Rally in index heavyweight and cigarette major ITC took key benchmark indices higher. Shares of the cigarettee major jumped on reports the government may put on hold its plan to ban sales of single cigarettes. The barometer index, the S&P BSE Sensex, was provisionally up 111.52 points or 0.39% at 28,554.23. The market breadth indicating the overall health of the market was positive. Chinese stocks led a rally in Asian shares.
Meanwhile, India's finance ministry after trading hours yesterday, 3 December 2014, announced the setting up of a High Level Committee (HLC) to interact with trade and industry on tax laws.
Bank stocks edged higher in volatile trade. PSU OMCs were in demand.
Earlier, key indices had trimmed gains after an initial rally. The 50-unit CNX Nifty had surged to record high in early trade on firm Asian stocks.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 391.07 crore yesterday, 3 December 2014, as per provisional data.
In overseas markets, European stocks edged higher in choppy trade, with an improving US economic outlook and expectations of further stimulus from the European Central Bank helping the market. Asian stocks edged higher amid fresh signs of resilience in the US economy, the world's biggest economy. In the US yesterday, 3 December 2014, big gains in energy, materials and industrials sectors helped propel the S&P 500 and Dow Jones Industrial Average to record levels.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
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Brent crude oil futures rose after a US government-supply report yesterday, 3 December 2014, showed an unexpected decline in US crude inventories last week.
As per provisional closing, the S&P BSE Sensex was up 111.52 points or 0.39% at 28,554.23. The index jumped 366.07 points at the day's high of 28,808.78 at onset of the day's trading session, its highest level since 1 December 2014. The index rose 6.24 points at the day's low of 28,448.95 in mid-morning trade.
The CNX Nifty was up 26.75 points or 0.31% at 8,564.40, as per provisional data. The index hit a high of 8,626.95 in intraday trade, a record high for the index. The index hit a low of 8,526.40 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,492 shares gained and 1,459 shares fell. A total of 123 shares were unchanged.
The BSE Mid-Cap index was up 25.96 points or 0.25% at 10,525.82. The BSE Small-Cap index was up 35.37 points or 0.31% at 11,471.25. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3949 crore, higher than Rs 3936.82 crore yesterday, 3 December 2014.
Index heavyweight and cigarette major ITC jumped 5.51% to Rs 383. The stock hit high of Rs 383.60 and low of Rs 373. As per reports, the government has indicated that it is in favour of wider consultations before bringing any amendments to the existing laws to restrict the sale of loose cigarettes. As per reports, objections by some MPs, including some Union ministers, and farmers associations may put the health ministry's proposal to ban sale of loose cigarettes on hold. It may be recalled that the health ministry had last month accepted a panel's proposal to ban loose cigarettes to deter smoking.
Bank stocks edged higher in volatile trade. Among PSU bank stocks, State Bank of India (SBI) (up 0.66%), Andhra Bank (up 1.61%), Punjab National Bank (up 0.66%), Canara Bank (up 1.37%), Bank of India (up 1.69%) and Union Bank of India (up 1.8%) gained. Bank of Baroda shed 0.31%.
Among private bank stocks, Kotak Mahindra Bank (up 1%), Yes Bank (up 2.41%), IndusInd Bank (up 1.99%) and ING Vysya Bank (up 0.09%) gained.
Axis Bank ended unchanged for the day at Rs 498.90 after hitting record high of Rs 502.70 in intraday trade.
ICICI Bank rose 0.68% to Rs 361.05 after scaling a record high of Rs 366.30 in intraday trade. ICICI Bank has reportedly reduced the interest rate on retail term deposit, with maturity between 390 days and two years by 25 basis points to 8.75%. The new rate is effective from 28 November 2014. Following this revision, the bank now offers a maximum of 8.75% interest on term deposits of up to Rs 1 crore, from 9% earlier.
HDFC Bank rose 0.84%. HDFC Bank has reportedly lowered its retail term deposit rates by 25-50 basis points on various maturities. The rate cut is effective from 1 December 2014 and is applicable on retail term deposits with maturity between 46 days and one year.
Coal India fell 0.21%. Minister of state for Power, Coal & New and Renewable Energy (Independent Charge) Piyush Goyal today, 4 December 2014, said in a written reply to a question in the Lok Sabha that Coal India has been indicated a gross target to produce 1000 Mt. of coal by 2019-20, which is about double the amount of present level of coal production. The expected growth is to come from identified future projects. Goyal further stated that the envisaged growth is possible in the brown field as well as green field areas and is expected to be achieved through on timely completion of 'New Railway Infrastructure Projects', faster environment & forestry clearances, completion of Rehabilitation & Resettlement with the help of State Government, Improvement in Law & Order situation apart from technology improvement in mining and related infrastructure.
