Published on February 28, 2014
India-Global Market Summary 28-2-2014 • • • • • Market edged higher in a highly volatile last trading session of the week. Sensex, finished above the psychological 21,000 mark settling at five-week high. Nifty settled at its highest level in over five weeks. Indian stocks edged higher today, 28 February 2014, after BJP's prime ministerial candidate for this year's Lok Sabha elections Mr. Narendra Modi's reformist agenda and promised policy implementation in a speech on Thursday, 27 February 2014, and on dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 26 February 2014. Sensex was up 0.63% to 21,120.12 and Nifty was up 0.61% to 6,276.95 The Cabinet Committee on Economic Affairs today, 28 February 2014, approved the proposal of the Department of Fertilizers regarding modified New Pricing Scheme-III (NPS-III) for existing urea units. The implementation of the Modified NFS-III will compensate existing urea units for increase in fixed costs, etc, and thereby facilitate their continuing operations and regular supply of urea to farmers, a government statement said. The Cabinet Committee on Economic Affairs also approved a proposal of the Department of Fertilizers regarding amendments to the New Investment Policy 2012 (NIP-2012) in the urea sector. The amendments are necessitated by the suggestion of Dr. Saumitra Choudhuri, Member Planning Commission and the response of various companies received by the Department of Fertilizers (DoF) after the notification of NIP-2012, the government said. Amendments in NIP-2012 will allow market forces to operate for new urea units. It is expected that this would attract investments in urea sector for required indigenous capacity addition and increased production of urea domestically, the government said. This would facilitate actual implementation of NIP- 2012, it added. In the foreign exchange market, the rupee edged lower against the dollar on dollar demand from oil firms to meet month-end payment commitments. Indian government bond prices rose after dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014 The Ministry of Corporate Affairs on Thursday, 27 February 2014, said that the government has issued notifications to give effect to Section 135 and Schedule VII of the Companies Act, 2013, which relate to CSR (Corporate Social Responsibility) related spending by companies. Mr. Sachin Pilot, Minister for Corporate Affairs, said that the concerned rules have been finalised after extensive consultations with all stakeholders.
• • • • • • • Narendra Modi, the BJP's prime ministerial candidate, said on Thursday, 27 February 2014, that India's traders and grocery store owners must learn to compete with large modern stores and online retailers. "We should not worry about the challenges from global trade," he told a gathering of the Confederation of All India Traders. Rather, he said, small traders should emphasise on quality of their products to compete better and could enter into contracts with big online retailers to create "virtual malls in small shops". With the general elections fast approaching, Modi also laid out his economic views separately at a conference on the Indian economy on Thursday, 27 February 2014. "Speedy, yet sustainable economic growth that is inclusive of all is the need of the hour," he told a crowd of businessmen, bankers, economists and diplomats. As India is vast, he said there are no tailor-made solutions for the problems of the entire country. "The government must identify the strengths of each state and devise strategies accordingly," he said. Modi, chief minister of Gujarat, said he also favoured introducing a nationwide goods and services tax (GST), a long-pending reform expected to bring a uniform market, reduce costs of businesses and increase government revenue. Modi answered only two questions from members of the audience, one of which was related to energy security. He said he preferred using the country's own natural resources such as solar energy and wind energy to energy imports. Reserve Bank of India (RBI) Governor Raghuram Rajan on Wednesday, 26 February 2014, defended his decision to repeatedly raise interest rates when he said that reducing inflation is the best way to foster stable growth. "We cannot wait until the public's expectations of inflation get more entrenched, and the inflationary spiral gains momentum," Mr. Rajan said in a speech, defending RBI's decision to raise key policy rate three times by a combined 0.75 percentage points since he took over as head of the central bank in September 2013. Mr. Rajan indicated that he agreed with the recommendations of a central bank panel which had suggested the RBI start using a consumer price inflation target to determine monetary policy. The panel suggested that RBI should bring down the consumer price inflation rate to 8% by January 2015 and to 6% by January 2016. After that it should aim to keep it within two percentage points of 4%, the panel said. Mr. Rajan said the gradual raising of interest rates now rather than later is the best way to slowly squeeze inflation out of the economy. "Rather than administer shock therapy to a weak economy, the RBI prefers to dis-inflate over time rather than abruptly, while being prepared to do what is necessary if the economy deviates from the projected inflation path," Mr. Rajan said. He said keeping inflation in check will also bolster the rupee and business confidence. "Greater public faith that inflation will be low will add stability to our currency, and prevent the kind of gyrations we saw last summer," he said. Reliance Industries (RIL) dropped in choppy trade after Arvind Kejriwal's Aam Aadmi Party (AAP) intensified its attack on RIL Chairman and Managing Director (CMD) Mukesh Ambani, accusing him of being involved in a Rs 6530-crore moneylaundering operation. Pharma stocks edged higher on renewed buying, with Cadila Healthcare, Lupin and Dr. Reddy's Laboratories hitting record high. Shares of power finance companies gained. Fertiliser shares declined.
