Tuesday, 13 January 2015

HUL slips on profit-taking

Hindustan Unilever (HUL) has changed direction and is now trading with significant losses owing to profit-taking at higher levels.

The stock this morning surged to a fresh all-time high of Rs. 908, and was up over 20 per cent in the last seven trading sessions at the highest point of the day.

The stock, however, has now dropped to a low of Rs. 877 - down 3.5 per cent from the day's high.

The stock is now down 2 per cent to Rs. 877.

The counter has seen trades of around 342,000 shares as against the two-week daily average volume of around 169,000 shares on the BSE.

The stock had rallied smartly on the back of ratings upgrade by select foreign broking firms.

The company is scheduled to announce its earnings on January 19, 2015.

Meanwhile, the Sensex has suddenly tumbled into red and is now down 235 points at 27,351

Sensex at day's low, down 218 pts

The BSE Sensex has tumbled sharply and is currently trading at the lowest level of the day - with a drop of 218 points at 27,367 on the back of weakness in oil & gas, realty, IT and bans.

The NSE Nifty has also slipped into red, and is now down 41 points at 8,281. 

Among sectors, the BSE Realty index has slipped 1.4 per cent at 1,510.

The Oil & Gas index has dropped a per cent at 9,619.

The IT index has shed 0.5 per cent at 10,894 and the Bankex is also down 0.2 per cent at 21,490.

The market breadth has turned negative - out of 2,892 stocks traded on the BSE so far 1,448 stocks have declined, while 1,349 stocks have advanced. ONGC and Hindustan Unilever are the top Sensex losers - down over 2 per cent each at Rs. 340 and Rs 879, respectively.

Infosys, Hero MotoCorp and ICICI Bank have slipped 1.5 per cent each at Rs. 341, Rs 2,084 and Rs. 2,895, respectively.

Tata Power, Tata Steel, Reliance, Bharti Airtel, TCS and Gail India are the other significant losers. 

Nifty steady, up 28 points

The Indian equity market continues to trade on a mixed note. The NSE Nifty is out-performing the BSE Sensex, the Nifty index is up 28 points at 8,351, while, the BSE benchmark index is up 20 points at 27,650.

The India VIX (Volatility) index has pared gains, but still holds gain of around over a per cent at 16.3075. 

The Small-cap and Nifty Junior indices are still trading with a gain of 0.5 per cent each at 5,361 and 18,813, respectively.

The Mid-cap index is slightly up at 3,383. In sectors, the Metal, FMCG, Pharma and Bank Nifty indices are the major gainers - up 0.5 per cent each.

On the other hand, the Realty index has dropped over a per cent at 198 and the Energy index has also declined nearly a per cent at 8,404.

The breadth remains positive - out of 1,734 stocks traded on the NSE so far 865 stocks have advanced, while 619 stocks are declining.

The European markets start in red, the CAC index has declined over 0.5 per cent at 4,202 and the FTSE index has moved down 0.4 per cent at 6,477.

In the Metal space, Hindustan Copper has zoomed almost 5 per cent to Rs. 73.70.

Orissa Minerals has surged 2.5 per cent at Rs. 3,270. NMDC has jumped over 2 per cent at Rs. 136. 

Jindal Steel has spurted almost 2 per cent at Rs. 152. GMDC, Hindalco and Sesa Sterlite have also climbed over a per cent each. On the losing side, SAIL has slipped 2 per cent at Rs. 78.40. National Aluminium has dropped 1.5 per cent at Rs. 48.90.

Fall in commodity prices a big benefit for FMCG companies

From a medium term perspective, the fall in commodity prices has been a big benefit for all FMCG companies. Companies which are dependent on agriculture inputs are seeing a much benign cost environment than what they have seen in the last three or four years and that is what is leading to a substantial upgrade in numbers for these companies which is being reflected in the stock moves.


It is also a function on how uncertain the markets are with respect to things globally. FMCG has traditionally been a defensive, so in an uncertain global environment, people would or might continue to move into some of these names because they provide a decent downside support. So, a combination of these two factors has led to sharp outper formance with the FMCG companies.


A lot of the positive news could be getting priced in at these levels from a fundamental perspective but my sense is that given the uncertain global environment, you might continue to see FMCG companies doing well. People would definitely allocate a portion of their funds to these companies and a lot of people were underweight on these companies. You might end up in a situation in which these companies might continue to do well.

Sensex, Nifty stuck in a range after a positive start; top 20 intraday bets

The S&P BSE Sensex rose as much as 85 points in trade on Tuesday but pared most of its gains in the mid-morning trade, led by losses in Infosys, ONGC, ICICI Bank, RIL and HUL.

Tracking the momentum, the 50-share Niftyindex also pared gains after reclaiming its crucial psychological level of 8350, weighed down by losses in IT, realty, oil & gas and auto stocks.

