Key benchmark indices surged after data released by the Reserve Bank of India (RBI) after trading hours on Wednesday, 5 March 2014, showed that India's current account deficit declined sharply in Q3 December 2013. The barometer index, the S&P BSE Sensex, hit record high on intraday as well as closing basis. The 50-unit CNX Nifty attained record closing high. The Sensex jumped 237.01 points or 1.11%, up 183.99 points from the day's low and off 11.27 points from the day's high. The market breadth, indicating the overall health of the market was strong. Except BSE Healthcare index, all the other sectoral indices on BSE were in the green. The BSE Small-Cap and Mid-Cap indices rose more than 1% each, with both these indices outperforming the Sensex. The market sentiment boosted by data showing that foreign institutional investors (FIIs) remained buyers of Indian stocks on Wednesday, 5 March 2014. Gains in Asian and European stocks also boosted sentiment on the domestic bourses.
Indian stocks edged higher for the third day in a row today, 6 March 2014. The Sensex has garnered 567.22 points or 2.7% in three trading sessions from a recent low of 20,946.65 on Monday, 3 March 2014. The Sensex has risen 1,000.02 points or 4.87% in this month so far (till 6 March 2014). The Sensex has risen 343.19 points or 1.62% so far in calendar 2014 (till 6 March 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 4,065.16 points or 23.29%.
Coming back to today's trade, airline stocks rose as crude oil prices declined. Realty stocks edged higher for the second day in a row. Mining and metal stocks gained for the second day in a row after China's Premier Li Keqiang on Wednesday, 5 March 2014, said that consumption, investment, trade and innovation will drive the country's economic growth this year as he set 7.5% GDP growth target for the year.
The market edged higher in early trade after data released by the Reserve Bank of India (RBI) after trading hours on Wednesday, 5 March 2014, showed that India's current account deficit declined sharply in Q3 December 2013. The Sensex extended initial gains and hit fresh intraday high in morning trade. Key benchmark indices extended gains and hit fresh intraday high in afternoon trade. A bout of volatility was witnessed in mid-afternoon trade as key benchmark indices trimmed gains soon after the Sensex scaled a record high. Key benchmark indices extended gains extended gains in late trade.
The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Wednesday, 5 March 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 747.90 crore from the secondary equity markets on Wednesday, 5 March 2014, as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex jumped 237.01 points or 1.11% to settle at 21,513.87, a record closing high. The index jumped 248.28 points at the day's high of 21,525.14 in late trade, surpassing its previous record high of 21,483.74 it had reached on 9 December 2013. The index rose 53.02 points at the day's low of 21,329.88 in early trade.
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The CNX Nifty garnered 72.50 points or 1.15% to settle at 6,601.15, a record closing high. The index hit a high of 6,406.60 in intraday trade, just a few points away from its record high of 6,415.25 which it had struck on 9 December 2013. The index hit a low of 6,339.70 in intraday trade.
The BSE Mid-Cap index garnered 80.49 points or 1.21% to settle at 6,708. The BSE Small-Cap index garnered 80.02 points or 1.22% to settle at 6,626.46. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2680 crore, higher than Rs 2354.96 crore on Wednesday, 5 March 2014.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,701 shares gained and 1,033 shares fell. A total of 149 shares were unchanged.
The S&P BSE Realty index (up 4.09%), the S&P BSE Power index (up 2.45%), the S&P BSE Metal index (up 2.23%), the S&P BSE Oil & Gas index (up 2.23%), the S&P BSE Capital Goods index (up 1.81%), the S&P BSE Bankex (up 1.68%), the S&P BSE Consumer Durables index (up 1.5%) outperformed the Sensex.
The S&P BSE Auto index (up 0.85%), the S&P BSE Teck index (up 0.48%), the S&P BSE FMCG index (up 0.44%), the S&P BSE IT index (up 0.25%) and the S&P BSE Healthcare index (down 0.27%) underperformed the Sensex.
Among the 30-share Sensex pack, 24 stocks rose and rest of them fell.
Index heavyweight and cigarette maker ITC rose 0.35% to Rs 334.05. The stock was volatile trade. The scrip hit high of Rs 335.20 and low of Rs 330.40.
Index heavyweight Reliance Industries (RIL) rose 2% to Rs 823. The stock hit high of Rs 824.40 and low of Rs 809.35. Reliance Jio Infocomm (Reliance Jio), a subsidiary of RIL, and Bharti Infratel, early this week announced the signing of a Master Services Agreement. Under the agreement, Reliance Jio would utilize the telecom tower infrastructure of Bharti Infratel to launch its services across the country. As per the agreement, the pricing would be at 'arm's length,' based on prevailing market rates.
Shares of Bharti Infratel rose 4%, with the stock extending Wednesday's gains.
