Sensex erases initial gains; Auto, metal stocks lose shine

Indian equities erased their early gains and were trading marginally in the green at the pre-close session on Friday amid firm European cues.

At 2.40 p.m., the 30-share BSE index Sensex was up 12.15 points (0.06 per cent) at 20,341.20 and the 50-share NSE index Nifty was up 7 points (0.12 per cent) at 6,006.05.

Among BSE sectoral indices, consumer durables, oil & gas, capital goods and PSU led the charge, while auto, metal, realty and FMCG indices succumbed to selling pressure.

Consumer durables index was up 1.33 per cent, followed by oil & gas 0.72 per cent, capital goods 0.59 per cent and PSU 0.35 per cent. On the other hand, auto index was down 0.76 per cent, metal 0.46 per cent, realty 0.28 per cent and FMCG 0.26 per cent.

ONGC, HDFC, Tata Steel, GAIL and Dr Reddy's were the top five Sensex gainers, while the top five losers were SSLT, Tata Motors, Hindalco, Bajaj Auto and Sun Pharma.

European stocks were up as investors awaited data that may show German business confidence increased in November after falling in October for the first time in six months. Asian shares were up.

The Dow Jones industrial average closed above 16,000 for the first time as the US Labour Department reported that applications for unemployment benefits have come down significantly. The number of applications received was close to where it was before the Great Recession, it said.

On the other hand, producer prices came down for the second straight month in October, an indication that inflation continues to remain muted in the world's largest economy. All Asian equities were on firm ground.

In a research note released ahead of Indian markets opening, HDFC Securities said: “Indian market could open flat to marginally in the green and remain volatile in a range of plus/minus 25 points on Nifty throughout the session…Among the sectoral indices, banks & capital goods could see some value-buying. However, FMCG could underperform.”

Brokerage firm Mehta Group expects some action by the Reserve Bank of India today to control rupee volatility, a move that will shape the market sentiment.

Union Bank of India raises Rs 2,000 crore via Basel III compliant Tier II Bonds

Union Bank of India has raised additional capital to the extent of Rs 2,000 crore by issue of Basel III compliant Unsecured Redeemable Non-Convertible Tier II Bonds (Series XVII-A). Recently, the bank had received an approval for raising equity capital not exceeding Rs 1,997 crore on preferential/QIP/Rights basis subject to approval of Government of India/RBI and various regulations and laws related thereto.

The board of directors at its meeting held on October 30, 2013 had approved for the same.

The bank has reported a rise of 9.51% in its net profit at Rs 560.22 crore for first quarter ended June 30, 2013, as compared to Rs 511.59 crore for the same quarter in the previous year. Total income from operation of the bank has increased by 16.04% to Rs 7613.53 crore for the quarter under review as compared to Rs 6561.10 crore for the quarter ended June 30, 2012.

Consumer durables, oil & gas stocks help Sensex gain 90 points

Indian equities were trading up by about 0.4 per cent in the mid-session on Friday on the back of positive job market indicators and subdued inflation data from the US.

At 1.05 p.m., the 30-share BSE index Sensex was up 83.99 points (0.42 per cent) at 20,313.04 and the 50-share NSE index Nifty was up 27.9 points (0.47 per cent) at 6,026.95.

Among BSE sectoral indices, consumer durables, oil & gas, PSU and capital goods led the charge, while auto, metal and realty indices were trading in the red.

Consumer durables index was up 1.32 per cent, followed by oil & gas 1.02 per cent, PSU 0.65 per cent and capital goods 0.5 per cent. On the other hand, auto index was down 0.65 per cent, metal 0.53 per cent and realty 0.39 per cent.

ONGC, HDFC, Bharti Airtel, GAIL and Tata Steel were the top five Sensex gainers, while the top five losers were Hindalco, Tata Motors, SSLT, Bajaj Auto and Sun Pharma.

European indices, FTSE-100 was in the green while DAX and CAC-40 were in the red.

