The key benchmark indices edged higher, snapping last three days' losses, as global stocks rose. Higher advance tax payment by India Inc also underpinned sentiment. The BSE Sensex was provisionally up 91.57 points or 0.55%, off close to 60 points from the day's high and up close to 45 points from the day's low. Index heavyweight Reliance Industries pared iintraday gains in volatile trade. The company today, 22 December 2009, announced a gas discovery at one of its exploration blocks in the Krishna Godavari basin.
Banking and realty stocks gained. Metal stocks also rose tracking higher metal prices on the London Metal Exchange on Monday, 21 December 2009. Shares of public sector oil marketing companies rose after Finance Secretary Ashok Chawla said the government may offer cash instead of bonds to state-run oil firms for compensating them for selling fuel at lower than market price. The market breadth was strong.
The market surged in early trade tracking firm Asian stocks. It soon trimmed gains. The market regained strength in mid-morning trade. The Sensex surged to a fresh intraday high in mid-morning trade. The market cut gains later as Chinese stocks fell extending their recent losses. The Sensex pared gains soon after hitting a fresh intraday high in afternoon trade.
The government could improve upon its aims to slow the growth of greenhouse gas emissions by 2020, the environment minister said on Tuesday after returning from climate change talks in Copenhagen. The government said it was willing to rein in its "carbon intensity" -- the amount of carbon dioxide (CO2) emitted per unit of economic output -- by between 20 and 25% by 2020, from 2005 levels.
The government has signed two loan agreements totalling $850 million with the Asian Development Bank (ADB), the finance ministry said in a statement on Tuesday. The ADB will provide a $700-million loan, in three tranches in as many years, to state-run India Infrastructure Finance Company to fund the country's infrastructure programme. The Manila-based bank will lend $150 million in four tranches over a period of three years, the statement added, for the restructuring and development of Khadi industry, which makes India's traditional handspun fabric.
Corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal, pointing to a firm broad-based economic recovery. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.
The sharp surge in food prices reflects the impact of the drought and inefficient distribution, which could not be addressed by monetary policy, the deputy head of India's Planning Commission Montek Singh Ahluwalia said on Tuesday. While the increase in food prices was to some extent expected, it was a concern -- food prices rose an annual 20 percent in early December -- but they should decline in January 2010, Ahluwalia said today.
"From January 2010 you will see a decline a food prices. What you see now is speculative, probably due to the drought situation. The stock situation is relatively OK," Singh said. "Problems such as this cannot be tackled by blunt instruments like monetary policy." "Price increase at the retail level is much more than the increase at the wholesale level. This is because of dysfunctionality in the distribution system," Ahluwalia said. "The ministry is looking into it, but whenever required, we should import," he added.
India's food-price inflation cannot be tackled through monetary and other policy steps, while inflationary expectations will not stay long, Finance Secretary Ashok Chawla said on Monday. Earlier on Monday, the Prime Minister's economic advisor C Rangarajan said India's central bank may have to raise the cash reserve ratio (CRR) to drain money from the banking system if prices do not decline in December.
India is battling soaring food prices after a poor monsoon and then flooding in parts of the country hit crops. "Unlike previous inflation, this is very sector specific. It is a very peculiar inflation which needs to be attacked at the level of the sector," said Kaushik Basu, chief economic advisor to the finance ministry.
India's central bank governor D Subbarao had earlier said that monetary policy is not the right tool to fix supply problems such as food shortages, but added that if not contained soaring food prices would stoke inflationary pressures in the broader economy.
Food prices surged an annual 20% in early December and rising food prices contributed to a faster-than-expected 4.78% increase in the wholesale price index in November 2009. Last week, Mukherjee had said containing inflation is high on the government's agenda and it is monitoring the price situation.
In overseas news, rating agency Moody's cut Greece's debt to A2 from A1 on Tuesday over soaring deficits, becoming the third major rating agency to downgrade the highly-indebted country's rating this month. Moody's kept Greece on a negative outlook. Its rating is still two notches above that of Fitch and S&P, which earlier this month cut their rating on the indebted country to BBB+, the euro area's lowest level.
European shares advanced for a second straight session on Tuesday, tracking sharp gains on Wall Street and in Asia, with banks featuring among the top gainers. The key benchmark indices in Frnace, Germany and UK rose by between 0.43% to 0.82%.
