBI and the court, and also subjudice, it is inappropriate for the company to comment, Hindalco said.
Among private sector banks, ICICI Bank rose 2.54%. HDFC Bank rose 0.91%. HDFC Bank's advance tax payment reportedly rose 10% to Rs 1500 crore in Q3 December 2014 over Q3 December 2013.
State Bank of India (SBI) dropped 2.26%. The bank's advance tax payment reportedly rose 27% to Rs 1420 crore in Q3 December 2014 over Q3 December 2013.
Bharti Airtel fell 1.42% Bharti Airtel during market hours on Monday, 15 December 2014, announced an agreement under which IHS Holding will acquire Bharti's over 1,100 telecom towers across in Zambia and Rwanda. Bharti Airtel said that the sale of telecom towers in the two African countries will allow the company to focus on its core business and customers, enable it to deleverage through debt reduction, and will significantly reduce its on-going capital expenditure on passive infrastructure in these African markets. As per the agreement with IHS Holding, Bharti Airtel will sell and lease back over 1,100 towers from IHS in Zambia and Rwanda under a 10-year renewable contract. This agreement will accelerate infrastructure sharing amongst operators and benefit customers in form of affordable tariffs and wider network coverage, said Christian de Faria, MD & CEO – Africa, Bharti Airtel. The agreements are subject to statutory and regulatory approvals, Bharti Airtel said.
Coal India rose 3.07%. With respect to news titled "CIL gets order to import 5 lakh tones of coal for FY'15," the company clarified during market hours on Monday, 15 December 2014, that there is no material impact on the company as the company has merely performed its obligations under the enforceable fuel supply agreement (FSA) and complied with the provision of Presidential Directives dated 17 Jul 2013. As per Presidential directives issued in April 2012 and July 2013, CIL board decided that under FSAs for new power plants commissioned after 2009, out of the minimum assured quantity i.e 80% of annual contracted quantity, 15% shall be supplied from imported coal to the power plants who have opted to take the same from CIL and balance 65% from domestic coal till 2014-15. For the subsequent two years, the domestic coal component shall increase to 67% and 75% respectively with corresponding reduction in imported supply.
Tata Motors fell 2.80%. The company after trading hours on Friday, 12 December 2014, said that Tata Motors Group's global wholesales rose 2.37% to 83,906 units in November 2014 over November 2013. Global wholesales for Jaguar Land Rover (JLR) rose 3.4% to 41,318 units in November 2014 over November 2013.
India's largest cigarette maker by sales ITC fell 6.61% to Rs 369.50. It was the top Sensex loser last week.
Sesa Sterlite (down 3.39%), Cipla (down 3.48%), Sun Pharmaceuticals Industries (down 3.89%), Hindustan Unilever (down 5.41%) and Dr Reddy's Laboratories (down 5.42%), were the other losers from the Sensex pack.
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 Monday, 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.
India's merchandise exports rose 7.27% to $25.96 billion in November 2014 over November 2013, data released by the Ministry of Commerce & Industry after trading hours Monday, 15 December 2014, showed. Imports jumped 26.79% at $42.82 billion in November 2014 over November 2013. Oil imports dropped 9.7% at $11.72 billion in November 2014 over November 2013. Non-oil imports jumped 49.6% at $31.10 billion in November 2014 over November 2013. The trade deficit rose sharply to $16.86 billion in November 2014, from $9.57 billion in November 2013.
The Union Cabinet on Wednesday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out. The Bill is likely to be introduced in parliament during the ongoing winter session.
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.
In the US market, the Federal Reserve after two-day policy meet on Wednesday, 17 December 2014, said it will be patient when it comes to the timing of rate increases, replacing a pledge in its statement to keep borrowing costs near zero for a “considerable time,” and raising its assessment of the job market.
Federal Reserve Chair Janet Yellen restored clarity to the central bank's monetary policy plans, saying it was on course to raise interest rates, though not right away. Yellen also laid out the economic parameters that would need to be met for liftoff to begin later in the year and said that rates probably would be raised gradually thereafter. They may not return to more normal levels until 2017, she added.
Tree House Education & Accessories rose 1.53% to Rs 444.20 at 13:42 IST on BSE after the RBI advised that Registered Foreign Portfolios Investors can now invest up to 49% of the paid up capital of the company under the Portfolio Investment Scheme.
Meanwhile, the BSE Sensex was up 340.14 points, or 1.25%, to 27,466.71
On BSE, so far 14,089 shares were traded in the counter as against an average daily volume of 31,150 shares in the past one quarter.
The stock hit a high of Rs 464.80 and low of Rs 443 so far during the day. The stock had scaled a record high of Rs 520 on 13 October 2014. The stock had hit a 52-week low of Rs 214.20 on 7 March 2014.
The stock had outperformed the market over the past one month till 18 December 2014, falling 2.02% compared with 3.68% fall in the Sensex. The scrip, however underperformed the market in past one quarter, falling 3.43% as against Sensex's 0.05% rise.
The small-cap company has an equity capital of Rs 37.77 crore. Face value per share is Rs 10.
The Reserve Bank of India after market hours yesterday, 18 December 2014 advised that Registered Foreign Portfolios Investors (RFPIs) can now invest up to 49% of the paid up capital of Tree House Education & Accessories under the Portfolio Investment Scheme (PIS).
The RBI stated that Tree House Education & Accessories has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by RFPIs. The purchases could be made through primary market and stock exchanges, the RBI said.
Tree House Education & Accessories reported 9.8% rise in net profit to Rs 12.59 crore on 20.5% rise in net sales to Rs 49.76 crore in Q2 September 2013 over Q2 September 2012.
Tree House Education & Accessories is one of the leading providers of educational services in India. It operates the largest number of self-operated pre-schools in India.