Watch the interview of Navneet Damani of Motilal Oswal Commodities Broker with Ekta Batra and Anuj Singhal on CNBC-TV18. He spoke about the current trend in commodities markets.
Watch the interview of Navneet Damani of Motilal Oswal Commodities Broker with Ekta Batra and Anuj Singhal on CNBC-TV18. He spoke about the current trend in commodities markets.
12:24
Moneycontrol Bureau Though the sharp fall in market continues in noon trade, the buying at lower levels helped the Nifty to hold 8100 level. The index plunged 109.95 points or 1.34 percent to 8109.65 and the Sensex tanked 378.22 points or 1.38 percent to 26941.34 due to consistent fall in banking & financials, metals and FMCG stocks.The broader markets cracked more compared to benchmarks. The BSE Midcap and Smallcap indices lost 2-3 percent. About five shares declined for every share advancing on the Bombay Stock Exchange.
Experts advise buying quality stocks on every dip as they believe the market may rebound soon to see fresh record highs.
The rupee plunged to a 13-month low on broad dollar strength, but is off the day's low after hitting its lowest level since November 14, 2013. Traders say that RBI may have sold dollars at around Rs 63.54 per dollar to stem the rupee fall. The currency declined 47 paise to 63.41 a dollar.
All BSE sectoral indices (except IT) traded in the red. FMCG, Bank, Metal and Realty fell 2-3 percent. Auto, Healthcare and Power lost 1-1.7 percent while IT gained 1.9 percent.
Hindalco led the list of metal losers after the Special Court rejected the CBI closure report and has asked for further investigation in the coal scam case. The stock tanked 7 percent. Jindal Steel and Power too sees a cut of 3 percent after the Supreme Court rejected the company's plea to make coal mine payments in tranches.
Shares of ICICI Bank, ITC, HDFC, SBI, ONGC, Dr Reddy's Labs, Sesa Sterlite, M&M and Tata Steel dropped 2-6 percent while TCS bucked the trend, up 2.4 percent on fall in rupee followed by Infosys and Wipro with 0.5-0.9 percent gain.
SpiceJet lost more than 10 percent for the second day running. The government gave the airline a final chance to survive and asked them to raise funds within the next 10 days or face closure. The airline immediately required cash amounting to Rs 1400 crore.
Globally, most of Asia was weak barring Shanghai. Markets weighed down by the persisting slump in oil prices and weak US close last midnight. Focusing on China in particular, the Flash HSBC PMI for China slipped to 49.5 contracting for the first time in seven months fueled hopes of more stimulus measures.
Strides Arcolab today announced that it has received approval from the USFDA for Calcitriol Softgel Capsules, 0.25mcg and 0.5 mcg.
Strides Arcolab Ltd has informed BSE regarding a Press Release dated December 16, 2014 titled "Strides Arcolab receives US FDA approval for Calcitriol Softgel Capsules"Source : BSE
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12:00
Moneycontrol Bureau 12:20pm Brent crude UpdateBrent crude gave up some of its gains and dropped toward USD 62 a barrel today in volatile trading, which saw prices fall to a 5-1/2 year low after the IEA cut its outlook and then rise more than a dollar on hopes of improving manufacturing data.
Brent for January delivery LCOc1 was at USD 62.05 a barrel at 0425 GMT (11:25 p.m. EST), up 20 cents from its Friday's settlement but 90 cents below the intra-day high of USD 62.95 a barrel.
Earlier, Brent fell to near USD 60 after the International Energy Agency forecast further price falls and OPEC's chief defended the group's decision not to cut its output target.
US crude for January delivery CLc1 was trading at 57.88 a barrel, almost flat with its last settlement, after hitting a low of USD 56.25 earlier in the day - the lowest since May 2009.
The volatile trading was a result of conflicting factors, with economic indicators supporting prices while supply factors acted as price breaks, reports Reuters.
12:00pm Market Check
Equity benchmarks gained marginal strength in noon trade following sharp fall in WPI inflation at 0 percent in November compared to 1.77 percent in October. The Sensex rose 22.94 points to 27373.62 and the Nifty climbed 11.05 points to 8235.15, supported by banking & financials stocks.
About 1081 shares have advanced, 1372 shares declined, and 84 shares are unchanged on the Bombay Stock Exchange. The Indian rupee fell 36 paise to 62.67 per dollar.
Housing finance company HDFC extended gains, up 4 percent. A media report suggested that Standard Life is planning to increase its stake in joint venture HDFC Standard Life Insurance company to 33 percent from 26 percent. HDFC holds 72.4 percent in JV.
