HINDUJA BANK (SWITZERLAND) LTD BUILDING WEALTH, ENABLING ENTERPRISE 30 September 2015 DAILY MARKET COMMENTS INDIA SUMMARY Benchmark Indices gained for the second consecutive session after higher-than-expected repo rate cut by 50bps by the Reserve Bank of India on Tuesday while a strong rally in the global markets also boosted sentiment. The 30-share Sensex ended higher by 376 points or 1.4% at 26,155 and the 50- share Nifty settled at 7,949 levels, up by 105 points or 1.3%. The strength in the local equities aided the Indian currency as it firmed up against the US dollar. Out of 12 sectors, 11 ended with strong gains while BSE Bankex was the sole loser. Axis Bank, the country's third largest private sector lender, has reduced its base rate by 35 basis points to 9.50%. Metals shares have bounced back post the overnight rally in commodity prices. Steel producers like Tata Steel and JSW Steel likely to hike prices by up to Rs 1,500/ton as government recently imposed a prov safeguard duty of 20%. RIL surged 2.5% after Reliance Jio Infocomm raised Rs 35 bn by issuing non-convertible debentures through private placement. Shares of Idea Cellular were up over 7% after the company announced that its shareholders have approved all the items of business contained in the notice of the AGM which includes issue of non-convertible securities on private placement basis. HIGHLIGHTS IN THE HEADLINES TODAY Rate cut, firm global cues lift Sensex 376 points higher Govt cuts natural gas prices by 16% to $4.24 per unit Axis Bank cuts base rate by 35 bps to 9.50% Rajan denies he is running for IMF chief's job Reliance Communications to partner Reliance Jio in 4G services Godrej Properties sells office space in BKC to Abbott for Rs 14.79 bn Oil cos' losses on subsidised sales to drop 54% to Rs 335 bn in current fiscal INSTITUTIONAL ACTIVITY ON NSE & BSE Category Buy Value (Rs bn) Sell Value (Rs bn) Net Value (Rs bn) Foreign Institutional Investors (FII) 70.63 69.47 1.16 Domestic Institutional Investors (DII) 23.50 25.41 (1.91)
INDEX MOVEMENTS Index Close Open High Low Close Gain / Loss Var. S&P BSE Sensex 25,779 25,987 26,180 25,918 26,155 376.17 1.46 CNX Nifty 7,843 7,924 7,958 7,875 7,949 105.60 1.35 CNX 500 6,552 6,614 6,652 6,586 6,646 93.75 1.43 CNX Nifty Junior 19,235 19,395 19,640 19,341 19,610 374.60 1.95 CNX Midcap 12,741 12,848 12,993 12,835 12,985 243.45 1.91 CNX IT 11,864 12,011 12,056 11,904 12,032 168.15 1.42 CNX 100 7,953 8,033 8,077 7,988 8,068 114.75 1.44 BANK Nifty 17,281 17,405 17,450 17,100 17,216 (64.90) (0.38) NIFTY GAINERS Company Curr. Gain CAIRN 154 145 6.44 IDEA 148 140 6.23 TATASTEEL 214 201 6.21 GAIL 305 291 4.90 BHARTIARTL 338 323 4.68 NIFTY LOSERS Company Curr. Loss BANKBAROD 183 187 (2.11) TECHM 559 570 (1.92) SBIN 238 242 (1.63) TATAPOWER 65 66 (1.44) AXISBANK 498 505 (1.33) COMMODITIES & CURRENCIES Commodity (Futures) Day Curr. Day Brent Crude (USD / bbl) 48.23 48.09 Gold (USD / t. Oz) 1,126.80 1,117.40 Silver (USD / t. Oz) 14.57 14.55 Currency Curr. Rate USD / INR 65.57 EUR / INR 73.37 ASIAN MARKETS Index Closing Gain / Loss Var. Hang Seng 20,846 289.70 1.41 Nikkei-225 17,388 457.31 2.70 Shanghai Composite 3,053 14.64 0.48 Straits Times 2,791 2.95 0.11 Taiwan TAIEX 8,181 48.89 0.60 100 Yen / INR 54.60
GLOBAL MARKET OVERVIEW Asian shares rallied in today s trade, however, the concerns over China loom in the background. Japan s Nikkei ended 2.6% higher while HangSeng closed 1.4% higher. Shanghai was up 0.5%. European markets followed Asian peers and are trading firm. GLOBAL NEWS The World Trade Organization cut its forecasts for global goods trade on Wednesday after quarterly growth turned negative, with trade shrinking by an average of 0.7% in the first two quarters of this year. The WTO sees world trade growth of 2.8% this year and 3.9% in 2016, revised down from the forecasts it made in April of 3.3% and 4.0%, respectively. Risks, including a potential US interest rate rise and further slowing in developing economies, are "firmly on the downside", the WTO said in a statement. The International Monetary Fund (IMF) has announced "immediate disbursement" of $504.8 million to Pakistan, bringing the total amount released to bolster the country's struggling economy to $4.54 billion. The decision was announced yesterday after the IMF Executive Board completed eighth review of a 36-month extended fund facility for Pakistan on September 28. The foreign ministers of BRICS countries endorsed United Nations Security Council (UNSC) reforms saying it was necessary to make it "more representative and efficient" putting China and Russia publicly on the side for reorganisation. China had campaigned to derail the reform process earlier this month before the UN General Assembly endorsed a negotiating text that would allow the stalled