Goodbye 2014: Nifty ends a tad below 8300, Sensex up 96 points
31 December 2014
03:30 pm Market close The market has finally wrapped up trading for 2014 on a good note. After some massive gains in the later half of the year, the Sensex ended up 95.88 points at 27499.42, and the Nifty was up 34.45 points at 8282.70 on Wednesday. About 1671 shares have advanced, 1196 shares declined, and 126 shares were unchanged. BHEL was up 3 percent while NTPC, Dr Reddy's Labs, Reliance and Tata Power are gainers in the Sensex while M&M, HDFC Bank, Bajaj Auto, Maruti and HUL are losers.
03:00 pm Year in review Indian shares edged up, capping a record-setting year with hopes that the momentum would sustain in 2015 should the government announce additional economic reforms and the RBI start cutting interest rates.
Foreign investors were key to the rally, buying a net USD 16.1 billion in shares so far this year, the biggest net purchase since buying USD 29.4 billion worth in 2010. Analysts say that with inflation under control, the RBI can now afford to ease interest rates while they are hopeful that Modi will introduce additional policy reforms after measures on land acquisition and insurance this month.
02:55pm Market Outlook "Markets loved Modi and this saw FIIs pumping in close to USD 16 billion in equities during the current year. The BSE touched new highs in 2014 and are likely to carry this momentum in the coming year too. The caveat, of course, is delivery on domestic policy implementation and relative global economic stability.
The government's focus on increasing retail participation in equity markets should see some clearer guidelines and will be reinforced with continuing optimism. Money from foreign and domestic sources should continue to flow in as everyone will like to get a slice of the India growth story. Rupee has been toggling at 62-64 and that may not necessarily be a bad thing though a steep fall could spook investors for a part of 2015," says Jayant Manglik, president - retail distribution, Religare Securities.
Manglik expects FY15/FY16 earnings growth of around 15 percent each and the best case scenario of 30,000 for the Sensex in case of a market-friendly budget. "Overall the new year looks good with significantly reduced inflation and signs of policy decisions being taken in earnest," he says.
02:45pm India's external debt India's total external debt stood at USD 455.9 billion at the end of September, up USD 13.7 billion or 3.1 percent from the end of March, the finance ministry said in a statement on Wednesday. The rise in external debt during the period was mainly due to an increase in commercial borrowings and deposits mobilised from non-resident Indians, the ministry said in a statement. The share of India's short-term debt in the total external debt was at USD 86.4 billion or 18.9 percent as of end-September, the statement added, reports.
02:30pm FII View The new year, 2015, is likely to see a decent rally but it is unlikely to be as grand as the one seen in 2014, says Morgan Stanley's executive director Amay Hattangadi. ''India saw a complete 180-degree shift in sentiment. Our removal from the fragile five has been very critical to the sentiment in 2014,'' says Swanand Kelkar, ED, Morgan Stanley. Furthermore, 2015 is likely to see some sweet spots, which according to Hattangadi is likely to be: the logistics and auto sector. Hattangadi believes the theme has shifted from unorganized to organized sector and to the aspirational demand.
02:00pm Market Check Equity benchmarks continued to trade with a positive bias with the Nifty holding above 8250 while midcap and smallcap outperformed. The market breadth was positive; about 1605 shares have advanced while 1127 shares declined on the Bombay Stock Exchange. The Sensex climbed 82.80 points to 27486.34 and the Nifty rose 27.10 points to 8275.35 while the BSE Midcap and Smallcap indices gained 1 percent each. Jitendra Sriram of HSBC says equity markets will give higher returns than debt in 2015.
He likes industrials and metals sectors in 2015. Shares of Dr Reddy's Labs and BHEL climbed 2-3 percent followed by Reliance Industries, Axis Bank, Bharti Airtel, Hindalco Industries and Sesa Sterlite with more than a percent gain. However, HDFC and HDFC Bank were down half a percent each. Select auto stocks were sluggish reacting to the likelihood of the government withdrawing excise duty concessions to the auto industry from January 1, 2015. Maruti told CNBC-TV18 that it has not received any communication from the government as yet but does not expect long term negative impact on car demand.