Private sector lender HDFC Bank and its rival State Bank of India gained 1 percent each. Coal India surged 2.5 percent while two-wheeler majors Hero Motocorp and Bajaj Auto climbed over half a percent.
However, technology stocks remained under pressure post TCS provided bearish Q3 outlook. The stock fell more than 3 percent as the software services provider says it expects a weak quarter from BFSI and sees negative 220 basis points impact due to cross currency. Infosys slipped nearly a percent while Wipro trimmed losses from 2 percent to 0.4 percent.
In an interview to CNBC-TV18, Sandeep Shenoy of Pioneer Investcorp shares his views on the market momentum.
In an interview to CNBC-TV18, Sandeep Shenoy of Pioneer Investcorp shares his views on the market momentum.
Watch videos for more.
From the intra-day perspective, Indian Rupee is expected to trade on a mixed note on the back of central bank selling dollars coupled with estimates of favorable wholesale inflation data from the country will support an upside in the currency, says Angel Broking.
Dollar/INR
On a weekly basis, Indian Rupee traded on a negative note and depreciated around 1 percent. The currency depreciated on the back of dollar demand from the oil companies. Further, weak domestic market sentiments exerted downside pressure on the currency. Additionally, foreign institutional investors selling shares worth Rs.2.21 billion acted as a negative factor.
However, sharp downside in the currency was cushioned due to central bank selling dollars to prevent sharp fall in the Indian Rupee. The currency touched a weekly low of 62.525 and closed at 62.52 on Friday.
India's Consumer Price Index (CPI) fell to 4.38 percent in November as against a rise of 5.52 percent in October. Industrial Production declined by 4.2 percent in October from rise of 2.5 percent a month ago.
For the month of December 2014, FII inflows in equities totaled at Rs.8269.51 crores ($1335.43 million) as on 12th December 2014. Year to date basis, net capital inflows stood at Rs.104288.95 crores ($17260.02 million) as on 12th December 2014.
Outlook
From the intra-day perspective, we expect Indian Rupee to trade on a mixed note on the back of central bank selling dollars coupled with estimates of favorable wholesale inflation data from the country will support an upside in the currency. While on the other hand, decline in industrial production data from the country on Friday and weak market sentiments will cap sharp upside or reversal in the Indian Rupee.
Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
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In a disappoinment to the market which was hoping for growth to crawl back, industrial growth number for October showed a contraction of 4.2 percent.
The detailed data was even more discouraging, as manufacturing contracted by 7.6 perceny; capital goods by 2.3 percent; consumer goods by 19 percent and consumer durables by 35 percent.
This seminal fall in consumer goods is corroborated by companeis like Havells and TTK Prestige lowering their sales guidance sharply for the second half of this fiscal.
On the flip side, inflation seems to be finally coming udner control. CPI rose by just 4.38 percent in November from year ago level and price levels were almost flat in October ; food inflation fell even more to 3.14 percent from year ago levels, while non-food and non-fuel prices rose by just 5.5 percent, which was down from 8 percent levels for a better part of 2013.
In an interview to CNBC-TV18, Dr. Pronab Sen, country director at IGC and former chief statistician of India along with Sajjid Chinoy, India economist at JP Morgan discuss if inflation is finally conquered and must the RBI governor hasten his promised rate cut.
Below is the verbatim transcript of Sajjid Chinoy and Dr. Pronab Sen's interview:
Q: Is Index of Industrial Production (IIP) as bad as it looks? After all October was a month when we had a lot of holidays, I mean the Dussehra holidays came in and then there were some election holidays in Maharashtra and the Diwali holidays?
Chinoy: Ironically, what worried me yesterday a little bit more was the consumer price index (CPI) numbers not the IIP number. The IIP had lots of one offs. For starters IIP is notoriously volatile don't be surprised if two months later this number is revised up substantially. However, there were two specific one offs that should not be a concerned one is just a working days issue. This is what happened when US weather was very adverse a year ago. The number of working days is almost 15 percent less than the month before and therefore you will have lower production.
There was another on off which is a large factory in the consumer durable sector actually close shop and there would be some sequential decrease because of that. So, I would not worry too much about the October number; if you look at the high frequency data in November you see auto production has increased ten percent sequentially on a seasonally adjusted basis. The November purchasing managers index (PMI) was at the 21 month high the manufacturing PMI, the services PMI was at a 6 month high so I think October was aberration you will see the November numbers bounce back.
For me the concern was that the headline CPI number was very good. There is good news in lower food prices and lower oil prices but if you look at the month-on-month a seasonally adjusted momentum of core this is the second consecutive month that the number has gone up a lot. It went up 0.7 percent in October, it went 0.5 percent in November and it will strip out the impact of petrol and diesel which is part of core given the way it is defined. The numbers get even more soberry it is o.7 for last month and 0.8 this month. I guess it adds up to that fact there is something up in demand.
