A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, registered marginal losses whereas the 50-unit CNX Nifty registered small gains. The two benchmark indices alternately swung between positive and negative zone in intraday trade. Yet, the overall movement for the key indices during the trading session was within a relatively narrow range. The barometer index, the S&P BSE Sensex, lost 1.30 points to settle at 28,442.71. The Sensex hit its lowest closing level in nearly a week. Shares of a number of side counters rose, with quite a few stocks registering decent to strong gains.
The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index rose 1.39%. The BSE Small-Cap index gained 1.64%. Both these indices outperformed the Sensex.
Meanwhile, a monthly survey showed a pick in activity at Indian services companies last month. Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements.
Auto stocks were in demand on renewed buying. Eicher Motors scaled a record high after a foreign brokerage reportedly resumed coverage on the stock with a 'buy' rating, citing strong demand for Royal Enfield. TVS Motor Company jumped after a foreign brokerage reportedly resumed coverage on the stock with a 'buy' rating and added it to conviction list. Shares of auto component makers rose. Shares of hospitality also edged higher. Shares of construction companies surged after the Department of Industrial Policy & Promotion (DIPP) issued a notification announcing relaxation of foreign direct investment in property development and construction sector.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 130.60 crore from the secondary equity markets yesterday, 2 December 2014.
Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements. Deregulation of diesel prices announced by the government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
In overseas markets, European stocks edged lower in volatile trade. Asian stocks were mixed. US stocks moved higher yesterday, 2 December 2014, sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
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In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged higher after a steep slide during the previous trading session.
The Sensex lost 1.30 points to settle at 28,442.71, its lowest closing level since 27 November 2014. The index gained 60.64 points at the day's high of 28,504.65 at onset of the day's trading session. The index fell 73.28 points at the day's low of 28,370.73 in morning trade.
The CNX Nifty gained 12.95 points or 0.15% to settle at 8,537.65, its highest closing level since 1 December 2014. The index hit a high of 8,546.95 and low of 8,508.35 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,930 shares gained and 1,082 shares fell. A total of 119 shares were unchanged.
The BSE Mid-Cap index rose 143.75 points or 1.39% to settle at 10,499.86. The BSE Small-Cap index gained 184.67 points or 1.64% to settle at 11,435.88. Both these indices outperformed the Sensex.
The S&P BSE IT index (down 0.19%) and the S&P BSE Teck index (down 0.16%) underperformed the Sensex. The S&P BSE Realty index (up 1.32%), the S&P BSE Power index (up 1.06%), the S&P BSE Bankex (up 0.43%), the S&P BSE Healthcare index (up 0.01%), the S&P BSE Consumer Durables index (up 0.28%), the S&P BSE Capital Goods index (up 0.96%), and the S&P BSE Metal index (up 0.04%), the S&P BSE Oil & Gas index (up 0.99%), and the S&P BSE Auto index (up 1.34%), outperformed the Sensex.
The total turnover on BSE amounted to Rs 3917 crore, higher than Rs 3334.72 crore on Tuesday, 2 December 2014.
Strides Arcolab rose 1.65%. The company after market hours today, 3 December 2014, said that its wholly owned subsidiary -- STELIS Biopharma -- today, 3 December 2014, announced the ground-breaking for construction of its customized, multi-product, biopharmaceutical manufacturing facility at Bio-Xcell Biotechnology Park in Nusajaya, Johor, Malaysia's premier park and ecosystem for industrial and healthcare biotechnology. STELIS Biopharma and Bio-XCell had previously announced the signing of a build and lease agreement with Bio-Xcell for the construction of the building and part of the equipment of STELIS Biopharma's 1.4 lakh square foot biologics facility for a total investment of RM 201 million ($60 million).
Shares of construction companies surged after the Department of Industrial Policy & Promotion (DIPP) issued a notification announcing relaxation of foreign direct investment in property development and construction sector. Ashoka Buildcon (up 5.72%, Jaiprakash Associates (up 0.34%), Hindustan Construction Company (up 7.07%), NCC (up 5.53%), L&T (up 0.07%), Unity Infraprojects (up 4.16), Valecha Engineering (up 10.6%), Patel Engineering (up 14.16%), IVRCL (up 5.41%), and Gammon India (up 7.86%), gained. IRB Infrastructure & Developers declined 0.79%.
Realty stocks also edged higher. DLF (up 1.34%), D B Realty (up 1.75%), Godrej Properties (up 6.48%), Oberoi Realty (up 3.72%) and Unitech (up 0.27%) gained. Housing Development and Infrastructure declined 2.16%.