Britain's gross domestic product contracted by 0.2% in the third quarter, the Office for National Statistics said Tuesday. That's compared to an earlier estimate of a 0.3% quarterly decline.
Asian stocks rose on Tuesday as a weaker yen boosted the earnings outlook for Japanese makers of electronics and cars and after metal prices advanced. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 0.69% to 1.91%. But China's Shanghai Composite fell 2.32% on concerns more initial public offering subscriptions by the year-end could impact market liquidity.
The yen hit a fresh 7-week low against the dollar in Asia Tuesday, as rising long-term US interest rates prompted hedge funds to buy the higher-yielding currency.
Trading in US index futures indicated Dow could gain 37 points at the opening bell on Tuesday, 22 December 2009.
US stocks gained on Monday with the Nasdaq closing at a new 15-month high. Positive earnings and upgrades for Alcoa and Intel triggered gains despite the dollar index gradually gaining traction. The Dow Jones Industrial Average was up 85.25 points, or 0.83% at 10,414.14. The Standard & Poor's 500 Index gained 11.58 points, or 1.05%, to 1,114.05. The Nasdaq Composite Index rose 25.97 points, or 1.17%, to end at 2,237.66, its highest close since September, 2008.
As per provisional figures, the BSE Sensex was up 91.57 points or 0.55% to 16692.77. The Sensex rose 136.92 points at the day's high of 16,738.12 in afternoon trade. The Sensex opened with an upward gap of 32.61 points at 16,633.81 which was also the day's low.
The S&P CNX Nifty was up 38.30 points or 0.77% to 4,990.90 as per provisional figures. It hit a high of 4997.30.
The market breadth, indicating the overall health of the market was strong. On BSE, 1636 shares advanced as compared with 1152 that declined. A total of 93 shares remained unchanged.
Among the 30-member Sensex pack, 18 rose while rest fell.
The BSE Mid-Cap index rose 0.88% and the BSE Small-cap index rose 1.03%. Both these indices outperformed the Sensex.
BSE clocked a turnover of Rs 3616 crore lower than Rs 3878.06 crore on Monday 21 December 2009.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) witnessed alternate bouts of buying and selling to end flat for the day at Rs 1017. It hit a high of Rs 1029 and a low of Rs 1011.60. Reliance Industries said on Tuesday it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin off the country's east coast. Reliance Industries holds a 90% interest in the block, which covers an area of 3,288 square kilometres, and Hardy Exploration and Production India holds the rest.
RIL's plans to gain control of the bankrupt petrochemical major LyondellBasell may reportedly come undone if rival billionaire Len Blavatnik has his way. Reliance Industries' (RIL) bid fails to factor in the potential turnaround gains of the bankrupt petrochemicals-maker, said a top official of the part-owner of the LyondellBasell, signalling that RIL may have to revisit its offer, if it has to realise its dream of becoming one of the world's biggest petrochem players. The official from Access Industries, promoted by Russian-born billionaire Len Blavatnik, said the $12 billion at which RIL has reportedly valued LyondellBasell was too low.
Meanwhile, Reliance Industries may reportedly face a probe by the Registrar of Companies (RoC) in a matter related to purchase of shares in it by a group of privately-owned promoter companies in 2000, allegedly using its own funds. The expected probe follows the Securities & Exchange Board of India's report to the government earlier this month seeking 'appropriate action' on those transactions conducted nearly a decade ago.
RIL's advance tax payment rose 82.89% to Rs 834 crore in Q3 December 2009 over Q3 December 2008.
Banking shares rose on firm American depository receipts on Monday. Banking stocks had drifted lower in the past few days on a likely monetary tightening by the RBI. India's largest private sector bank by net profit ICICI Bank rose 2.05% as its ADR rose 1.31% on Monday. ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010.
ICICI Bank's advance tax payment declined by 51.8% to Rs 301 crore in Q3 December 2009 as compared with Rs 625 crore in Q3 December 2008.
India's largest bank by net profit and branch network State Bank of India rose 0.87%. The state-run bank's Q3 advance tax rose 5.59% to Rs 1795 crore over a year ago.