At 11:50 a.m.; the 30-share index was at 27570, down 15 points or 0.05 per cent. It touched a high of 27670.19 and a low of 27529.60 in trade today.

The Nifty was at 8341 up 18 points or 0.22 per cent. It touched a high of 8356.30 and a low of 8321.85 in trade today.

Dramatic fall in oil prices a boon: RBI

RBI Deputy Governor Urjit Patel on Monday said dramatic fall in global oil prices was a "boon" for Indian economy and may help save $50 billion on import bill.


According to Patel, the fall in oil prices will increase disposable incomes, reduce input cost of businesses and bring down energy subsidy burden.


"It (oil fall) saves, on an annualised basis, around $50 billion, roughly, one-third of our annual gross POL (Petroleum, Oil and Lubricants) imports of about $160 billion ... But our external situation undoubtedly improves," he said.

GMR Infra begins roadshows for DIAL's bond issue; stock down 2%

As per the media report, GMR Infrastructure has started roadshows for unit Delhi International Airport Ltd's maiden overseas bond issue.

The company is planning to raise about $ 290-300 million in dollar bonds.

Report said the funds will be used to retire debt on the airport's books.

Citibank and Standard Chartered are the global coordinators and joint book managers for the bond issue.

GMR's airports business had total debt of Rs. 6,323 crore as of June last year. At 1.13 PM, the stock was down 2.03% at Rs. 17. The stock has hit a high of Rs. 17.40 and a low of Rs. 16.75.

Lower oil prices an opportunity; but comprehensive structural reforms needed

Growth in Asia-Pacific developing economies will pick up moderately in 2015. Prospects for growth would be better if supported by much-needed structural reforms, and could also be boosted by lower oil prices that are an opportunity to mobilize resources for inclusive and sustainable development, the United Nations said here today.


Developing countries in Asia and the Pacific are forecast to grow at an average of 5.8% this year, up from 5.6% in 2014, driven by improved economic performances in Bangladesh, India, Indonesia, Papua New Guinea, Republic of Korea and Thailand, according to updated forecasts by the United Nations Economic and Social Commission for Asia and the Pacific (ESCAP) in its Economic and Social Survey of Asia and the Pacific 2014: Year-end Update. The report also highlights that growth in the region remains below pre-crisis levels.

Structural reforms in India and Indonesia are projected to help increase their growth to 6.4 and 5.6%, respectively, from 5.5 and 5.2%, respectively, in 2014. Growth in China is forecast to hover around 7% in 2015 consistent with the ongoing economic rebalancing.

A decrease in regional inflation this year to 3.5 from 3.9% in 2014, offers room in some regional economies for loosening monetary policies to support growth, indicates the Year-end Update, which was unveiled by United Nations Under-Secretary-General and ESCAP Executive Secretary Dr. Shamshad Akhtar.

“Despite improved prospects many developing economies in the region face structural constraints which have kept them from realizing their growth potential. Infrastructure shortages remain acute and growth has not translated into enough decent jobs,” Dr. Akhtar said.

The steep decline in oil prices in recent months may be the start of a longer-term trend and will have a significant, yet varying impact across the region. The Year-end Update estimates that for energy-importing countries, a $10 per barrel fall in the oil price in 2015 would translate into an increase in GDP growth of up to 0.5 percentage points.

However, it could reduce growth in the Russian Federation, a net energy exporter, by 1.1 percentage points and deprive neighbouring Central Asian countries of $1.7 billion in remittances from nationals working in the Russian Federation.

While a recovering United States economy will support growth in Asia-Pacific exporting economies, slow growth in the eurozone and Japan will be a challenge as will be China’s moderating growth. ESCAP also alerts the region to brace for capital outflows following an expected raising of interest rates by the US Federal Reserve although this could be buffered to some extent by new financial injections by the eurozone and Japan.

ESCAP also projects higher growth in all Asia-Pacific subregions in 2015, except North and Central Asia where it is expected to decline to 0.2 from 1.0% in 2014, mainly due to the difficult outlook for the Russian Federation. The Russian Federation accounts for almost 80% of the GDP of North and Central Asia subregion.

Among the growth drivers in the region, Thailand’s economy, after the sharp slowdown to 0.8% in 2014, is forecast to grow by 3.9% due to increased short-term consumer and investor confidence following the end of the protracted political instability. 
Constraints and opportunities
 
Likely capital volatility in 2015, triggered by developed world monetary policies could slash Asia-Pacific GDP growth by up to 0.7 percentage points, ESCAP estimates, advocating sound macroeconomic management and macroprudential policies to address this.

On the domestic front, developing countries in the region need to bridge physical and social infrastructure gaps that need an annual investment of $815 billion, according to the Year-end Update. It outlines ways to increase infrastructure financing and recommends labour market reforms to increase decent job opportunities.

