Market provisionally settles with small gains

Gains in metal, pharma and oil sector stocks enabled small gains for key benchmark indices after the Reserve Bank of India (RBI) kept its benchmark interest rate unchanged after a monetary policy review.

The barometer index, the S&P BSE Sensex, was up 19.41 points or 0.07% at 26,165.08, as per the provisional closing data.

The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was up 18.15 points or 0.23% to 7,953.40, as per the provisional closing data. The market breadth indicating the overall health of the market was positive.

On BSE, 1,668 shares rose and 1,158 shares fell. A total of 147 shares were unchanged. The BSE Mid-Cap index was up 0.78%. The BSE Small-Cap index was up 0.46%. Both these indices outperformed the Sensex.

The RBI kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary policy review today, 1 December 2015.

The central bank also kept the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL).

The decision was announced at 11:00 IST. Retaining the easing stance of monetary policy, the RBI said that it will use the space for further accommodation when available.

The RBI said that switching to the marginal cost of funds methodology for determining the base rate and linking small savings interest rates to market interest rates will allow increased transmission of policy rates into lending rates.

In overseas stock markets, European stocks edged lower in choppy trade. Earlier during the global day, shares in Hong Kong led a rally in Asian markets on expectations for more stimulus for the Chinese economy after the latest data showed China’s manufacturing sector remains plagued by overcapacity, falling prices and weak demand.

The total turnover on BSE amounted to Rs 2980 crore, higher than turnover of Rs 2831.87 crore registered during the previous trading session.

Realty stocks were mixed after the RBI kept the repo rate unchanged after a monetary policy review. Sobha (down 2.23%), Indiabulls Real Estate (down 1.8%), Godrej Properties (down 1.47%) and Housing Development & Infrastructure (HDIL) (down 0.35%) declined.

DLF (up 2.08%), and Anant Raj (up 0.82%) edged higher. Purchases of both residential and commercial property are largely driven by finance.

Unitech rose 2.82% after Citigroup Global Markets Mauritius bought 1.45 crore shares of the company at an average price of Rs 6.99 per share in a bulk deal on the NSE yesterday, 30 November 2015.

Bank stocks witnessed a mixed trend after the RBI kept the repo rate unchanged after a monetary policy review. Among public sector banks, UCO Bank (up 1.34%), Syndicate Bank (up 0.21%),Corporation Bank (up 2.24%), and United Bank of India (up 2%) edged higher.

Bank of India (down 0.42%), Bank of Baroda (down 1.45%), Punjab National Bank (down 0.62%), State Bank of India(SBI) (down 0.18%), and Canara Bank (down 0.81%) declined. Union Bank of India was flat.

Allahabad Bank gained 0.65% after the bank indicated that it may divest its stake in insurance joint venture Universal Sompo General Insurance.

Allahabad Bank announced after market hours yesterday, 30 November 2015, that a meeting of its board of directors will be held on 4 December 2015, to consider floating request for proposal for appointment of consultant for advising and undertaking redrafting of existing shareholders agreement forming insurance joint venture of bank namely Universal Sompo General Insurance Company so as to align the same with amended Indian Insurance Laws. Presently, the shareholding of Allahabad Bank in Universal Sompo General Insurance Company is 30%.

The board of directors may also consider partial/complete disinvestment of the bank’s stake in the insurance joint venture in compliance with the applicable laws, rules and regulations as amended.

Among private sector banks, HDFC Bank (up 0.39%), Federal Bank (up 0.43%), and IndusIndBank (up 0.89%) edged higher. ICICI Bank (down 0.22%), Axis Bank (down 1.51%) and Kotak Mahindra Bank (down 0.81%) declined.

The Reserve Bank of India (RBI) will shortly finalise the methodology for determining the base rate based on the marginal cost of funds.

Yes Bank fell 0.85%. The bank said during market hours that it has signed loan agreements totalling $265 million with Overseas Private Investment Corporation (OPIC) and Wells Fargo to support small business growth in India.

The bank said it has signed an agreement with the OPIC, the US government’s development financial institution, for debt financing of $245 million to increase lending to micro, small and medium enterprises (MSMEs) in India.

US based lender Wells Fargo will act as sponsor and co-lender to the project, providing a loan of $20 million, bringing the total facility amount to $265 million. Specifically half of the financing will be used to support either micro SMEs or SMEs in undeserved rural and urban markets.

Mahindra & Mahindra (M&M) rose 0.18%. The company said during market hours that total auto sales rose 21% to 41,590 units in November 2015 over November 2014.

Domestic sales rose 23% to 39,383 units in November 2015 over November 2014. Exports rose 1% to 2,207 units in November 2015 over November 2014.

Separately, M&M said during market hours that total tractor sales jumped 42% to 21,717 units in November 2015 over November 2014.

Domestic sales jumped 47% to 20,819 units in November 2015 over November 2014. Exports fell 20% to 898 units in November 2015 over November 2014.

Aurobindo Pharma gained 1.8% after the company announced that it has received final approval from the US Food & Drug Administration (USFDA) to manufacture and market Risedronate Sodium tablets USP, 5 milligram (mg), 30 mg and 35 mg.

This approval is an extension of tentative approval received on 10 October 2012. This product is ready for launch. The announcement was made during trading hours today, 1 December 2015.

The approved abbreviated new drug application (ANDA) is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) ACTONEL Tablets of Warner Chilcott Co., LLC Risedronate Sodium tablets are used in the treatment of Osteoporosis.

The approved product has an estimated market size of $113 million in the US for the twelve months ending October 2015 according to IMS.

On macro front, India’s gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth mainly driven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a pick up from 7% growth recorded in Q1 June 2015.

Meanwhile, the GDP growth remained below 8.4% rise recorded in the corresponding quarter of the last year. The Q2 GDP data was announced after market hours yesterday, 30 November 2015.

The finance ministry is expecting the economy to grow in the vicinity of 7.5% in the year ending 31 March 2016 (FY 2016).

Meanwhile, the outcome of a monthly survey showed tepid growth in India’s manufacturing sector last month. The seasonally adjusted Nikkei India Manufacturing Purchasing Managers’ Index (PMI) fell to a 25-month low of 50.3 in November 2015.

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