Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently up 7.52 points or 0.04%, up about 100 points from the day's low and off close to 10 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Capital goods pivotals edged lower. Among IT stocks, Infosys scaled record high. GAIL (India) hit 52-week high. Lupin reversed direction after hitting record high. AstraZeneca Pharma India hit an upper circuit limit of 20% on BSE after the company said its board will meet on 5 March 2014 to consider delisting proposal from its overseas parent firm AstraZeneca Pharmaceuticals AB (AZP AB) Sweden.
The market edged lower in early trade on weak Asian stocks. Key benchmark indices reversed initial losses in morning trade. Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 591.82 crore on Friday, 28 February 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was up 7.52 points or 0.04% to 21,127.64. The index rose 19.88 points at the day's high of 21,140 in morning trade. The index dropped 90.13 points at the day's low of 21,029.99 in early trade.
The CNX Nifty was down 4.85 points or 0.08% to 6,272.10. The index hit a low of 6,249.60 in intraday trade. The index hit a high of 6,276.30 in intraday trade.
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The BSE Mid-Cap index was up 42.91 points or 0.66% to 6,543.33. The BSE Small-Cap index rose 42.50 points or 0.66% to 6,487.54. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,261 shares gained and 861 shares fell. A total of 106 shares were unchanged.
Dr. Reddy's Laboratories (down 1.73%), Bajaj Auto (down 1.39%) and Tata Motors (down 1.32%) edged lower from the Sensex pack.
Infosys rose 0.13% to Rs 3,825 after hitting record high of Rs 3,847.20 in intraday trade.
GAIL (India) gained 0.3% to Rs 370.70 after hitting 52-week high of Rs 372 in intraday trade.
Lupin fell 0.47% to Rs 988.80, with the stock reversing direction after hitting record high of Rs 1,003 in intraday trade.
Capital goods pivotals edged lower. ABB (down 0.19%), and Bhel (down 0.03%) dropped.
L&T shed 1.58%. The company said during market hours that the company's Transportation Infrastructure Business unit has bagged a prestigious international order worth Rs 1550 crore from the Ministry of Transport and Communications, Sultanate of Oman, for the construction of a road between Bidbid-Sur Section (Second Phase, First Part). The project is scheduled to be completed in 38 months.
AstraZeneca Pharma India hit an upper circuit limit of 20% at Rs 1,110.90 on BSE after the company said its board will meet on 5 March 2014 to consider delisting proposal. AstraZeneca Pharma India (the company) said that its board received a letter from AstraZeneca Pharmaceuticals AB (AZP AB) Sweden, promoter of the company, proposing to delist the equity shares of the company from Indian stock exchanges (BSE, NSE and Bangalore Stock Exchange).
Astrazeneca Pharmaceuticals AB holds 75% in AstraZeneca Pharma India.
In a separate announcement, the company said that AZP AB had entered into a subvention agreement with the company dated 7 May 2013, whereby it had decided to provide a voluntary non-repayable financial grant of approximately $22.5 million to $26.5 million over the three years between fiscal year ending March 2014 (FY14) - fiscal year ending March 2016 (FY16), of which the first tranche of $14 million was to be provided to the company in FY14.
The objective of this financial grant was to assist the company in its efforts to establish/grow its presence in the Indian market. In line with the subvention agreement, AZP AB has already provided $10.5 million to the company during the nine month period ended 31 December 2013. The subvention agreement provided for AZP AB to continuously monitor and review the business and financial performance of the company, thereby assessing the need for the continuation / modification of this voluntary financial grant, based on evolving business environment and conditions. AZP AB believes that the company's business and financial performance has been in line with more recent expectations, and that the company shall require approximately $3.5 million till end-FY14, and no further grant thereafter, the company added.
It has therefore been decided by AZP AB that the total amount of financial grant to be provided by AZP AB to the company shall stand revised to $14 million (as against the $22.5 million originally envisaged and approved as part of the financial assistance package), which shall continue till end-FY14, post which the payments under the subvention agreement shall cease, the company said.
