Nifty ends Dec F&O expiry below 8200; Sensex sinks 298 points
24 December 2014
03:30 pm Market close
The market ended December F&O series expiry with some heavy losses. The Nifty was down 92.90 points or 1 percent at 8174.10. The Sensex sunk 297.85 points or 1 percent at 27208.61. About 1364 shares have advanced, 1473 shares declined, and 108 shares are unchanged.
GAIL, ONGC, Dr Reddy's Labs, Coal India and Infosys were top losers in the Sensex. Among the gainers were Sesa Sterlite, Tata Steel, Tata Power, ICICI Bank and Axis Bank.
03:15pm Rubber price
Several rubber farmers have put away their tapping knives and switched to planting other crops, as ample global supplies and sinking benchmark prices of the tyre-making raw material squeeze their profit margins.
But this means local rubber farmers are likely to miss out on an expected boom in tyre demand from rising car use in India, paving the way for cheaper imports and supporting Asian prices that have dropped almost 26 percent this year.
"For most Indian farmers it is not viable to continue tapping at current levels," said George Valy, president of the Indian Rubber Dealers' Federation. India could need to ship in more than 1 million tonnes of rubber by 2020, equivalent to Vietnam's total output, versus estimated imports of 400,000 tonnes this year, he added.
03:00pm Market Update
Profit booking extended in last hour of trade with the Sensex losing 284.06 points or 1.03 percent to 27222.40 and the Nifty falling 80.45 points or 0.97 percent to 8186.55.
About 1265 shares have advanced, 1470 shares declined, and 132 shares are unchanged.
Amitabh Chaudhry, managing director and chief executive officer, HDFC Life, says the company is still far away from being listed on any bourse.
In an interview to CNBC-TV18, Chaudhry says the company's stake sale is in no way a pre-initial public offer (IPO).
''HDFC Standard Life would like to take the equity in the company to 30-40 percent,'' adds Chaudhry who is happy with the company's current growth. HDFC on Monday said Azim Premji Trust would buy 0.95 percent stake in its life insurance venture, HDFC Life, for Rs 198.9 crore thereby valuing the company at Rs 19,890 crore.
02:25pm Novartis in News
Shares of Novartis India gained over 5 percent today after fair trade regulator CCI approved a multi-billion dollar deal between global pharma giants GlaxoSmithKline Plc and Novartis.
Novartis India's scrip soared 5.48 per cent to Rs 674 at the BSE. However, the stock surrendered most of the gains later and was trading 2.12 percent higher at Rs 652.50.
CCI has approved a multi-billion dollar deal between global pharma giants GlaxoSmithKline Plc and Novartis as it did not find the transaction to be anti-competitive in India.
The multi-layered deal involves UK-based GlaxoSmithKline (GSK) acquiring the Swiss major's vaccine business while the latter would purchase GSK's cancer drugs portfolio, reports PTI.
In a order dated December 12 and made public yesterday, the Competition Commission of India (CCI) said it is of the opinion that the "the proposed combination is not likely to
have appreciable adverse effect on competition in India."
02:00pm Market Check
Equity benchmarks remained under pressure on last day of the December series. The Nifty fell 30.10 points to 8236.90 while the Sensex declined 100.92 points to 27405.54.
However, the broader markets outperformed benchmarks with the BSE Midcap and Smallcap indices rising around 0.4 percent. But the market breadth was negative. About 1285 shares have advanced while 1358 shares declined on the Bombay Stock Exchange.
State-run power equipment maker BHEL topped the selling list, down 2 percent followed by HDFC, TCS, ONGC, HUL, Dr Reddy's Labs, NTPC and Hindalco Industries with 1-1.8 percent loss. However, ICICI Bank, State Bank of India, Tata Motors, Sesa Sterlite and Tata Steel bucked the trend, up 0.4-1.4 percent.
Cabinet has approved ordinance on insurance. Insurance companies like Max India and HDFC Life say foreign investors may be tentative and ucnertain till ordinance is repalced by a law. Cabinet also cleared ordinance on coal and approved formula & methodology for floor/reserve price for coal auction with the first tranche of bid documents to be released on December 27.
UltraTech Cement and Jaiprakash Associates gained 4 percent each on news that Ultratech will buy JP's two cement plants in Madhya Pradesh for Rs 5,400 crore. Deutsche Bank says it is another sweet deal for Ultratech Cement allowing it to truly become a pan-India player.