process to move forward. Russia had also expressed its opposition to the reform process. ECONOMIC AND POLITICAL NEWS The government today cut natural gas prices by 16% to $4.24 per unit for the six month period, beginning October 1. Natural gas prices, according to a formula approved by the government in October last year, will fall to $4.24 per million British thermal unit on net calorific value (NCV) basis from the current $5.50 per mmbtu. On gross calorific value (GCV) basis, the new gas price for October 1 to March 31 would be $3.82 per mmbtu as compared to $4.66 currently, officials said. When India's central bank cut interest rates by much more than expected this week, government officials hailed it as a victory after months of imploring Governor Raghuram Rajan for strong action. Now it is New Delhi that will need to deliver. Rajan cut the key repo rate by 50 basis points to a 4-1/2 year low of 6.75% on Tuesday. He expects that show of faith to be rewarded by government efforts to manage food inflation and keep fiscal spending under control, said officials familiar with discussions at the Reserve Bank of India and the finance ministry. Reserve Bank of India (RBI) Governor Raghuram Rajan said on Wednesday that he was not interested in heading the International Monetary Fund after finishing his term as India's central bank chief. "It's not a job I have applied for," he told television channel NDTV in an interview. "It's not a job I am running for." Rajan's three-year term is due to end in Sept. 2016.
INDUSTRY NEWS Anil Ambani said Japanese major Nippon Life is looking to hike its stake in Reliance Life Insurance and Reliance Mutual Fund units within this financial year. In Reliance Life, Nippon plans to hike the stake from 26% to 49%, while it would increase its holding in Reliance Capital Asset Management Company from 35% to 49%. Anil Ambani said these proceeds will flow to Reliance Capital and will be utilised to further reduce overall debt levels. SECTOR PERFORMANCE AND TRENDS Out of 2774 scrips traded over BSE, 1672 advanced & 1001 declined. Sector Var S&P BSE Fast Moving Consumer Goods 2.36 S&P BSE Healthcare 1.71 S&P BSE Information Technology 1.81 S&P BSE AUTO 1.44 S&P BSE BANKEX (0.44) S&P BSE CAPITAL GOODS 1.45 S&P BSE CONSUMER DURABLES 0.46 S&P BSE METAL 3.36 S&P BSE OIL & GAS 1.86 Sector Trend * Auto BFSI Construction Consumer Goods Energy Industrial Manufacturing IT Metals Telecom * Shows trend for current and last four trading session S&P BSE POWER 1.88 S&P BSE REALTY 2.05 S&P BSE TECK 2.07 IPOs / BONDS State-run Power Finance Corporation is looking to raise Rs 7 bn in retail tax free bonds next week. The financier has kept the coupon between 7.11% and 7.60% depending upon the tenure of the issue. There will be three different maturity periods - 10 years, 15 years and 20 years. The company will hit the market on October 5 and the issue will remain open till October 9. It is raining good news for foreign fund managers with central bank Raghuram Rajan laying out a road map for raising the investment limit in government bonds, a move that is expected to deepen the market and make it more liquid. Over the next two-and-half years, the amount of central government bonds that foreign portfolio investors can hold will be increased gradually to 5% of the total outstanding debt, the Reserve Bank of India said its fourth bi-monthly policy document. The limit will be in rupees, and not in dollars as is the case now. Currently, overall FPI holding in government securities can't cross $30 bn, a limit that they have almost reached.
COMMODITIES Jewellers are eager to participate in the gold monetisation scheme that has been approved by the Centre recently to unlock an estimated 22,000-tonne of the precious metal lying idle in Indian households. About 20,000 jewellers across the country are planning to approach the RBI to request it to involve them in the scheme, according to the All India Gems & Jewellery Federation. CORPORATE ANNOUNCEMENTS Axis Bank, the country's third largest private sector lender, has reduced its base rate by 35 basis points to 9.50%. This comes a day after Reserve Bank of India reduced the repo rate by 50 basis points. Reliance Communications Ltd (RCom) will partner with Reliance Industries Ltd's telecom subsidiary to launch fourth-generation (4G) mobile phone services by year-end, the company's chairman said on Wednesday. Engineering and construction major Larsen & Toubro today said its construction arm has won contracts worth Rs 13.76 bn in power transmission and distribution business this month. Energy solutions provider Inox Wind today said it has bagged a 50 Mw wind power project in Gujarat from a major minerals and lignite mining company GMDC. 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.