Stocks
Nifty, Sensex may drift higher– Thursday closing report

Nifty will head higher subject to dips caused by global sell-offs

 

Market sentiments were boosted by the surprise rate cut from Reserve Bank of India (RBI) on Thursday, which resulted in the benchmarks recording strong gains. We had mentioned in Wednesday’s closing report that a close above yesterday’s high will support a bullish position although the indices were weakening. The big gap in opening on Thursday was followed by the indices progressively moving higher except for some volatility at the beginning and at the end of the session.
 
S&P BSE Sensex opened at 27,831 while CNX Nifty opened at 8,425. Sensex moved from the low of 27,704 to 28,195 and closed at 28,076 (up 729 points or 2.66%). The 50-share Nifty hit a low 8,381, moved to the level of 8,527, and closed at 8,494 (up 217 points or 2.62%). NSE recorded a volume of 107.84 crore shares. India VIX fell 6.31% to close at 16.1600.
 
Before the market opening today, RBI announced a surprise cut in repo rate under the liquidity adjustment facility by 25 basis points to 7.75%.
 
Finance Minister Arun Jaitley hailed the decision of RBI to cut the interest rate, saying it is a positive development for the Indian economy and will certainly help in reviving the investment cycle the government is trying to restore.
 
The RBI's unexpected 25 basis points rate cut does not change the country's sovereign credit profile, an analyst at Fitch Ratings told the media.
 
Interest rate sensitive stocks like HDIL (18.59%), Indiabulls Real Estate (10.55%) and DLF (10.39%) were among the top four gainers in the ‘A’ group on the BSE.
Pipavav Defence and Offshore (4.50%) was the top loser in ‘A’ group on the BSE. In it December 2014 ending shareholding pattern the FIIs holding were reduced from 2.28% in September 2014 to 1.36%, DIIs holding were also reduced from 14.03% to 13.56% while retail shareholding were increased from 39.19% to 40.58%.
 
Except for Hindalco (0.18%) and Hindustan Unilever (0.05%) all the other stocks in the Sensex 30 pack closed in the green. HDFC (7.16%) was the top gainer followed by SBI (5.02%) and ICICI Bank (4.60%).
 
On Wednesday, US indices closed in the red. US retail sales dropped 0.9% in December, the biggest slide since January 2014, following a 0.4% gain in November that was smaller than previously estimated, according to the Commerce Department.
 
Except for NZSE 50 (0.12%) and Taiwan Weighted (0.16%) all the other Asian indices closed in the green. Shanghai Composite (3.54%) was the top gainer.
 
In China, the latest data showed that Chinese banks issued 697.3 billion yuan ($112.5 billion) worth of new loans in December, down from 852.7 billion yuan in November. Total social financing, a broader measurement of credit in the economy, rose to 1.69 trillion yuan in December from 1.15 trillion yuan in November. China's foreign exchange reserves stood at $3.84 trillion at the end of December, down from $3.89 trillion at the end of September.
 
European indices and US premarket futures were extremely volatile in the afternoon (declining deeply into the red from a strong rally) after Swiss National Bank shocked investors by removing its currency ceiling against the Euro and slashing its deposit rate to negative 0.75%. This is what caused the sharp selloff later in the session in India.
 
However, at the time of writing, European markets had turned around strongly and US Futures were trading in the green.
 

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SpiceJet: Marans, Kal Airways give control to co-founder Ajay Singh

SpiceJet co-founder Ajay Singh, who holds 4.5% stake has been given control of the ailing carrier by promoters Maran and Kal Airways

 

Beleaguered budget carrier SpiceJet on Thursday said that it decided to transfer ownership, management and control of the company back to its co-founder Ajay Singh from Sun Group chairman Kalanithi Maran and Kal Airways.
 
SpiceJet in a statement, said: "The Board has further directed the company to take further steps to implement and undertake all necessary steps including to make the appropriate application before the Ministry of Civil Aviation, Government of India for seeking approval of the ‘Scheme of Reconstruction and Revival for the takeover of ownership, management and control of SpiceJet Ltd’.
 
Maran had acquired SpiceJet for close to Rs750 crore in 2010. However, the carrier suffered losses and landed in debt due to cash crunch.
 
Promoters, Maran and Kal Airways hold 53.48% stake, while Ajay Singh hold 4.5% in SpiceJet. Retail investors hold 45.69% in the company that has a total market value of Rs1,000 crore. Major public shareholders in SpiceJet, includes Tata group unit Ewart Investments (1.79%) and Kalpana Singh (1.41%). 
 
SpiceJet closed Thursday 3% higher at Rs18.65 on the BSE, while the 30-share Sensex ended the day 2.7% up at 28,075.
 

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Global markets swing into turmoil as Swiss lets franc soar

Over $98 billion was wiped off the value of Swiss stocks, their biggest daily fall in 26 years, while the pan-European FTSEurofirst 300 slumped 2% and Wall Street futures turned negative after the SNB scrapped its three-year old peg of 1.20 Swiss francs per euro

 

Global markets were thrown into turmoil on Thursday as a shock move by Switzerland to abandon its more than three-year-old cap on the franc sent the currency soaring and Europe's shares and bond yields tumbling, says a report from Reuters.
 
The Swiss National Bank (SNB) stunned markets when it scrapped its three-year-old peg of 1.20 Swiss francs per euro. The central bank also cut its main interest rate to -0.75%—a move further into negative territory. 
 
In a chaotic few minutes after the central bank's announcement, the Swiss franc soared by almost 30% in value against the euro. 
 
Over 100 billion francs ($98 billion) was wiped off the value of Swiss stocks, their biggest daily fall in 26 years, while the pan-European FTSEurofirst 300 slumped 2% and Wall Street futures turned negative, says the report.
 
The move, however hit European equity markets hard, with the Swiss benchmark stock index falling by more than 13%. 
 
According to a report from MarketWatch, despite the plunge in Switzerland's stock market, the US-listed shares of some high-profile Swiss companies were actually rising in premarket trade Thursday as the Swiss franc soared. 
 

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