Key benchmark indices extended gains to hit fresh intraday high in morning trade. The S&P BSE Sensex was up 68.20 points or 0.33%, up 87.91 points from the day’s low and off 5.87 points from the day’s high. The market breadth, indicating the overall health of the market, was strong. In the foreign exchange market, the rupee edged higher against the dollar tracking the dollar’s losses versus other Asian currencies.
IT stocks gained on good US economic data. US is the biggest outsourcing market for the Indian IT firms. Tata Consultancy Services (TCS) gained after the company after market hours on Thursday, 30 January 2014 announced that it has been designated as a Leader in the IDC MarketScape. Aditya Birla Nuvo (ABNL) rose after the company before market hours today, 31 January 2014 said its wholly-owned subsidiary, ABNL IT & ITES, has on Thursday, 30 January 2014 entered into an agreement to divest its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide.
A bout of volatility was seen in early trade as the key benchmark indices hit intraday high after sinking in negative zone following a slightly positive start. Key benchmark indices extended gains to hit fresh intraday high in morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 430.20 crore on Thursday, 30 January 2014, as per provisional data from the stock exchanges.
At 10:18 IST, the S&P BSE Sensex was up 68.20 points or 0.33% to 20,566.45. The index gained 74.07 points at the day’s high of 20,572.32 in morning trade, its highest level since 29 January 2014. The index fell 19.71 points at the day’s low of 20,478.54 in early trade.
The CNX Nifty was up 17.80 points or 0.29% to 6,091.50. The index hit a high of 6,096.45 in intraday trade, its highest level since 29 January 2014. The index hit a low of 6,068.35 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,169 shares gained and 421 shares fell. A total of 179 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks gained and rest of them declined.
Mahindra & Mahindra (up 2.69%), Tata Steel (up 2.31%) and Sesa Sterlite (up 1.47%) edged higher from the Sensex pack.
NTPC (down 2.93%), Tata Motors (down 2.74%) and HDFC (down 0.95%) edged lower from the Sensex pack.
IT stocks gained on good US economic data. US is the biggest outsourcing market for the Indian IT firms.
Infosys (up 0.47%), Wipro (up 1.08%), Tech Mahindra (up 2.96%) and HCL Technologies (up 1.27%) edged higher.
Tata Consultancy Services (TCS) gained 1.79%. TCS after market hours on Thursday, 30 January 2014 announced that it has been designated as a Leader in the IDC MarketScape: Worldwide Life Science Manufacturing and Supply Chain ITO. Among the attributes cited in the report, ‘IDC MarketScape: Worldwide Life Science Manufacturing and Supply Chain ITO 2013 Vendor Assessment,’ TCS was lauded for its overall capability and extensive experience in working with global life science companies across all three sections of the industry: pharmaceutical, biotech and medical devices.
The report evaluated the 12 leading IT vendors that serve the life science manufacturing and supply chain space, across a number of capability and strategy measures such as Offering Roadmap, Portfolio Strategy, Customer Base, Engagement Capability, Pricing Model, Investment, Growth Strategy, etc. IDC MarketScape criteria selection, weightings and vendor scores represent well-researched IDC judgment about the market and vendors through structured discussions, surveys and interviews with market leaders, participant buyers and end users.
In the current market conditions, there is a strong demand from life sciences companies for skilled IT Outsourcing (ITO) partners that have significant domain depth and experience, said Eric Newmark, Program Director, IDC Health Insights, Business Systems Strategies Program. TCS has demonstrated its expertise and innovation through its extensive work with life sciences companies in the manufacturing and supply chain market. TCS’ exceptional technical skills, coupled with the overall value that the company consistently delivers to its global life sciences clients, make it an established leader in the field.
Our continued leadership in the life sciences manufacturing and supply chain market is a testament to the unparalleled value we bring to our customers, said Debashis Ghosh, President, Life Sciences, Manufacturing and Energy, TCS. Our strategy is to enable life sciences companies to use technology effectively to optimize manufacturing operations and adopt emerging supply chain practices, which will result in a more holistic, patient-centric healthcare ecosystem. This, coupled with a strong global footprint and a continuous focus on innovation, ensures that we are a partner of choice for life sciences companies worldwide.
IDC MarketScape vendor analysis model is designed to provide an overview of the competitive fitness of IT, telecommunications, or industry-specific suppliers in a given market.
Aditya Birla Nuvo (ABNL) rose 1.65%. The company before market hours today, 31 January 2014 said its wholly-owned subsidiary, ABNL IT & ITES, has on Thursday, 30 January 2014 entered into an agreement to divest its IT-ITeS subsidiary, Aditya Birla Minacs Worldwide, subject to customary closing conditions, third party consents and regulatory approvals. Pursuant to a share purchase agreement with a group of financial investors led by Capital Square Partners (CUP) and CX Partners (CXP), ABNL IT & ITeS will divest Aditya Birla Minacs at an enterprise value of $260 million subject to the working capital adjustments.