It was a mixed bag for global equities. Japan and Korea moved higher while China shed weight. The French market was down 0.22 percent.
1:50 pm Fund infusion: Coal India, the world's largest producer, and state gas utiltity GAIL India Ltd today signed agreements to invest Rs 9,000 crore in a plant to convert coal into gas and use this fuel to manufacture fertiliser.
CIL and GAIL along with Rashtriya Chemicals and Fertilizers (RCF) and Fertilizer Corp of India Ltd (FCIL) will set up the integrate coal gasification cum fertiliser and ammonium nitrate complex at Talcher in Odisha by 2019, Fertiliser Minister Ananth Kumar said after the four firms signed joint venture agreements.
The plant will be built by the two joint ventures - the upstream consortia for converting coal into synthetic gas or syngas, and downstream plant to manufacture urea and other fertilizers.
GAIL will holds 35 percent in the upstream venutre, called GAIL Coal Gas (India) Ltd. FCIL will take 11 percent interest while RCF and CIL will pick up 3 percent each each. The balance 48 percent will be given to technology provider and financial institutions.
1:30 pm How to trade financial companies? For the banking and financial companies, year 2015 has been one of stable asset quality, but weak credit growth. Credit growth for 2015 is estimated at 11 percent.
Jignesh Shial, research analyst, IDBI Capital Markets feels public sector banks may find it easier to raise capital in 2015. He sees scope for a lot of consolidation in the private banking space, but not in PSU banks. He likes HDFC Bank the most among private banks and State Bank of India among public sector banks. He is also bullish on City Union Bank, Karur Vysya Bank and Federal Bank.
The market is still limping as the ordinance on insurance and coal does not seem to boost sentiment. The Sensex is down 110.20 points at 27396.26. The Nifty slips 30.25 points at 8236.75. About 1251 shares have advanced, 1300 shares declined, and 103 shares are unchanged.
BHEL, NTPC, Hindalco, Dr Reddy's Labs and HDFC are top losers in the Sensex. Among the gainers are Tata Steel, ICICI Bank, Maruti, ITC and SBI.
Shares of Max India and Reliance Capital rallied 4-5 percent after the Cabinet approved ordinance on insurance. Government today approved promulgation of an ordinance to hike foreign direct investment (FDI) cap in the insurance sector to 49 percent from 26 percent, as the legislation could not be passed in the Parliament session that ended on Tuesday.
The Reserve Bank of India today fixed the reference rate of the rupee at 63.4614 against the
US dollar and for the euro at 77.3087 as against 63.4475 and 77.6217 yesterday. According to a RBI press release, the exchange rates for the pound and yen against the rupee were quoted at 98.5111 and 52.73 per 100 yen, respectively, based on reference rates for the dollar and cross-currency quotes at noon. The SDR-Rupee rate would be based on this rate, the release added.
As expected the Cabinet has approved ordinance on Insurance and Coal. With Coal Mines Bill yet to be cleared by the Parliament, the government re-promulgated the ordinance.
Earlier, an ordinance on coal was introduced on October 20 after the Supreme Court scrapped over 200 coal block allocations. It was valid till January 4 as the life-span of an ordinance is only six weeks since the inception of a Parliament session.
Reacting to the news, Rajesh Sud, MD & CEO of Max Life Insurance says the ordinances indicate firm resolve on the government's part. However, foreign investors will view this tentatively until a Bill is passed, he adds. An ordinance is an interim measure, a statement of intent on the part of the government. The government has six weeks after an ordinance is passed to get approval from both the houses and pass the Bill or let it lapse - after the first sitting of the Parliament.
Sud believes that the domestic ownership clause in the insurance bill will have only company-specific ramifications.
The Cabinet has also cleared formula for coal block auction floor/ reserve price. The first tranche of bid documents on coal block auction will be released on December 27.
12:20pm Nikkei Update
Japanese stocks rallied today after Wall Street hit a record closing-high on the back of data pointing to rapid momentum in the US economy, which boosted risk appetite and lent weight to last week's positive assessment by the Federal Reserve.
The Nikkei benchmark gained 1.2 percent in thin trade to 17,854.23, its highest close since Dec. 8 and its fifth straight day of gains. Japanese markets were closed on Tuesday for a public holiday.
Exporters performed strongly on the back of a weaker yen, which fell through the 120 mark against the dollar. Toyota Motor Corp gained 1.6 percent, while Panasonic added 1.5 percent.
The broader Topix added 0.9 percent to 1,426.02, while the JPX-Nikkei Index 400 also gained 0.9 percent to 12,955.65, reports Reuters.
