A close below 8,400 in Nifty may trigger a short-term decline
After rising sharply on Monday to all-time highs, the Indian indices failed to gain momentum on Tuesday. The benchmark opened high, but was immediately pulled lower and struggled throughout the day to remain positive.
S&P BSE Sensex opened at 28,209 and hit a life time high of 28,283 from where it moved lower to hit a low of 28,120 and closed at 28,163 (down 15 points or 0.05%). The NSE’s CNX Nifty opened at 8,441 and moved lower to the level of 8,407 after hitting a high of 8,455. Nifty closed at 8,426 (down 5 points or 0.06%). NSE recorded a volume of 99.65 crore shares. India VIX fell 2.39% to close at 14.0650.
Finance Minister Arun Jaitley said most of the contentious issues on the implementation of the Goods and Service Tax (GST) have already been resolved. He said he would apprise the empowered committee of state finance ministers' about the draft Constitution Amendment Bill on GST before introducing it in the parliament.
A memorandum of understanding (MoU) was signed Monday between Department of Economic Affairs (DEA), Ministry of Finance, Government of India and Department of Commerce, US on establishing an Infrastructure Collaboration Platform under which the two governments would coordinate with the goal of facilitating US industry participation in Indian infrastructure projects.
In a joint statement issued during Prime Minister Narendra Modi's official visit to Australia, stated that Prime Minister Tony Abbott and Modi agreed to expedite progress towards early conclusion of the administrative arrangements to implement the civil nuclear agreement signed between the two countries during Abbott's visit to India in September. Australian supply of uranium in coming years will enhance India's energy security, the joint statement stated.
Defence Minister Manohar Parrikar and Telecom Minister Ravi Shankar Prasad have reportedly agreed to work to resolve spectrum related issues. Based on various recommendations and agreements, the Department of Telecommunications (DoT) expects Defence ministry to clear about 165 Mhz of spectrum across frequency bands. Out of all bands, there is immediate demand for 3G spectrum in frequency band 2100 Mhz.
The Telecom Regulatory Authority of India (TRAI) has recommended that spectrum in 2100 Mhz band, a part of which is with the Defence Ministry, should be put up for auction along with two sets of spectrum bands– 900Mhz and 1800Mhz in February next year, reports added.
Coming back to Indian stock markets, Reliance Communications (9.46%) was the top gainer in ‘A’ group on the BSE in spite of posting weak results on Friday.
Rasoya Proteins (19.89%) continued to be the top loser, after posting weak result last Friday, in ‘A’ group on the BSE and also hit its new 52-week low today.
Sesa Sterlite (4.09%) was the top gainer in Sensex 30 pack. There was news that it is planning to expand its copper smelter plant in Tuticorin (Tamil Nadu) with an investment of Rs2,500 crore. Under this expansion plan, the company reportedly plans to double the copper manufacturing capacity to 400,000 tonne per annum and set up a two power projects with 80 megawatts capacity.
Sun Pharma (1.94%) was the top loser in Sensex 30 stock. The company today clarified to BSE in regards to the news article appearing titled "Sun Pharma, Merck call off 3 year old JV" that "There is no termination of JV of Sun Pharma with Merck (MSD). So there is no information to be announced / furnished to the Exchanges under clause 36 of the Listing Agreement."
On Monday, US indices closed flat. Except for Shanghai Composite (0.71%), Hang Seng (1.13%) and Taiwan Weighted (0.28%) all the other Asian indices had closed in the green. Nikkei 225 (2.18%) was the top gainer.
Deputy policy chief of Japan's ruling Liberal Democratic Party reportedly said that the Japanese government will order the creation of an economic stimulus package.
European indices were trading strongly higher. US Futures were flat.
Nifty has broken out after consolidating over the last two weeks and may be headed for 8,550.
In Friday’s closing report, we had mentioned that the Indian benchmark will have to push past 8,420 to rally higher. Up to 2pm in the afternoon Monday, the NSE’s CNX Nifty moved in a range of 8,349 and 8,380. After crossing Friday’s closing, it witnessed a strengthened up move. Nifty hit its new lifetime high and closed near to the day’s high.
S&P BSE Sensex opened at 28,019 and moved up to the level of 28,206 after hitting a low of 27,921. Nifty opened at 8,378 and hit a low 8,349 before reaching up to the high of 8,438. Both Sensex, Nifty closed Monday at their new life time high. Sensex closed at 28,178 (up 131 points or 0.47%), while Nifty closed at 8,431 (up 41 points or 0.49%).
