Markets Continue to Falter

The Indian equity markets languished in the red for a second consecutive day amid weak oil prices. Fragile global markets also dampened the domestic sentiment. BSE Sensex finished today with losses of over 321 points, while NSE-Nifty lost 91 points during today's trade. S&P BSE Mid Cap and S&P BSE Small Cap indices also underperformed the market as mid cap stocks fell about 0.8%, while small cap stocks fell about 1.2%. Barring oil & gas sector, all the sectoral indices finished below the dotted line with metal and healthcare stocks leading the losses.

The Chinese markets bucked a generally downward trend in Asia today as major indices in Australia, Japan, and Hong Kong fell. The Shanghai Composite gained 0.88%, while the Hang Seng and the Nikkei 225 fell 1.15% and 0.85% respectively. European markets are trading sharply lower today with shares in Germany off the most. The DAX is down 1.98%, while France's CAC 40 is off 1.51% and London's FTSE 100 is lower by 1.39%.

Overnight comments from Saudi Arabia's oil minister dashed hopes for a possible production cut to tackle the global supply glut and sent already low oil prices lower still. The rupee was trading at Rs 68.57 against the US$ in the afternoon session.

Selling activity continued across majority of the private sector banks with Karnataka Bank and Federal Bank leading the losses. Kotak Mahindra Bank (KMBL) has reportedly inked a share subscription and shareholders agreement with Airtel M Commerce Services (AMSL) and Bharti Airtel, wherein, KMBL has agreed to acquire 98,382,022 equity shares aggregating to Rs 983.8 million in cash, representing 19.90% of the paid-up capital of AMSL.

The new payments bank will help the fourth largest private sector bank by assets to break new ground among the unbanked and expand its reach in the huge rural market. The total cashless transactions in India amounted to Rs 1,200 billion in FY15. In the same year, cashless transactions through mobile banking amounted to Rs 1,000 billion.

AMSL, incorporated in April 2010, is a 100% subsidiary of Bharti Airtel and offers services under the 'Airtel Money' brand. Bharti Airtel recently declared results for the third quarter of FY16. The company has reported a 3.8% YoY increase in total revenues and a 22.2% YoY decrease in net profits during the quarter (Subscription Required).

Bharti Airtel finished the trading day on an encouraging note (up 1.2%) on the BSE.

Healthcare sector fell over 1.5% in today's trade. Aurobindo Pharma and Divi's Laboratories bore majority of the losses. According to a leading financial daily, Glenmark Pharmaceuticals Inc., USA, has been granted final approval by the United States Food & Drug Administration (USFDA) for Norgestimate and Ethinyl Estradiol Tablets USP, the generic version of Ortho Tri-Cyclen Lo Tablets of Janssen Pharmaceuticals, Inc.

According to IMS Health, sales data for the 12-month period ending December 2015, the Ortho Tri-Cyclen Lo Tablets market achieved annual sales of approximately US$503.9 million.

The company's current portfolio consists of 107 products authorized for distribution in the US market and 62 ANDAs pending approval with the USFDA. In addition to these internal filings, the company continues to identify and explore external development partnerships to supplement and accelerate the growth of its existing pipeline and portfolio. The stock price of Glenmark has witnessed sharp correction quite recently. The company's performance (Subscription Required) has been severely impacted by global headwinds.

Apart from the US, Indian pharma companies have steadily expanded exports across some key emerging markets including Russia, Brazil, Romania, South Africa, and Venezuela. Improving healthcare affordability in the emerging markets, governments encouraging the expansion in healthcare, and low-cost manufacturing by Indian companies have been the key to Indian Pharma's increased presence in the emerging markets. But growth from emerging markets has come under pressure recently (Subscription Required).

BSE lays down new norms for bidding in OFS segment

Leading stock exchange BSE has issued a new set of guidelines for bidding in the Offer for Sale segment, reducing advance notice period to one day and allowing retail investors to place their bids a day later.

Government has been demanding from Sebi that the advance notice should be allowed till evening of the day before OFS, as the share prices of many state-owned companies on the disinvestment list get hammered down due to longer notice.

The government is far behind its disinvestment target of Rs 69,500 crore set for the current fiscal and is not likely to meet it.

Currently, listed companies need to give the OFS notice two banking days in advance, while the bids need to be placed by retail as well as non-retail investors on a single day during the market hours.

Under the new norms, retail investors would place their bids a day later while the companies would be allowed to notify the stock exchanges about their intention for sale of shares latest by 5 pm a day before the day of the OFS.