Among other PSU stocks, Punjab National Bank, Bank of Baroda and Bank of India rose by between 0.89% to 3.04%.
But, India's second largest private sector bank by net profit HDFC Bank fell 0.69% even as its ADR rose 1.77% on Monday.
Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.5% on Monday, 21 December 2009. Sterlite Industries, Hindalco Industries, Hindustan Zinc, Steel Authority of India, National Aluminum Company rose by between 0.49% to 7.39%.
India's largest steel maker by sales Tata Steel rose 4.42% The company's Q3 advance tax rose 160% to 650 crore. The company's European unit Corus recently secured a 350 million euro contract to supply rails tracks to French railway operator SNCF.
Realty stocks rose on bargain hunting after recent fall. Indiabulls Real Estate, Unitech and Omaxe rose by between 0.38% to 1.94%.
India's largest realty player by market capitalization DLF rose 1.44%. DLF recently announced a merger of its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL's debt. The new structure involves the merger of DLF subsidiary DLF Cyber City Developers with Caraf Builders and Constructions, which is the holding company of DAL. The valuation ratio approved by the board for Cyber City and Caraf is in the ratio of 60:40.
This means that DLF shareholders will have access to 60% and promoters to 40% of the merged entity. However, this will be a cashless transaction. DLF sells commercial property to DAL, which is controlled by KP Singh who owns 78% in the latter along with his son and DLF promoter Rajeev Singh. DAL buys commercial property from DLF and collects lease rentals from it. With this merger, the debt on DLF's books would be an additional Rs 2,460 crore.
Shares of public sector oil marketing companies rose after Finance Secretary Ashok Chawla said the government is likely to offer cash instead of bonds to state-run oil firms before 31 March 2010 for compensating them for selling fuel at lower than market price. Indian Oil Corporation, BPCL and HPCL rose by between 1.87% to 2.76%.
The oil ministry has sought Rs 20,000 crore of bonds for state-run firms as compensation during the full fiscal year ending March 2010.
Banking and realty stocks gained. Metal stocks also rose tracking higher metal prices on the London Metal Exchange on Monday, 21 December 2009. Shares of public sector oil marketing companies rose after Finance Secretary Ashok Chawla said the government may offer cash instead of bonds to state-run oil firms for compensating them for selling fuel at lower than market price. The market breadth was strong.
The market surged in early trade tracking firm Asian stocks. It soon trimmed gains. The market regained strength in mid-morning trade. The Sensex surged to a fresh intraday high in mid-morning trade. The market cut gains later as Chinese stocks fell extending their recent losses. The Sensex pared gains soon after hitting a fresh intraday high in afternoon trade.
The government could improve upon its aims to slow the growth of greenhouse gas emissions by 2020, the environment minister said on Tuesday after returning from climate change talks in Copenhagen. The government said it was willing to rein in its "carbon intensity" -- the amount of carbon dioxide (CO2) emitted per unit of economic output -- by between 20 and 25% by 2020, from 2005 levels.
The government has signed two loan agreements totalling $850 million with the Asian Development Bank (ADB), the finance ministry said in a statement on Tuesday. The ADB will provide a $700-million loan, in three tranches in as many years, to state-run India Infrastructure Finance Company to fund the country's infrastructure programme. The Manila-based bank will lend $150 million in four tranches over a period of three years, the statement added, for the restructuring and development of Khadi industry, which makes India's traditional handspun fabric.
Corporate advance tax payments for the October-December 2009 quarter shot up sharply, suggesting a higher profit growth in corporate sector in the third quarter (October-December) of the current fiscal, pointing to a firm broad-based economic recovery. Corporate advance tax payments for the quarter were up 44% to Rs 48,300 crore against a 3.7% decline in April-June quarter and a 14.7% increase in July-September quarter. The company-wise break-up of advance tax collection suggests a broad-based recovery with automobiles, cement, metals and consumer goods, doing well.
The sharp surge in food prices reflects the impact of the drought and inefficient distribution, which could not be addressed by monetary policy, the deputy head of India's Planning Commission Montek Singh Ahluwalia said on Tuesday. While the increase in food prices was to some extent expected, it was a concern -- food prices rose an annual 20 percent in early December -- but they should decline in January 2010, Ahluwalia said today.
