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Courtesy the rigidity of the opposition parties and the inability of the ruling alliance managers to negotiate a thaw in the chilling, Rajya Sabha snows ensured that the winter session of the Parliament came a cropper in terms of delivering the passage of the key Coal and Insurance bills.
Going back to ordinance promulgation is no solution. The December series have been bad for the markets. The Nifty lost 3.77%. The Bank Nifty, however, gained 2.85%.The Nifty ended the series on a weak note , tumbling 93 points to 8174.
What does the January series looks like?
We know from experience that how the series ending on the last day is no indication of how the benchmark will behave in the next one. So to that extent, traders will do well not to be carried away by the bearish mindset that was prevailing on Wednesday. Have an open mind.
During the last series the Nifty took support at 7961. That is the know support on intraday basis for the January series. On a closing basis, 8029 is the known support. These two figures will need to be remembered. The resistance is at 8364.
In this series, we will see commencement of the Budget Session of the Parliament around January 24. The result season will be underway from January 9. The talk that some players in the NBFC space are not going to have technology budgets could take the hope out of the result season.
It is too early to know whether the Government has a plan in place to pass the key pending bills in the Parliament. But hoping would not be good. Obama will be here for the Republic day parade. This could be of help for the markets.
Start the series with an open mind but don?t have hopes of a new high in the immediate series till the political thorns are taken out.
Import Duty on Crude & Refined Edible Oil hiked
To protect the interests of the farmers and provide a level-playing field to domestic oilseed processors, the government has raised the import duty on crude edible oil from 2.5 per cent to 7.5 per cent and that on refined edible oil from 10 per cent to 15 per cent.
The increase means the duty differential between crude and refined edible oils has been kept at 7.5 percentage points, as suggested by the agriculture ministry.
Govt okays 100% FDI in medical devices via automatic route
The government on Wednesday approved 100% foreign direct investment (FDI) in medical devices via the automatic route. Currently the FDI in pharma exists, albeit with certain riders. This comes as a major positive for Indian companies as India currently imports over 70% of medical devices.
The 100% FDI will be permitted under the automatic route, meaning a foreign investor will not have to seek the permission of Foreign Investment Promotion Board (FIPB) to acquire an existing company or set up a new manufacturing unit in the medical devices sector.
Earlier FDI up to 100% was permitted, subject to certain conditions. While FDI in new projects is under automatic route, brownfield projects are placed under the government approval route.
Cabinet approves ordinance on Coal, Insurance Bill
As expected the Cabinet has approved ordinance on Insurance Bill and Coal on Wednesday. An ordinance is an interim measure, a statement of intent on the part of the government. The government has six weeks after an ordinance is passed to get approval from both the houses and pass the Bill or let it lapse - after the first sitting of the Parliament.
With Coal Mines Bill yet to be cleared by Parliament, the government approved re-promulgation of an Ordinance to facilitate e-auction of coal blocks for private companies for captive use and allot mines directly to state and central PSUs. Earlier, an ordinance on coal was introduced on October 20 after the Supreme Court scrapped 204 coal block allocations. It was valid till 4th January as the life-span of an ordinance is only six weeks since the inception of a Parliament session.
The re-promulgation of the Ordinance will enable the Coal Ministry to go ahead with its decision to give a total 101 mines, including 65 through auction, in the first phase. The Cabinet has also cleared formula for coal block auction floor/ reserve price.
The Insurance Bill on the other hand has been pending with the Rajya Sabha since 2008. It seeks to increase the composite foreign investment limit in insurance companies to 49% from current 26%. The 49% cap would be for both FDI and foreign portfolio investments.
Japan's Sumitomo Mitsui to take 2.77% stake in Reliance Capital
Japan?s Sumitomo Mitsui Trust Bank will pick up a 2.77 per cent stake in Anil Ambani?s financial services company Reliance Capital for Rs 371 crore.
Reliance Capital, a non-banking finance company engaged in lending, asset management and insurance, said it intended to open a bank with support of the Japanese financial giant.
The company termed the investment of Sumitomo Mitsui as ?initial and strategic?. It added the Japanese bank would have a one-year lock-in period for its investment in Reliance Capital.
The investment was being made at Rs 530 a share, at a premium of a little over 11 per cent to the stock price on the relevant date of Reliance Capital, a company statement said.(6% premium to Wednesday's close price)
The deal values Reliance Capital close to Rs 13,400 crore compared with its market capitalisation of Rs 12,216 crore, based on the closing price of its stock on Wednesday.
Reliance Industries inks pact with Mitsui O.S.K. Lines
Reliance Industries has signed agreements with Mitsui O.S.K. Lines Ltd (MOL), one of the world?s largest and reputed shipping companies, to handle transportation of liquefied ethane from North America to India.
?MOL will supervise the construction of six Very Large Ethane Carriers (VLECs), ordered by Reliance. MOL will also operate and manage the vessels after they are built and delivered,? RIL said in a statement on Thursday.
Over four months back, RIL had placed an order for six VLECs with Samsung Heavy Industries Co Ltd for transportation of liquefied ethane. These carriers, a hybrid of LPG and LNG carriers, would be the largest vessels ever built in the world and are expected to be delivered starting last quarter of 2016 in synchronisation with the readiness of terminal in North America.
RIL which has invested heavily in shale gas in North America plans to import ethane that has become the dominant feedstock for crackers replacing liquids. Shipping ethane to India is part of RIL?s plans to attain long term feedstock competitiveness, the company had said in August this year.