Maruti and Bajaj Auto declined 0.4 percent each while Mahindra & Mahindra dropped 2 percent. Tata Motors and Hero Motocorp recouped losses, up 0.8 percent each. Telecom stocks remained in focus. Telecom Regulatory Authority of India released recommendations on reserve price and valuation for 2100 megahertz. Reserve price pan-India kept at Rs 2,720. Analysts say overall, reserve price is on the higher side and only serious players are expected to bid. The rupee recovered further, currently trading at 63.20 a dollar, up 18 paise compared to previous day's closing value of 63.38.
1:50 pm Exclusive: The government has appointed managing director-cum-chief executive officers for 4 public sector banks. They are P Kotteswaran for Indian Overseas Bank, Animesh Chauhan for Oriental Bank of Commerce, P Srinivas for United Bank and KK Sansi for Vijaya Bank.
Speaking to CNBC-TV18, P Srinivas said he has been appointed for one year, and that the recovery of United Bank would be faster as the economy was recovering. Earlier this year, former Chairman and Managing Director of United Bank, Archana Bhargava had quit under a cloud and the bank is staggering under the weight of bad loans. Speaking to CNBC-TV18, Asvin Parekh, Partner, Ernst & Young said the government's decision to split the chairman's and managing director's post was a good one.
1:30 pm Macro-economy outlook: Year 2015 will see CAD and inflation under control, rising GDP, but not a complete goldilocks situation, says Chetan Ahya, chief Asia economist, managing director, Morgan Stanley. He sees a gradual acceleration in GDP and it may inch towards 6 percent toward the end of 2015.
He says recovery in capex is still weak as of now, but it is bottoming out, while adding that capex will be the key driver of growth recovery for India. According to him, there is some improvement in capital goods imports. On the difference in opinion between the Reserve Bank and the finance ministry, he believes Raghuram Rajan and Arun Jaitley's objectives are not different. He says the finance minister has already clarified that he will leave it to Rajan to decide when to reduce interest rates.
The market is still flat but the Nifty manages to hold above the 8250-level. The Sensex is up 26.40 points at 27429.94 and the Nifty is up 13.25 points at 8261.50. About 1531 shares have advanced, 1113 shares declined, and 118 shares are unchanged. BHEL, Dr Reddy's Labs, Hindalco, NTPC and Bharti Airtel are major gainers in the Sensex. Among the losers are M&M, HDFC twins, Maruti and Bajaj Auto.
China stocks closed up more than 2 percent, boosted by a late afternoon rally which helped the stock market become the best performer among major global bourses this year. The CSI300 index of the largest listed companies in Shanghai and Shenzhen rose 2.2 percent, to 3,533.71 to end up 51.7 percent for the year. The Shanghai Composite Index gained 2.2 percent, to 3,234.68 points, up 52.9 percent year to date. Gold prices fell by Rs 110 to Rs 26,931 per 10 grams in futures trade today as the metal posted losses in global markets. Analysts said fall in gold futures was mostly due to a weakening trend in global market. In Singapore, the metal traded lower at USD 1,200 an ounce.
12:58pm Market Update The market maintained its morning gains with the Sensex rising 62.18 points to 27465.72 and the Nifty gaining 23.75 points to 8272. The market breadth was positive as about 1510 shares have advanced and 1060 shares declined on the Bombay Stock Exchange. The BSE Midcap Index gained 0.9 percent and Smallcap climbed 0.8 percent.
12:45pm Interview KEC International bagged orders worth Rs 1412 crore in T&D and cable businesses. According to Ramesh Chandak, MD & CEO, the average margins for these new orders would be over 10 percent, which are much better than earlier 5.5-6 percent margins. Moreover, with the last two quarters showing a pick-up in growth, FY15 overall has been a better year, says Chandak. The order book backlog is more than Rs 9000 crore including these recent orders and the L1 for the company is more than Rs 2000 crore, says Chandak.