ABB India rose 3.09%. The company during market hours today, 3 December 2014, said it has bagged orders worth Rs 334 crore from public utilities, Bihar Grid Corporation (BGCL) and West Bengal State Electricity Transmission Company (WBSETCL), to build new transmission and distribution substations that will boost power supply in the region.
Auto stocks were in demand on renewed buying. Maruti Suzuki India (up 0.89%), Ashok Leyland (up 0.46%) and Mahindra & Mahindra (up 1.42%) edged higher.
Tata Motors shed 0.33% to Rs 527.25. The stock was volatile. The stock hit a high of Rs 538.60 and low of Rs 526.50. Tata Motors after market hours on Tuesday, 2 December 2014, announced that it has received an order for 1,542 Sumo Gold utility vehicles from various police and law enforcement agencies across the country. As one of the country's largest selling utility vehicles, the Sumo Gold is one of the most powerful entry-level utility vehicles, conceived keeping in mind comfort and robust all-round performance, the company said in a statement.
Meanwhile, Tata Motors British luxury car unit Jaguar Land Rover (JLR) yesterday, 2 December 2014, announced that it started construction of its 750 million reais state-of-the-art manufacturing facility in the state of Rio de Janeiro (Brazil) and confirmed plans to build its first overseas Education Business Partnership Centre there. JLR is the first British automotive company to invest in a manufacturing factory in Brazil. In the programme's first phase, the new manufacturing facility in Itatiaia will employ 400 people and will have an annual capacity of around 24,000 vehicles.
Eicher Motors jumped 7.14% to Rs 15,375, also its record high, after a foreign brokerage resumed coverage on the stock with a 'buy' rating, citing strong demand for Royal Enfield.
Among two-wheeler stocks, Bajaj Auto rose 0.08%.
Hero MotoCorp shed 1%. Hero MotoCorp after market hours on Tuesday, 2 December 2014 said the company has roped in golf champion Tiger Woods as its brand ambassador.
TVS Motor Company rose 6.33% to Rs 247 after a foreign brokerage resumed coverage on the stock with a 'Buy' rating and added it to conviction list. The brokerage said TVS Motor Company could benefit from strong scooter segment growth, motorcycle launches and margin expansion.
Shares of auto component makers were in demand. Amtek Auto (up 0.59%), Bharat Gears (up 1.94%), Bosch (up 6.37%), Sona Koyo Steering Systems (up 1.45%) and Subros (up 2.86%) gained.
Tyre stocks were in demand on renewed buying. Apollo Tyres (up 1.4%), Goodyear India (up 1.38%), JK Tyre & Industries (up 1.68%) and TVS Srichakra (up 5.15%) gained.
MRF jumped 9.48% to Rs 37,542.75 after scaling a record high of Rs 37,722.35in intraday trade.
MRF in a clarification with regard to news item titled "MRF embarks upon Rs 4000 crore expansion" said that the company in line with its long term strategy proposes to increase capacities across all its existing factories. These proposals are an ongoing process as part of the company's capex plan over a period of time, for its eight factories situated at various places in the country, MRF said. The capex mentioned in the article is its broad estimation which will depend upon cash flows and review of the company's capex needs, MRF said. These proposals are currently tentative and as and when the same becomes definite, the company will keep the stock exchange(s) informed, if there are any material developments in compliance with clause 36 of the Listing Agreement, MRF said
CEAT dropped 5.39% to Rs 849.75. Shares allotted by the company to institutional investors under Qualified Institutional Placement (QIP) were admitted for trading on the bourses today, 3 December 2014. CEAT had priced the issue of a total of 44.94 lakh shares to institutional investors at Rs 890 per share.
BPCL shed 0.69%. BPCL at the fag end of trading hours today, 3 December 2014, said that its board of directors have given their approval for diversification into Petrochemicals at an estimated capital cost of Rs 4588 crore. BPCL plans to produce niche petrochemicals such as Acrylic Acid, Acrylates and Oxo Alcohols, that are predominantly being imported into the country, at its Kochi Refinery facility, using the Polymer Grade Propylene that will be available after the ongoing Integrated Refinery Expansion Project (IREP) is completed, the company said. The major end uses are in paints and coatings, adhesives, plasticisers, solvents, water treatment etc. The unit is expected to come on stream during the Financial Year 2018-19. The project proposal will now be submitted for obtaining environmental clearance, BPCL said.
