A bout of volatility was witnessed as key benchmark indices trimmed gains after reversing intraday losses in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was up 11.44 points or 0.05%, off close to 80 points from the day's high and up about 45 points from the day's low. 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 power generation and power distribution companies rose on strong demand from investors for the follow-on public offer of state-run Power Grid Corporation of India (PGCIL). Shares of PGCIL extended initial gains.
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. A bout of volatility was witnessed as key benchmark indices trimmed gains after reversing intraday losses in mid-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 14:20 IST, the S&P BSE Sensex was up 11.44 points or 0.05% to 20,969.25. 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 8.85 points or 0.14% to 6,249.95. 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, 1,249 shares rose and 1,118 shares dropped. A total of 163 shares were unchanged.
From the 30-share Sensex pack, 21 rose and rest fell. Coal India (up 3.67%), Hero MotoCorp (up 2.3%), and Sesa Sterlite (up 1.3%) edged higher from the Sensex pack.
Shares of power generation and power distribution companies rose on strong demand from investors for the follow-on public offer of state-run Power Grid Corporation of India. Torrent Power, GVK Power & Infrastructure, NHPC, Tata Power Company, NTPC, Adani Power, JSW Energy and Reliance Power rose 0.86% to 4.9%,
Power Grid Corporation of India (PGCIL) rose 3.17% to Rs 99.20, with the stock extending intraday gains on strong response from institutional investors to the company's follow-on public offer (FPO). The FPO was subscribed 5.1 times till 14:00 IST on the last day of the bidding for the FPO today, 6 December 2013. The FPO received bids for a total 401.25 crore shares till 14:00 IST today, 6 December 2013, compared with 78.70 crore shares on offer, as per NSE data.
The portion reserved for institutional investors i.e. Qualified Institutional Buyers (QIBs) was subscribed 9.09 times. Thursday was the last day of bidding for the FPO by institutional investors. Category wise subscription data showed that foreign institutional investors (FIIs) put in bids for a total of 186.93 crore shares, compared with 39.20 crore shares reserved for the QIB category as a whole. Domestic financial institutions, which includes banks, financial institutions and insurance companies put in bids for a total of 144.04 crore shares. Mutual funds put in bids for a total of 10.83 crore shares.
Today is the last day for the bidding for the FPO by retail investors and employees of the company. The price band for the FPO has been set at Rs 85 to Rs 90 per share. A discount of Rs 4.50 per share on the final issue price discovered through the book-building route will be available to retail investors and eligible employees of the company.
PGCIL is issuing a total of 78.70 crore shares through the FPO, which includes 60.18 crore fresh equity shares and disinvestment by the Government of India (GoI) of 18.51 crore equity shares held by the President of India, acting through the Ministry of Power. After the successful divestment, GoI's holding in PGCIL will come down to 57.89% from the present level of 69.42%.
PGCIL, a navaratna public sector undertaking under the ministry of power, is the country's central transmission utility (CTU). The company owns and operates more than 90% of India's inter-state and interregional electric power transmission systems (ISTS). As principal electric power-transmission company of the country, it owns and operates 102109 circuit kilometers of electrical transmission lines and 172 electrical substations with a total transformation capacity of 172378 MVA as end of 30 September 2013.
Tata Motors rose 0.18%. The company's British luxury car unit Jaguar Land Rover (JLR) on Thursday, 5 December 2013, said it has decided to set up a manufacturing facility in Brazil following a landmark agreement between the company and state authorities to build a plant in the State of Rio de Janeiro. An agreement paving the way for construction of the plant has been signed by Phil Hodgkinson, Global Business Expansion Director of JLR, and Sergio Cabral, State Governor of Rio de Janeiro. JLR's planned expansion into Brazil is the next major step in the company's strategy to increase its global manufacturing footprint and create additional capacity, the company said in a statement. This new facility will play an important role in supporting the significant growth opportunity identified in Brazil and across other South American markets, JLR said.
Dr Ralf Speth, CEO of Jaguar Land Rover, said: "Brazil and the surrounding regions are very important. Customers there have an increasing appetite for highly capable premium products. This new programme will enable us to bring exciting new vehicles to them, with outstanding British design and engineering, creating a world-class Jaguar Land Rover facility incorporating leading premium manufacturing technologies. We have established excellent working relationships with the State of Rio de Janeiro, the City of Itatiaia & the Rio de Janeiro State Industrial Development Company and we look forward to attracting new customers to our business in this important market".
Based in the City of Itatiaia, the new programme represents a total investment of 750 million reais by 2020. Construction of the premium manufacturing facility will commence in mid-2014. It is anticipated that the first vehicles will come off the assembly line in 2016, subject to the final approval of the plans from the Brazilian Federal Government under its Inovar-auto Programme, JLR said. The new plant will have a capacity to build 24,000 vehicles annually for the Brazilian market. Initially, the plant will employ almost 400 people. This number is expected to almost double by the end of the decade, JLR said. Following a detailed feasibility study, JLR selected the City of Itatiaia, close to the heart of the emerging Regional Automotive Zone, due to its excellent logistics links, access to the local supplier base and skilled workforce, the company said in a statement.
Sergio Cabral, Governor of Rio de Janeiro State commented: "The choice of Rio de Janeiro to host the Jaguar Land Rover's new facility is another historic achievement for our state. We offer perfect conditions to JLR to install its plant in Brazil, as we have an automotive hub in the South Fluminense region that concentrates qualified labour and important suppliers. It is a privilege to welcome this great group, with an estimated investment of up to R$750 million and we are confident that this agreement will bring to Brazil extraordinary results".
SML Isuzu jumped 10.03% after the company said its total vehicle sales rose 11% to 666 units in November 2013 over October 2013. The company announced the sales numbers during market hours today, 6 December 2013. SML Isuzu's total vehicle sales declined 9.51% to 666 units in November 2013 over November 2012.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was currently hovering at 61.67, 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 9.1507%, 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.
European stocks rose on Friday, 6 December 2013, before a US jobs report that may give clues on the timing of Federal Reserve stimulus cuts. Key benchmark indices in France, Germany and UK were up 0.28% to 0.53%.
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 also kept interest rates at a record low of 0.5% on Thursday, despite signs that the UK economy is improving.
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 0.92%. Key benchmark indices in Japan and Hong Kong rose 0.13% 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 41 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.
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