In the Asian trade, Japan's Nikkei was up 16.12 points or 0.1 per cent at 15,381.70, Hong Kong's Hang Seng rose 110.24 points or 0.47 per cent to 23,690.50 and Australia's S&P/ASX 200 climbed 47.59 points or 0.9 per cent to 5,335.91.

The Dow Jones industrial average closed above 16,000 for the first time as the US Labour Department reported that applications for unemployment benefits have come down significantly. The number of applications received was close to where it was before the Great Recession, it said.

On the other hand, producer prices came down for the second straight month in October, an indication that inflation continues to remain muted in the world's largest economy. All Asian equities were on firm ground.

In a research note released ahead of Indian markets opening, HDFC Securities said: “Indian market could open flat to marginally in the green and remain volatile in a range of plus/minus 25 points on Nifty throughout the session…Among the sectoral indices, banks & capital goods could see some value-buying. However, FMCG could underperform.”

Brokerage firm Mehta Group expects some action by the Reserve Bank of India today to control rupee volatility, a move that will shape the market sentiment.

Tata Power strengthens on commencing additional transmission line between Kalwa and Salsette

Tata Power, India's largest integrated power company, has commissioned additional transmission lines in Maharashtra between Kalwa and Salsette. The 220kV line will relieve critical loading of the Kalwa-Salsette lines and will enhance transmission and bringing power from outside to Mumbai city.

The unavailability of natural gas to power plants has forced the Unit 6 of Tata Power’s Trombay thermal power plant to be underutilised or remain out since July 19, 2013. This acute shortage of up to 500MW capacity generation from Trombay for Mumbai city has made it necessary for power to be imported from outside the city. The transmission network, especially the 220KV Kalwa- Salsette lines, was critically loaded during most of the period due to reduction in embedded generation in Mumbai. To reduce this critical loading of these lines, Tata Power had put up a proposal to Maharashtra State Load Despatch Centre and State Transmission Utility for augmenting transmission lines between Kalwa and Salsette.

As a first phase, to augment lines between Kalwa and Salsette, an additional interconnecting line has been commissioned as a short-term measure which has also increased the load-carrying capacity and paves way for further planned augmentation.

Tata Power is India's largest integrated power company with a significant international presence. The Company has an installed generation capacity of 8521 MW in India and a presence in all the segments of the power sector viz. Generation (thermal, hydro, solar and wind), Transmission, Distribution and Trading.

Chidambaram motivates overseas investors to make investment in India

Allaying fears of investors in overseas countries, especially the Indian diaspora, concerned over the deteriorating fundamentals of the domestic country, Finance Minister P Chidambaram assured them saying that India is a safe investment destination for them. By adding further, Chidambaram has said that present exchange rate of rupee is a better reflection of its true value and the country is confident that both volatility and speculation have been largely contained.

Finance Minister assured investors that stability in rupee value will come soon as Indian authorities such as RBI have been continuously taking measures in order to check rupee volatility. On inflation front, Chidambaram said that the rate of price rise will ease to below 5 percent in current fiscal following steps taken by the Government and the Reserve Bank of India.

Foreign investment is considered crucial for economic development, as a rise in capital inflow will help support the rupee, which has depreciated over 15 percent against dollar in 2013. Despite the various efforts of Indian authorities to enhance capital inflow, FIIs have pulled out Rs 2,916 crore from debt securities so far this month and have withdrawn Rs 53,070 crore from the debt market since the beginning of year owing to the rising worries over the US Fed tapering.

HDFC gains on plan to raise Rs 250 crore through NCD issue

India’s premier housing finance entity, HDFC is likely to raise Rs 250 crore through non-convertible debentures (NCD) issue with a green shoe option at 9.8% annual coupon rate. The company is raising this fund to meet general corporate need. Standard Chartered Bank is the arranger of the issue. Further, the Rating agencies like Crisil and ICRA have assigned ‘AAA’ rating, which indicates highest safety.

Housing Development Finance Corporation (HDFC) is India’s premier housing finance entity in existence for over 35 years. With a presence in banking, insurance and asset management, the HDFC group is an important part of the Indian financial services.