Shares of PSU OMCs rose as crude oil prices declined and as the rupee edged higher against the dollar. BPCL (up 4.49%), HPCL (up 3.69%) and Indian Oil Corporation (up 3.86%) gained. Lower crude oil prices could reduce under-recoveries of public sector oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at government controlled prices. US crude oil futures for April delivery were off 10 cents or 0.1% to $101.35 a barrel in electronic trading today. On Wednesday, 5 March 2014, crude oil for April delivery fell $1.88, or 1.8%, to settle at $101.45 a barrel on the New York Mercantile Exchange.
Gains in rupee against the dollar aided gains in shares of PSU OMCs. A firm rupee will reduce cost of crude oil imports. PSU OMCs import about 70-75% of their crude oil needs.
PSU OMCs hiked the price of petrol by 60 paise and diesel by 50 paise per litre effective 1 March 2014 midnight amid rising crude oil prices and depreciation of rupee against the dollar. This price hike is exclusive of local taxes. PSU OMCs also hiked the price of jet fuel or aviation turbine fuel by 1% effective 1 March 2014.
Separately, the price of non-subsidized cooking gas (LPG), which customers buy after using up their quota of 12 subsidised cylinders, was cut by Rs 53.5 per cylinder, the second straight reduction in rates since February.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the second fortnight of February 2014. The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of March 2014 rose to Rs 8.37 per/litre. This was Rs 8.31 per litre during the second fortnight of February 2014. In case of PDS Kerosene, the under-recovery is Rs 36.34 per litre for March 2014. The under-recovery is Rs 605.80 per cylinder for domestic LPG cylinders for March 2014. While the under-recovery for diesel is calculated on fortnightly basis, the under-recovery for PDS Kerosene and LPG is calculated on monthly basis.
In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.
Car major Maruti Suzuki India rose 1.64%. The company after trading hours on Wednesday, 5 March 2014, said its total production declined 9.8% to 1.08 lakh units in February 2014 over February 2013. The monthly production data includes CBU imports of Kizashi.
Separately, Maruti Suzuki India announced after market hours on Wednesday, 5 March 2014, that Indian Railways and Maruti flagged off a new high capacity railway rake called (BCACBM) on Wednesday setting a new benchmark in transportation of new cars through railways. Named 'Flexi deck auto-wagon rake', it brings the advantages of higher capacity, flexibility, faster speed and environmental friendliness to rail transportation of cars.
The 'Flexi deck auto-wagon rake' designed by Indian Railway's Research Design and Standards Organization has 20 per cent additional capacity (318 cars) as compared to the current twin-decker rakes (265 cars), used for rail transportation. The new rake, with its height adjustable middle-deck is highly flexible and can transport vehicles of multiple dimensions. The new rake can move at speed of upto 95 km per hour as compared to 65 km per hour of the existing rakes. The new rake can travel between Gurgaon and Bangalore in around 5 days as compared to 7 days by road transportation. Transporting cars by new 'Flexi deck auto-wagon rake' will lead to reduction in carbon emission making it more environment friendly.
The 1st Flexi deck auto-wagon rake consisting of 27 wagons chugged off to Nidavanda, Bangalore from Gurgaon carrying a mixed load of Maruti Suzuki cars including Swift, Dzire, Alto, Wagon R and Omni. Maruti Suzuki is India's first automobile company to procure flexi deck auto-wagon rakes. Maruti Suzuki has initially procured three such rakes of 27 wagons each. These rakes will be primarily deployed in the high-volume West and South India destinations. In the long term, the company will dispatch cars through railways to several destinations like Nagpur, Siliguri, Mumbai, Pune, Mundra, Kolkata etc. In the coming times, Maruti Suzuki will order more rakes to meet its growing transportation requirement.
On the occasion of the flag off, Mr. Kenichi Ayukawa, Managing Director and CEO, Maruti Suzuki said: "We are delighted to have initiated this contemporary mode of transport to the Indian automobile industry. Indian Railways deserves all the credit for their foresight and tremendous enthusiasm and co-operation to make this initiative move from a concept to reality within a short span of around 36 months".
On the occasion Mr. M.M. Singh, Chief Operating Officer (Production), Maruti Suzuki said: "The induction of 'flexi deck auto-wagon rake' will start a new chapter in automotive logistics in the country. Trains are one of the fastest, safest and eco-friendly modes of transportation. With these newly designed rakes we have been able to increase the load carrying capacity along with a high flexibility to cater to a variety of vehicle dimensions. We are happy that Indian Railways supported the initiative of Maruti Suzuki to enhance the country's transportation infrastructure".