12:00pm Market Check
Equity benchmarks extended fall in noon trade weighed by HDFC twins, oil & gas, capital goods and healthcare stocks. The Sensex fell 113.25 points to 27393.21 and the Nifty declined 31.70 points to 8235.30.
About 1114 shares have advanced, 1284 shares declined, and 105 shares are unchanged on the Bombay Stock Exchange.
Medical equipment maker Opto Circuits surged 16 percent after the Cabinet has approved 100 percent foreign direct investment in medical devices.
Max India and Reliance Capital gained 3-4 percent as Cabinet has approved ordinance on insurance today along with ordinance on coal.
11:55 am Interview: Amitabh Chaudhry, managing director and chief executive officer, HDFC Life, says the company is still far away from being listed on any bourse.
In an interview to CNBC-TV18, Chaudhry says the company's stake sale is is in no way a pre-initial public offer (IPO).
''HDFC Standard Life would like to take the equity in the company to 30-40 percent,'' adds Chaudhry who is happy with the company's current growth. HDFC said Azim Premji Trust would buy 0.95 percent stake in its life insurance venture, HDFC Life, for Rs 198.9 crore thereby valuing the company at Rs 19,890 crore.
11:45 am Market outlook: Mahesh Nandurkar, CLSA says state election results from Jharkhand and J&K confirmed that Narendra Modi continues to gain ground. ''Since December 2013, BJP and allies have won 7 state level elections and account for 46 percent of India's GDP with 10 contiguous states. The just concluded Winter Session of the Parliament passed 12 bills, the highest since 2010. However, two of the most important bills i.e. insurance and coal could not be passed,'' Nandurkar says in the note.
11:30 am Dec series expiry: Hemant Thukral of Aditya Birla Money says the rollovers for December series are very healthy. In an interview to CNBC-TV18, Thukral says people are now showing supportive signs of coming back to the market. Thukral says traders should use every dip in the market as a buying opprutunity. ''We will test 8400 level in the next few days and I don't expect to see a lot of volatility today,'' he adds.
The market is sluggish with the Sensex down 46.48 points at 27459.98. The Nifty is down 13.35 points at 8253.65. About 1134 shares have advanced, 1037 shares declined, and 83 shares are unchanged.
Hindalco, NTPC, ONGC, Dr Reddy's Labs and HDFC are among the losers in the Sensex. Gainers are Coal India, ITC, M&M, Infosys and Hero.
Meanwhile, Japanese stocks rallied and the dollar stood tall thanks to surprisingly robust US economic growth, helping investors head into the Christmas holidays in a more relaxed mood after the global markets turbulence of the past two weeks.
Risk appetite got a helping hand from revised data showing the US economy grew at a 5.0 percent clip in the third quarter, its quickest pace in 11 years and the strongest sign yet that growth has decisively shifted into higher gear. The strong US GDP prompted markets to bring forward the timing of a likely hike in interest rates by the Federal Reserve, which last week gave an upbeat assessment of the world's biggest economy.
The bullish outlook pushed Treasury yields up and gave an already strong dollar fresh momentum. The two-year US Treasury yield rose to a high not seen in almost four years in light of the Fed expectations.
10:55am 3i Infotech on buyers' radar
3i Infotech says 3i Infotech (Western Europe) Group Limited, a step down subsidiary of the company, has signed an agreement to sell 3i Infotech (Western Europe) and 3i Infotech (Flagship-UK) to Objectway Financial Software, which is a leading provider of wealth management and digital software solutions in EMEA.
This sale is in line with the group's strategy to sell its non-core assets / investments and use the additional cash generated from such sale to deleverage its balance sheet and for business purpose.
3i Infotech Western Europe provides investment management software solutions to midmarket UK firms.
10:40am Market expert on expiry
Hemant Thukral of Aditya Birla Money says the rollovers for December series are very healthy as are the rollover costs. In an interview to CNBC-TV18, Thukral says people are now showing supportive signs of coming back to the market.
Thukral says traders should use every dip in the market as a buying opprutunity.
''We will test 8400 level in the next few days and I don't expect to see a lot of volatility today,'' he adds.
10:20am Panacea Biotec in News
Panacea Biotec has entered into collaboration with a leading international pharmaceutical company for the development and supply of an immunosuppressant generic product in USA.
Under the terms of the agreement, the company will receive an upfront research fee, as well as milestone payments linked with the development of product.
