Telecom stocks jumped after the government allowed foreign borrowing to fund 3G spectrum fees. FMCG stocks fell. Metal, banking and capital goods stocks rose. The market breadth was strong.
The market drifted lower soon after hovering in positive zone at the onset of the trading session. The market cut losses after hitting fresh intraday low in early trade. The market regained positive zone in early afternoon trade. The market pared gains after hitting fresh intraday high in early afternoon trade. The market hit fresh intraday high in mid-afternoon trade. The market pared gains in late trade.
Subbarao said capital inflows into India were roughly in line with the current account deficit. "We cannot call it a capital surge like what happened in 2006-08," he said. Subbarao had said early this week that capital inflows in India reflected investor confidence in the economy. An economic adviser to the prime minister C Rangarajan has said India could absorb inflows of up to $100 billion in the current fiscal year, well above projected levels of $57-$60 billion.
RBI said after trading hours on Wednesday it would withdraw from 1 January 2010 some concessions on overseas borrowing for Indian firms introduced during the global credit crisis, although it also eased rules for the infrastructure and telecoms sectors.
A facility for Indian companies to buy back their foreign currency convertible bonds under the automatic route and approval route would be discontinued from January 2010 due to the improvement in the equity market. The central bank said it would allow non-bank financial companies which are focused on financing infrastructure projects to borrow from overseas markets under the approval route.
It also extended by a year a rule which allowed firms involved in developing integrated townships to borrow overseas. The central bank also allowed telecom firms to access oversees markets to fund their bids for 3G spectrum, effective immediately. The government plans to auction 3G spectrum in January 2010.
"Yesterday we reversed the easing we had done on the ECB policy," Subbarao said on Thursday. "That's our policy for now. I cannot really speculate on what, if any, we will do," he said. Subbarao, who is in Kolkata for a central bank board meeting, declined to comment on any further moves on capital account management and said the bank was monitoring the liquidity situation.
If there is too much liquidity it has a potential for asset price buildup. But every asset price buildup need not necessarily result in asset price bubbles and RBI is keeping keeping a vigil on that, Subbarao said.
The government announced at 12:00 IST today that the food price index rose 19.05% in the year to 28 November 2009. The fuel price index rose 0.06% while primary article index jumped 13.9% in the year to 28 November 2009.
Inflation expectations can be fueled if price pressures persist, the Reserve Bank of India Governor D Subbarao said on Wednesday.
Prime Minister Manmohan Singh said on Thursday the country needs to sharply increase public spending on agriculture, particularly on irrigation and technology, to raise farm output. This year, the worst monsoon in 37 years ravaged India's rice and cane crop, making the world's second-most populous country a big importer of sugar. The government is also considering rice imports to ensure the country has adequate grain stocks.
Meanwhile, Barclays said on Thursday it was cooperating with the Securities and Exchange Board of India (SEBI), a day after the Indian regulator barred the British bank from transacting new offshore derivative instruments. Sebi said in an order on Wednesday that Barclays had not correctly disclosed details of the derivatives that are used by foreign investors to buy Indian equities. The order will stand until Barclays shows it has adequate systems and controls in place for disclosing transactions in offshore derivative instruments, Sebi said.
Barclays said on Thursday that it has suspended the sale from inventory and any further issuance of iPath MSCI India Index exchange traded notes. Barclays said the suspension may cause fluctuations in the trading value of the notes. It added that daily redemptions at the option of the holders of the notes will not be affected and neither will Barclays' lending activity from existing inventory.
Meanwhile, Mumbai based realty firm Godrej Properties' initial public offering (IPO) was subscribed 1.27 times by 16:00 IST on second day of the issue on Thursday, 10 December 2009. The price band is at Rs 490-530 per share. The issue will close on 11 December 2009.
Stocks in Dubai rose on Thursday after falling for three consecutive sessions this week, as real-estate developer Emaar Properties announced it had decided not to merge with Dubai Holding entities. The DFM index rose 5.7% to 1,619 points in recent trading. The index had tumbled 6.4% in the previous session.
European shares drifted higher on Thursday after losses in the previous three sessions, with investors waiting for the Bank of England's interest rate decision later in the session. The key benchmark indices in France, Germany and UK rose by between 0.63% to 0.79%.
The Bank of England is widely expected to leave rates on hold at 0.5% and its asset buying program unchanged.
