Volatility continued as key benchmark indices alternately swung between positive and negative zone in morning trade. The barometer index, the S&P BSE Sensex was currently up 4.02 points or 0.01% at 28,698.01. The market breadth indicating the overall health of the market was positive. Global crude oil prices tumbled. Fall in crude oil prices augur well for India as the country 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. Foreign portfolio investors (FPIs) bought shares worth a net Rs 935.86 crore during the previous trading session on Friday, 28 November 2014, as per provisional data.
Shares of public sector oil marketing companies (PSU OMCs) gained as Brent crude oil future hit four-year low, with HPCL hitting record high. Shares of jewellery retailers gained after the Reserve Bank of India eased gold import norms in a bid to curb smuggling of the yellow metal.
Earlier, key benchmark indices had trimmed gains amid volatility in early trade. The 50-unit CNX Nifty had trimmed gains after hitting record high.
In overseas markets, Asian stocks were mixed. In US on Friday, 28 November 2014, the Dow Jones Industrial Average eked out miniscule gains and attained record closing high.
In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in Asian currencies against the dollar.
Brent crude oil futures hit four-year low, extending a steep sell-off after the Organization of Petroleum Exporting Countries (OPEC) decided not to cut production last week. Indian government's decision in October 2014 to decontrol diesel prices 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.
At 10:15 IST, the Sensex was up 4.02 points or 0.01% at 28,698.01. The index jumped 115.65 points at the day's high of 28,809.64 in early trade. The index shed 21.26 points at the day's low of 28,672.73 in morning trade.
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The Nifty was up 3.40 points or 0.04% at 8,591.65. The index hit a high of 8,623 in intraday trade, a record high for the index. The index hit a low of 8,583.50 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,112 shares gained and 772 shares fell. A total of 44 shares were unchanged.
The BSE Mid-Cap index was up 46.42 points or 0.45% at 10,317.03. The BSE Small-Cap index was up 29.64 points or 0.26% at 11,300.43. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 685 crore by 10:15 IST compared to Rs 271 crore by 09:30 IST.
Among the 30-share Sensex pack, 16 stocks gained and rest of them declined.
Shares of public sector oil marketing companies (PSU OMCs) gained as Brent crude oil future hit four-year low. Indian Oil Corporation (IOCL) advanced 1.33% to Rs 369.55. BPCL rose 1.09% to Rs 754.
HPCL gained 2.72% to Rs 613 after scaling a record high of Rs 617.55 in intraday trade.
Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. 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. The government has already freed pricing of petrol and diesel.
Meanwhile, petrol prices were reduced by Rs 0.91 per litre and diesel prices by Rs 0.84 with effect from midnight of 30 November 2014 and 1 December 2014. The international prices of both petrol and diesel have continued to be on a downtrend, IOCL said in a statement yesterday, 30 November 2014. The rupee dollar exchange rate has however appreciated since the last price change on 1 November 2014, IOCL said. The combined impact of both these factors warrant a decrease in retail selling prices of both petrol and diesel, IOCL said.
The movement of prices in international oil market and rupee dollar exchange rate shall continue to be closely monitored and developing trends of the market will be reflected in future price changes, IOCL said.
Shares of jewellery retailers gained after the Reserve Bank of India late on Friday, 28 November 2014, eased gold import norms in a bid to curb smuggling of the yellow metal.
Gitanjali Gems (up 20%), Shree Ganesh Jewellery House (up 20%), Tribhovandas Bhimji Zaveri (up 14.35%), PC Jeweller (up 8.47%), Tara Jewels (up 9.07%), Titan Company (up 5.84%), Thangamayil Jewellery (up 9.92%) and Rajesh Exports (up 5.8%) surged.
The Reserve Bank of India (RBI) in a circular said that the Government of India has decided to withdraw the 20:80 scheme and restrictions placed on import of gold. Accordingly, all instructions issued about the 20:80 scheme stand withdrawn with immediate effect, the RBI said in a notification.
In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in Asian currencies against the dollar. The rupee was hovering at 62.145, compared with its close of 62.035 during the previous trading session on Friday, 28 November 2014.
Brent crude oil futures touched a fresh four-year low, extending a steep sell-off after Organization of Petroleum Exporting Countries (OPEC) decided not to cut production last week. Brent for January settlement was off $1.68 a barrel at $68.47 a barrel. The contract had dropped $2.43 a barrel to settle at $70.15 on Friday, 28 November 2014, the lowest close since 25 May 2010.
India's economic growth eased in Q2 September 2014 mainly due to moderation in the growth of the agricultural and industrial sectors, data released by the Central Statistical Office after trading hours on Friday, 28 November 2014, showed. The GDP grew 5.3% in Q2 September 2014, compared with 5.7% expansion in Q1 June 2014. The services sector growth has shown improvement for the second straight quarter in Q2 September 2014. On the demand side, the net foreign demand weakened, while the domestic investment demand growth slowed sharply to remain flat from 7% in Q1 June 2014. However, the domestic private consumption and government consumption growth improved in Q2 September 2014.
GDP growth in the first half of current fiscal year stood at 5.5%, compared with 4.9% expansion during the corresponding period in the previous year. India's GDP grew 4.7% in 2013-14.
HSBC India Manufacturing Purchasing Managers' Index (PMI) for November 2014 will be released today, 1 December 2014. Adjusted for seasonal influences, the headline HSBC India PMI - a composite indicator designed to give a single-figure snapshot of manufacturing operating conditions - rebounded from September's nine-month low of 51 to 51.6 in October.
The government plans to introduce the nationwide Goods and Service Tax (GST) in April 2016, the Minister of State for Finance, Jayant Sinha, said in written reply to a question in Lok Sabha on Friday, 28 November 2014. The various aspects of GST design are being discussed in the Empowered Committee of State Finance Ministers so that there is broad consensus regarding modalities of its implementation, the government said. GST has been so designed that credit of taxes paid at every stage of value addition from the point of manufacture to the point of consumptions can be availed at the next stage. GST is essentially a tax on value addition and there is seamless transfer of input tax credit across the value chain. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
According to the government, GST will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of production and inflation in the economy, therby making the Indian trade and industry more competitive domestically as well as internationally. It is also expected that introduction of GST will foster a common or seamless Indian market and contribute significantly to the growth of the economy, according to the government.
The government is likely to introduce the constitutional amendment bill for GST during the ongoing winter session of parliament.
Sinha also said in written reply to another question in Lok Sabha on Friday, 28 November 2014, that a series of reforms have been initiated by the government and that many more reforms are on the anvil.
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.
The Reserve Bank of India (RBI) undertakes monetary policy review tomorrow, 2 December 2014. The central bank aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
Asian stocks were mixed today, 1 December 2014. Key benchmark indices in Singapore, Taiwan, Hong Kong and South Korea were of 0.48% to 1.73%. Key benchmark indices in China, Indonesia and Japan were up 0.12% to 0.66%.
The HSBC China manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, fell to a six-month low of 50 in November from 50.4 in October, HSBC Holdings PLC said today, 1 December 2014. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates expansion.
China's official manufacturing Purchasing Managers Index fell to 50.3 in November compared with 50.8 in October, the National Bureau of Statistics, said today, 1 December 2014.
Trading in US index futures indicated that the Dow could fall 60 points at the opening bell today, 1 December 2014. US stocks posted a mixed finish in a holiday-shortened session on Friday, 28 November 2014, as energy shares got slammed a day after the Organization of the Petroleum Exporting Countries (OPEC) did nothing to alleviate a global supply glut. The Dow Jones Industrial Average eked out a gain of 0.49 point to end at 17,828.24, marking another record close.
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