12:30pm Brent crude falls further Brent crude prices dropped towards USD 57 a barrel on Wednesday as weak Chinese manufacturing data and demand concerns outweighed supply disruptions in Libya. China's factory sector shrank for the first time in seven months in December, with the final HSBC/Markit Purchasing Managers' Index (PMI) for this month coming in at 49.6.
The final reading was higher than a preliminary reading of 49.5, but down from the final 50.0 in November. The 50.0 mark separates growth from contraction. China is the world's second largest oil consumer and any contraction in its factory sector can have a big impact on demand. Brent for February delivery fell 69 cents to USD 57.21 as of 0622 GMT, after earlier dropping as low as USD 56.87. US crude for February delivery was down 50 cents to USD 53.62, reports Reuters.
12:00pm Market Check Equity benchmarks continued to trade higher with marginal gains while the broader markets outperformed. The Sensex advanced 45.02 points to 27448.56 and the Nifty rose 17.25 points to 8265.50. The BSE Midcap and Smallcap indices gained 0.8 percent each. About 1443 shares have advanced, 977 shares declined, and 109 shares are unchanged on the Bombay Stock Exchange. The rupee inched higher on global unwinding of dollar longs, up 8 paise to 63.30 a dollar. Indian traders too sold long dollar positions ahead of January quarter which is usually strong for the rupee. State-run power equipment maker BHEL and drug maker Dr Reddy's Labs topped the buying list on Sensex, up 2 percent each followed by ICICI Bank, Reliance Industries, Axis Bank, Infosys, SBI, ITC, NTPC and ONGC with 0.2-1 percent gains.
Telecom stocks were in focus as Telecom Regulatory Authority of India released recommendations on reserve price and valuation for 2100 megahertz. Reserve price pan-India kept at Rs 2720 crore. Analysts say overall, reserve price is on the higher side and only serious players are expected to bid. Bharti Airtel gained nearly a percent. Auto stocks were sluggish reacting to the likelihood of the government withdrawing excise duty concessions to the auto industry from January 1. Maruti told CNBC-TV18 that the company has not received any communication from the government as yet but do not expect long term negative impact on car demand. Mahindra & Mahindra fell 1.6 percent. Bajaj Auto and Maruti Suzuki declined over half a percent while Tata Motors and Hero Motocorp rebounded, up over 0.4 percent. Globally, China led gains, up 2 percent in thin trade despite data showing slight contraction in manufacturing activity.
11:50 am 2015 outlook: Jitendra Sriram, MD & Head of Research at HSBC India says the house is more positioned towards equity markets at this juncture because we are a cusp of recovery. He expects equities to give better returns than debt markets in 2015. In 2014, debt was a big play because India was probably the only market amongst emerging and Asian markets with higher interest rates. However in 2015, rates could move higher globally and soften in India. He expects a 50 basis points rate cut by RBI through the year. Meanwhile, US Fed is also likely to hike rates by Q3 of 2015 because the US GDP growth is more conducive for a rate hike, says Sriram. According to him 2015 is going to be an earnings tracker.
11:30 am Buzzing: Shares of Bajaj Corp touched a record high of Rs 367.20, up 4.7 percent intraday after shareholders allowed the company to raise FII investment limit. In a extraordinary general meeting on Tuesday, shareholders of the hair care products manufacturer approved the proposal to raise foreign institutional investors' investment limit to 49 percent from current 24 percent. "Shareholders permitted foreign institutional investors (including their sub-accounts)/foreign portfolio investor to acquire and hold equity shares of the company under the portfolio investment scheme/foreign portfolio investment scheme or any other permissible mode under FEMA up to an aggregate limit of 49 percent of the paid-up equity share capital," said the company in its filing to the exchange.