"From January 2010 you will see a decline a food prices. What you see now is speculative, probably due to the drought situation. The stock situation is relatively OK," Singh said. "Problems such as this cannot be tackled by blunt instruments like monetary policy." "Price increase at the retail level is much more than the increase at the wholesale level. This is because of dysfunctionality in the distribution system," Ahluwalia said. "The ministry is looking into it, but whenever required, we should import," he added.
India's food-price inflation cannot be tackled through monetary and other policy steps, while inflationary expectations will not stay long, Finance Secretary Ashok Chawla said on Monday. Earlier on Monday, the Prime Minister's economic advisor C Rangarajan said India's central bank may have to raise the cash reserve ratio (CRR) to drain money from the banking system if prices do not decline in December.
India is battling soaring food prices after a poor monsoon and then flooding in parts of the country hit crops. "Unlike previous inflation, this is very sector specific. It is a very peculiar inflation which needs to be attacked at the level of the sector," said Kaushik Basu, chief economic advisor to the finance ministry.
India's central bank governor D Subbarao had earlier said that monetary policy is not the right tool to fix supply problems such as food shortages, but added that if not contained soaring food prices would stoke inflationary pressures in the broader economy.
Food prices surged an annual 20% in early December and rising food prices contributed to a faster-than-expected 4.78% increase in the wholesale price index in November 2009. Last week, Mukherjee had said containing inflation is high on the government's agenda and it is monitoring the price situation.
In overseas news, rating agency Moody's cut Greece's debt to A2 from A1 on Tuesday over soaring deficits, becoming the third major rating agency to downgrade the highly-indebted country's rating this month. Moody's kept Greece on a negative outlook. Its rating is still two notches above that of Fitch and S&P, which earlier this month cut their rating on the indebted country to BBB+, the euro area's lowest level.
European shares advanced for a second straight session on Tuesday, tracking sharp gains on Wall Street and in Asia, with banks featuring among the top gainers. The key benchmark indices in Frnace, Germany and UK rose by between 0.43% to 0.82%.
Britain's gross domestic product contracted by 0.2% in the third quarter, the Office for National Statistics said Tuesday. That's compared to an earlier estimate of a 0.3% quarterly decline.
Asian stocks rose on Tuesday as a weaker yen boosted the earnings outlook for Japanese makers of electronics and cars and after metal prices advanced. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore and Taiwan rose by between 0.69% to 1.91%. But China's Shanghai Composite fell 2.32% on concerns more initial public offering subscriptions by the year-end could impact market liquidity.
The yen hit a fresh 7-week low against the dollar in Asia Tuesday, as rising long-term US interest rates prompted hedge funds to buy the higher-yielding currency.
Trading in US index futures indicated Dow could gain 37 points at the opening bell on Tuesday, 22 December 2009.
US stocks gained on Monday with the Nasdaq closing at a new 15-month high. Positive earnings and upgrades for Alcoa and Intel triggered gains despite the dollar index gradually gaining traction. The Dow Jones Industrial Average was up 85.25 points, or 0.83% at 10,414.14. The Standard & Poor's 500 Index gained 11.58 points, or 1.05%, to 1,114.05. The Nasdaq Composite Index rose 25.97 points, or 1.17%, to end at 2,237.66, its highest close since September, 2008.
As per provisional figures, the BSE Sensex was up 91.57 points or 0.55% to 16692.77. The Sensex rose 136.92 points at the day's high of 16,738.12 in afternoon trade. The Sensex opened with an upward gap of 32.61 points at 16,633.81 which was also the day's low.
The S&P CNX Nifty was up 38.30 points or 0.77% to 4,990.90 as per provisional figures. It hit a high of 4997.30.
The market breadth, indicating the overall health of the market was strong. On BSE, 1636 shares advanced as compared with 1152 that declined. A total of 93 shares remained unchanged.
Among the 30-member Sensex pack, 18 rose while rest fell.
The BSE Mid-Cap index rose 0.88% and the BSE Small-cap index rose 1.03%. Both these indices outperformed the Sensex.