Declining global oil prices are a valuable opportunity for Asia-Pacific economies to reduce fuel subsidies that account for a large share of national budgets in many countries in the region. Regressive fossil fuel subsidies more often benefit the rich and have little impact on reducing poverty. The savings from a cut in these could be better invested into more productive and inclusive development, says the report.

ESCAP estimates that savings from energy subsidies could, for example, finance the provision of income security to all elderly and persons with disabilities as well as universal access to health and education in Indonesia, Malaysia, Philippines and Thailand.

“This is a particularly critical and opportune time to decrease subsidies,” the ESCAP Executive Secretary said, noting that this would not only reduce budgetary strains but also prepare governments for the near future when global financing may be even more challenging to secure.

“Reducing subsidies can raise significant public financial resources for productive investment in the region and could make needed funds available for financing sustainable development,” Dr. Akhtar closed.

Sharp Gains In COMEX Gold, Chinese Demand Seen Rising Ahead Of Lunar New Year

Gold has gained impressively after breaking above $1200 per ounce mark. COMEX Goldjumped to two and half month high today amid continued buying support as the metalshrugged off strength in dollar and poor import figures from India. Stocks are tradingmixed in Asia as falling oil prices depress investor confidence but gold’s safe havenstatus seems to be offering it a helping hand. COMEX Gold is quoting at $1236 per ounce,up $3.20 per ounce on the day. MCX Gold futures are trading at Rs 27130 per 10 grams, upRs 100 per 10 grams on the day.

Traders are expecting good demand to emerge from China ahead of its Lunar New Year. Netgold imports from Hong Kong to China rose to 99.111 tonnes in November from 77.628 tonnesin October, according to the Hong Kong Census and Statistics Department. Total imports tothe mainland, including stocks that are re-exported to Hong Kong, jumped to 149.235 tonnesin November from 111.409 tonnes in October.

The US dollar extended its gains this week, hitting fresh nine year highs under 1.1800against the Euro as calls for a full scaled quantitative easing from the European CentralBank increased after the inflation readings for the region fell into negative. TheEuropean Union's statistics agency stated that consumer prices last month were 0.2% belowtheir December 2013 levels. That was the first year-over-year fall since October 2009.Dollar has been appreciating constantly over the last few months and has played a criticalrole in keeping gold under check.

Gold started the new year on a jittery note and fell under $1200 per ounce on lack ofmajor positive catalyst and a bleak performance by crude oil prices, which lingered aroundtheir lowest level in five and half years. However, a break above $1200 per ounce turnedcrucial for gold and the metal edged up amid signs of increased volatility in the globalmarkets. Terror attacks in France also increased the safe haven appeal of the commodity.

Strong gains emerged for gold after US job growth increased briskly in December,further strengthening the case for an interest rate increase from the Federal Reserve thisyear. US Nonfarm payrolls increased 252 000 last month after a revised 353 000 jump inNovember, the Labour Department noted. The unemployment rate fell 0.2 percentage point toa 6-1/2 year low of 5.6%. December marked the 11th straight month of payroll increasesabove 200 000, the longest stretch since 1994.

Meanwhile, Indian gold demand is moderating. India's gold imports have droppedsubstantially in December after surging in previous months. Gold imports had jumped afterthe government scrapped a rule that mandated traders export one-fifth of the goldconsignment imported into the country. India's Gold imports came in at just 39 tonnes inDecember after surging to 152 tonnes in November.

Farrokh Cooper turns 70, Cooper set to see double growth in less than five years

Farrokh Cooper, Chairman and Managing Director of Cooper Corp, a Satara based manufacturer of diesel engines turns 70 tomorrow. Taking forward the legacy of the company that his grandfather Sir Dhunjisha B Cooper established in 1922, the agriculture graduate turned businessman talked about Cooper’s ambitions of doubling its Rs. 700 crores turnover in less than five years.


Cooper Corporation’s ceaseless commitment to quality, service and product innovation has consistently kept pace with the changing market needs worldwide. The company’s rapid strides in the global market bear testimony to this fact. Cooper today employs over 2000 people including engineers, quality control personnel, workmen and administrative staff recruited from leading educational and technical institutions. A rigorous induction strikes a judicious blend of academic expertise and professional exposure. Over the years, the company has consistently invested in the latest state-of-the-art technology across 75 acres of land at 9 plants in Satara with the help of experienced consultants from all over the world. The company has set-up its own Research and Development (R&D) unit to explore the possibilities of developing new products. Today Cooper supplies auto spare parts and engine components to all leading manufacturers in India and across the world from Japan to Europe and the USA. Cooper has a technical collaboration with Ricardo UK for the design of its state of the art family of engines in 2, 3, 4 & 6 cylinder configurations. These Engines are designed to meet all future emission norms while delivering the best in class fuel efficiency. Consistently delivering high quality castings for over 75 years, Cooper Corporation is today a market leader in centrifugal castings. The Cooper commitment to quality and service that has been the driving force since inception has enabled the company to scale new heights.