Stock exchange will have to inform the market immediately upon receipt of such notice.

The notice would detail the name of the firm, seller(s) - promoters, non-promoter shareholder - number of shares being offered, bid time, allocation methodology, seller member(s), discount (if any) and percentage of reservation for retail investors, BSE said in a circular.

The new norms will help in encouraging greater participation of all investors including retail investors.

Only non-retail investors will be permitted to place their bids on the first day of the OFS through stock exchanges, while retail investors can bid on T+1 day and they may place a price bid or opt for bidding at cut off price. T or trade refers to the day of the OFS.

Settlement for bids received on T+1 day will take place on T+3 days. In case of any discount to retail investors, the same will be applicable to bids received on T+1 day.

To ensure that shares reserved for retail investors do not remain unallocated due to insufficient demand by the retail investors, the bids of non-retail investors will be allowed to carry forward to T+1 day.

Unsubscribed portion of the shares reserved for retail investors will be allocated to non-retail bidders on T+1 day at a price equal to cut off price or higher as per the bids.

In this regard, option will be provided to such non-retail bidders to indicate their willingness to carry forward their bids to T+1 day.

If the non-retail bidders choose to carry forward their bids to T+1 day, then, they may be permitted to revise such bids. Settlement for such bids shall take place on T+3 day.

Cut off price will be determined based on the bids received on T-day.

According to BSE, minimum 25 per cent of the shares offered shall be reserved for mutual funds and insurance companies, any unsubscribed portion will be available to the other bidders, while at least 10 per cent of the offer size will be reserved for retail investors.

The offer size would be a minimum of Rs 25 crore.

However, it can be less than Rs 25 crore so as to achieve minimum public shareholding in a single tranche.

Market Morning Brief: What you must know as trading begins on Dalal Street

The Budget week starts amid chaos not only at domestic front, but also global. While, JNU row and Jat stir hogged the limelight over the weekend, markets will draw cues majorly from Budget session that starts on Tuesday and derivatives expiry approaching on Thursday.

Here is a wrap-up of important updates that you must go through before playing the bourses:

 Fed Rate hike prospects brighten on US inflation data: Data on Friday showed the core consumer price index (CPI), a measure of underlying US inflation, rose in January by the most in nearly 4-1/2 years to a 2.2 per cent annualized rate. It drew particular attention as the number was above the Fed's 2.0 per cent target, though it is not the central bank's benchmark inflation measure. Stronger than expected CPI has sharpened focus on Federal Reserve's next move.

Brexit referendum on June 23: Britain Prime Minister David Cameron has launched a major push to win support to keep Britain inside European Union, while London mayor Boris Johnson is opposing Cameron to campaign for Brexit, a Britain exit from 28-nation European Union. The referendum on the same will happen on June 23. Expect extreme volatility in the bond and equity markets in the course of approaching voting day.

Asian markets trade on a cautious note: Asian markets climbed off to a cautious start on Monday as investors await a rush of February industry surveys to get the sense of global economy, while sterling suffered on concerns the UK might yet vote to leave the European Union.

Oil prices stabilise: Oil prices on Monday made up ground from steep falls in the previous session but analysts said oversupply meant the market remained weak. US West Texas Intermediate (WTI) crude futures were trading at $29.89 per barrel, up 25 cents from their last settlement, while Brent was up 24 cents at $33.25 per barrel. Both contracts had fallen almost 4 per cent on Friday.

Gold holds above $1200: Gold eased for a second straight session as the dollar edged higher, but the metal remained underpinned above $1,200 an ounce as caution in financial markets prompted investors to channel money into bullion.

Jat stir and Maruti Suzuki: The country's largest carmaker Maruti Suzuki India suspended operations at its two plants in Gurgaon and Manesar as component supplies have been hit by the agitation of Jats demanding job reservation.

Nifty struggles below 7200; FMCG & banks drag, metals shine

Government will sell five percent stake in NTPC via offer-for-sale (OFS). It hopes to garner around Rs 5000 crore.

The stake sale would be spread over two days with institutional bidders getting the first chance to buy shares today. Retail investors, for whom 20 percent shares have been reserved, will get to bid on February 24. Recently the government had tweaked the OFS rules for retail investors.

NTPC is the first company to hit the markets under the revised offer for sale (OFS) guidelines of market regulator Sebi. The OFS route has now been spread over two days.

The floor price of Rs 122 is at a 3.8 percent discount to Monday's closing price of Rs 126.85.