To streamline the railways transportation, Maruti Suzuki will develop infrastructure at the off-loading destinations. Initially, Maruti Suzuki has developed a railway station at Nidavanda, near Bangalore. The Nidavanda station has a capacity to handle nearly 300 vehicles presently. As Maruti Suzuki has big volumes for South India destinations, Bangalore will be used as a feeder point for dealer network.
With the 'Flexi deck auto-wagon rake' in place the Indian Railways and Maruti Suzuki will jointly relieve the road infrastructure of the excessive load and bring modern, high capacity vehicle transportation to the country's logistics map.
Interestingly, the Maruti Suzuki has been using rail transportation mode for over two decades. In 2008 Maruti Suzuki joined hands with Indian railways and developed double-deck container trains to enhance the load carrying capacity. These continue to be used by Maruti Suzuki mainly for the export vehicles from its' manufacturing plants in Haryana to Mundra port.
While the dispatch through railways increased from 2% in 2007-08 to over 5% in 2012-13, with the commissioning of the Flexi Deck Auto-Wagon rakes, the company is confident rail transportation would substantially increase in the future.
Lupin fell 0.81%. Lupin after market hours today, 6 March 2014, announced that it has received final approval for its Doxycycline Capsules USP, 50 mg, 75 mg, and 100 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Aqua Pharmaceuticals Monodox Capsules 50 mg, 75 mg, and 100 mg. Lupin's Doxycycline Capsules 50mg, 75mg and 100mg are the AB-rated generic equivalents of Aqua Pharmaceuticals, LLC's Monodox Capsules 50mg, 75mg and 100mg and are indicated in the treatment of infections caused by various microorganisms and as an adjunctive therapy in severe acne.
The company also received final approval from the FDA for its Ciprofloxacin for Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) to market a generic version of Bayer HealthCare Pharmaceuticals, Inc.'s (Bayer) Cipro for Oral Suspension 5 g/100 mL and 10 g/100 mL, Lupin said. Lupin's Ciprofloxacin Oral Suspension, 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) is the generic equivalent of Bayer's Cipro Oral Suspension 5 g/100 mL (250 mg/5 mL) and 10 g/100 mL (500 mg/5 mL) and indicated for the treatment of infections caused by susceptible isolates of the designated microorganisms in various conditions and patient populations.
Lupin is the first applicant to file an ANDA for Cipro Oral Suspension 250 mg/ml & 500 mg/ml and as such is entitled to 180 days of marketing exclusivity. Lupin Pharmaceuticals Inc. (LPI), the company's US subsidiary would commence marketing the products shortly, Lupin said in a statement.
Monodox Capsules had annual US sales of $180.6 million (IMS MAT Dec, 2013) whereas Cipro Oral Suspension had annual US sales of $8.6 million (IMS MAT Dec, 2013).
Zee Entertainment Enterprises rose 0.68%. Zee Entertainment Enterprises after market hours today, 6 March 2014, said that the company has issued and allotted 20,169,423,120 - 6% Cumulative Redeemable Non-Convertible Preference Shares (Bonus Preference Shares) of Re 1 each fully paid as bonus to the company's equity shareholders as on record date i.e. 4 March 2014, in ratio of 21 bonus preference shares for every 1 equity share held in the company.
Bank shares rose across the board. Among private bank stocks, Yes Bank (up 4.66%), Federal Bank (up 0.31%), IndusInd Bank (up 1.07%), ICICI Bank (up 2.56%), Axis Bank (up 2%), Kotak Mahindra Bank (up 1.4%), HDFC Bank (up 1.18%) gained.
Among PSU bank stocks, Union Bank of India (up 2.11%), Bank of Baroda (up 0.39%), Canara Bank (up 1.1%), Bank of India (up 0.47%), Punjab National Bank (up 0.43%), State Bank of India (up 0.05%) edged higher.
Shares of power generation and power distribution companies edged higher. GVK Power & Infrastructure (up 4.41%), Adani Power (up 0.68%), Reliance Infrastructure (up 10.01%), NTPC (up 2.63%), JSW Energy (up 3.01%), Power Grid Corporation of India (up 1.67%) and Reliance Power (up 4.91%) gained.
Tata Power Company gained 1.36% after the company said after market hours on Wednesday, 5 March 2014, that the duly empowered committee of the board of directors of the company will meet on Saturday, 8 March 2014, to consider and decide upon the terms and conditions of the proposed rights issue including the rights entitlement ratio, the issue price, the issue size, record date, the timing of the rights issue and other related matters.
CMC rose 3.82% to Rs 1550 after the company said its board of directors at a meeting held today, 6 March 2014, decided, subject to shareholders' approval, to enhance the limit of shareholding of foreign institutional investors (FIIs) to 35% of the paid up share capital of the company. CMC is a subsidiary of IT major TCS.
Shares of TCS lost 0.45%.