Most Asian markets fell on Thursday on investor risk aversion after the global rating agency S&P on Wednesday revised Spain's outlook to negative from stable citing concern about the nation's public finances. The key benchmark indices in Hong Kong, Japan, Singapore and Taiwan were down by between 0.19% to 1.53%. Some Asian stocks reversed early losses and turned positive. The key benchmark indices in China, Indonesia and South Korea rose by between 0.21% to 1.14%.
South Korea's central bank offered its clearest signal yet it was ready to raise interest rates, saying the current level was too low for an economy expected to grow around 5% next year.
Orders for Japanese machinery fell in October 2009. Orders an indicator of business investment in three to six months, declined 4.5% in October from September, when they increased 10.5%, the Cabinet Office said today in Tokyo.
US index futures reversed early losses. Trading in US index futures indicated the Dow could rise 5 points at the opening bell on Thursday, 10 December 2009.
US stocks ended higher on Wednesday, reversing earlier losses, as a weaker dollar fueled appetite for riskier assets, boosting shares of financial, technology and natural resource companies. The Dow gained 51.08 points, or 0.5%, to 10,337.05. The S&P 500 index added 4.01 points, or 0.4%, to 1,095.95. The Nasdaq Composite Index rose 10.74 points, or 0.5%, to 2,183.73.
US Treasury Secretary Timothy Geithner on Wednesday extended the government's $700 billion financial bailout fund to October 2010, saying it was still needed for "significant challenges" in the economy. Geithner, in letters to congressional leaders, pledged to deploy no more than $550 billion from the Troubled Asset Relief Program, allowing the remainder to reduce budget deficits.
The BSE Sensex rose 64.09 points or 0.37% to 17,189.31. The Sensex rose 105.83 points at the day's high of 17231.05 in mid-afternoon trade. The Sensex fell 92.92 points at the day's low of 17032.30 in early trade.
The S&P CNX Nifty rose 22.65 points or 0.44% to 5,134.65. Nifty December 2009 futures were at 5,128.85, at a discount of 5.80 points as compared to the spot closing of 5,134.65. Turnover in NSE's futures & options (F&O) segment was Rs 57,983.48 crore, lower than Rs 61,314.31 crore on Wednesday, 9 December 2009.
BSE clocked a turnover of Rs 4557 crore, lower than Rs 5128.93 crore on Wednesday, 9 December 2009.
The market breadth, indicating the overall health of the market was strong. On BSE, 1662 shares advanced as compared with 1156 that declined. A total of 89 shares remained unchanged.
Among the 30-member Sensex pack, 15 rose while the rest fell.
A deluge of global liquidity has boosted stocks across the globe this year. Governments and central banks around the world have injected trillions of dollars in the past one year to pull the world out of a most severe recession since the 1930s Great Depression. The Sensex is up 7542 points or 78.17% in calendar year 2009, as on 10 December 2009. From a 3-year closing low of 8,160.40 on 9 March 2009, the Sensex is up 9028.91 points or 110.64% as on 10 December 2009.
Coming back to today's trade, the BSE Mid-Cap index rose 0.28% and underperformed the Sensex. The BSE Small-cap index rose 0.89% and outperformed the Sensex.
The sectoral indices on BSE showed a mixed trend. The BSE Capital Goods index (up 1.63%), the BSE Bankex (up 0.75%), the BSE Power index (up 0.71%), the BSE PSU index (up 0.55%), the BSE Teck index (up 0.47%), the BSE Metal index (up 0.4%), outperformed the Sensex.
The BSE Consumer Durables index (down 0.85%), the BSE FMCG index (down 0.69%), the BSE Auto index (down 0.65%), the BSE IT index (down 0.37%), the BSE Healthcare index (down 0.13%), the BSE Realty index (down 0.08%), the BSE Oil & Gas index (up 0.33%), underperformed the Sensex.
India's largest private sector firm by market capitalisation Reliance Industries (RIL) fell 0.14% to Rs 1070.55. The stock was volatile. It hit a high of Rs 1081.70 and a low of Rs 1062.20. Amid reports that Reliance Industries was mobilising funds for its acquisition, global petrochemical major LyondellBasell has said it has not yet received a final bid. RIL said on Wednesday it has no plans to buy any debt of LyondellBasell.
FMCG shares fell on profit taking. ITC, Hindustan Unilever, Marico, Dabur India fell by between 0.66% to 2.19%.