The market extended losses in morning trade, dragged by FMCG, banking & financials and technology stocks. Metals and select auto stocks outperformed.

The 30-share BSE Sensex fell 144.73 points or 0.61 percent to 23644.06 and the 50-share NSE Nifty declined 49.15 points or 0.68 percent to 7185.40. The broader markets too were under pressure with the BSE Midcap and Smallcap indices down nearly half a percent.

The market breadth was weak as about two shares declined for every share advancing on the BSE.

 Markets in Asia gave up early gains on Tuesday, trading mostly lower as the improved market sentiment which spurred a global rally Monday appeared to fade. Shanghai declined over a percent.

Saudi, Iraq sell more oil to India, elbow out Latin America crudes

New Delhi: India`s oil imports from Saudi Arabia and Iraq hit the highest in more than a decade last month as OPEC`s top producers gained at the expense of Latin American crudes, a validation of the OPEC policy of maintaining output and fighting for market share.

Competitive prices and shorter shipping distances are giving the Middle East members of the Organization of the Petroleum Exporting Countries (OPEC) the upper hand in India, the world`s third-largest crude oil importer.

Saudi Arabia was the top supplier to India in January, with volumes jumping 29 percent from the same month a year ago to nearly 940,000 barrels per day (bpd), ship tracking data obtained from sources and data compiled by Thomson Reuters Oil Research & Forecasts showed on Friday.

Just behind was Iraq at 930,000 bpd, up 52 percent from January levels last year. The daily rates from both were at their highest since at least 2001, according to data available on the Thomson Reuters Eikon terminal.

In contrast, total imports from Latin America fell by a quarter in January from a year ago to 706,000 bpd, the data showed.

"We are going slow in the purchase of Latin America oil and have raised supplies from the Middle East," said H. Kumar, managing director of Mangalore Refinery and Petrochemicals Ltd.

Indian refiners say they increased imports of Middle Eastern crude after Brent rose relative to the Dubai benchmark, making oil priced off the latter more attractive.

As well, on top of competitive monthly prices for its oil compared with similar grades, Iraq provides discounts that could amount to more than $1 a barrel to compensate for crude quality changes, trade sources said.

"Basra Heavy is better priced compared to any other heavy crude. Even Basra Light is better priced compared to other heavy crudes," A. K. Sharma, head of finance at Indian Oil Corp said last week.

IOC buys about 300,000 bpd of Iraqi oil, including a recently signed term deal for Basra Heavy.

Reliance Industries Ltd, owner of the world`s biggest refining complex, has also entered into a long-term deal with Iraq to buy Basra Heavy, according to its website.

Indian refiners that have invested billions of dollars in upgrading their plants are scouting for cheaper heavy, sour grades such as those from Iraq and Iran to maximise gross refining margins.

"For a country like India where value of local currency is fluctuating and so are global oil markets, it`s better to go for nearby markets for oil purchases than going for a parcel that takes up to two months to reach India," said Ehsan Ul-Haq, senior analyst at London-based consultancy KBC Energy Economics.

The Indian rupee is edging near a record low of 68.85 to the U.S. dollar hit in August 2013 - when India was mired in its worst currency turmoil in more than two decades.

In January, India also took just over 170,000 bpd of Iranian crude, down nearly 40 percent from the same month last year, the data showed. Volumes from Iran are expected to surge from this month as Indian buyers start receiving barrels snapped up from Tehran soon after economic sanctions were lifted.

Sonal Parikh elected Chairperson of erstwhile VSEL

VADODARA: Sonal Parikh was today unanimously elected as the chairperson of the erstwhile Vadodara Stock Exchange Ltd (VSEL).

The first meeting of the newly elected nine directors was held here today.

"Our future plans include starting of commodity market, foreign currency market, non banking financial company," VSEL Director Jagdish Thakkar said.

Earlier in the day, the directors were elected during an extraordinary general meeting (EGM) of the erstwhile VSEL.

Apart from Thakkar and Parikh, Shailesh Bhoite, Shashikant Parikh, Jayant Gaekwad, Aashih Chokshi, Satyanarayan Shah, Nitin Parikh and Manoj Shah were also elected as directors to the stock exchange.

The EGM was a stormy affair as outgoing chairman Makrand Parikh walked out of the meeting.

After which, the members present at the meeting appointed C V Makwana to conduct elections for the posts of nine directors.

