HINDUJA BANK (SWITZERLAND) LTD BUILDING WEALTH, ENABLING ENTERPRISE 5 September 2014 DAILY MARKET COMMENTS INDIA SUMMARY Markets extended losses for the second day, amid weak global cues, with HDFC Group shares leading the decline even as IT majors gained after huge overseas orders. The broader markets outperformed the benchmark indices-bse Midcap and Smallcap indices gained between 0.4-1.2%. Wipro has secured a 5-year Infrastructure Management contract from Philip Morris International (PMI), which owns cigarette brands like Marlboro. The stock gained by nearly 1%. Infosys too gained by nearly 1% after the company signed a five-year group-wide IT outsourcing services contract with BP (formerly British Petroleum). Suven Life Sciences zoomed by 20%, extending its previous 7% gain, after the company said it received one product patent each in three countries. Steel stocks rose on slide in global iron ore prices. JSW Steel rose after the company reported good growth of production in August. United Spirits (USL) lost 4.65% with the stock extending Thursday's losses triggered by weak Q4 results. Shares of both Sun Pharmaceuticals Industries and Ranbaxy Laboratories declined in volatile trade after the Competition Commission of India (CCI) said that the merger of the two pharma companies is likely to have an appreciable adverse effect on competition in the Indian pharma sector. HIGHLIGHTS IN THE HEADLINES TODAY Markets end lower; Sensex holds 27,000 ECB's stimulus package draws hope of FII flows even as Fed support recedes JSW Steel production up 13% in August CCI probes public sector general insurance companies L&T wins over Rs 51 bn order from Madhya Pradesh utility JP Associates' stock tanks 35% in two days Natco jumps 5% after US partner files ANDA for Everolimus INSTITUTIONAL ACTIVITY ON NSE & BSE Category Buy Value (Rs bn) Sell Value (Rs bn) Net Value (Rs bn) Foreign Institutional Investors (FII) 38.08 34.97 3.11 Domestic Institutional Investors (DII) 12.17 15.72 (3.55)
INDEX MOVEMENTS Index Close Open High Low Close Gain / Loss Var. S&P BSE Sensex 27,086 27,127 27,179 26,921 27,027 (59.23) (0.22) CNX Nifty 8,096 8,100 8,123 8,050 8,087 (9.10) (0.11) CNX 500 6,502 6,507 6,528 6,476 6,502 0.35 0.01 CNX Nifty Junior 17,358 17,377 17,443 17,246 17,367 8.90 0.05 CNX Midcap 11,536 11,552 11,624 11,499 11,568 32.45 0.28 CNX IT 10,960 11,019 11,122 10,974 11,026 65.10 0.59 CNX 100 8,041 8,046 8,068 7,996 8,034 (7.05) (0.09) BANK Nifty 16,034 16,030 16,111 15,892 15,983 (51.05) (0.32) NIFTY GAINERS Company Curr. Gain NMDC 185 177 4.70 DLF 175 168 4.48 ASIANPAINT 647 632 2.32 KOTAKBANK 1,082 1,059 2.19 JINDALSTEL 234 229 2.12 NIFTY LOSERS Company Curr. Loss MCDOWELL 2,300 2,392 (3.86) COALINDIA 370 379 (2.48) HEROMOTO 2,756 2,825 (2.43) HDFC 1,058 1,080 (2.09) BHEL 223 227 (2.00) COMMODITIES & CURRENCIES Commodity (Futures) Day Curr. Day Brent Crude (USD / bbl) 101.83 101.72 Gold (USD / t. Oz) 1,266.50 1,269.90 Silver (USD / t. Oz) 19.14 19.13 Currency Curr. Rate USD / INR 60.42 EUR / INR 78.12 ASIAN MARKETS Index Closing Gain / Loss Var. Hang Seng 25,240 57.77 0.23 Nikkei-225 15,669 7.50 0.05 Shanghai Composite 2,326 19.57 0.85 Straits Times 3,342 4.61 0.14 Taiwan TAIEX 9,408 20.95 0.22 100 Yen / INR 57.52
GLOBAL MARKET OVERVIEW European stocks edged lower today, 5 September 2014, ahead of the influential US non-farm payroll data for August. Key benchmark indices in France, Germany and UK dropped 0.19% to 0.65%. Asian stocks fell today, 5 September 2014, led by fall in material companies. Key indices in Hong Kong, Japan, South Korea, Taiwan, and Singapore were off 0.14% to 0.33%. Key indices in Indonesia and China rose 0.23% to 0.85%. GLOBAL NEWS The European central Bank (ECB) unexpectedly lowered all its interest rates to all-time low on Thursday, 4 September 2014. ECB President Mario Draghi announced two new programs under which the institution will buy asset-backed securities and covered bonds issued by eurozone banks. In a news conference, Draghi said the aim was to expand the bank's balance sheet back to the heights reached in early 2012, which equates to a rise of around 50% or 1 trillion euros in new assets. German industrial output grew more than forecast in July, signaling that Europe's largest economy is headed for a third-quarter rebound. Production, adjusted for seasonal swings, rose 1.9% from June, when it expanded a revised 0.4% the Economy Ministry in Berlin said today, 5 September 2014. The Bank of England's Monetary Policy Committee at its meeting on Thursday, 4 September 2014, left its Bank Rate at 0.5%, where it has been since the depths of the financial crisis more than five years ago. ECONOMIC AND POLITICAL NEWS Investors are betting that foreign portfolio flows into the Indian equity and debt markets, which has crossed Rs.1.8 trillion so far in 2014, will receive support from the European Central Bank (ECB) even as the Fed rolls back its stimulus package. Among other things, the ECB has cut the rate at which banks can borrow from the central bank to 0.05%. It is also set to commence its own stimulus package from October though the quantum of the same is yet to be announced. The United States Federal Reserve is on pace to end its monthly bond buying programme in October. The trimming of the bond buying began in December 