Q: Which elements in the core are rising?
Chinoy: It is essentially across the board. If you look at housing for example, if you look at personal requisite; so only transport and communication saw the biggest contraction but that happened for four months because diesel and gasoline petrol up are included part of that. So to get the true measure of core you want to strip it out.
So, it was a pretty broad based increase for two months which ties up in what the November PMI told you that output prices are going up. So, the story that I draw from all of this is that there is actually a modest cyclical recovery underway in November and unfortunately that is meant that pricing power is perhaps increasing.
Q: Let me come to you first on the growth data, I will come to the inflation data in just a minute because I did not notice so much concern on a core from other economist but I will come to inflation in a minute. What did you make of the growth data? Are you convinced that things are at least troughing out and this 4.2 is quite clearly a one off? Let me tell u that corroborating evidence is there from industry from the corporate honchos who come on our channel that growth is not as good as they thought. They are not saying that they are in recession but Havells like they told us that they were expecting 17 percent growth and now they are adjusting to 12-14 percent. TTK Prestige, the cookers maker, the kitchen appliances makers said he was expecting 25 percent growth in the second half that is his normal rate of growth and he is now scaled it down to 12-14 percent?
Sen: There is something which has been happening for a while which we need to take note of. There are one offs events that Sajjid talked about but there is a larger trend. Rural demand which has been propping up the sector for last three years has started to taper and that it is been a trend for a while. We are at a cusp now, my sense is rural demand will continue to taper and the million dollar question is when does urban demand start picking up more than making up for the loss of the rural side.
We need to keep pretty close watch. Sajjid is right if you take of the one off factors what you are getting is not a minus 4 point something IIP's but it is probably not very different from around zero or perhaps a mild plus so that is at the heart of it. What we are seeing is features that were driving the Indian economy for the last several years are going off and we know what the reasons for that are the decline in food price inflation is again one of the indicators which seem to substantiate that.
Q: Before I come to whatever policy actions one can think off. How concerned are you about the core inflation? The numbers on face of it did not look so scary tome as Sajjid puts it but clearly he has put its math on stripping off the impact of petrol and looking at the month-on-month increases in medical, education. There is an increase in everything by about a few basis points. Would you worry that we have not yet got inflation under control?
Sen: Well, we have the fact is a lot of what you have seen in terms of the core really reflects the wage increases that have taken place in the past and so they will come out. The other point that Sajjid made which was about pricing power shifting there probably is a small element of that. Don not forget we have been through two years where corporate investments have been extremely low. So, additions to capacity have simply not happened which means that as the economy starts turning around if it does turn around then you will see pricing power shifting for may be a seven to eight month period.
Q: This long period of slowdown is also being accompanied at a time when commodity prices are crashing and export markets are not yielding any demand either. Given these two scenarios is that pricing power pushing up prices in the core CPI?
Sen: Core CPI is to break it up into two components. One is the part which is being driven by services and as far as services is concerned; a lot of it is a reflection of the delayed pass through of previous price increases through the wages. The second is what is happening in the manufacturing sector and there the real issue is that what has happened to capacity over the last two years, are we in a situation where because of rural demand there is insufficient capacity to meet the current needs.
Q: Therefore let us come to what policy can do. Do you think therefore the Governor should relent and advance? Your argument seems to be that if anything he should stay pat on interest rates?
Chinoy: That is clear from the RBI guidance which has been quite consistent over the last six months. They saw this coming a year ago; everyone knew November would be the trough of CPI inflation. If you just look at where food prices have gone over the first 10-12 days in December and take into account relatively modest increases in core inflation for December, the December CPI just because of the base normalising should be back up around 5.4-5.5 percent. So what the RBI first wants to do is understand where all of these base effects normalise, where inflation is averaging in the first quarter. My guess is it is going to be somewhere between 5.5-6 percent. I think that's the first hurdle that needs to be passed.
Undoubtedly are the risks abating by the day? Absolutely, with oil tumbling on daily basis that reduces inflation but my sense is (a) they want to wait to see where the numbers stabilise (b) they will want to see what the budget has to offer and (c) they will want to see in light of what has happened over the last two months whether this core dynamics are just data noise and they will normalise in the next month or two because input costs have collapsed and firms can normalise margins even without raising output prices or are these dynamics slightly more ominous and as there is some cyclical recovery on consumption and demand that firms who have taken large compressions will want to raise prices. There are all these uncertainties. So I firmly believe after yesterday number the RBI will wait it out probably wait post the Budget and if these core dynamics continue perhaps push any rate cut out, not prepone it
Q: Two questions - should the Governor cut rates and is he likely to lose political space, must he?