Upon commercialisation of product, Panacea will be responsible for manufacturing and supply of product to a partner company while the partner will be responsible for front end sales and distribution in USA.
Both companies agreed on a hybrid model of transfer price and profit share at a pre-agreed ratio.
10:00am Market Check
The 50-share NSE Nifty continued to be rangebound at around 8250-8300 levels on the day of expiry of December derivative contracts. The 30-share BSE Sensex fell 7.47 points to 27498.99 amid consolidation.
About 974 shares have advanced, 832 shares declined, and 65 shares are unchanged on the Bombay Stock Exchange.
ICICI Bank, ITC, Infosys, L&T, M&M, Coal India and Hero Motocorp gained 0.4-1 percent while HDFC Bank, TCS, ONGC, NTPC, Dr Reddy's Labs, Hindalco, Wipro and Bharti fell 0.5-2 percent.
Gujarat Gas, Nirlon, Wockhardt, Mastek, Reliance Capital, SBI, Infosys and Jaiprakash Associates were most active shares on exchanges.
Nirlon hits 52-week high of Rs 204 as GIC Real Estate, the subsidiary of Singapore Government, will acquire majority stake in company. The acquisition by GIC Real Estate will trigger open offer.
Gujarat Gas too touched a 52-week high of Rs 812.55 after circuit filter revised to 10 percent from 20 percent by exchanges.
9:50 am Currency in 2015: Asian currencies could be in for a wild ride in 2015, with central bank policy on track for further divergence as the Federal Reserve prepares to raise interest rates, analysts say.
"The US Federal Reserve will be hiking interest rates next year, while some Asian central banks will be acting in the opposite direction. Growth momentum is firmly in favor of the US, while structural and cyclical slowdowns in certain parts of Asia will see growth differentials narrow," ANZ said in a note last week.
The Federal Reserve is widely expected to hike interest rates in July after unwinding its quantitative easing program this year, according to CNBC's latest Fed survey of economists, strategists and fund managers, released last week.
By contrast, most of Asia's central banks are easing. The People's Bank of China cut interest rates for the first time in two years in October, while the Bank of Korea cut rates to a record low that month. Meanwhile, the Bank of Japan remains committed to its massive stimulus effort, while calls for rate cuts in Thailand and Australia are growing.
9:30 am Market outlook: Mahesh Nandurkar, CLSA says state election results from Jharkhand and J&K confirmed that Narendra Modi continues to gain ground. ''Since December 2013, BJP and allies have won 7 state level elections and account for 46 percent of India's GDP with 10 contiguous states.
The just concluded Winter Session of the Parliament passed 12 bills, the highest since 2010. However, two of the most important bills i.e. insurance and coal could not be passed,'' Nandurkar says in the note. The brokerage is of the view that the BJP will continue to face headwinds till April 2018 as the party is unlikely to have clear majority in the upper house till then.
The market has opened in flat. The Sensex is up 21.47 points at 27527.93 and the Nifty is up 5.05 points at 8272.05. About 326 shares have advanced, 175 shares declined, and 20 shares are unchanged.
Cipla, HDFC, BHEL, Sesa Sterlite and Bajaj Auto are top gainers in the Sensex. Among the losers are Dr Reddy's Labs, Tata Steel, GAIL, HUL and ITC. In a win-win deal, Aditya Birla Group company UltraTech Cement on Tuesday announced acquisition of Jaiprakash Associates ' two cement units and associated power plants in Madhya Pradesh for Rs 5,400 crore. JP Associates rises 5 percent, UltraTech Cement gains 2 percent.
The Indian rupee slipped in the early trade. It has opened lower by 15 paise at 63.43 per dollar against 63.28 a dollar Tuesday.
The dollar hovered at its highest in nearly nine years against a basket of major currencies after stunningly strong US economic growth spurred markets to bring forward the timing of a likely hike in interest rates.
Himanshu Arora of Religare said, "The USD-INR is expected to trade higher today on the back of strength in dollar against a basket of currencies and strong year-end dollar demand from state run banks and importers.''
Meanwhile, Wall Street enjoyed a "Santa rally," as investors cheered data showing the US economy expanded in Q3 by the most in 11 years. The Dow closed above 18,000 but the Nasdaq fell, snapping a four-session winning streak, as biotechnology names weighed.
European and Asian markets were trading significantly in the green drawn on by a strong US economic engine with Japan's Nikkei up over a percent. In commodities, Brent Crude rose above USD 61 per barrel.