The Union Cabinet has already approved divestment of 10% stake in Coal India.
PSU OMCs were in demand. HPCL rose 0.52%.
BPCL gained 2.15%. BPCL at the fag end of trading session yesterday, 3 December 2014, announced 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.
Indian Oil Corporation (IOCL) rose 0.45%. IOCL announced after market hours yesterday, 3 December 2014, that company along with Mangalore Refinery and Petrochemicals (MRPL) have signed a non-binding Memorandum of Understanding (MoU) with State Trading Corporation (STC), a government entity of Mauritius for exploring the possibilities for setting up oil storage terminal(s) in Mauritius through a joint venture company. For this purpose, a detailed feasibility study and market study would be carried out. The MoU executed on 27 November 2014 does not have any material impact on the financials of IOCL at present, the company said.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.895, compared with its close of 61.91 during the previous trading session.
Brent crude oil futures rose after a US government-supply report yesterday, 3 December 2014, showed an unexpected decline in US crude inventories last week. Brent for January settlement was up 19 cents a barrel at $70.11 a barrel. The contract had slipped 62 cents a barrel to settle at $69.92 yesterday, 3 December 2014.
The finance ministry after trading hours yesterday, 3 December 2014, announced the setting up of a High Level Committee (HLC) to interact with trade and industry on tax laws. The HLC will interact with trade and industry on regular basis and ascertain areas where clarity in tax laws is required. The HLC will give recommendations to the CBDT/CBEC for issuance of appropriate clarifications by way of circulars, instructions etc. on tax issues. The CBDT/CBEC will issue the required clarifications, circulars, instructions etc. within a period of 2 months from the date of receipt of recommendations of the HLC, the finance ministry said in a statement. The term of the committee shall be for one year from the date of its constitution, subject to further extensions, as may be considered appropriate by the Department of Revenue, Ministry of Finance.
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.
European stocks edged higher in choppy trade today, 4 December 2014, with an improving US economic outlook and expectations of further stimulus from the European Central Bank helping the market. Key benchmark indices in UK, France and Germany were up 0.09% to 0.39%.
The European Central Bank (ECB) reviews interest rates today, 4 December 2014, amid speculation policy makers will add to stimulus measures to ward off deflation.
Separately, the Bank of England is seen keeping its interest rates at a record low after a monetary policy review today, 4 December 2014.
Asian stocks edged higher today, 4 December 2014, amid fresh signs of resilience in the US economy, the world's biggest economy. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea were up 0.04% to 0.94%.
Chinese stocks surged on prospects a jump in trading will boost profits at brokerages. In mainland China, the Shanghai Composite index jumped 4.31% to settle at 2,899.46, its highest closing level since May 2011. Hong Kong's Hang Seng index jumped 1.72%.
In Japan, the result of polls by Japanese news organizations today, 4 December 2014, showed that Japanese Prime Minister Shinzo Abe 's ruling Liberal Democratic Party is poised for a landslide victory in Dec. 14 parliamentary elections in Japan. The poll results come despite some disappointing economic news recently for Abe and his pro-growth Abenomics platform built on measures such as monetary easing and measures such as labor-market liberalization. All the polls cautioned that many voters have yet to make up their minds, meaning the final outcome could change. All the polls predicted that the Japan Communist Party, which currently has eight seats, would make gains.
Trading in US index futures indicated that the Dow could rise 15 points at the opening bell today, 4 December 2014. Big gains in energy, materials and industrials sectors, following a rebound in oil and gold prices, helped propel the S&P 500 and Dow Jones Industrial Average to record levels yesterday, 3 December 2014.
In economic data, a private report showed hiring in the US topped 200,000 workers for the seventh time in eight months, while the Federal Reserve's Beige Book indicated widespread hiring. Service industries in the US expanded last month at the second-fastest pace in more than nine months.
US government's monthly nonfarm payrolls report for November will be out tomorrow, 5 December 2014.
Federal Reserve Bank of Dallas President Richard Fisher yesterday, 3 December 2014, said that he'd like the US central bank to revisit its recently revised plans for raising borrowing costs in way that could help ease conditions in the bond market. In remarks in Dallas, Fisher, who will retire from the Fed next March, said he'd like the central bank to think again about its current plan to stop reinvesting the proceeds of maturing Treasury and mortgage bonds into new holdings only after it begins to raise short-term interest rates. The Fed's ongoing reinvestment process is designed to keep its $4.5 trillion balance sheet size steady. If it didn't buy new securities with the proceeds of its maturing holdings, the balance sheet would automatically begin to shrink. In a plan updated in September, the Fed said the reinvestment process would stop only after the Fed begins to raise short-term rates.
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