Public Sector Banks: At Cross Road

Indian banking sector comprises of different types of institutions to cater to the divergent banking needs of various sectors of the economy. There are typical commercial banks which operate on all India basis. There are government owned banks, privately owned banks and foreign owned banks. There are also small banks with limited areas of operation.

Credit cooperatives were created to cater to the credit, processing and marketing needs of small and marginal farmers organised on cooperative lines. Cooperatives expanded also in urban and semi-urban areas in the form of urban cooperative banks to meet the banking and credit requirements of people with smaller means. Regional Rural Banks were created to bring together the positive features of credit cooperatives and commercial banks and specifically address credit needs of backward sections in rural areas. Further, there was an experiment of establishing Local Area Banks, albeit on a smaller scale, to bridge the gap in credit availability and strengthen the institutional credit framework in the rural and semi-urban areas. Most recently, we have decided to experiment with new types of banks under our differential licensing policy. Accordingly, we have invited applications for Small Finance Banks and Payment Banks. These banks will operate in their own niche areas of small finance and payments services.

In India, the universal banking model is followed. As regards the structure of universal banks, the conglomerate structure is bank-led, i.e., banks themselves are holding companies which operate certain businesses through Subsidiaries, Joint Ventures and Affiliates. The general principle in this regard is that para-banking activities, such as credit cards, primary dealer, leasing, hire purchase, factoring etc., can be conducted either inside the bank departmentally or outside the bank through subsidiary/ joint venture /associate. Activities such as insurance, stock broking, asset management, asset reconstruction, venture capital funding and infrastructure financing can be undertaken only outside the bank. Lending activities must be conducted from inside the bank. Investment banking services are provided by the banks as an in-house departmental activity or through subsidiary.

a. Firstly, Capital Planning for PSBs needs to be considered over a long term horizon. Approximately, as high a sum of Rs 4.50 lakh crorein Tier 1 capital (which includes Rs 2.40 lakh crore equity capital) will be needed. Recently, it has been reported that the GOI is contemplating scaling down their holdings in PSBs to 52%. This may not be sufficient to fully meet the capital needs of the PSBs under Basel III norms particularly since the projections are based on minimum requirements. We also have to remember that Pillar II assessment has nottaken off effectively/ fully as of now. The PSBs will have to chart out a clear capital raising plan over the next five years.The PSBs should actively consider several options including, non- voting rights share capital, differential voting rights share capital, golden voting rights share capital, etc.
b. Secondly, there is a need to reflect on the Holding Company Structure in respect of the PSBs.The Nayak Committee recommendations in the matter look at the Bank Investment Company Structure from the limited perspective / single angle of separating the GOI investments from the PSBs. There are deeper ramifications on this aspect and the whole issue must be looked at from multiple dimensions including that of the financial stability perspective. The suggestions made in the ShyamalaGopinath Report on the Bank Holding Company structure need to be given a serious consideration. The objective must be threefold – i) help reduce capital requirement impact on the GOI ii) financial stability perspective, and iii) strengthening corporate governance by reducing government influence and interference;
c. Thirdly, the Performance Appraisal System (PAS) needs a complete revamp.Currently the PAS makes no meaningful distinction between individuals for identifying or deploying talent, skills and / or specialisation; nor does it guide determining compensation. The system needs reshaping so as to serve as the mainstay for evaluating employees’performance, assessing compensation and developing leadership.
d. Fourthly, the Public Sector Banks (PSBs) have hardly any meaningful participation in the financial markets, i.e in the BCD instruments. This restricts / curtails the financial market development. A selected set of foreign banks and the new Private Sector Banks dominate the financial markets in India. PSBs need to engage proactively, especially, in the derivative instruments for hedging their risks. Treasury function is relatively weak in PSBs. Well established and robust Treasury is a must for the purpose; they must build up specialisation and should have sufficient number of specialists. The vigilance aspect on treasury losses/ losses from transactions will need to be rationalised just as in other areas of PSB operations. e. Fifthly, the PSBs should have a relook on their portfolios. Currently, their portfolio share in advances to agriculture, industries, services, retail and other services account for 13.90%, 46.32%, 20.93%, 15.74% and 3.11%. They will need to rebalance this, from the perspective of diversification.
f. Sixthly, the Retail Banking in PSBs needs a complete overhaul in terms of products, instruments and methods for deployment. As India is poised for re-entering high growth period, and as greater number of individuals will have higher income and higher financial needs, PSBs should be ready to meet these needs.
g. Seventhly, the PSBs should look at financial inclusion as a profitable business proposition and not as a matter of compliance with the RBI and government requirements. Extensive and smart use of ICT, mobile and internet banking as well as the Aadhaar linkage for customer identification and authentication can make this truly possible. Banks need to come out of the brick and mortar branch set-up mindset, and reorient the business models in accordance with changing times and requirements as well as improve profitability. We must not distrust the ability of the rural and/ or poor, small and marginal businesses/ operators/ farmers to understand and use basic / simple technology. The mobile and internet revolution in India has proved that already.
h. Eighthly, the PSBs should grab the opportunity offered to them during the GyanSangam, the retreat for the PSB chiefs at Pune last week. Now that Government has clearly articulated that the PSBs will take their own commercial decisions, the PSBs will have no excuse hereafter for any poor performance.
i. Ninethly, level playing field is on the cards. Already banking regulations and priority sector norms are increasingly owner agnostic. Now government also desires that the PSBs are professionally managed and operated. This augurs well for the PSBs.

