A divergent trend was witnessed as key benchmark indices trimmed gains in mid-morning trade. While the barometer index, the BSE Sensex, was currently a tad higher for the day, the 50-unit CNX Nifty, was in red. The Sensex was currently up 13.36 points or 0.05% at 28,456.07. The BSE Mid-Cap slipped into the red from green. The market breadth indicating the overall health of the market was positive. Meanwhile, 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.
Shares of cigarette makers jumped on reports the government may put on hold its plan to ban sales of single cigarettes. PSU bank stocks were mixed. Shares of private sector banks were mixed.
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, 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.
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.
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At 11:15 IST, the S&P BSE Sensex was up 13.36 points or 0.05% at 28,456.07. 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 off 7.20 points or 0.08% at 8,530.45. The index hit a high of 8,626.95 in intraday trade, a record high for the index. The index hit a low of 8,529.15 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,249 shares gained and 1,148 shares fell. A total of 108 shares were unchanged.
The BSE Mid-Cap index was off 5.01 points or 0.05% at 10,494.85, underperforming the Sensex. The BSE Small-Cap index was up 27.31 points or 0.24% at 11,463.19, outperforming the Sensex.
The total turnover on BSE amounted to Rs 1419 crore by 11:15 IST compared to Rs 975 crore by 10:15 IST.
Shares of cigarette makers jumped on reports the government may put on hold its plan to ban sales of single cigarettes. Godfrey Philips India (up 5.7%) and VST Industries (up 2.48%) edged higher.
Index heavyweight and cigarette major ITC was up 4.37% at Rs 378.85. The stock hit high of Rs 383.60 and low of Rs 373 so far during the day.
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.
Shares of PSU banks declined on profit booking. State Bank of India (SBI) (down 0.8%), Andhra Bank (down 1.21%), Punjab National Bank (down 0.62%), Bank of Baroda (down 0.86%), Canara Bank (down 0.93%), Bank of India (down 0.84%) and Union Bank of India (down 1.62%) declined.
Among private bank stocks, Kotak Mahindra Bank (down 0.29%), Yes Bank (down 0.36%), IndusInd Bank (down 1.08%) declined. ING Vysya Bank rose 0.18%.
Axis Bank fell 1.08% to Rs 493.50. The stock reversed direction after scaling a record high of Rs 502.70 in intraday trade.
ICICI Bank rose 0.91% to Rs 361.90 after scaling a record high of Rs 366.30 in intraday trade. The stock turned ex-split today, 4 December 2014, for 5-for-1 stock split. 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 0.11%. 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.
Tata Power Company fell 1.44%. Tata Power Company after market hours yesterday, 3 December 2014, said that the Y-phase of Generator Transformer 1 has been successfully repaired and energized on 1 December 2014 and Unit-1 has been synchronized with the Grid on 3 December 2014. Earlier on 11 November 2014, Tata Power Company had informed that Unit-1 of Maithon Power (MPL), a subsidiary of the company with Damodar Valley Corporation, had tripped due to failure of Y-phase GT bushing.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.8825, 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 53 cents a barrel at $70.45 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.
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 China, Singapore, Taiwan, Hong Kong, Japan, Indonesia and South Korea were up 0.19% to 2.46%.
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 6 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.
In Europe, 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.
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