India's largest engineering and construction firm by sales Larsen & Toubro rose 1.95%. The company said on Tuesday that it got orders worth Rs 844 crore. India's largest power equipment maker by sales Bharat Heavy Electricals rose 2.78%.
Among other capital goods stocks, Crompton Greaves and Punj Lloyd rose by between 0.01% to 2.11%.
Praj Industries gained 3.44%, after the company signed a pact with Denmark-based Novozymes for collaboration on advanced biofuels.
Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.43% on Wednesday, 9 December 2009. Hindalco Industries rose 0.88%. Hindalco Industries is reportedly raising Rs 4500 crore ($966 million) in debt to fund a new alumina refinery. The 1.5-million-tonne per year refinery, in the eastern state of Orissa, is expected to start production in July 2011 and involves about Rs 6500 crore as capital expenditure.
Steel Authority of India, Sterlite Industries and Hindustan Zinc rose by between 0.45% to 1.31%.
Tata Steel, the world's eighth-largest steelmaker by sales, rose 0.69%. The company said on 7 December 2009 its sales rose 34.5% to 498,000 tonnes, in November 2009 over November 2008.
The company on 4 December 2009 announced a partial closure of Corus' Teesside Cast Product (TCP) plant in north England, after four companies stopped buying metal from it. Operations will be suspended at the end of January 2010 forcing the loss of 1,700 jobs around 600 fewer than envisaged earlier, Tata Steel said in a statement.
Telecom stocks rose after the central bank allowed telecom firms to access oversees markets to fund their bids for 3G spectrum. India's largest mobile services provider by sales Bharti Airtel rose 3.43%, extending recent gains. Bharti Airtel sees revenue pressured in the short term amid an intense price war in the country's wireless sector, director Akhil Gupta said on 7 December 2009.
India's second largest mobile services provider by sales Reliance Communications rose 2.15%. The government may impose a penalty on Reliance Communications after examining a state audit report that found the No. 2 telecoms firm under-reported revenue for two years, the telecoms minister A Raja said on Thursday.
Idea Cellular and Spice Communications rose by between 0.93% to 4.15%.
Mobile operators including Bharti Airtel, Vodafone Essar and Reliance Communications are locked in a tariff war, raising concerns about telecom firms' profitability. The price war is aimed at grabbing new users as new firms enter the market.
Banking shares rose, reversing early losses. India's largest bank by net profit and branch network State Bank of India rose 0.07% to Rs 2295.80. The stock came off the day's low of Rs 2272. The UPA government last week cleared the introduction of State Bank of India (Amendment) Bill in the current session of Parliament. The Bill seeks to bring the government's holding in the country's largest public sector bank on a par with other public sector banks at 51 %. Currently, the Union government holds 59% stake in SBI. At present, the stake of the promoter, that is Government of India, cannot fall below 55 %.
India's largest private sector bank by net profit ICICI Bank rose 2.45% to Rs 876.25 . The stock came off the day's low of Rs 844.50 . 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. Its ADR rose 0.38% on Wednesday, 9 December 2009.
But, India's second largest private sector bank by net profit HDFC Bank fell 1.05% as its ADR fell 2.6% on Wednesday.
India's largest mortgage lender by total income Housing Development Finance Corporation (HDFC) fell 0.27%, extending recent losses triggered by investor worry a dual interest rate scheme on home loans introduced by the company would hit margins.
HDFC, last week, announced a dual-rate loan scheme under which a borrower will be charged a fixed rate up to March 2012 and a floating rate thereafter. For a 20-year loan of Rs 30 lakh, a borrower will pay a fixed rate of 8.25% up to March 2012 and then a floating rate that's 500 basis points below the prime lending rate (PLR) - the institution's benchmark rate. Currently, the PLR is 13.75%.
Select construction shares rose on government's thrust on the infrastructure sector. Hindustan Construction Company, Valecha Engineering, Era Infra Engineering and Gayatri Projects rose by between 0.14% to 0.45%. The government has set a target of spending $20 billion a year on road construction.
Cement stocks fell on profit taking. Recent reports suggested a second wave of cement price hike is on the cards. After prices were up by Rs 5-10 for a 50 kg bag in the last week of November in western and southern India, prices rose by Rs 8-11 a bag in the Mumbai region on 2 December 2009. The next set of price rises would happen in the north which is enjoying comparatively stable prices till now vis-a-vis the south and the west, reports suggest.