To conclude, we can easily agree that the PSBs are at the cross road. They are now being increasingly enabled to compete on professional basis. They are being assured of autonomy for their commercial decision making. Given these changed environment, it is time that they deliver value for the nation which provides its capital.

(Speech delivered by Shri R. Gandhi, Deputy Governor at the “Indian PSU Banking Industry: Road Ahead” Summit organized by Bengal Chamber of Commerce and Industry on January 10, 2015 at Kolkata)

Depositories to set up risk management framework in 3 months: SEBI

The SEBI on Monday asked depositories to put in place a comprehensive risk management framework within three months.

The Depository System was reviewed by the Depository Systems Review Committee(DSRC) inter alia in the context of Principles for Financial Market Infrastructures(PFMI) laid down by the Committee on Payment and Settlement Systems (CPSS) and International Organization of Securities Commissions (IOSCO).

The FMI principles lay emphasis on the need to have a robust risk management framework to identify, monitor and manage various risks emanating from multiple sources to its operations.

The principles also emphasize that as the Board of the FMI is ultimately responsible for managing the FMIs risks, it should establish a clear, documented risk-management framework that includes the FMI’s risk-tolerance policy, assigns responsibilities and accountability for risk decisions, and addresses decision making in crises and emergencies.

The Depository Systems Review Committee(DSRC) has therefore recommended the following: "There should be a Board approved policy providing for a well documented comprehensive risk management framework at both depositories.

The risk management group/ committee should be active and meet periodically to continuously identify, evaluate and assess applicable risks in depository system through various sources such as investors complaints, inspections, system audit etc. and suggest measures to mitigate risk wherever applicable.

A Chief Risk officer should be made responsible, accountable, accessible & answerable to the board on overall risk management issues." In view of the above, the depositories are advised to establish a clear, comprehensive and well documented risk management framework which shall include the following:
a. an integrated and comprehensive view of risks to the depository including those emanating from participants, participants' clients and third parties to whom activities are outsourced etc.;
b. list out all relevant risks, including technological, legal, operational, custody and general business risks and the ways and means to address the same;
c. the systems, policies and procedures to identify, assess, monitor and manage the risks that arise in or are borne by the depository;
d. the depository's risk-tolerance policy; e. responsibilities and accountability for risk decisions and decision making process in crises and emergencies. "The depositories shall implement the provisions of this circular within three months from the date of this circular," Sebi said.

The depository system was reviewed by the DSRC in the context of Principles for Financial Market Infrastructures and International Organisation of Securities Commissions.

The principles lay emphasis on the need to have a robust risk management framework to identify, monitor and manage various risks emanating from multiple sources to its operations.

Yes Bank gains 2% on fund raising buzz

Yes Bank is trading on a positive note on media reports that the bank is planning to raise up to Rs. 3,000 crore in tier-II or non-equity capital by September.

The stock opened with a gain of 0.5 per cent at Rs. 782 and so far, has jumped 2.7 per cent to touch a high at Rs. 799.

Now, the stock has pared some of its earlier gains, but still trading higher by 1.5 per cent at Rs. 789. The BSE counter has registered trades of around 149,000 shares, against its two-week daily average volume of 252,000 shares.

SEBI to strengthen market-wide circuit breaker systems.

The Securities and Exchange Board of India (SEBI) on Monday moved to strengthen the market-wide circuit breaker mechanism.

SEBI had advised stock exchanges to implement an index based market wide circuit breaker system to bring about a coordinated trading halt in all equity and equity derivative markets nationwide on 10%, 15% and 20% movement either way of BSE Sensex or NSE Nifty.