In the foreign exchange market, the rupee edged lower against the dollar on risk aversion in global markets triggered by escalating geopolitical tension over Ukraine and after an official gauge of Chinese manufacturing dropped to an eight-month low. The partially convertible rupee was hovering at 61.86, compared with its close of 61.75/76 on Friday, 28 February 2014.
The Indian manufacturing economy showed signs of strengthening in February, with faster increases in output and new orders bolstering the PMI to reach a one-year peak. New export business also rose at a quicker clip, Markit Economics said. Up from 51.4 in the previous month to 52.5 in February, the headline HSBC India Purchasing Managers' Index (PMI) signalled a solid and stronger improvement in business conditions across the country's goods-producing sector, Markit Economics said.
Production growth accelerated on the back of a stronger rise in incoming new work. The pace of output expansion was solid and the quickest in one year. New orders increased for the fourth month running and at the most pronounced rate since February 2013. Survey respondents commented on higher demand from both domestic and export clients. Indeed new work from abroad rose in the latest month, with the growth rate climbing to the highest since June last year, Markit Economics said in a statement today, 3 March 2014.
Consumer goods was again the best performing sub-sector of the manufacturing economy in February, leading the rises in both output and new orders. Operating conditions also improved at intermediate goods producers, but were unchanged in the capital goods category.
Reflective of higher production requirements, Indian manufacturers raised their buying activity further in February. Although moderate, the overall expansion in quantity of purchases accelerated to the quickest since April last year. Nonetheless, pre-production stocks fell in the latest month as raw material shortages at vendors' units resulted in longer supplier delivery times.
February data also indicated that manufacturing employment increased, stretching the current period of job creation to five months. That said, payroll numbers rose at a fractional pace that was the weakest in that sequence, Markit Economics said.
Indian manufacturers signalled higher levels of unfinished work in February, as has been the case since August 2012. Capacity constraints were linked by panellists to strong new order growth and, to a lesser extent, shortages of raw materials.
Input cost inflation quickened to its highest in four months during February. Anecdotal evidence pointed to increased metals, chemicals, textiles and energy costs, Markit Economics said. All three monitored market sectors recorded sharp increases in purchase prices. Subsequently, average tariffs were raised further in February. However, survey participants indicated that competitive pressures persisted and limited their pricing power. The rate of charge inflation was, therefore, slight and the weakest in five months, Markit Economics said. Stocks of finished goods increased for the sixth consecutive month in February. Nevertheless, the pace of accumulation was slight and unchanged from that seen in January.
Commenting on the India Manufacturing PM survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Manufacturing activity picked up further in February. New order flows have firmed, with the improvement in external demand and the reduction in macroeconomic uncertainty since last summer. This, in turn, has provided a lift to output growth. However, the recovery in activity is still likely to prove protracted given the lingering structural constraints. Moreover, underlying inflation pressures remain potent, which was evident from the jump in the input price component of the PMI survey. This will keep RBI hawkish and likely compel it to raise rates a bit further this year".
As per the data released by the Central Statistics Office (CSO), Ministry of Statistics and Programme Implementation after market hours on Friday, 28 February 2014, the Quarterly GDP at factor cost at constant (2004-05) prices for Q3 of 2013-14 is estimated at Rs 14.8 lakh crore, as against Rs 14.1 lakh crore in Q3 of 2012-13, showing a growth rate of 4.7% over the corresponding quarter of previous year. As per the revision policy, quarterly estimates and growth rates of 2011-12 and 2012-13 have undergone revision on account of revision in annual estimates of 2011-12 and 2012-13. However, the growth rates of Q1 and Q2 estimates of 2013-14 have not been revised and would undergo revision only at the time of the release of fourth quarter estimates and Provisional estimates for the year 2013-14 to be released on 31 May 2014. Therefore, Q1 and Q2 GDP estimates given in this release are based on Provisional estimates of 2012-13 released in May 2013, while the Q3 estimates are based on the First Revised estimates of 2013-14 released in January 2014.
