Market summary pptx 6.6.2014


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Market summary pptx 6.6.2014

  1. 1. India-GlobalMarketSummary 6-6-2014 • Market surged as the market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 5 June 2014. Firmness in European stocks also boosted sentiment. The market edged higher in early trade after the European Central Bank on Thursday, 5 June 2014, cut its benchmark interest rates to unprecedented lows, spurring speculation the decision will accelerate capital inflows. Sensex was 1.51% at 25,396.46 and Nifty was up 1.46% at 7,583.40 • Securities and Exchange Board of India (Sebi) on Thursday, 5 June 2014, issued an order restraining Factorial Master Fund, which is domiciled in Cayman Islands and operates as a hedge fund, from dealing in the securities in Indian securities market, including through Offshore Derivative Instruments and/or accessing the Indian securities market, directly or indirectly, in any manner whatsoever till further orders on allegations of insider trading in shares of L&T Finance Holdings. • Sebi said on 13 March 2014, abnormal movement was observed in the share price of L&T Finance Holdings (LTFH) and, therefore, Sebi undertook preliminary examination in the matter. Sebi said it observed that on 13 March 2014, i.e. the day on which the shares of LTFH were included in the futures & options (F&O) segment, the price of the March expiry futures contract of LTFH in the F&O segment opened at Rs 87.80, and dropped by more than 10% to close at Rs 75.55 on the same day. In cash segment, the scrip had opened at Rs 86, rose to Rs 88 and then dropped by more than 10% to close at Rs 79.20.
  2. 2. • Sebi observed that just before 13 March 2014, Factorial was involved as potential investor in the market gauging exercise undertaken by Credit Suisse Securities (India) with regard to Offer for Sale (OFS) of LTFH shares by promoter L&T. Credit Suisse was appointed by L&T as Seller Broker in the OFS. • Sebi observed that Factorial built substantial short position in LTFH (84.15% of the market wide open interest) in the futures & options segment on 13 March 2014 at average price of Rs 80.94 ahead of announcement of the OFS of shares of LTFH at a floor price of Rs 70 on the same day in the late evening. Sebi also observed that Factorial had taken such an aggressive short position without any existing exposure in the shares or derivatives of LTFH. Sebi said five different and independent FIIs were used to build the short position in LTHF. Sebi also said nearly the same number of shares were covered in cash segment the next day by subscribing to the OFS at a price of Rs 71.50, locking a profit of approximately Rs 20 crore. • Sebi said that Factorial may file its reply, if any, to Sebi on this order within 21 days from the date of receipt of this order, if it so desires, avail an opportunity of personal hearing on a date, place and time fixed in that regard by Securities and Exchange Board of India. • The crucial South West monsoon rains arrived over India's southern Kerala state today, 6 June 2014, around five days later than usual. After arriving over Kerala, the monsoon usually spreads over the entire country by mid-July. L.S. Rathore, director general of India Meteorological Department was quoted as saying by a news agency today, 6 June 2014, that the monsoon has finally arrived but it is currently moving at a slow pace as the parameters that support its progress are either weaker than their normal positions or not properly placed. • India's rainy season usually starts in the first week of June. With the majority of the country's agricultural land dependent on rainfall, not manual irrigation, variations in the rains' arrival date can seriously affect plans for sowing summer crops such as rice, sugar cane, cotton and oilseeds. • The IMD will issue an update on the forecast of the South West monsoon rains in this month. IMD in April 2014 predicted below-normal rains this year, saying that there is a 60% possibility of the emergence of the El Niño weather phenomenon—a warm weather system that starts in the southern Pacific can affect weather around the world. El Niño last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal. Annual rains are important for India as most of its farmlands are dependent on rain for irrigation and more than half of its workforce is employed in agriculture.