• • • • • • • • • • • • • • • • • L&T gained in volatile trade after the company said its construction division has won new orders worth Rs 5220 crore across various business segments in January and February 2014. Bharat Heavy Electricals (Bhel) edged higher for the second day in a row after the company on Wednesday, 26 February 2014, said it has won a contract worth Rs 321 crore for setting up a 206 megawatts hydro electric project in Punjab. Jaiprakash Power Ventures jumped after the company said that a meeting of the board of directors of the company will be held tomorrowto consider the recommendations aiming at reduction of debt and unlocking the shareholders' value. Among IT stocks, Infosys scaled a record high after its BPO unit -- Infosys BPO -- on Thursday, 27 February 2014, unveiled its Process Progression Model TM (PPM), a holistic and innovative framework to accelerate optimization and end-to-end transformation of business processes. Among metal stocks, Hindalco Industries surged. Tata Power Company said that the company's Board of Directors at its meeting held on Thursday, 27 February 2014, has approved raising funds upto Rs 2000 crore by way of a rights issue of equity shares Jaiprakash Associates and Ranbaxy Laboratories will be replaced by Tech Mahindra United Spirits in the 50-unit CNX Nifty index. Power Grid Corporation of India said that the company's board of directors at its meeting has declared an interim dividend of Rs 1.27 per share for the year ending 31 March 2014. Titan Company said that the company has entered into a joint venture agreement with Montblanc Services B.V, Netherlands for establishing operations in India for carrying on single brand retail trade. Tech Mahindra GmbH, Dusseldorf, a wholly-owned German subsidiary of Tech Mahindra, announced that it has signed an agreement with BASF Business Services Holding GmbH to acquire its business with third party customers. Rural Electrification Corporation said that it has filed an amendment in the Shelf Prospectus dated 26 August 2013 for increasing the shelf limit to Rs 6000 crore from Rs 5000 crore, with the office of Registrar of Companies Bosch's net profit fell 19.22% to Rs 138.98 crore on 0.44% rise in total income to Rs 2255.13 crore in Q4 December 2013 over Q4 December 2012. Hinduja Ventures said its board reviewed the performance of one of its subsidiary, IndusInd Media and Communications, and it reiterated the earlier decision to invest Rs 300 crore in IndusInd Media and Communications, a subsidiary of the Company, either directly or through its subsidiary. The board of directors of IL&FS Transportation Networks will meet on 4 March 2014 to consider fixing the issue price as well as ratio for the proposed rights issue. Arvind said that Arvind Goodhill Suit Manufacturing, a joint venture between the company and Goodhill Corporation of Japan, announced launch of formal suits on Wednesday, 26 February 2014. Lanco Infratech rose 2.69% after the company said it has emerged as the successful bidder for an EPC contract of about Rs 3960 crore from Tamil Nadu Generation and Distribution Corporation. M&M's consolidated net profit fell 1.93% to Rs 1230 crore in Q3 December 2013 over Q3 December 2012. Consolidated gross revenue and other income rose 8.5% at Rs 20679.90 crore in Q3 December 2013 over Q3 December 2012 Bosch said that the board of directors of the company at its meeting held on 27 February 2014, inter alia, have recommended a dividend of Rs 55 per share for the year ended 31 December 2013 .
Global news • European stocks reversed initial gains on Friday, 28 February 2014, as investors awaited reports on American housing, consumer spending and economic growth. Asian stocks edged higher on Friday, 28 February 2014, after dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee on Thursday, 27 February 2014. Trading in US index futures indicated that the Dow could drop 22 points at the opening bell on Friday, 28 February 2014. US markets edged higher on Thursday, 27 February 2014, with the benchmark S&P 500 closing at a fresh record as investors welcomed dovish remarks from Federal Reserve Chairwoman Janet Yellen before the Senate Banking Committee. • Euro-zone inflation was unchanged in February, easing pressure on the European Central Bank to take further action to support the financial system and growth when its governing council meets next Thursday. Consumer prices grew 0.8% in February from a year earlier in the euro zone, the European Union's statistics office Eurostat said Friday, well below the ECB's target of just below 2%. • A meeting of China's lawmakers to set economic policy and growth targets begins next week in Beijing. The National People's Congress annual gathering begins on 5 March 2014. • Yellen told senators it was difficult to tell how much of the recent decline in US economic growth was due to weather, adding the central bank might consider a pause in its reduction of bond buying if the weakness persists. The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion • In latest US economic news, the number of people applying for unemployment benefits rose last week to match the highest level of 2014, suggesting that progress in a gradually recovering US labor market has slackened off. However, the average of new claims over the past month, usually a more reliable gauge than the up-and-down weekly number, was unchanged at 338,250. • Orders for US durable goods fell 1% in January as demand tapered off for most big-ticket items except military hardware, the government said Thursday
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1.India Market Summary for the week ended 28-2-2014 I Review of the Week Market review for the week ended 28 February 2014• Market edged higher during ...