The core sector registered a growth of 1.6% in January 2014, data released by the government after trading hours on Friday, 28 February 2014, showed. The eight core industries have a combined weight of 37.90% in the Index of Industrial Production (IIP).
Arun Jaitley, leader of the Bharatiya Janata Party (BJP) in the upper house of parliament, said in a TV interview on Sunday, 2 March 2014, that the BJP will consider raising the cap on foreign investment in the insurance sector from the current level of 26% if the party comes to power after elections due by May. He said that the BJP had discussed with Congress leaders ways to break the deadlock over the insurance legislation. "We have worked out various alternatives. Unfortunately, this has (been) too close to the elections," Jaitley said. Jaitley said his party would be looking at the measure as a way to revive investment in an economy that grew just 4.7% last year. The ruling Congress government has repeatedly sought parliament's approval to raise the limit to 49%.
Jaitley, however, said that the BJP continues to oppose foreign direct investment in the retail sector.
Asian stocks edged lower on Monday, 3 March 2014, amid escalating geopolitical tension over Ukraine and after an official gauge of Chinese manufacturing dropped to an eight-month low. Key benchmark indices in Singapore, Japan, Hong Kong, Indonesia, Taiwan and South Korea were off 0.58% to 1.23%.
China's Shanghai Composite rose 0.85%. China's Purchasing Managers' Index fell to 50.2 in February compared with January's 50.5 reading, the lowest since June, the National Bureau of Statistics and China Federation of Logistics & Purchasing said March 1 in Beijing. HSBC China Manufacturing Purchasing Managers Index, a gauge of nationwide manufacturing activity, fell to a final reading of 48.5 in February from 49.5 in January, HSBC Holdings PLC said Monday.
A meeting of China's lawmakers to set economic policy and growth targets begins on Wednesday, 5 March 2014. The latest meeting of the legislature, the first to be overseen by President Xi Jinping and Premier Li Keqiang, comes as leaders pledge to give markets a "decisive" role in the economy. Investors will be watching the National People's Congress (NPC) meeting for clues to the next steps to fix local-government finances, charge market prices for natural resources, rein in shadow-banking risks, free up deposit rates and open up state businesses to private investment.
Trading in US index futures indicated that the Dow could fall 89 points at the opening bell on Monday, 3 March 2014. Most US stocks rose on Friday as some positive economic data boosted the S&P 500 to record levels for a second straight day. The Chicago Purchasing Managers Index rose to 59.8 in February, topping expectations, while the final February reading on consumer sentiment from the Thomson Reuters/University of Michigan Surveys of Consumers also rose more than expected.
Other reports released on Friday suggested an economy that struggles to gain traction. GDP was estimated to have grown at an annual rate of 2.4% in the fourth quarter, the Commerce Department said. That was below estimates and down sharply both from its estimate last month of 3.2% and the 4.1% rate in the third quarter. Separately, pending home sales rose 0.1% in January, far below expectations for growth of 2%.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Meanwhile, a crisis in Ukraine has deteriorated as Russian President Vladimir Putin won parliamentary backing to send troops into its southern neighbor. Crimea, where Russian speakers comprise the majority, has become the focal point of Ukraine's crisis after an uprising that triggered last month's overthrow of President Viktor Yanukovych. Ukraine has put its forces on combat readiness and US President Barack Obama warned Russia not to intervene.
The US, the UK and Canada are suspending preparations for a meeting of the Group of Eight industrial nations in Russia in June. Russia may lose its membership of the G-8, while the US is considering imposing sanctions, US Secretary of State John Kerry said on Sunday, 2 March 2014.
Crude oil prices rose amid escalating geopolitical tension between Ukraine and Russia, the world's largest energy exporter. Brent crude oil futures for delivery in April 2014 were up $1.64 a barrel or 1.5% at $110.71 a barrel.
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