Stocks
Sensex, Nifty to gain further strength – Wednesday closing report

If the Nifty manages to keep itself above today’s low, may see the upmove strengthening

We have been talking about a short rally since the last weekend. For the third day on Wednesday, the market rallied and it has been a big move. The indices opened higher and witnessed an almost range bound session until around 2.25pm after which it made a big upmove. S&P BSE Sensex closed at its highest since 8 July 2014 while NSE's CNX Nifty closed at its highest since 7 July 2014. The Reserve Bank of India (RBI) move of announcing incentives for raising long term bonds for infrastructure financing helped boost the market sentiment, especially among bank stocks. We had mentioned on Tuesday that if the Nifty manages to close above 7,570, we may see it rising further. We continue with the stance.

Sensex opened at 25,322 and moved from the level of 25,247 to level of 25,603 and closed at 25,550 (up 321 points or 1.27%). On the other hand Nifty opened at 7,564 and hit a low of 7,532 from where it reached up to 7,640 and closed at 7,624 (up 98 points or 1.30%). The NSE recorded a volume of 96.87 crore shares. India VIX fell 0.25% to close at 14.7300.

The RBI on Tuesday announced incentives to raise long term bonds for a minimum maturity of seven years to raise resources for lending to long term projects in infrastructure sub-sectors and affordable housing. These bonds will be exempted from computation of net demand and time liabilities and would not be subjected to cash reserve ratio /statutory liquidity ratio requirements. This exemption will be subject to a ceiling of the eligible credit which has been decided by the RBI.

The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the first fortnight of July 2014. Accordingly, the under-recovery on High Speed Diesel (HSD) applicable for second fortnight of July effective 16 July 2014 will go down to Rs2.49 per litre. This was Rs3.40 per litre during first fortnight of July 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the second fortnight of 2014 continue to be Rs33.07 per litre and Rs449.17 per cylinder respectively, as in the last fortnight.

India's merchandise exports jumped 10.22% to $26.48 billion in June 2014 over June 2013, data released by the government on Wednesday showed. Imports rose 8.33% to $38.24 billion in June 2014 over June 2013. The trade deficit stood at $11.76 billion in June 2014, which was higher than the trade deficit of $11.28 billion in June 2013.

Jaypee Infratech (19.86%), top gainer in the ‘A’ group on the BSE , filed its shareholding for June 2014 quarter today which showed that the FII holding and DII holding in the company reduced from 5.62% to 5.17% and from 11.76% to 10.80% respectively. Financial Technologies which was the top gainer on Tuesday was among the top two gainers in the ‘A’ group on the BSE on Wednesday.

Rural Electrification Corporation (REC) (4.95%) was among the top two losers in the ‘A’ group on the BSE. REC has appointed REC Transmission Projects Company Limited (RECTPCL), a wholly owned subsidiary of the company, to act as bid process coordinator (BPC) for selecting developer as transmission service provider for five transmission projects through tariff based competitive bidding. The board of directors of REC has approved a proposal for incorporation of five project specific SPVs as subsidiary companies of RECTPCL. These SPVs would be transferred to respective successful bidders to be selected through tariff based competitive bidding process as transmission service provider for developing above transmission projects.

All bank stocks in the Sensex 30 pack were among the gainers on account of the RBI move of easing of the lending norms. ICICI Bank (4.70%), Axis Bank (3.57%), SBI (2.26%) and HDFC Bank (1.07%) led the list of gainers.

Gail, (0.96%), was the top loser in the Sensex 30 stock. The company has proposed to establish a gas pipeline grid in Andhra Pradesh.

US indices closed Tuesday mostly lower. Asian indices showed a mixed performance. Jakarta Composite (0.85%) was the top gainer while Taiwan Weighted (0.88%) was the top loser. US futures were trading higher and all European markets are trading in the green.

China today reported second-quarter GDP growth of 7.5% compared with 7.4% in the previous three months. Other data showed retail sales gained 12.4% in June from a year earlier and industrial production jumped 9.2%.

The leaders of the BRICS countries agreed on Tuesday on to create a $100 billion development bank and a reserve fund of the same size to challenge Western dominance over global finances. The presidency will be initially held by India.

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Bajaj Finance Q1 net profit up 20% on higher interest income

For the June quarter, the Bajaj group financial unit reported a net profit of Rs211 crore, as its total net interest income grew to Rs747 crore from Rs601 crore

Bajaj Finance Ltd reported a higher first quarter net profit mainly on robust revenues, including interest income.
 
For the quarter to end-June, the Bajaj group financial unit said its net profit increased 20% to Rs211 crore from Rs176 crore, while its total revenues, including interest income, grew 34% to Rs1,246 crore from Rs934 crore, a year ago period.
 
During the quarter, the private sector lender said its NII (net interest income) increased Rs747 crore from Rs601 crore, same period last year.
 
Bajaj Finance said its total advances increased 48% to Rs9,266 crore from Rs6,250 crore, same period last year.
 
The Bajaj group company said, as on 30 June 2014, its total assets under management (AUM) stood at Rs26,943 crore compared with Rs24,061 crore on 31 March 2014.
 
Bajaj Finance closed Wednesday marginally down at Rs2,186 on the BSE, while the 30-share Sensex ended the day 1.3% higher at 25,549.
 
For more stock results, check out this page

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Almost 33 MFs flout investor, investment norms: Sitharaman

Individual unit holders were observed holding more than 25% of the mutual fund scheme’s quarterly average net assets


As many as 33 mutual fund (MF) houses out of the total 45 were found to have violated the ‘20-25 rule’ which requires a minimum of 20 investors and a cap of 25% investment by an individual investor in a particular scheme, the Parliament was informed.

 

According to Nirmala Sitharaman, minister of state for finance, large-scale violations in several schemes of such fund houses were found by capital market regulator Securities and Exchange Board of India (SEBI).

 

“Letters were issued to 33 mutual funds, wherein individual unit holders were observed holding more than 25% of the scheme’s quarterly average net assets,” the minister said in a written reply to the Rajya Sabha.

 

She advised them to comply with the ‘20-25’ norms in “letter as well as in spirit.”

 

The fund houses were also advised to strengthen its systems and improve its compliance standards to avoid recurrence of such instances, failing which penal actions would be taken in accordance with the provisions of SEBI regulations.

 

Currently, there are about 45 fund houses in the country, which together manage assets worth about Rs10 lakh crore.

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