2013 and is down from $ 85 billion per month to $ 25 billion so far. Retirement fund manager EPFO's ambitious project to provide portable universal PF account numbers (UAN) to its subscribers is likely to be launched this month. The UAN project is likely to be launched by Prime Minister Narendra Modi. However, no date for the formal launch has been fixed as yet. The universal number will be portable throughout the working career of members and can be used anywhere in India. Thus, workers in organised sector would not need apply for transfer of PF account claim on changing jobs. While formulating its Fuel Supply Agreement (FSA) with power producers, state-run Coal India (CIL) was earlier forced to keep a provision for import after a directive from the Prime Minister's Office (PMO) in 2012. However, as CIL gets ready to make its maiden import, it is doing so for a requisition from only a handful of plants, with a total requirement of less than a million tonnes, even as power units are grappling with acute coal shortages. On power producers' dally over import, an industry source said, "International coal prices are higher than domestic coal, though this has come down sigficantly. But everyone wants to ensure their fuel requirements are fulfilled through more of domestic coal. Another reason could that some are waiting for the international price to further go down."
INDUSTRY NEWS Competition Commission has started a probe against various public sector general insurers, including New India Assurance, for alleged unfair business practices with regard to third party administrators. Besides New India Assurance, Oriental Insurance, UnitedInsurance and National Insurance, among others, have come under the scanner of the fair trade regulator. It has been alleged that the four companies dealing in health insurance business were not allowing third party administrators or TPAs to work independently. SECTOR PERFORMANCE AND TRENDS Out of 3087 scrips traded over BSE, 1739 advanced & 1262 declined. Sector Var S&P BSE AUTO (0.65) S&P BSE BANKEX (0.30) S&P BSE CONSUMER DURABLES 0.17 S&P BSE CAPITAL GOODS 0.86 S&P BSE FMCG (0.32) S&P BSE HEALTHCARE 0.20 S&P BSE IT 0.51 S&P BSE METAL 0.69 S&P BSE OIL & GAS 0.28 S&P BSE POWER 0.05 Sector Trend * Auto BFSI Construction Consumer Goods Energy Industrial Manufacturing IT Metals Telecom * Shows trend for current & previous trading sessions S&P BSE REALTY 1.15 S&P BSE TECK 0.24 BONDS, T-BILLS & IPOs With the market racing ahead and investor sentiment improving, India's primary market, after hiatus of almost two years, is warming up for action. Buoyed by success of Rs 2 bn initial public offering (IPO) of Snowman Logistics, which saw bids worth almost Rs 120 bn, at least three more issues are set to hit the market. Agrochemical company Sharda Cropchem launched its Rs 3.5 bn offering on Friday. Next in line are media firm Shemaroo Entertainment, which plans to raise about Rs 1.5 bn and apparel retailer Monte Carlo Fashion's Rs 5 bn IPO. Besides these, Adlabs Entertainment and Lavasa Corporation are seeking regulatory nod to launch the offerings. Public sector lender Punjab National Bank plans to capitalupto Rs 15 bn through Basel III compliant tier II bonds to shore up capital adequacy ratio. The cost of capital raised through Basel III instruments is expected to be lower as early this week Reserve Bank of India (RBI) eased of rules for these instruments.
COMMODITIES Gold prices recovered from near three-month lows on Friday as a stock market rally sparked by a European Central Bank rate cut ran out of steam, but gains were capped ahead of key US payrolls data later in the day. The metal hit its weakest since mid-june earlier on Friday at $1,256.90 an ounce, and remains on track to end the week lower on the back of rising equities and signs that the US economy is improving. Brent crude oil steadied near $102 a barrel on Friday, heading for a third weekly drop in four as a strong dollar depressed demand, though data showing lower crude stocks in the United States kept a floor under prices. CORPORATE ANNOUNCEMENTS JSW Steel today reported a 13% rise in production in August at 1.12 mn tonnes. IT services major Wipro today said it has secured a 5-year Infrastructure Management contract from Philip MorrisInternational (PMI), which owns cigarette brands like Marlboro. Financial details of the contract were not disclosed. Infrastructure major Larsen & Toubro today said it has won Rs 51 bn order for setting up a 1,320 MW thermal power plant in Madhya Pradesh. The information in this publication was developed using data which Hinduja Bank () Ltd assumes to be accurate; nevertheless, Hinduja Bank () Ltd accepts no liability and offers no guarantee. The availability of such information does not constitute a recommendation to buy or sell any of the securities discussed therein. Statements made in this publication can be changed without prior notice. Moreover, the content is not intended for individuals (or entities) who (which), by reason of their nationality or domicile or for any other reason, are subject to foreign regulations prohibiting access to banking services or investment instruments via one or several distribution channels, or prohibiting or restricting the use of any information provided in this document.