It is a tepid day at Dalal Street as the market prepares to wind up the year. The Sensex is up 69.78 points at 27473.32 and the Nifty is up 23.40 points at 8271.65. About 1414 shares have advanced, 895 shares declined, and 117 shares are unchanged. Telecom stocks are in focus as TRAI releases recommendation on reserve price and valuation for 2100 mhz. E&Y says reserve price is on the higher side and only serious players with serious demand will bid. BHEL, Dr Reddy's Labs, Hindalco, NTPC and ICICI Bank are top gainers in the Sensex. Among the losers are M&M, Maruti, Bajaj Auto, HDFC Bank and Coal India.
The year 2014 ends on a strong note. The Nifty gains over 30 percent posting its best annual performance in 5 years. The midcap index is up 55 percent and BSE Small Cap Index is up 68 percent. The 10-year bond too can't be left behind with yields softening to the lowest level since July 2013 and FII debt flows reaching the USD 26 billion, the highest ever. Globally, Asian markets are broadly higher in thin trade. The only data point is HSBC PMI for China for December came in at 49.6 in line with the preliminary reading of 49.5. For today Japan, South Korea, Indonesia, Thailand and Phillipines are shut and Hong Kong and Australia are open only for half the day
10:59am China data In a fresh sign of a slowdown in China`s economy, the final China HSBC PMI for December indicated manufacturing contracted for the first time in seven months, with both output and new orders declining. The final reading came in at 49.6, up slightly from the 49.5 preliminary reading of 49.5 from HSBC/Markit, but still lower than November`s 50.0. A reading above 50 indicates growth, while a reading below signals a contraction.
The data come as China`s economic growth is slowing, with the central bank this month forecasting a 7.1 percent pace next year, down from expectations for around 7.4 percent this year, reports CNBC. However, the contraction in PMI was "only marginal," noted Hongbin Qu, chief economis for China at HSBC, said in a note. "Data suggested that the decline was largely driven by softer domestic demand, as new export work rose for the eighth month in a row and at a slightly quicker rate than in November."
10:45am Logistics stocks on buyers' radar Allcargo Logistics, Gati, Snowman Logistics and Transport Corporation rallied 3-9 percent.
10:40am KEC International in News KEC International bagged orders worth Rs 1,412 crore in transmission & distribution and cables businesses. In the transmission and distribution business, the company received orders in India, Africa and America amounting to Rs 1,128 crore. It included Rs 543 crore order from Karnataka Power Transmission Corporation, Rs 112 crore order from Sterlite Power Grid Ventures in West Bengal, two orders worth Rs 106 crore from Power Grid Corporation of India and Rs 71 crore order from West Bengal State Electricity Transmission Company. In Africa, KEC secured orders worth Rs 83 crore.
"SAE Towers, the wholly owned subsidiary of the company secured orders for the supply of lattice towers, monopoles, hardware and EPC works from the US, Brazil, Mexico and Chile. The total value of these orders is Rs 213 crore," said the infrastructure EPC major in its filing to the exchange. In cable business, KEC bagged orders worh Rs 284 crore for supply of power and telecom cables.
10:25am Market Expert 2015 will be a good year, but it may not give as good returns as 2014, says Dilip Bhat of Prabhudas Lilladher. But for retail investors it may be a great time to build their portfolios for the next 3-5 years, he adds. For the January series, or even the month of January there are three factors that need to be watched, according to Bhat.
Over the last month, FII interest has waned off significantly, but the broad assumption is it will make a comeback, he says. There may be a pre-Budget rally and the Nifty may once again see 8500-8600 for a brief period. But the spoilsport, according to him, will be the third quarter numbers. Bhat says the possibility of excise duty concession being withdrawn from the auto sector is a known factor and it is unlikely to impact the market much.
10:00am Market Check Equity benchmarks gained some strength after flat opening today. The Sensex rose 68.02 points to 27471.56 and the Nifty climbed 22.30 points to 8270.55. Banks, capital goods, oil & gas, metals and power stocks supported the market while auto stocks remained under pressure. The broader markets gained too with the BSE Midcap and Smallcap indices rising 0.5 percent each.
