HINDUJA BANK (SWITZERLAND) LTD BUILDING WEALTH, ENABLING ENTERPRISE 17 March 2015 DAILY MARKET COMMENTS INDIA SUMMARY Benchmark share indices ended over 1% higher, amid a choppy trading session, led by financials on expectations that weak US economic data may prompt the US Federal Reserve not to announce hike interest rates at it two-day policy meet which begins later today. Meanwhile, Finance Minister Arun Jaitley told lawmakers on Tuesday that India's current account deficit will "hopefully" be less than 1% of gross domestic product (GDP) in the fiscal year that begins in April which further buoyed the trading sentiments. The 30-share Sensex surged 299 points to close at 28,736 and the 50-share Nifty gained 90 points to end at 8,723. Metal shares gained on prospect of further stimulus measures from China which may raise hopes of a boost in demand in the biggest consumer. Hindalco, Sesa Sterlite, Tata Steel were up between 2-6%. Shares of Tata Motors ended higher by 2% on expectations of a revival in the demand for commercial vehicles. Banks have shown healthy growth in their advance tax deposit this quarter, with the highest payer, State Bank of India, depositing Rs 17.50 bn, 20% higher than in the corresponding period of the previous year. A strong rupee casted its shadow on the IT pack. Infosys was down 1% while Wipro dropped 0.7%. HIGHLIGHTS IN THE HEADLINES TODAY Sensex, Nifty gain 1% led by financials ahead of Fed meet Current account deficit to be below 1% of GDP in 2015-16: Jaitley Emerging markets must prepare for US rate hike: Lagarde Jindal Steel and Power falls over 15% intraday; ends 8% lower Cairn's tax liability credit negative for Vedanta: Moody's RBI further restricts gold imports Sun Pharma surpasses SBI in market valuation INSTITUTIONAL ACTIVITY ON NSE, BSE & MCX-SX Category Buy Value (Rs bn) Sell Value (Rs bn) Net Value (R bn) Foreign Institutional Investors (FII) 51.23 48.58 2.65 Domestic Institutional Investors (DII) 13.70 16.14 (2.44)
INDEX MOVEMENTS Index Close Open High Low Close Gain / Loss Var. S&P BSE Sensex 28,438 28,595 28,784 28,435 28,736 298.67 1.05 CNX Nifty 8,633 8,689 8,743 8,631 8,723 90.15 1.04 CNX 500 7,079 7,122 7,166 7,087 7,154 75.10 1.06 CNX Nifty Junior 19,609 19,704 19,938 19,704 19,909 300.60 1.53 CNX Midcap 13,105 13,167 13,276 13,135 13,233 127.75 0.97 CNX IT 12,419 12,460 12,499 12,301 12,383 (35.90) (0.29) CNX 100 8,651 8,705 8,765 8,658 8,748 97.00 1.12 BANK Nifty 18,837 18,961 19,122 18,782 19,058 220.90 1.17 NIFTY GAINERS Company Curr. Gain HINDALCO 134 127 5.48 SSLT 194 186 4.31 CAIRN 227 218 4.24 DRREDDY 3,432 3,313 3.59 INDUSINDBK 907 877 3.39 NIFTY LOSERS Company Curr. Loss JINDALSTEL 175 190 (8.37) HCLTECH 2,037 2,057 (0.97) INFY 2,245 2,267 (0.96) TATAPOWER 80 81 (0.74) BHARTIARTL 386 388 (0.63) COMMODITIES & CURRENCIES Commodity (Futures) Day Curr. Day Brent Crude (USD / bbl) 54.67 53.44 Gold (USD / t. Oz) 1,153.20 1,150.60 Silver (USD / t. Oz) 15.62 15.51 Currency Curr. Rate USD / INR 62.73 EUR / INR 66.63 ASIAN MARKETS Index Closing Gain / Loss Var. Hang Seng 23,901 48.06 0.20 Nikkei-225 19,437 190.94 0.99 Shanghai Composite 3,503 53.54 1.55 Straits Times 3,370 6.09 0.18 Taiwan TAIEX 9,539 26.53 0.28 100 Yen / INR 51.75
GLOBAL MARKET OVERVIEW European stocks reversed initial gains today. Asian shares edged higher on speculation that weaker US economic data mean the US Federal Reserve won't rush to raise borrowing costs. Key benchmark indices in Indonesia, China, Japan, South Korea and Taiwan were up by 0.07% to 2.14%. Hong Kong's Hang Seng was down 2% and Singapore's Straits Times was down 0.18%. GLOBAL NEWS Germany-Investor confidence rose for the fifth month in a row in March, suggesting that economic recovery is still building momentum but the lower-than-expected growth indicated risks inside and outside the eurozone. The ZEW indicator of economic sentiment published today, 17 March 2015, rose to 54.8 in March from 53.0 in February. The Bank of Japan (BOJ) left its main policy unchanged today despite a tumbling inflation rate, indicating it is still confident that prices will resume their upward trend later in the year without the need for additional action. The central bank expects cheaper energy prices and expected wage increases at major companies to eventually stimulate consumer spending, boosting growth and helping the bank achieve its 2% inflation target by around spring 2016. The BOJ said its policy board voted 8-1 to keep unchanged the size of the annual asset purchases at 80 trillion. Emerging markets must prepare for the impact of a rise in U.S. interest rates which could surprise in both its timing and pace, the head of the International Monetary Fund said in India on Tuesday. In a speech in Mumbai, Managing Director Christine Lagarde warned the so-called "taper tantrum" that slammed emerging markets in 2013 could be repeated. "The danger is that vulnerabilities that build up during a period of very accomodative monetary policy can unwind suddenly when such policy is reversed, creating substantial market volatility," Lagarde said in prepared remarks. Lagarde said advanced economies could help reduce the risk of market volatility by communicating policy intentions clearly. But she added that emerging markets that