Shriram City Union Finance eyeing to raise up to Rs 200 crore through NCDs

Shriram City Union Finance is eyeing to raise up to Rs 200 crore through issue of non- convertible debentures (NCDs) of Rs 100 crore with an option to retain over subscription to the extent of another Rs 100 crore. The NCD issue, which will open for subscription on November 25, will have effective yields ranging from 12.27% to 14.46% per annum.

Out of the total issue size, 80% is reserved for individuals, which constitute 40% earmarked for retail investors and 40% for high net worth individuals. The NCDs are also proposed to be listed on BSE and NSE.

Shriram City Union Finance has presence in the following business segments - loan Against Gold (LAG), Small Business Finance Loans (SBF), Auto Loans, 2-Wheeler loans, Personal Loans and Consumer Durables Loans.

Jai Corp shines on promoter hiking its stake to 7.99%

Jai Corp’s one of promoters, Laxmi Jain, has raised stake in the company by 3.5% for Rs 36.64 crore. Laxmi Jain had 80,03,540 shares constituting 4.49% stake in the company. Following the said transaction, Jain now holds 142,53,540 shares constituting 7.99% stake in the firm.

The said transaction was held on November 20 through ‘inter se transfer between relatives’ and executed by SSM Securities. The promoters overall held 73.01% stake in the company as of September-end.

Jai Corp traditionally is engaged into manufacturing businesses like steel, plastic processing and spinning yarn. It was incorporated in 1985. Later the company expanded in developing SEZs, infrastructure, venture capital and real estate.

Markets rebound on global cues, Nifty above 6,000

Markets rebounded after sharp losses in previous two sessions amid firm global cues

Benchmark share indices rebounded in early trades on Friday, amid firm global cues, as investors bought shares at lower levels after sharp losses in the previous two sessions.

At 9:33AM, the 30-share Sensex was up 100 points at 20,329 and the 50-share Nifty wsa up 32 points at 6,031.

Asian markets were trading higher on Friday tracking overnight gains on Wall Street after the Dow ended above 16.000 for the first time. Japan's Nikkei emerged as the top gainer in the region following weakness in the yen. The Nikkei was up 1.4%. Among other indices in the region, Shanghai Composite and Hang Seng were up 0.2-0.6% each. Straits Times was trading flat with negative bias.

The Dow Jones and S&P 500 rebounded on Thursday after losses in the previous three sessions on the back of encouraging economic data and inflation remaining below the US Fed's estimate. The number of US citizens applying for new claims for unemployment benefits was down more than expected while inflation remained tamed at 1% compared with the US Fed's estimate of 2%.

The Dow Jones Industrial average ended up 109 points, or 0.7%, to end at 16,009.99. The Standard & Poor's 500 Index gained 14 points, or 0.8% at 1,795.85. The tech laden Nasdaq Composite Index ended up 48 points or 1.2% at 3,969.16.

Key European shares ended lower on Thursday weighed down by weak economic data from China and the US Fed minutes indicating winding down its monetary stimulus measures. The CAC-40 ended down 14 points lower at 4,253.90, the DAX lost 6 points to end at 9,196.08, while the FTSE-100 ended nearly unchanged at 6,681.33.

The Indian rupee was trading flat against the US dollar in early trades at 62.95 against Thursday's close of 62.94. On Thursday the rupee weakened after minutes from the US Federal Reserve's October meeting showed policymakers were considering cutting its stimulus programme in the coming months. The rupee ended at 62.94, compared with Wednesday's close of 62.58 a dollar.

Realty index was the top gainer among the sectoral indices on the BSE up 1% followed by Consumer Durables, Capital Goods, Metal and Bankex indices.

HDFC, L&T, ICICI Bank, ITC, SBI and Infosys were among the top Sensex gainers.

However, Tata Motors and Sun Pharma were marginally down on profit taking after recent gains.

In the broader market, the BSE Mid-cap index was up 0.6% and Small-cap index was up 0.5%.

Market breadth was positive with 682 gainers and 205 losers on the BSE.