The EGM of VSEL was held as markets regulator after Securities Exchange and Board of India ( SEBI) had on November last year, ordered the exit of Vadodara Stock Exchange.

Stock Market Tutorials by Dhanashri Academy

Stock Market Tutorials by Dhanashri Academy from Dhanashri Academy

Indian Gold Demand Seen Rising in 2016

India's gold demand is likely to rise this year as investors have factored in interest rate hikes by the U.S. Federal Reserve, while the turmoil in stock markets is making the metal attractive, the World Gold Council (WGC) said on Thursday.

Stronger demand from the world's second-biggest gold consumer could support the global bullion price, which is trading near its highest in 8-1/2 months.

"Overall demand is seen promising since rate hike uncertainty is behind us," Somasundaram PR, managing director of the WGC's Indian operations, told Reuters.

The Federal Reserve raised U.S. rates for the first time in nearly a decade in December, and is expected to hike rates gradually going forward.

"There are strong tailwinds for demand in India. What is happening in the stock market is good for gold demand," Somasundaram said.

Indian gold prices have risen 15 per cent so far in 2016, while India's broader Nifty has dropped nearly 10 per cent.

In 2015, Indian demand rose 2 per cent from a year before to 848.9 tonnes, WGC data released on Thursday showed.

The increase comes even as total global gold consumption was little changed in 2015, the report showed.

WGC said Indian demand got a boost from an increase in jewellery sales despite adverse weather conditions and a squeeze on rural incomes.

The earnings of millions of farmers were curtailed by the first back-to-back drought in the country in nearly three decades. Rural demand for gold accounts for nearly two-thirds of India's total.

India's jewellery demand in 2015 was the highest since 2010 and the third highest year on record, but the outlook was cautious, WGC said.

"There are reasons to adopt a cautious outlook as we head into 2016: rural incomes continue to feel the squeeze from rising inflation and weather-related crop damage," the report said.

Somasundaram said gold smuggling in the country is likely to fall "significantly" in 2016, after dropping by 75 tonnes last year to 100 tonnes.

Gold smuggling started rising from mid-2013 as India raised import duties on gold to a record high to narrow the current account deficit and arrest a free-fall in the currency following heavy buying of the metal, a traditional store of wealth for millions of poor and rich Indians.

India remained the second biggest consumer of gold in 2015 after China, where demand last year rose 3 percent to 984.5 tonnes. While jewellery demand in China eased due to a slowing economy, investment demand climbed as a weakening currency triggered demand for gold bars and coins.

ONGC Aims for New Drilling Contracts in Cost-Saving Drive: Report

India's Oil and Natural Gas Corp hopes to agree new cheaper drilling contracts for its western offshore fields, two sources involved in the matter said, in its biggest ever cost-saving drive in response to lower crude prices.

The state-owned explorer wants to end existing expensive contracts for drilling rigs signed in the 2014-15 fiscal year when crude prices averaged $85 a barrel and to sign new ones at a lower price.

That could help the company save Rs 500-1,000 crore ($74-$148 million) a year, analysts said.

Brent crude has fallen to just over $30 a barrel. This, along with a sharp drop in commodity prices, has led to a fall in the cost of equipment used for drilling for oil and gas.

ONGC's plan to slash costs, a final decision on which is still to be taken, would come about a year and half after crude prices first started to decline, and underscore the challenges Prime Minister Narendra Modi faces in trying to turn around large but slow-moving public sector giants.

The company is likely to post flat December quarter profit compared to the year-ago period on Thursday. Its shares fell by a third last year.

ONGC's plan comes against the backdrop of overseas explorers lowering spending and scaling back drilling, forcing rig contractors to idle or even scrap rigs, due to the prolonged slump in oil prices.

The biggest cost saving could come from hiring new jack-up rigs, drilling rigs that are used for drilling in shallow water, said offshore rig consultant, Rajeev Nair, who has worked with ONGC at its Mumbai High field.

The jack-up rigs were contracted by ONGC in 2014 at a cost of between $80,000 and $90,000 per day, he said, adding those rigs are now available for $35,000-$40,000 a day.

ONGC has close to 15 jack-up rigs in the western offshore fields, according to a company presentation in December 2014.

ONGC does not disclose the names of its contractors. Jindal Drilling and Industries Ltd and Dynamic Offshore Drilling Ltd have said in the past they had rigs working for ONGC.

Other areas for cost-cutting could include the staffing and maintenance cost of rigs and offshore marine and air logistics costs, the sources said.