Hospitality stocks gained. Taj GVK Hotels (up 4.13%), Indian Hotels (up 4.31%), EIH (up 3.6%), EIH Associated Hotels (up 2.5%) and Royal Orchid Hotel (up 3.94%) rose. Hotel Leela Ventures declined 2.94%.
The Sensex slipped for the third day in a row today, 3 December 2014. From a record closing high of 28,693.99 on 28 November 2014, the Sensex has declined 251.28 points or 0.87% in three trading sessions. The Sensex has declined 251.28 points or 0.87% in this month so far (till 3 December 2014). The Sensex has gained 7,272.03 points or 34.34% in calendar year 2014 so far (till 3 December 2014). From a record high of 28,822.37 struck on Friday, 28 November 2014, the Sensex has fallen 379.66 points or 1.31%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,479.59 points or 42.47%.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.91, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged higher after a steep slide during the previous trading session. Brent for January settlement was up 18 cents a barrel at $70.72 a barrel. The contract had dropped $2 a barrel to settle at $70.54 during the previous trading session.
Meanwhile, a monthly survey released today, 3 December 2014, showed a pick in activity at Indian services companies last month. Rising from 50 in October to 52.6 in November, the seasonally adjusted HSBC India Services PMI Business Activity Index was consistent with a solid expansion in service sector activity in November. Moreover, the latest reading was the highest in five months, albeit below the series average. The services sector contributes about 60% to India's gross domestic product.
Commenting on the India Services PMI survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition".
The Ministry of Finance after trading hours yesterday, 2 December 2014, said that it is encouraging that the Reserve Bank of India (RBI) has taken note of the structural change in the outlook for inflation. Responding to the Monetary Policy Statement issued by the RBI, the finance ministry said that the government looks forward to the RBI supporting the revival of growth and employment. In the weeks ahead, the government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth, the finance ministry said in a statement.
The RBI kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review, yesterday, 2 December 2014, saying it still needs more proof that inflation is under control before it can start lowering lending rates. In the statement accompanying the rate decision, RBI Governor Raghuram Rajan said that the current slowdown in consumer prices may be short-lived. Rajan said the risk to the January 2016 target of 6% appear evenly balanced under the current policy stance.
The Indian government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the winter session of parliament which began on 24 November 2014. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.
Meanwhile, a high level official panel headed by Parthasarathi Shome in its report submitted to the government yesterday, 2 December 2014, suggested reintroduction of the fringe benefit tax (FBT). Reintroducing FBT would be an effective measure to widen the direct tax base, the committee said in its report. This is a good temporary administrative measure for enhancing tax collection, until rising income tax collection makes it unnecessary, the committee said.
The committee said that cash economy is a major problem in the Indian economic system as large scale transactions reportedly take place in cash, especially in land dealings and the construction sector. A nonintrusive verification system should be designed so that more cases of capital gains liability are detected, the committee said in its report.
European stocks edged lower in volatile trade today, 3 December 2014. Key benchmark indices in UK and France were down by 0.11% to 0.26%. Germany's DAX rose 0.01%.
The European Central Bank (ECB) is scheduled to undertake its monthly monetary policy review tomorrow, 4 December 2014.
Asian stocks were mixed today, 3 December 2014. Key benchmark indices in Taiwan, China, Japan and South Korea were up 0.21% to 1.55%. Key benchmark indices in Indonesia, Singapore and Hong Kong were off 0.19% to 0.95%.
The HSBC China services purchasing managers index rose to 53 in November from 52.9 in October, HSBC Holdings PLC said today, 3 December 2014 pointing to modest economic resilience outside the nation's factory sector. A reading above 50 indicates month-to-month expansion while a level below that points to contraction. New orders in the service sector grew at their fastest pace in 30 months, compared with a much weaker showing in factory activity, HSBC said.
Meanwhile, China's official nonmanufacturing purchasing managers' index rose to 53.9 in November from 53.8 in October, data from the China Federation of Logistics and Purchasing showed today, 3 December 2014.
Trading in US index futures indicated Dow could fall 17 points at the opening bell later in the global day today, 3 December 2014. US stocks edged higher on Tuesday, 2 December 2014 sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
Federal Reserve Vice Chairman Stanley Fischer yesterday, 2 December 2014, reportedly said that the US central bank is closer to getting rid of its forward guidance that interest rates would be kept close to zero for a considerable time. But Fischer did not comment on whether the forward guidance would be changed at the next policy meeting in two weeks.
In addition to closely monitored US jobs data for November due on Friday 5 December 2014, investors are awaiting data later this week such as US private sector jobs report for November and the US Federal Reserve Beige Book, both scheduled for release later in the global day today, 3 December 2014.
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