had tackled economic vulnerabilities had fared better when shockwaves hit in 2013. ECONOMIC AND POLITICAL NEWS India's current account deficit will "hopefully" be less than 1% of gross domestic product (GDP) in the fiscal year that begins in April, Finance Minister Arun Jaitley said at the Lok Sabha today. The deficit narrowed to 1.6% in the October-December quarter from 2% a quarter earlier on the back of slumping oil prices. Analysts said it should move into surplus in early 2015 for the first time in eight years. With a number of key reforms bills stuck, government today appealed to the opposition not to play "obstructionist" as the country has the "historic opportunity" to grow and the GDP is expected to go beyond 8% next year, overtaking China. India benefits from lower oil prices through lower inflation, an improved trade balance and reduced fuel subsidy costs. Looking ahead, sustained lower oil (and other commodity) prices will support the growth acceleration we expect in 2015 and 2016 by preventing a build-up of inflation and current account deficits, global research and ratings agency Moody s has said in its latest report. Therefore, despite an upside risk to non-oil inflation from food inflation shocks or a return of pricing power as growth rises, we expect CPI inflation to remain well below the RBI s target of 6% through January 2016, Moody s Investors Service said. As per reports, a list of 65 floundering central public sector enterprises (CPSE), which includes names like Air India, Fertilizer Corp of India, Hindustan Shipyard, HMT, MTNL, Bharat Coking Coal and ITI Ltd, among others, will serve as the starting point of the government s Rs 285 bn strategic disinvestment plan in 2015-16.
INDUSTRY NEWS Shares of Jindal Steel and Power (JSPL) tanked 9% today. According to Business Standard reports, of the 34 blocks, auctioned in two phases, letters of allocation for eight have not been signed with the successful bidders. These blocks, as per the ministry of coal, had comparatively low bids and would need a re-look by the Nominated Authority (NA) for the re-allocation. The asset base of equity mutual funds has almost doubled to more than Rs 3 trillion till February end on the back of retail investors pouring money into these schemes. The industry's equity assets under management (AUM) rose from Rs 1.57 trillion in February 2014 to Rs 3.07 trillion in February this year, according to Association of Mutual Funds in India (AMFI). SECTOR PERFORMANCE AND TRENDS Out of 2939 scrips traded over BSE, 1351 advanced & 1456 declined. Sector Var S&P BSE AUTO 1.22 S&P BSE BANKEX 1.13 S&P BSE CONSUMER DURABLES 1.47 S&P BSE CAPITAL GOODS 1.70 S&P BSE FMCG 1.51 S&P BSE HEALTHCARE 1.82 S&P BSE IT (0.32) S&P BSE METAL 1.17 S&P BSE OIL & GAS 1.44 S&P BSE POWER 0.95 Sector Trend * Auto BFSI Construction Consumer Goods Energy Industrial Manufacturing IT Metals Telecom * Shows trend for current and previous trading session S&P BSE REALTY 0.44 S&P BSE TECK (0.16) BONDS, T-BILLS & IPOs The Rs 4.35 bn IPO of amusement park operator Adlabs Entertainment managed to scrape through on the final day, helped by last-minute bids from institutional investors. The IPO was subscribed 1.1 times according to provisional data provided by the stock exchanges. The qualified institutional buyer (QIB) segment was subscribed 1.2 times and the retail segment was subscribed 1.4 times, while the wealthy investor category got only 70% subscription. A stable currency, low volatility in bond yields, and a relatively high risk-adjusted return have prompted many global central banks to increase their investments in India's debt markets in the past three years. According to data compiled by ETIG, of the total FII investment in India's debt markets, the share of global central banks has increased to 15% in January 2015 from 2% three years ago.
COMMODITIES The Reserve Bank of India yesterday late evening asked the banks not to sell gold imported on consignment basis to jewellers on outright basis. The clarification is expected to tighten gold imports. On 18th February the central bank allowed banks to import gold on consignment basis and also allowed them to provide gold metal loans to jewellers. However, banks were found importing gold on consignment basis and selling that to jewellers against full payment. This has increased imports as jewellers were buying gold virtually off the shelf. COMPANY ANNOUNCEMENTS Tata Power has successfully commissioned the second unit of 63 MW of its 126 MW Dagachhu hydro power project in Bhutan. "The project has achieved full commissioning and clean power generated by this plant will be sold to India, thereby helping reduce carbon emission," Tata Power said in a filing to the BSE. Automotive parts and components manufacturer Pricol Ltd has sold its 49% shares in its joint venture with Japan-based Denso Corporation, Denso Pricol India Private Limited, for a consideration of Rs 200 mn. Sanofi Pasteur, the vaccine division of Sanofi, announced today that its affiliate Shantha Biotechnics has delivered the first 400,000 doses of its pediatric Pentavalent vaccine Shan5 to support the immunisation of children in cities of Gwaliorand Jabalpur in the state of 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.