Gujarat Automotive Gears may merge HIM with itself

Gujarat Automotive Gears has received an approval for the proposal to evaluate / explore the opportunities for potential merger / amalgamation of HIM Teknoforge (HIM) with the company. The board of directors at its meeting held on November 21, 2013 has approved for the same.

Gujarat Automotive Gears was established in 1973 at Baroda, India for the manufacture of auto and tractor components. The primary products of the company are transmission gears, axle shafts, propeller shaft components, king pin units, wheel spanners, tractor components, etc.

ONGC’s arm inks MoU with Petrovietnam for joint cooperation in hydrocarbon sector

Oil and Natural Gas Corporation’s (ONGC) - 100% overseas subsidiary - ONGC Videsh (OVL), has signed a Memorandum of Understanding (MoU) with Petrovietnam (PVN) to promote the joint cooperation in hydrocarbon sector in Vietnam, India and other countries. Under the MOU, Petrovietnam has offered 5 blocks to ONGC Videsh (OVL). OVL would assess these blocks and if these are of interest, it would make a proposal to PetroVietnam.

Vietnam is one of the focus countries for OVL where it would like to acquire stakes in oil and gas assets depending on techno-commercial viability. ONGC Videsh is present in E&P sector of Vietnam since 1988 when exploration license for Block 6.1 was acquired. The current non-operating participating interest of OVL in the block is 45% which consists of Lan Tay and Lan Do fields. During the year 2012-13, OVL share of gas production from the fields was 2.1 BCM. Up to September 30, 2013 OVL’s cumulative investment in the block was $415 million.

OVL also holds 100% operating stake in exploration Block-128 with cumulative investment of more than $50 million. Earlier, OVL also held 100% operating stake in exploration Block-127 and invested about $51 million.

Dabur India buys Northern Aromatics unit in Uttarakhand for Rs 15 crore

Dabur India, the country’s leading natural personal care company, has agreed to purchase the business undertaking including manufacturing facility and all assets and liabilities relatable to the said facility situated at Plot no. 16, Sector -2, IIE, Pantnagar, Uttarakhand, on a going concern basis from Northern Aromatics, the company’s existing vendor on a slump sale basis at a consideration of Rs 15 crore.

The said facility will be used to manufacture food products, ayurvedic medicines and cosmetics. The agreement to sell in this respect has been executed on November 18, 2013.

Dabur India is one of the largest FMCG Company in India. Building on a legacy of quality and experience of over 125 years, Dabur operates in key consumer products categories like Hair Care, Oral Care, Health Care, Skin Care, Home Care & Foods.

RBI directs banks to strengthen due diligence and improve loan recovery process

Highlighting its growing discomfort with rising bad loans, hovering at record highs, the Reserve Bank of India (RBI) in its report on “Trends and Progress of Banking in India - 2012-13” underscored that it would focus on the monitoring of banks' asset quality and will help improve the poor debt recovery process in the country. In respect to this, country’s central bank has directed banks to strengthen their due diligence, credit appraisal and post sanction loan monitoring systems to minimize and mitigate the problems of increasing non-performing assets (NPAs).

As per the report, Gross NPAs as percent of gross advances for scheduled commercial banks stood at 3.6% as at March 2013 as against 3.1% previous fiscal, while Net NPAs as percent of net advances for banks stood at 1.7% in FY13, as against 1.3% previous year. It noted that public sector banks had highest amount of bad loans at Rs 1,65,000 crore followed by private sector banks at Rs 21,000 crore and foreign bank at Rs 7,900 crore.

Pointing this, India’s Apex Bank called for better legal system in place for helping bank recover public funds from defaulters. It was of the view that the bank’s recovery should be focused on efficiency and fairness- preserving the value of the underlying assets and jobs where possible, even while redeploying unviable assets to new uses and compensating employees fairly.

The other area that the central bank voiced concern was the deteriorating capital position of public sector banks in view of the migrating to Basel-III framework, given the fiscal implication of capital infusion in these banks.