NSE recorded a volume of 90.96 crore shares. India VIX rose 3.13% to close at 14.4100.
Prime Minister Narendra Modi, speaking at the G20 summit, called for close global coordination to address the challenges posed by tax avoidance. President Barack Obama announced a $3 billion US contribution to an international fund to help poor countries cope with the effects of climate change.
India’s merchandise exports in October contracted by 5.04% at $26.09 billion from $27.48 billion in the same month last year. Imports, on the other hand, rose by 3.62% reaching $39.45 billion compared to $38.07 billion in October last year. Trade deficit in October rose to $13.35 billion from $10.59 billion last year, according to the data released Monday. In September, it had widened to $14.25 billion. In October, gold imports soared by a whopping 280.39% reaching $4.17 billion as against $1.09 billion.
There are reports that the Reserve Bank of India (RBI) is in talks with the government on increasing curbs on gold imports.
JSW Energy (12.13%) was the top gainer in ‘A’ group on the BSE. It informed BSE that it has agreed to acquire from Jaiprakash Power Ventures Ltd and other shareholders, 100% stake in Himachal Baspa Power Company Ltd for Rs9,700 crore. The board of directors of Jaiprakash Power Ventures has approved the transfer of, the 300 MW Baspa II hydro-electric project and the 1091 MW Karcham Wangtoo hydro-electric project, both located in Himachal Pradesh into a separate company, i.e. the Himachal Baspa Power Co Ltd.
Coming back to stock markets, Rasoya Proteins (19.91%) was the top loser in ‘A’ group on the BSE. The stock hit its 52-week low today. The company posted a weak result on Friday.
State Bank of India (SBI) (up 5.44%) was the top gainer in Sensex 30 pack. The stock hit its 52-week high today. The bank was in news as it had signed a memorandum of understanding with Adani group to provide a loan of up to $1 billion for the development of Carmichael mine in Queensland, which it aims to build by the end of 2017.
ICICI Bank (1.27%) was the top loser in Sensex 30 stock. According to reports, the bank recently raised 600 million yuans from the Chinese debt market (Dim Sum bonds) or a little over $ 95 million, at a coupon of 4%.
US indices closed Friday flat. A report from the US Commerce Department on Friday showed that retail sales in October increased 0.3% after a 0.3% drop in September, as American consumers ate out and shopped for clothes, enjoying a windfall from cheaper gasoline. The US Federal Reserve reports the US industrial production data for October today.
Except for Jakarta Composite (0.09%), rest of the Asian indices, which were trading closed Monday in the negative. Nikkei 225 (2.96%) was the top loser.
Japan's GDP unexpectedly shrank in the third quarter. Japan's real GDP shrank 1.6% on an annualised basis in July-September third quarter as firms cut inventories and held back on capital investment. The figure marked the second quarter of contraction, after the economy shrank 7.3% in the April-June second quarter after the national sales tax ticked up to 8% from 5% on 1 April 2014.
European indices were trading lower while US Futures too were trading in the red.
According to SEBI data, during April-September 2014, offers worth Rs38,729 crore were made to public shareholders by 29 companies
During the six months to September 2014, open offers by listed companies to buy shares from investors tumbled 66.43% to Rs13,000 crore.
According data from market regulator Securities and Exchange Board of India (SEBI), during April to September 2014, offers worth Rs38,729 crore were made to public shareholders. Besides, the number of open offers issued by the firms declined to 29 from 46 for the period under review.
As per the SEBI regulations, pursuant to substantial acquisition of shares or change in control in a listed firm, an acquirer has to make an open offer to their respective public shareholders, so as to give them a fair opportunity to exit the company if they so wish to.
The open offers are made with the objective of change in control of management, consolidation of holdings and substantial acquisition in a company.
For the April-September period this fiscal, the highest number of open offers was made towards change in control of management followed by that for substantial acquisition.
As many as 21 offers worth Rs1,218 crore were made for change in control of management. Seven open offers to the tune of Rs333 crore were for substantial acquisition. One offer worth Rs11,449 crore was made with regard to consolidation of holdings.
In September this year, only two open offers valued at Rs14 crore were made to the investors -- the second lowest this fiscal -- after the four offers worth Rs4 crore in August.
SEBI data is available only till the month of September.
"The two public offers (in September) were made with the objective of change in control of management," the market regulator said.
In terms of value, offers worth Rs12,549 crore were made in June -- the highest amount recorded so far this financial year. Open offers were valued at Rs48 crore in April, Rs254 crore in May and Rs131 crore in July this fiscal.