ONGC's average cost of production in the western offshore fields, India's biggest for crude oil and gas, is about $40 per barrel and, at current crude prices, the company is losing money fast, one of the sources said.

The company's western offshore interests, home to the company's biggest crude oil field Mumbai High and biggest natural gas asset Bassein & Satellite, are located off the west coast of India in the Arabian sea.

The western offshore field contributes 60 per cent of the company's total crude oil production.

As ONGC makes additional investments in the near future, it expects the average cost of production at Mumbai High, the most productive field in the western offshore area, to go up to $44-$45 a barrel, the source said.

By signing new drilling contracts, the company aims to reach "a borderline (break even) figure" for production cost, he said.

Both the sources did not want to be named as the matter is not public yet. An ONGC spokesman did not immediately respond to Reuters request for comment.

Store Our Oil and Take Two-Thirds For Free: UAE's Offer to India

The United Arab Emirates' national oil company - Abu Dhabi National Oil Company (ADNOC) - has in the first deal of its kind agreed to store crude oil in India's maiden strategic storage and give two-third of the commodity to it for free.

India, which is 79 per cent dependent on imports to meet its crude oil needs, is building underground storage facilities at Visakhapatnam in Andhra Pradesh, and Mangalore and Padur in Karnataka to store about 5.33 million tonnes of crude oil to guard against global price shocks and supply disruptions.

Adnoc is keen on taking half of the 1.5 million tonnes Mangalore facility, Oil Minister Dharmendra Pradhan said on Wednesday.

It will stock 0.75 million tonnes or 6 million barrels of oil in one compartment of Mangalore facility. Of this, 0.5 million tonnes will belong to India and it can use it in emergencies. Adnoc will use the facility as a warehouse for trading its oil.

The 1.33 million tonnes Visakhapatnam storage and 2.5 million tonnes Padur stockpile together with the 1.5 million tonnes Mangalore storage will be enough to meet nation's oil requirement of about 10 days.

After talks with visiting UAE Minister for Energy Suhail Mohammed Al Mazrouei, Mr Pradhan said the tax issue remains to be sorted out before Adnoc can begin storing oil at Mangalore.

Congress-ruled Karnataka government has not yet agreed on waiving VAT (value-added tax) on the crude oil imported for the strategic storage, which UAE wants to use to stock oil when prices are low and supply to its customers when rates are good.

"This will be beginning of our strategic ties," he said, adding that Prime Minister Narendra Modi's visit to UAE in August last year, the first by an Indian Prime Minister in 38 years, laid the foundation of closer cooperation.

The UAE had then committed to invest $75 billion in India, and Mr Pradhan on Wednesday showcased to Mr Mazrouei opportunities for that investment.

"We have offered them refinery projects, petrochemical plans, pipelines and LNG terminals for investment," he said.

On offer was 26 per cent stake for $700 million in ONGC's about-to-be-commissioned petrochemical project at Dahej in Gujarat and 24 per cent equity for $200 million in expansion being planned by BPCL of its subsidiary Bina refinery in Madhya Pradesh from 6 million tons to 7.5 million tonnes.

Also, an investment of $530-850 million can get the UAE 25-40 per cent stake in HPCL's planned petrochemical plant on the Andhra coast, he said, adding that the Gulf national can also invest in the planned 60 million tons in Maharashtra and the Jagdishpur-Haldia and Paradip-Surat gas pipelines.

"UEA makes up for 8 per cent of our oil imports. We are trying to import more oil from UAE. In 2016-17, we plan to import 2.5 million tonnes more oil than current year's purchase of 16.11 million tonnes," he said.

Mr Pradhan said areas of mutual interest were discussed during his meeting with UAE Energy Minister.

Indian firms are not present in upstream oil exploration and production business in the UAE, he said, and mentioned the interest of companies like ONGC Videsh Ltd (OVL) to secure producing or prospective assets there.

Also, they are interested in taking stake in Abu Dhabi Company for Onshore Petroleum Operations Ltd (ADCO), he said, adding that Engineers India Ltd (EIL) was interested in engineering and consultancy contracts in UAE.

"We also offered them partnership in building of second phase of strategic crude oil storages," he said.

India is looking at building four more strategic crude oil facilities at Bikaner in Rajasthan, Rajkot in Gujarat, Padur in Karnataka and Chandikhole in Jajpur district of Odisha.

Besides Adnoc, Kuwait Petroleum Corp (KPC) has also evinced interest in hiring a part of the maiden strategic storage.