Key benchmark indices alternately swung between positive and negative zone near the flat line in afternoon trade. The CNX Nifty was currently slightly higher for the day. The barometer index, the S&P BSE Sensex, was slightly lower for the day. The Sensex was down 3.84 points or 0.02%, up about 32 points from the day's low and off close to 96 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee edged higher against the dollar.
Shares of tyre major CEAT edged higher in choppy trade. Jaiprakash Associates fell, with the stock sliding on profit taking after recent steep rally.
A bout of volatility was witnessed in early trade as key benchmark indices regained positive terrain after opening lower. Volatility continued as key benchmark indices trimmed initial gains in morning trade. The market hovered in positive terrain in mid-morning trade. The Sesnex slipped into the red in early afternoon trade. Key benchmark indices alternately swung between positive and negative zone near the flat line in afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1151.51 crore on Thursday, 5 December 2013, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was down 3.84 points or 0.02% to 20,953.97. The index rose 92.03 points at the day's high of 21,049.84 in early trade. The index fell 35.36 points at the day's low of 20,922.45 in early trade, its lowest level since 4 December 2013.
The CNX Nifty was up 2.45 points or 0.04% to 6,243.55. The index hit a high of 6,268.15 in intraday trade. The index hit a low of 6,230.75 in intraday trade, its lowest level since 4 December 2013.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 1,177 shares rose and 1,094 shares dropped. A total of 171 shares were unchanged.
From the 30-share Sensex pack, 18 rose and rest fell. Coal India (up 3.47%), Tata Power (up 3.18%), NTPC (up 2.74%), Hero MotoCorp (up 2.29%), Dr Reddy's Laboratories (up 1.06%), Sesa Sterlite (up 1%), ONGC (up 0.74%) and Sun Pharmaceutical Industries (up 0.82%), edged higher from the Sensex pack.
Hindalco Industries (down 1.23%), HDFC (down 1.14%), HDFC Bank (down 1.13%), Bharti Airtel (down 1.07%), Infosys (down 0.84%), GAIL (India) (down 0.64%), Hindustan Unilever (down 0.64%), Reliance Industries (down 0.53%), Tata Steel (down 0.53%) and ICICI Bank (down 0.21%), edged lower from the Sensex pack.
CEAT rose 1.08% to Rs 317.25, with the stock reversing direction after hitting 5% lower circuit. The stock saw immense intraday volatility. The stock opened with downward gap, sliding by the maximum 5% daily circuit and remained locked at the 5% level at Rs 298.20 in early trade. Thereafter, the stock recovered and rose as much as 2.18% at the day's high of Rs 320.70 so far during the trading session.
Shares of CEAT had declined by the maximum permissible level of 5% of the day to settle at Rs 313.85 on Thursday, 5 December 2013, after the Bombay Stock Exchange (BSE) all of a sudden reduced daily circuit filter in the stock to 5% from 10%. BSE on Wednesday, 4 December 2013, announced a reduction in circuit filter in the CEAT counter to 5% from 10%. Before Thursday's slide, shares of CEAT had surged 15.58% in three trading sessions to settle at Rs 330.35 on Wednesday, 4 December 2013, from a recent low of Rs 285.80 on 29 November 2013.
Jaiprakash Associates lost 1.81% to Rs 54.35, with the stock sliding on profit taking after recent steep rally. The stock rallied 19.8% in six trading sessions to settle at Rs 55.35 on Thursday, 5 December 2013 from a recent low of Rs 46.20 on 27 November 2013.
Bharti Infratel (up 5.08%), Torrent Power (up 4.78%), Engineers India (up 4.55%), Amara Raja Batteries (up 3.96%) and UCO Bank (up 3.92%), were among the major gainers from BSE's 'A' group.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was currently hovering at 61.6325, compared with its close of 61.7525/7625 on Thursday, 5 December 2013.
Indian government bond prices dropped as improving US economic data fueled concern that the Federal Reserve will reduce its monthly bond purchases sooner than forecast. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.1297%, higher than its close of 9.1087% on Thursday, 5 December 2013. Bond yields and bond prices are inversely related.
The winter session of parliament began on Thursday, 5 December 2013. The session will end on 20 December 2013.
Counting of votes for assembly elections in Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan takes place on Sunday, 8 December 2013. Counting of votes for assembly elections in Mizoram takes place on Monday, 9 December 2013. The elections were marked by record high turnout in most states. The results are being closely watched by markets as a potential indicator of the mood of voters in the world's biggest democracy before the 2014 general election.
Exit polls on 5 December 2013 predicted a strong performance for the main opposition Bharatiya Janata Party in the state elections held over the past few weeks in Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan. Despite the gains predicted for the BJP in exit polls, it was unable to win a majority of seats in the capital Delhi, two polls showed. One poll suggested the race was close in Chhattisgarh. While the exact results varied from exit poll to exit poll, the general trend was clear: The ruling Congress party recorded embarrassing declines in support in Delhi as well as the western state of Rajasthan. Meanwhile voters in Madhya Pradesh and Chhattisgarh voted basically on the same lines they voted five years ago, backing the main opposition party, the BJP.
On macro front, the Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
Most Asian stocks fell on Friday, 6 December 2013, as improving US economic data fueled concern that the Federal Reserve will reduce its monthly bond purchases sooner than forecast. Key benchmark indices in Taiwan, Indonesia, South Korea, Singapore and China shed 0.09% to 0.77%. Key benchmark indices in Japan and Hong Kong rose 0.14% to 0.81%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Trading in US index futures indicated that the Dow could advance 49 points at the opening bell on Friday, 6 December 2013. US stocks dropped on Thursday, with the Dow Jones Industrial Average and S&P 500 index dropping for a fifth straight session as improving economic data fueled speculation the Federal Reserve may bring forward stimulus cuts.
US gross domestic product climbed at a 3.6% annualized rate in the third quarter, up from an initial estimate of 2.8% and the strongest growth since the first quarter of 2012, data yesterday showed. Claims for unemployment benefits decreased 23,000 to 298,000 in the week ended 30 November 2013.
The US government will release the influential US non-farm payrolls data for November 2013 later in the global day today, 6 December 2013. The Fed has said improvement in the labor market is a key factor in its policy assessment. Investors are keeping a close watch on economic data in the United States as the Federal Reserve monitors the pace of recovery to gauge when it will begin to reduce monetary stimulus for the US economy, which has been aimed at encouraging growth.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
In Europe, the European Central Bank is ready to take fresh policy action to support the euro zone economy but has not yet worked out a detailed plan of which policy tool to use when, the bank's president said on Thursday. After its final policy meeting, Mario Draghi also said the ECB will only offer banks a fresh batch of long-term loans if it is confident they will lend on the funds, putting a question mark over the tool market expect the ECB to use next. The ECB left its key interest rate at 0.25 percent, choosing not to follow through on November's surprise cut.
The Bank of England has also kept interest rates at a record low of 0.5%, despite signs that the UK economy is improving.
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