Sen: I agree with Sajjid. I do not think the Governor will cut rates as things stand although my sense is that what we have seen in terms of the reduction in the headline CPI is much larger than anybody had expected including the Governor and Sajjid is again right, once the base effect goes everything else staying on the current trend, you are probably looking at about 5 and a bit CPI number in January and February, which is well within the comfort zone but nevertheless the real question is that what happens if - two things (1) petroleum prices stabilise and start inching upwards. The second much more importantly what we do know is that the rabi sowing is significantly below par. So the danger of food inflation resurfacing towards the latter part of the first quarter of next calendar year is something that he is going to have to keep his eyes open for.
Q: Your trajectory of growth because domestically it is not picking up and globally countries like Russia is now down to half their projected purchasing power, so 0.7 percent growth for Russia. What is your sense of India's growth trajectory, IIP and GDP for the next year?
Chinoy: We have been maintaining that the first half growth in India is little bit exaggerated because all of it is driven by government spending and agriculture, which Dr. Sen pointed out that cannot sustain. Therefore, 5.3 for this year with slight downside risk after the IIP debacle and the best case scenario inching up towards 6 percent in the next fiscal year.
Q: Inflation?
Chinoy: I think it will stabilise between 5.5-6 percent in March and what will drive the trajectory next year is what happens to food prices, where is oil and will growth pick up result in high core inflation. Those are the three uncertainties for me. I am looking at 6 percent trajectory through most of 2015 close to that number throughout the year.
Q: Your view on both those numbers for the next year?
Sen: Roughly correct. On the GDP, I would take it a little higher. I would probably be talking about close to 5.5 but in my case with a slight positive bias on that.
Inflation, roughly what Sajjid said. My take is that as far as non food inflation is concerned it would be in the region of 4.5 or thereabouts with food inflation closer to 6-6.5.
Friday: 10.30 pm, Saturday: 11.30 am
Sunday: 9:30am & 11.00pm
Published on Sat, Dec 13,2014 | 20:41, Updated at Sat, Dec 13 at 20:41Source : CNBC-TV18 | Watch Video :
Constitutional challenge to Competition Act, a word of caution for the Private Equity Industry, possible solution for the Thomas Cook problem, explanation to the Tesco surprise and the upset created by COMPAT's DLF order- CCI Chairman Ashok Chawla spoke to CNBC-TV18's Payaswini Upadhyay on all this and more.
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Published on Sat, Dec 13,2014 | 20:41, Updated at Sat, Dec 13 at 20:41Source : CNBC-TV18 | Watch Video :
It's the first time that India's competition regulator has ordered the sale of certain assets before approving a merger. CCI gave the 4 billion dollar Sun-Ranbaxy deal conditional approval. The 2 companies must sell certain select products identified by the CCI, before the merger can take place. This CCI order will set precedent for other such deals in India and hence today we are going to examine what it says and what means. First. here's a brief look at the highlights of the order.
Sun and Ranbaxy are both leading generic pharmaceutical players with most of their revenue from international sales. The CCI examined how a merger between the 2 would impact the Indian pharma market. To do so, it first defined relevant product market based on the molecule. Thereafter CCI examined 51 molecules or relevant markets where the combination would have a more than 15% market share. it found that in 7, the combined entity will have an adverse impact on competition. This determination was made not just on the basis of the market share of the merged entity but also taking into account the market share of competitors and number of significant players in the relevant market. For instance, in one of the 7 molecules, the merged entity's share adds up to just 40—45%, less than half the market. But there are only 2 other significant competitors and one of them has seen market share decline over the last 4 years. Based on this analysis, Ranbaxy has been asked to sell its product based on this molecule, before the merger is consummated. In total, Ranbaxy is to sell 5 products and Sun 2.
How will this CCI order impact future deals? To discuss that, CNBC-TV18's Menaka Doshi spoke to Amitabh Kumar of JSA and Samir Gandhi of AZB.
With reference to earlier announcement dated December 11, 2014 regarding Board Meeting on Dec 20, 2014 to consider buyback of equity shares, R Systems International has informed that, the Board of Directors of the Company at its meeting shall also consider the declaration of fourth interim dividend, if any, for the year 2014.
With reference to earlier announcement dated December 11, 2014 regarding Board Meeting on December 20, 2014 to consider Buy-back of equity shares, R Systems International Ltd has now informed BSE that, the Board of Directors of the Company at its meeting scheduled on December 20, 2014 in addition to the other business items, shall also consider the declaration of fourth interim dividend , if any, for the year 2014.Source : BSE
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