BSE clocked a turnover of Rs 3616 crore lower than Rs 3878.06 crore on Monday 21 December 2009.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) witnessed alternate bouts of buying and selling to end flat for the day at Rs 1017. It hit a high of Rs 1029 and a low of Rs 1011.60. Reliance Industries said on Tuesday it had made a gas discovery in one of its exploration blocks in the Krishna Godavari basin off the country's east coast. Reliance Industries holds a 90% interest in the block, which covers an area of 3,288 square kilometres, and Hardy Exploration and Production India holds the rest.
RIL's plans to gain control of the bankrupt petrochemical major LyondellBasell may reportedly come undone if rival billionaire Len Blavatnik has his way. Reliance Industries' (RIL) bid fails to factor in the potential turnaround gains of the bankrupt petrochemicals-maker, said a top official of the part-owner of the LyondellBasell, signalling that RIL may have to revisit its offer, if it has to realise its dream of becoming one of the world's biggest petrochem players. The official from Access Industries, promoted by Russian-born billionaire Len Blavatnik, said the $12 billion at which RIL has reportedly valued LyondellBasell was too low.
Meanwhile, Reliance Industries may reportedly face a probe by the Registrar of Companies (RoC) in a matter related to purchase of shares in it by a group of privately-owned promoter companies in 2000, allegedly using its own funds. The expected probe follows the Securities & Exchange Board of India's report to the government earlier this month seeking 'appropriate action' on those transactions conducted nearly a decade ago.
RIL's advance tax payment rose 82.89% to Rs 834 crore in Q3 December 2009 over Q3 December 2008.
Banking shares rose on firm American depository receipts on Monday. Banking stocks had drifted lower in the past few days on a likely monetary tightening by the RBI. India's largest private sector bank by net profit ICICI Bank rose 2.05% as its ADR rose 1.31% on Monday. ICICI Bank has launched a home-loan scheme under which 8.25% interest rate will be fixed for the first two years. The floating rates will apply after 2 years. These rates will be applicable to loans sanctioned between December 2009 and January 2010.
ICICI Bank's advance tax payment declined by 51.8% to Rs 301 crore in Q3 December 2009 as compared with Rs 625 crore in Q3 December 2008.
India's largest bank by net profit and branch network State Bank of India rose 0.87%. The state-run bank's Q3 advance tax rose 5.59% to Rs 1795 crore over a year ago.
Among other PSU stocks, Punjab National Bank, Bank of Baroda and Bank of India rose by between 0.89% to 3.04%.
But, India's second largest private sector bank by net profit HDFC Bank fell 0.69% even as its ADR rose 1.77% on Monday.
Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 1.5% on Monday, 21 December 2009. Sterlite Industries, Hindalco Industries, Hindustan Zinc, Steel Authority of India, National Aluminum Company rose by between 0.49% to 7.39%.
India's largest steel maker by sales Tata Steel rose 4.42% The company's Q3 advance tax rose 160% to 650 crore. The company's European unit Corus recently secured a 350 million euro contract to supply rails tracks to French railway operator SNCF.
Realty stocks rose on bargain hunting after recent fall. Indiabulls Real Estate, Unitech and Omaxe rose by between 0.38% to 1.94%.
India's largest realty player by market capitalization DLF rose 1.44%. DLF recently announced a merger of its commercial realty arm DLF Assets (DAL) with itself, a move aimed at repaying some of DAL's debt. The new structure involves the merger of DLF subsidiary DLF Cyber City Developers with Caraf Builders and Constructions, which is the holding company of DAL. The valuation ratio approved by the board for Cyber City and Caraf is in the ratio of 60:40.
This means that DLF shareholders will have access to 60% and promoters to 40% of the merged entity. However, this will be a cashless transaction. DLF sells commercial property to DAL, which is controlled by KP Singh who owns 78% in the latter along with his son and DLF promoter Rajeev Singh. DAL buys commercial property from DLF and collects lease rentals from it. With this merger, the debt on DLF's books would be an additional Rs 2,460 crore.
Shares of public sector oil marketing companies rose after Finance Secretary Ashok Chawla said the government is likely to offer cash instead of bonds to state-run oil firms before 31 March 2010 for compensating them for selling fuel at lower than market price. Indian Oil Corporation, BPCL and HPCL rose by between 1.87% to 2.76%.
The oil ministry has sought Rs 20,000 crore of bonds for state-run firms as compensation during the full fiscal year ending March 2010.