The mechanism implemented by the stock exchanges for ‘Index based market-wide circuit breakers’ was discussed with SEBI’s Technical Advisory Committee (TAC) and Secondary Market Advisory Committee (SMAC). Based on the recommendations of TAC and SMAC, it has been decided to further strengthen the mechanism of index based market-wide circuit breaker as under:
(a) NSE and BSE shall compute their market-wide index (NIFTY and SENSEX respectively) after every trade in the index constituent stocks and shall check for breach of market-wide circuit breaker limits after every such computation of the market-wide index.
(b) In the event of breach of market-wide circuit breaker limit, stock exchange shall stop matching of orders in order to bring about a trading halt as mandated vide SEBI circular dated June 28, 2001. All unmatched orders present in the system shall thereupon be purged by the stock exchange. BSE and NSE shall implement suitable mechanism to ensure that all messages related to market-wide index circuit breakers are given higher priority over other messages. Further, the systems (including the network) for computation of market-wide index, checking for breach of circuit breaker limits and initiating message to stop matching of executable order and acceptance of fresh orders, shall not be used for any other purposes. (d) BSE and NSE shall include in the scope of their annual system audit a review of its index based market-wide circuit breaker mechanism with the view to identify improvements.

BSE and NSE are directed to make necessary amendments to the relevant bye-laws, rules and regulations and take necessary steps to put in place necessary systems for implementation of the provisions of this circular. All stock exchanges are directed to bring provisions of this circular to the notice of their stock brokers and also disseminate the same on their website.

This circular is being issued in exercise of powers conferred under Section 11 (1) of the Securities and Exchange Board of India Act, 1992 to protect the interests of investors in securities and to promote the development of, and to regulate the securities market.

Nifty out-performs Sensex

The Nifty continues to trade on a flat note with positive bias, whereas the Sensex continues to languish in red zone in the early noon deals.

The Nifty has managed to out-performed the Sensex on the back of buying support in select index heavyweights - Ultratech Cement, Asian Paints and Grasim Industries.

At 12:34 pm, the Nifty is up 7 points at 8,356. The Sensex is down 53 points at 27,585. So far, 70 stocks have registered a fresh 52-week high on the NSE counter.

Asian Paints, Bajaj Corp, DCB Bank and BEML are some of the star performers.

The market breadth is positive in the early noon deals. 

Out of 1,732 stocks traded on the NSE - 891 stocks have advanced, while 576 stocks have declined.

Jet Airways stock hits 5% upper circuit



Shares of Jet Airways hit 5% upper circuit after report said that the airline will slash fares after Air India.

The stock has hit a high of Rs467 and a low of Rs453. Total traded quantity on the counter stood at over 5.01 lk shares.


Jet Airways reportedly said that the full-service airline will offer discounts on tickets booked between January 13 and January18, for travel between January 16 and April 15.

Falling Crude: World GDP to slowdown; unemployment to increase



The world economy is set to slowdown in 2015 followed with extensive pressure on currency across the globe and to end up with asset bubbles going for blow up.

Japan has declared that its economy is in recession, China is already under slow growth, Europe is struggling with its austerity measures and US is less to be relied on growth.

Among all these low crude prices has killed the remaining part of the world economic growth.

The recent ratings of Russia was very much expected in the lines but we should be expecting some more as major oil producing countries are taking the hit over the low crude prices.

In my previous I depicted that losses of the exporting countries and where countries like India are going to stand when their will be slow down in these exporting countries of India.

Global unemployment is also going to increase and the biggest blow would come to the new comers who will be finding difficulty in getting job as budgets would be reduced by the oil producing countries and exporting the same.

Sensex, Nifty on a flat note



At 11:17AM, the S&P BSE Sensex is trading at 27,569 down 15 points, while NSE Nifty is trading at 8,336 up 13 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%.

Auto, Consumer Durables, Power, banking, healthcare metal, capital goods, FMCG, indices are the gainers, while IT, Oil and gas, Realty, Teck indices are losers.

Crompton Greaves, Asian Paints, Hindalco, Indusind Bank, Idea Cellular, ABB are among the gainers, whereas Infosys, ONGC, Adani Power, Tata Motors are losing sheen on BSE.


Shares of Era Intra Engineering rallied 5% upper circuit on securing contract from NHDP-IV in the state of Chattisgarh.

Hindustan Unilever continues its winning streak for the seventh straight day on the back of positive upgrades from the foreign broking firms.The stock registered a fresh all-time high at Rs. 906.

Oberoi Realty started the day on a positive note on the back of launching two new projects in Central suburbs of Mumbai. The stock is up 1.7 per cent at Rs. 275.