India's largest cement producer by capacity ACC fell 0.52%. The company's cement shipments fell 4.04% to 1.66 million tonnes in November 2009 from 1.73 tonnes in November 2008.
Aditya Birla Group's cement shipments rose 15.3% to 2.93 million tonnes in November 2009 over November 2008. Aditya Birla Group last month said it was combining its cement operations under group firm UltraTech Cement to make India's largest cement firm. UltraTech Cement fell 0.12%.
But, India's largest dam builder Jaiprakash Associates rose 1.62% The company posted 48.77% jump in its cement sales to 1.03 million tonnes in November 2008 over November 2008.
India's largest thermal power generator by sales NTPC rose 0.05% The government is planning a 5% stake sale in the firm by March 2010. Among other power stocks, Reliance Infrastructure, PowerGrid Corporation of India and Torrent Power rose by between 0.53% to 1.1%.
Auto stocks fell on profit taking. India's second largest bike maker by sales Bajaj Auto fell 1.65%. Bajaj Auto will reportedly stop producing scooters by March 2010 to focus on motorcycles. Bajaj Auto on Wednesday launched a 135 cc Pulsar, pushing the Pulsar brand into the mass segment. Bajaj expects a sell a minimum 30,000 units per month of the new Pulsar model. The automaker had recently refreshed the entire Pulsar lineup and expects total Pulsar sales to cross 80,000 units per month.
The company's total vehicle sales rose 73% to 2.76 lakh units in November 2009 over November 2008. Motorcycles sales jumped 84% to 2.42 lakh units.
India's largest small car maker by sales Maruti Suzuki India fell 1.14% . Japan's Suzuki Motor said on Wednesday it will sell a 19.9% stake to Volkswagen (VW) for $2.5 billion and use half the proceeds to buy shares in the German automaker, as the two firms form a formidable force in the auto industry. Japan's Suzuki has a 54.2% stake in Maruti Suzuki India
Suzuki's chief told the media on Wednesday that the company will cooperate with VW in India by sharing common components. VW's chief Winterkorn said the firm will pursue synergies in India between Suzuki, Volkswagen, Skoda brands.
Maruti's total vehicle sales spurted 66.60% to 87,807 units in November 2009 over November 2008. Domestic sales spurted 60.10% to 76,359 units, while exports surged 128.60% to 11,448 units in November 2009 over November 2008.
India's largest motorcycle maker by sales Hero Honda Motors fell 1.7%. The company's total vehicle sales jumped 32% to 3.81 lakh units in November 2009 over November 2008.
India's top truck maker by sales Tata Motors fell 0.92% on reports the company is negotiating to acquire Japanese conglomerate Sumitomo's 53.5% stake in the Punjab-based auto firm Swaraj Mazda in a deal worth up to $54 million. Tata Motors' total sales zoomed 65.49% to 54,108 units in November 2009 over November 2008.
But, India's top tractor marker by sales Mahindra & Mahindra (M&M) rose 0.97%. Mahindra & Mahindra will reportedly launch its first truck under a joint venture (JV) with Navistar, North America's largest commercial truckmaker, next month. The company's domestic auto sales soared 105.1% to 21,387 units in November 2009 over November 2008. M&M sold a total of 22,587 vehicles (domestic plus exports) in November 2009 as against 11,515 vehicles sold in November 2008.
Car sales in India rose an annual 61% to 1,33,687 in November 2009 over November 2008, boosted by improved consumer sentiment, easier availability of loans and a low sales base a year earlier, an industry body said on Tuesday. Sales of trucks and buses, a gauge of economic activity, doubled to 40,847 units in November from 20,631 a year earlier, data from the Society of Indian Automobile Manufacturers showed.
Cals Refineries clocked the highest volume of 4.56 crore shares on BSE. GVK Power & Infrastructure (1.38 crore shares), Mahindra Satyam (1.25 crore shares), Unitech (0.97 crore shares) and Suzlon Energy (0.81 crore shares) were the other volume toppers in that order.
Mahindra Satyam clocked the highest turnover of Rs 135.41 crore on BSE. ICICI Bank (Rs 125.83 crore), Bharti Airtel (Rs 111.65 crore), Tata Steel (Rs 106.01 crore) and State Bank of India (Rs 104.71 crore) were the other turnover toppers in that order.