Aditya Birla Nuvo entered the iTeS sector in 2003 through acquisition of TransWorks, a $12 million company. Later to provide scale to the business, TransWorks acquired Minacs, a $265 million company in 2006. Committed to its turnaround and growth, ABNL supported Minacs over the years, to attain revenue of $450 million (Rs 2466 crore) and net profit of $23 million (Rs 125 crore) in fiscal 2012-13, Aditya Birla Nuvo said in a statement.
Today, Aditya Birla Minacs has risen to the stature of a global business solutions provider that partners with global corporations through its 35 centers spanning 10 countries across 3 continents. To further expand its scale, enhance its competitive advantage and attain the next level of growth, Minacs requires capital investments, the company added.
Being a conglomerate, Aditya Birla Nuvo constantly evaluates its capital allocation strategy and reviews its business portfolio. Given the multiple growth opportunities and ensuing capital requirements at ABNL, the company decided to divest Minacs to a strategic financial investor, with extensive domain experience, who can ensure that Minacs continues to progress forward on its strategic roadmap, Aditya Birla Nuvo said.
Dr. Rakesh Jain, Managing Director, Aditya Birla Nuvo, said, Considering ABNL’s capital commitment and growth plans for other businesses, the Company has decided to divest Minacs. We are confident that the new shareholders will provide the requisite direction to Minacs and enable it to rise to its full potential.”
The transaction is expected to be completed in 2 to 3 months, subject to the requisite customary and regulatory approvals, ABNL said.
In the foreign exchange market, the rupee edged higher against the dollar tracking the dollar’s losses versus other Asian currencies. The partially convertible rupee was hovering at 62.42, compared with its close of 62.56/57 /11 on Thursday, 30 January 2014.
India’s consumer inflation should ease in the next two months, and will fall to 8% by the end of the year, Reserve Bank of India (RBI) Governor Raghuram Rajan was quoted as saying in an interview with TV news channel on Thursday, 30 January 2014. The comments came after the RBI surprisingly raised the repo rate by 25 basis points on Tuesday, 28 January 2014. The consumer price index eased to a three-month low of 9.87% in December 2013.
Among Asian stocks, the Japanese Nikkei 225 index fell 0.78%.
China’s markets remain closed from today, 31 January 2014 until 7 February 2014 for the Lunar New Year holiday, while Hong Kong is shut until 4 February 2014. Among other bourses shut for holiday are those of Taiwan, South Korea, Indonesia, Malaysia and Vietnam.
Japanese industrial production rose 1.1% on month in December, the Ministry of Economy, Trade and Industry said Friday, on a demand rush ahead of an April sales tax increase. It also comes after a 0.1% decline in November. The increase in industrial output was due to a rise in production in the general purpose and production machinery sectors as well as electronic parts and devices.
Meanwhile, Japanese consumer prices rose at their sharpest rate in over five years in December, the government said Friday. Consumer prices also increased for the whole of 2013, the first annual increase in five years, according to data released by the Ministry of Internal Affairs and Communications.
The core consumer price index, which excludes volatile fresh-food costs, climbed 1.3% from a year earlier in December, faster than a 1.2% gain in the previous month, according to data released by the Ministry of Internal Affairs and Communications. It was the biggest rise since a 1.9% increase in October 2008. The core index for 2013 increased 0.4% after a 0.1% fall the previous year. The CPI including fresh food prices rose 1.6% on year in December.
Employment data released Friday also suggested a strongly recovering economy. The jobless rate fell to 3.7% of the work force, down from 4% in November and the lowest rate since December 2007. The closely watched ratio of available jobs to applicants also improved to 1.03, meaning 103 jobs were on offer for every 100 job seekers.
US stocks rebounded on Thursday, 30 January 2014 as investors welcomed data showing a robust pace of growth in the economy in the final quarter of last year, while upbeat earnings from Facebook Inc. boosted the tech sector.
The US economy expanded rapidly in the final quarter of 2013, the Commerce Department said on Thursday, 30 January 2014 as consumers shrugged off a government shutdown, with the data fueling hopes of even faster growth ahead. The gross domestic product grew at 3.2% annual pace. The economy’s strong year-end performance follows on the heels of a 4.1% growth rate in the third quarter. For the full year, US growth slowed to 1.9% from 2.8% in 2012.
Meanwhile, Janet Yellen will be sworn in as chairwoman of the Federal Reserve on Monday, 3 February 2014, the US central bank announced Thursday, 30 January 2014. Yellen will replace outgoing Fed Chairman Ben Bernanke, whose term as chairman expires on Friday, 31 January 2014.
The Federal Reserve on Wednesday, 29 January 2014, took another gradual step toward exiting its controversial bond-buying program, remaining stoic in the face of market turmoil. As expected, the Fed decided to reduce the pace of monthly asset purchases to $65 billion, from January’s $75 billion. The Fed will purchase mortgage-backed securities at a pace of $30 billion per month and add to its holdings of Treasurys at a pace of $35 billion per month beginning in February.
The Fed also signaled that it is likely to keep reducing its purchases in the coming months, citing a pickup in economic activity and improvement in the labor market.
In addition to proceeding with plans to scale back its bond buying, the Fed made no changes to its other main policy plank: its pledge to keep interest rates low for some time to come. It has pledged to hold rates steady “well past” the point that the unemployment rate falls below 6.5% as long as inflation remains low.