- See more at: http://www.indiainfoline.com/article/news-top-story/sensex-nifty-on-a-flat-note-115011300079_1.html#sthash.NyKTXcNy.dpuf

Expect highest earnings upgrade potential for Maruti: IIFL Research

After a strong volume performance in 2QFY15 (helped by an early festive season), volume growth rate fell in 3QFY15 due to the festive calendar shift and moderation in consumer sentiment. As a result, volumes were flattish QoQ in contrast to a heavier 3Q in previous years. This would result in margins being flat QoQ for most companies. Exceptions would be Maruti (benefit of JPY depreciation on imports) and battery makers (fall in lead price). We see the highest earnings upgrade potential for Maruti (margin-driven) and a downgrade possibility for M&M (volume disappointment).

Maruti’s volumes grew 12% YoY but were flattish QoQ. We expect ASP to improve QoQ due to better mix, price increase in Swift (refresh) and lower average discounts. JPY is down 7% QoQ. Maruti would derive benefit in relation to direct imports and royalty in 3Q and indirect vendor imports in 4Q, with a quarter’s lag. JPY and lower discounts will boost margins whereas low initial margin on Ciaz would be negative.

Dec-14 volumes grew by 21% YoY (-0.3% MoM) to ~109,791 units, driven by ~13% growth in domestic volumes and ~171% growth in exports. Domestic volumes grew 13% YoY to ~98,109 units. Retails for the month grew 18% YoY to ~157,000 units, driven by pre-buy in fear of excise duty increase. Compact segment (Alto, Wagon-R, Swift, Celerio, Ritz etc) grew by ~10% YoY to ~60,657 units.

As per data released by SIAM, the sales of Passenger Vehicles grew by 3.67 percent in April-December 2014 over the same period last year. Within the Passenger Vehicles segment, Passenger Cars and Utility Vehicles grew by 4.99 percent and 5.49 percent respectively.

Industrial growth picks up at 3.8% for Nov: CARE

Surpassing the market expectations, industrial output recorded 3.8% growth for the month of November’14. 
CARE’s own estimation was 2.4% for the month.
This growth in the industrial output is attributable to strong pick up of the manufacturing segment at 3%. 
The significant growth in capital goods segment also indicates the pickup in investment demand. However, the overall growth has been persistently offset by two important components (‘office, accounting & computing machinery’ and ‘Radio, TV and communications equipment, & apparatus’) without which the growth stands at 6.6% for the month.
The cumulative growth during the period Apr’14-Nov’14 was registered at 2.2% against 0.1% in the corresponding period of the previous fiscal. On the cumulative basis, the performance across the various sectors is given below: Cumulative growth of the mining & quarrying sector segment registered a growth of 2.5% during April – Nov’14 as against a contraction of -2.1% recorded during the corresponding period of the previous year.
Manufacturing segment picked up considerably registering a cumulative positive growth of 2.5% during Apr-Oct’14 against contraction of 0.4% in the previous fiscal.
Out of the 22 industries 14 industries recorded a positive cumulative growth. The electrical machinery & apparatus. n.e.c registered the highest increase of 19.9% followed by basic metals at 11.5% and other transport equipment at 10.1%. Remaining 8 industries were the negative performers.
The ‘office, accounting & computing machinery’ and ‘Radio, TV and communications equipment, & apparatus’ were the worst performers with unusual sharp contraction of 37.9% and 53.4% respectively. Power sector continued with its robust growth of 10.7%. Under the Use-based classification, Basic goods continued to record a significant cumulative growth of 7.5% during the period against a low of 1.2% in the corresponding period of the previous fiscal.
Cumulative growth in capital goods registered a 4.9% growth against a contraction of 0.1% last fiscal. Growth in intermediate goods too registered a subdued growth of 1.8% over 2.8% last fiscal year. Consumer durable and consumer non-durable goods recorded a growth of -15.9% and 1.9% respectively, with the cumulative growth in overall Consumer goods contracting by 5.7% against a contraction of 2.6% in the corresponding period of the last fiscal.
Industrial growth picked up considerably at 3.8% for the month driven by strong performance of the manufacturing segment.
Growth in capital goods is indicative of revival in investment demand. However, growth is partly offset by the negative growth in consumer demand for durables indicating no revival in consumer spending.

Top corporate news of the day – January 13, 2015

Cipla might restart supplying anti-HIV drugs to the National Aids Control Organization (Naco) in the next two months. 
 
Biocon concluded sale of 10% stake in its research arm Syngene for Rs 3.8bn to IVF Trustee Company Private Ltd.
 
The patent disupte between Bristol-Myers Squibb (BMS) and Natco Pharma Ltd over entecavir, a pharmaceutical combination for treating Hepatitis B has been settled amicably, both the companies informed Intellectual Property Appellate Board (IPAB).
 
The Modi’s government move to allow dual use of social and commercial infrastructure in non-processing areas of Special Economic Zone (SEZs) will give a big boost to the land monetization plans of Adani Ports & SEZ Ltd – which already has an operational SEZ at Mundra and has a large area which is yet to be leased.
 