  3. 3. • Shares of Tata Steel and Steel Authority of India (Sail) extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making. Tata Steel and Sail hit 52-week high. Shares of companies engaged in natural gas production rallied after a government official on Thursday, 5 June 2014, reportedly said that the oil ministry has to decide on gas pricing by 1 July 2014 and that more clarity on the issue is expected next week. ONGC scaled record high. • PSU OMCs extended recent gains on reports the Oil Ministry is considering hiking liquified petroleum gas (LPG) and kerosene prices and will be consulting the Prime Minister's Office (PMO) and the Finance Ministry on the same. IT stocks fell as rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. • The hike could be either a one-time hike or a gradual one like is seen with diesel prices. Both the Prime Minister's Office (PMO) as well as the Finance Ministry want fuel prices to be more market-aligned and better targeted subsidies. • State-run oil marketing companies (PSU OMCs) suffer under-recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol. • PSU OMCs hiked diesel prices by 50 paise a litre, excluding state levies, with effect from 1 June 2014. • Divi's Laboratories gained 3%. The company said that it has had an inspection by the US-FDA, with no major observations, for its Unit-II at vill. Chippada, Bheemunipatnam Mandal, near Visakhapatnam during June, 2014. • TCS declined 1.02% as the stock turned ex-dividend today, 6 June 2014 for final dividend of Rs 20 per share for the year ended 31 March 2014 (FY 2014). • Crompton Greaves rose after the company bagged a Rs 244-crore contract from Spanish multinational electric utility company Iberdrola to supply over 1 million ZIV single smart meters in a year. • Sugar shares surged after Food Minister was quoted as saying on Thursday that the government will examine raising import tax on sugar to support local prices and help mills clear dues to cane growers which is estimated at Rs 11000 crore. • In the foreign exchange market, the rupee edged higher against the dollar after the European Central Bank on Thursday, 5 June 2014, cut its benchmark interest rates to unprecedented lows, spurring speculation the decision will accelerate capital inflows. • NMDC said that production rose 0.81% to 4.94 million tonnes in May 2014 over May 2013. • Tech Mahindra and Informatica Corporation, the world's number one independent provider of data integration software,announced an expansion of their decade-long strategic association
  4. 4. Global news • European stock markets edged higher in choppy trade on Friday, 6 June 2014, as banks continued to benefit from easing measures announced by the European Central Bank in the prior session and ahead of US jobs data due later in the global day. Asian stocks edged lower in choppy trade on Friday, 6 June 2014, before US payrolls data due later in the global day. Trading in US index futures indicated that the Dow could gain 35 points at the opening bell on Friday, 6 June 2014. US stocks rose to records on Thursday as European Central Bank stimulus boosted optimism in the global economy before US jobs report. • German industrial output rose in April in a sign that Europe's largest economy is poised to continue growing at a solid pace. Production, adjusted for seasonal swings, increased 0.2% from March, when it declined a revised 0.6%, the Federal Statistics Office in Wiesbaden said today. • The European Central Bank cut interest rates to record lows on Thursday, launched a series of measures to pump money into the sluggish euro zone economy, and pledged to do more if needed to fight off the risk of Japan-like deflation. The ECB lowered the deposit rate to sub zero -- negative 0.1%. It cut its main refinancing rate to 0.15%, and the marginal lending rate - or emergency borrowing rate - to 0.40%. • For the first time, the ECB will charge banks for parking funds at the central bank overnight in an attempt to force them to lend to small- and medium-sized businesses. The measures were also aimed at easing pressure on the strong euro, which is threatening economic recovery and importing disinflation. • ECB President Mario Draghi outlined a four-year 400 billion euro ($544.86 billion) scheme giving banks that have been holding back credit due to looming stress tests an incentive to increase lending to businesses in the euro zone. "Now we are in a completely different world," Draghi said, citing "low inflation, a weak recovery and weak monetary and credit dynamics". The package, adopted unanimously, was aimed at increasing lending to the "real economy", he said. • Other steps included extending the duration of unlimited cheap liquidity for euro zone banks, injecting about 170 billion euros by stopping tenders that withdrew funds spent on past government bond purchases, and preparing for possible future purchases of asset-backed securities to support small business. "If required, we will act swiftly with further monetary policy easing," he said, adding that the policy-setting Governing Council was unanimous in its commitment to use unconventional instruments if needed "to further address risks of too prolonged a period of low inflation". • UK interest rates have been held at the record low of 0.5% for another month by the Bank of England on Thursday. The size of the Bank's bond-buying economic stimulus programme was also kept unchanged at £375 billion. The decision was widely expected, despite continued signs of strength in the UK economy. • The Fed said in its Beige Book business survey that the economy expanded at a modest to moderate pace last month as auto sales led household spending and the labor market improved. The survey, released two weeks before policy makers meet in Washington, supports Chair Janet Yellen's view that the economy is rebounding from a 1% contraction in the first quarter caused largely by harsh winter weather. Claims for American unemployment benefits climbed by a more-than- estimated 312,000 in the week to May 31, data yesterday showed.
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