Nearly two shares advanced for every share declining on the Bombay Stock Exchange. Gaurav Mehta, Ambit Capital says with key trendline resistance in the 8150-8200 region having been respected barring a brief intra-week breach, the near-term uptrend in the index has been reinforced while the structural trend stays up. ''We look for higher levels on the Nifty over the next few weeks, in the range of 8800-9000,'' he adds. Shares of ICICI Bank, Reliance Industries, Axis Bank, State Bank of India, L&T, Dr Reddy's Labs, ONGC, HDFC and ITC were up 0.2-1 percent whereas HDFC Bank declined 0.4 percent. Auto stocks like M&M, Bajaj Auto, Tata Motors, Maruti and Hero dropped 0.2-1.7 percent on likely removal of excise sops to auto industry.
9:45 am Market outlook: 2015 will be a good year, but it may not give as good returns as 2014, says Dilip Bhat of Prabhudas Lilladher. But for retail investors it may be a great time to build their portfolios for the next 3-5 years, he adds. For the January series, or even the month of January there are three factors that need to be watched, according to Bhat. Over the last month, FII interest has waned off significantly, but the broad assumption is it will make a comeback, he says.
There may be a pre-Budget rally and the Nifty may once again see 8500-8600 for a brief period. But the spoilsport, according to him, will be the third quarter numbers. As far as Bank Nifty goes, especially public sector banks (PSU), he believes it is still under-owned and it is one sector that will see maximum impact of government and RBI measures and the economy turning the corner. He feels there is still good amount of steam left in PSU bank stocks for the next one to one and a half years. He is bullish on frontline PSU banks such as State Bank of India, Bank of Baroda, Punjab National Bank and Union Bank. He also likes Syndicate Bank and UCO Bank among others.
9:30 am Excise duty rollback: Disappointed by government's move to discontinue excise sops for cars and consumer durables from January 1, 2015 , Society of Indian Automobile Manufacturers President Vikram Kirloskar said the move will make it tough for the auto industry to sell vehicles.
According to him, the overall auto industry has been hurt even with a lower duty and so, with a high duty it is going to be even harder. In an interview to CNBC-TV18, Kirloskar said that in the past 12-14 months the industry has worked very hard to squeeze its costs which will continue now. ''Everyone down the value chain, the suppliers - a whole lot will be under more and more pressure to reduce costs which means more efficiency. I do not know what effects it will have on labour but there are bound to be some effects if the sales don't pick up,'' he added.
The market has opened last trading day of 2014 on a very flat note. The Sensex is down 6.06 points at 27397.48 and the Nifty down 2.55 points at 8245.70. About 334 shares have advanced, 197 shares declined, and 38 shares are unchanged. M&M, Maruti, Bajaj Auto, BHEL and Hero Moto are major laggards in the Sensex. Among the gainers are HDFC, Tata Steel, Bharti Airtel, SBI and Axis Bank.
The Indian rupee opened with marginal gain of 7 paise at 63.31 per dollar versus 63.38 a dollar on Tuesday. Himanshu Arora of Religare said, "USD-INR pair is expected to trade lower today amid a data release that IMF has raised global forecast for the year 2015. This may cap dollar upmove against basket of currencies. Yen gains against the dollar and euro as investors seek the traditional safety of the Japanese currency. In the US stocks closed down in low volume trade, pressured by weakness abroad and a sharp decline in the utilities sector. The Dow slipped to close below the 18000 mark. In key data, consumer confidence index came in slightly lower-than-expected at 92.6.
The CBoE volatility index traded near 16. In Europe, shares closed lower as lower oil prices and political uncertainty in Greece weighed on investor sentiment. All major European indices closed lower with losses accelerating during the session. Trade was thin due to holiday season. The Nymex crude showed gains in choppy trade rebounding from a five and half year lows, as persistent worries about a global supply glut offset concerns about output disruptions in Libya. Brent crude trades above 57 dollars per barrel. From precious metals space, gold rose more than 2 percent as the dollar weakened and stock markets slipped.