PSU OMCs edge higher as crude drops
A range bound movement was witnessed as key benchmark indices languished in negative zone in morning trade. The losses for the benchmark indices were small. The barometer index, the S&P BSE Sensex, was currently off 35.88 points or 0.13% at 28,302.17. The market breadth indicating the overall health of the market was positive. Brent crude oil futures edged lower. Fall in crude oil prices augur well forIndia as the country imports 80% of its oil requirement.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 1168.94 crore yesterday, 25 November 2014, as per provisional data.
Shares of public sector oil marketing companies rose as crude oil prices fell. Realty stocks also gained.
Earlier, high volatility was witnessed as key indices alternately swung between positive and negative zone in morning trade. Before that, key indices had dropped amid initial volatility.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged lower amid intraday volatility as markets brace for the highly anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC) tomorrow, 27 November 2014.
In overseas markets, Asian stocks rose as materials and health-care shares advanced. US stocks ended marginally lower yesterday, 25 November 2014, snapping a three-day run on the S&P 500 and Dow Jones Industrial Average as a drop in consumer confidence offset faster economic expansion.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from November 2014 series to December 2014 series. The November 2014 derivatives contracts expire tomorrow, 27 November 2014.
At 11:19 IST, the S&P BSE Sensex was down 35.88 points or 0.13% at 28,302.17. The index rose 41.22 points at the day’s high of 28,379.27, in morning trade. The index fell 63.67 points at the day’s low of 28,274.38 in mid-morning trade.
The CNX Nifty was down 17.45 points or 0.21% at 8,445.65. The index hit a high of 8,468.70 in intraday trade. The index hit a low of 8,439.45 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,351 shares gained and 1,040 shares fell. A total of 91 shares were unchanged.
The BSE Mid-Cap index was up 51.26 points or 0.51% at 10,108.67. The BSE Small-Cap index was up 84.57 points or 0.76% at 11,140.53. Both these indices outperformed the Sensex.
Shares of public sector oil marketing companies rose as global crude oil prices fell. BPCL (up 0.56%), Indian Oil Corporation (up 0.69%) and HPCL (up 1.13%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
Shares of state run upstream oil and gas companies rose on hopes of lower subsidy burden as crude oil prices declined. Oil India gained 1.09%. GAIL (India) gained 2.46%. ONGC rose 0.38%.
ONGC, GAIL (India) and Oil India share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Coal India advanced 0.66%. As per reports, the government is yet to decide on the dates for selling a 10% stake in Coal India and 5% in ONGC. The Coal India sale may be done in two tranches of 5% each, reports said.
Realty stocks also gained. Sobha (up 0.33%), DLF (up 0.74%), D B Realty (up 1.2%), Unitech (up 1.1%), Housing Development & Infrastructure (HDIL) (up 0.77%), Godrej Properties (up 1.38%), Anant Raj (up 0.6%), and Oberoi Realty (up 0.94%) edged higher.
Ranbaxy Laboratories declined 0.36%. The company said during market hours today, 26 November 2014, that the D.C. Federal Court has not granted Temporary Restraining Order to block FDA approval for other ANDAs for generic version of Nexium and Valganciclovir. Ranbaxy Laboratories had filed a complaint against the US FDA in D.C. Federal Court and had also asked the Court for a temporary restraining order to prevent any further action by FDA until Ranbaxy’s case is decided.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.83, compared with its close of 61.87 during the previous trading session.
Brent crude oil futures edged lower amid intraday volatility as markets brace for the highly anticipated meeting of the Organization of the Petroleum Exporting Countries (OPEC) tomorrow, 27 November 2014. Brent crude for January settlement was off 11 cents at $78.22 a barrel. The contract had fallen $1.35 a barrel to finish at $78.33 a barrel during the previous trading session.
Oil ministers from the OPEC are scheduled to meet in Vienna tomorrow, 27 November 2014, to consider whether to adjust their output target of 30 million barrels per day (bpd) for early 2015. OPEC, which pumps about 40% of the world’s crude, has maintained its official quota at 30 million barrels a day since January 2012.
Indian government’s decision last month to decontrol diesel prices and a sharp decline in global crude oil prices over the past few months will help reduce the government’s fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
The government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the winter session of parliament which began on 24 November 2014. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.
The government will announce data on gross domestic product (GDP) for Q2 September 2014 at 17:30 IST on Friday, 28 November 2014. India’s GDP grew 5.7% in Q1 June 2014 over the corresponding period of the previous year.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 2 December 2014. The central bank aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
Asian stocks rose today, 26 November 2014, as materials and health-care shares advanced. Key benchmark indices in Singapore, Japan, South Korea, Hong Kong and Taiwan were up 0.05% to 0.5%. Key benchmark indices in Singapore and Indonesia fell 0.04% to 0.17%.
As per reports, police took their strongest action in weeks against pro-democracy protesters in Hong Kong, making dozens of arrests and driving activists from a portion of the most volatile of the three Hong Kong sites that have been occupied for nearly two months.
Trading in US index futures indicated that the Dow could gain 21 points at the opening bell today, 26 November 2014. US stocks broke a three-session streak of record highs yesterday, 25 November 2014, as a renewed slide in oil prices dragged down energy shares.
Economic data was mixed. The Commerce Department reported the US economy grew at its fastest pace in more than a decade during the spring and summer. But readings on consumer confidence and central-Atlantic manufacturing missed forecasts. The US government upgraded its reading on third quarter gross domestic product to 3.9% from 3.5% reported last month. The Conference Board said that consumer confidence fell to 88.7 in November, and a measure of manufacturing activity in the central Atlantic region came in below market expectations.