Maruti Suzuki India is eyeing 20% growth in vehicle exports this fiscal at 0.12mn units, riding on increased sales in non-European markets like Africa, Latin America and the Middle East.
 
Crompton Greaves (CG) has entered into a memorandum of understanding (MoU) with French enterprise Arelis that specialises in design and manufacturing of high-tech electronic solutions.
 
Insecticides India Ltd, which reported an annual turnover of Rs9bn last fiscal, is eyeing a turnover of Rs12bn in 2014-15.
 
Reliance Communication (RCOM) expects revenue from its India enterprise business to cross US$1 bn annually over the next year and half, a top executive said, citing demand for cloud-based services that he said is growing exponentially.
 
Bank of Maharashtra raised Rs10bn from bonds to funds business growth.
 
Intellect SEEC, providers of insurance software from Intellect Design Arena Ltd, a Polaris Group company, has inked a pact with global provider of advanced risk analytics solutions 'OutsideIQ'.
 
UK's Commonwealth Development Corporation (CDC), private equity investors CX Partners, Newquest and a unit of Bajaj Group are leading a Rs6bn investment in Ujjivan Financial Services, clinching the single largest funding deal in India's microfinance sector, sources directly familiar with the matter said. 

Top economic news of the day - January 13, 2015

Exceeding the expectation of a marginal improvement after contracting 4.2 % the previous month, India’s industrial output grew 3.8 % in November, showed the Index of Industrial Production (IIP) data. The rate of retail inflation, as measured by the consumer price index (CPI), meanwhile, rose to 5 % in December from 4.4 % in November.
 
Pushing for public private partnership (PPP) model for development of smart cities, Union Urban Development Minister M Venkaiah Naidu said that the central government was ready to provide viability gap funding for interested parties.

HUL crosses Rs. 900-mark, up 1%

Hindustan Unilever continues its winning streak for the seventh straight day this morning on the back of positive upgrades from the foreign broking firms.

The stock today registered a fresh all-time high at Rs. 908. The stock has now pared some gains and is up a per cent at Rs. 902.

The counter has seen trades of around 53,000 shares as against the two-week daily average volume of around 169,000 shares on the BSE. The company is scheduled to announce its earnings on January 19, 2015

Nifty above 8,300 levels



At 9:20AM, the S&P BSE Sensex is trading at 27,606 up 21 points, while NSE Nifty is trading at 8,343 up 20 points.

The BSE Mid-cap Index and BSE Small-cap Index was trading up at 1%.

Auto, Consumer Durables, Power, banking, healthcare metal, realty, capital goods, FMCG, Oil and gas indices are the gainers, while IT, Teck indices are losers.


Crompton Greaves, Asian Paints, Hindalco, Indusind Bank, Idea Cellular, ABB are among the gainers, whereas Infosys, ONGC, Adani Power, Tata Motors are losing sheen on BSE.


The Index of Industrial Production (IIP) for November rose to a 5-month high of 3.8%. Higher food costs pushed the Consumer Price Index (CPI) inflation for December to 5%. But the street will heave a sigh of relief that it was much lesser than what was expected and well within the RBI’s target. The data also opens up speculation again on what the RBI will do as far as interest rates are concerned.

Public Sector Banks will remain in focus today besides the companies which will declare their results. These include Reliance Industrial Infrastructure Ltd, DCB Bank and IndusInd Bank among others. Stocks like HUL are seeing action on the options front. The outlook is a flat start.

Global cues are mixed. Oil prices fell to below $46-a-barrel for the first time in nearly six years following a further slash in forecasts by global brokerages. The Dow fell 0.54%, the S&P 500 dropped 0.81% and Nasdaq fell 0.84%. Asian markets are also mostly lower with Japan's Nikkei down 1.7%, Hong Kong's flat and China's Shanghai marginally higher.

Finance minister Arun Jaitley reportedly said the divestment programme would be pursued on priority and involve more than one PSU during this period. This move comes as the government is planning to sell 10% stake in Coal India to raise Rs 24,000 crore.

The government is expected to implement Goods and Services Tax (GST) across the country in the course of next year, Finance Minister Arun Jaitley said.

The government is planning a big sales pitch in the US for its Make in India initiative ahead of President Barack Obama's visit, according to reports. DIPP secretary Amitabh Kant will head the team travelling to the US for an outreach on Make in India in Washington to drive investments in smart cities, industrial corridors and defence manufacturing.

According to reports, Gujarat was promised investments worth Rs 10 lakh crore on Day One of the Vibrant Gujarat summit. Over 15,000 agreements were inked on the first day of the business conclave at Mahatma Mandir in Gujarat. - See more at: http://www.indiainfoline.com/article/news-top-story/nifty-above-8-300-levels-115011300022_1.html#sthash.LAHwrx4D.dpuf