Reliance is implementing a project to source 1.5 MM TPA of ethane from US to feed its crackers in India. The company has now executed storage and capacity agreements for liquefaction and export of ethane with a North American Terminal, which is expected to commence operations in the second half of 2016.
RIL is also building a world-scale receiving and storage facility in India for liquefied ethane and pipeline to deliver ethane to its crackers.
This raw material substitution has the potential to add $ 2 to its GRMs by 2018.
JP Morgan Chase in talks to invest 1,200 crore in SpiceJet; Marans keen to make full exit
A fund managed by JP Morgan Chase is in advanced discussions to team up with Ajay Singh to invest around $200 million (Rs 1,200 crore) in cash-strapped SpiceJet - a move that will help the ailing airline to take off again, said multiple sources aware of the ongoing discussions.
Singh and JPMorgan are also in touch with representatives of billionaire Kalanithi Maran. Maran's Sun Group is the current promoter of the airline with a 58% stake. The sources cited above say that Marans want to exit the airline completely to let Singh and other investors take control.
SpiceJet has an immediate liability of Rs 1,400 crore and other liabilities of Rs 600 crore. Analysts estimate that the airline would require up to Rs 2,000 crore.
Bharti Raises VOIP rates, attracts Government attention
Bharti Airtel on Wednesday announced a sharply higher tariff for VOIP.
This will be a major setback for consumers who use popular internet services like Skype, Viber, Facebook messenger and Google hangouts to make voice calls to family and friends abroad. It decided to charge them nearly 16 times more than the ordinary data pack charges.
The move has attracted Government attention and Airtel may soon hear from the Government on this.
While the Government may direct the telecom company to charge less, the move nevertheless, will augur well for the company that will still get away with higher charges than the current one.
The Santa Claus Rally Continues on Wall Street
The Dow Jones Industrial average continued to rally Wednesday on sharper than expected dip in unemployment claims. The blue chip index added 6 points to its overnight tally to close at 18,030.
Over the past five sessions the Dow has risen 3.91%, making it the largest five day rally before Christmas in 23 years. For the records, this was the 37th close of the Dow at a new all time high this calendar year.
The S&P 500 wasn?t as lucky. Though it was up much more during the short session, but it closed with a minor loss of a fraction of a point. Had it closed in the green, it would have been the 52nd close at a new high this calendar year.
The Nasdaq Composite rose 8 points or 0.16% to 4,773. The tech and bio-tech heavy index is 18 points short of making a new calendar high but is way short by 360 points of its all time high close seen in the year 2000.
The indices were soaring high in their Santa rally in the short trading session that was to end at 1 pm, when last minute profit taking erased large part of their intraday gains.
Weekly jobless claims slid for the fourth straight week, an indication of steady improvement in the job market. The number of new claims for unemployment benefits slid 9,000 to 280,000. Economists had expected 290,000 claims after a reading of 289,000 a week earlier.
Crude oil prices were giving back some of Tuesday's gains. West Texas Intermediate crude was down 2.7% to $55.56, while oil majors Exxon Mobil and Chevron were lower and the Energy Select SPDR ETF dropped 0.77%. Crude prices had seen a brief rebound on Tuesday after Arab OPEC producers said they expect global oil to rebound to between $70 and $80 a barrel by end-2015.
Japan's parliament re-elected Prime Minister Shinzo Abe on Wednesday after his win at the polls earlier December. Abe has been charged with restoring growth in the world's second-largest economy through monetary policy easing and stimulus. Tokyo's Nikkei bounced 1.2%.
There were more troubles for Russia's economy after Standard & Poor's placed it on its CreditWatch Negative list. Russia's ruble has been in freefall alongside oil prices and the economy has suffered from Western sanctions imposed after the country's involvement in Ukraine.
Citigroup shares inched 0.22% higher on news Japan's Sumitomo Mitsui Banking Corp. will buy the bank's regional retail operations for around $330 million.
Petrobras slid more than 1% after Moody's placed the stock on review for downgrade due to "potential liquidity pressures." Over the past 6 months, the oil company has plummeted nearly 50% alongside oil prices.
American Airlines climbed 2.4% after the company said it plans to increase flight attendants' wages 4 percentage points due to increased profits on lower oil prices.
Sony shares climbed 2.2% after the studio confirmed it will release 'The Interview' via Google's YouTube. A day earlier, the studio confirmed plans to distribute to more than 200 independent theaters Christmas Day.
Walgreen shares gained 0.21% after Credit Suisse increased its price target to $73 based on the company's long-term growth opportunities.
Facebook climbed 0.2% after the social network scored a deal to integrate National Football League video clips with ads from Verizon. The New York Stock Exchange and Nasdaq are closed Thursday for the Christmas Day public holiday and will resume normal operations on Friday.
Christmas Eve traditionally is one of the lightest trading days of the years. Investors wrapped up the trading day early, with both the New York Stock Exchange and the Nasdaq Stock Market closing at 1 p.m. Eastern Time.
In Asia, Japan?s Nikkei Average rose 1.2%, while Hong Kong?s Hang Seng Index ended up a more modest 0.1%. European stock markets SXXP, ended mixed ahead of the Christmas break. Gold futures fell $3.60 to $1,174.4 an ounce.
The markets which were closed Thursday for Christmas Day will reopen Friday with normal trading hours.
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