Tech Mahindra rose 1.31%. Tech Mahindra during market hours today, 6 March 2014 said it has inaugurated the Texas Instruments Lab, in Bengaluru. This lab will allow the company to launch innovative solutions based on the concept of Internet of Things (IoT) in Industrial, Medical and Automotive sectors, Tech Mahindra said.
The Internet of Things (IoT) is an evolving space with billions of devices being connected on the fly. More and more consumers are looking for intelligence from connected devices, equipments and infrastructure. Today's consumers are excited with solutions that are connected, smart, efficient and affordable which can help them to perform their day to day work effectively. Likewise, enterprises are looking at connected ecosystems to drive customer satisfaction, efficiency in operations and for increased predictability in their business. Tech Mahindra sees this collaboration with TI as a compelling opportunity to synergize capabilities while addressing this market opportunity, the company said in a statement.
Mining and metal stocks gained for the second day in a row after China's Premier Li Keqiang on Wednesday, 5 March 2014, said that consumption, investment, trade and innovation will drive the country's economic growth this year as he set 7.5% GDP growth target for the year. China is the world's largest consumer of copper and aluminum. National Aluminum Company (up 2.89%), Jindal Steel & Power (up 2.72%), Hindalco Industries (up 4.42%), Sesa Sterlite (up 2.06%), Tata Steel (up 2.53%), JSW Steel (up 1.51%), Sail (up 3.01%), and Hindustan Copper (up 1.74%) gained.
Capital goods stocks edged higher for the second day in a row. Crompton Greaves (up 3.97%), L&T (up 1.86%), Bhel (up 4.05%), Punj Lloyd (up 3.84%) and Siemens (up 1.27%) gained. ABB India fell 2.5%.
Container Corporation of India rose 6.48% to Rs 852.30 on reports FTSE increased investability weightage of the stock in its Global Equity Index. The stock was fifth biggest gainer in 'A' group.
According to reports, FTSE raised Container Corporation of India's investability weightage to 30% from 24% earlier. The changes will be effective after the close of business on Friday, 21 March 2014 (i.e. 24 March 2014), reports added.
An increase in investability weightage of a stock in global benchmark indices such as FTSE, prompts buying from passive trackers of the FTSE indices.
FTSE, which is a part of the London Stock Exchange Group, is a world-leader in providing global index and analytical solutions. FTSE indices are used extensively by a range of investors such as consultants, asset owners, fund managers, investment banks, stock exchanges and brokers
ALSTOM India rose 2.92% after the company said it won a contract worth approximately Rs 679 crore from state-run Bhel to supply two supercritical boilers for a super thermal power project in Odisha. The company made the announcement after trading hours on Wednesday, 5 March 2014.
ALSTOM India said it won a contract worth approximately Rs 679 crore by Bharat Heavy Electricals (Bhel) to supply two 800 megawatts (MW) supercritical boilers for Darlipalli super thermal power project (STPP) located in Sundergarh, in the State of Odisha (India). This project forms part of NTPC's bulk 800 MW tender.
Under the scope of the contract, Alstom, the sole licensor for Bhel supercritical technology, will design the 800 MW supercritical boilers and supply identified pressure parts along with windboxes, pulverizers and airpreheater components. The company will also assist Bhel with technical advisors during the erection and commissioning of the units. Key components will be manufactured in Alstom's facilities in Concordia and Wellsville, USA, as well as in Durgapur and Shahabad, India. The units are expected to be commissioned starting in 2017, the company said in a statement.
Out of the entire aforesaid contract, ALSTOM India's scope of work would be approximately Rs 379.80 crore, ALSTOM India said.
IL&FS Transportation Networks jumped 6.29% after the company said it has approved the allotment of 1,000 rated, listed, redeemable, non-convertible debentures aggregating to Rs 100 crore on a private placement basis. The company made the announcement after market hours on Wednesday, 5 March 2014. IL&FS Transportation Networks (ITNL) said that the Committee of Directors approved the allotment of 1,000 rated, listed, redeemable, non-convertible debentures of the face value of Rs 10 lakh each aggregating to Rs 100 crore on a private placement basis on Tuesday, 4 March 2014. These debentures will be listed on the National Stock Exchange of India (NSE), the company said.
The company had earlier issued 10,000 debentures of Rs 10 lakh each aggregating Rs 1000 crore. With the aforesaid allotment the company has as of date issued and allotted 11,000 debentures of Rs. 10 lakh each aggregating to Rs 1100 crore.
Reliance Anil Dhirubhai Ambani (ADA) Group shares surged. Reliance Communications (up 2.39%), Reliance Broadcast Network (up 0.37%), Reliance Capital (up 3.9%) and Reliance MediaWorks (up 4.09%) gained.
Astrazeneca Pharma India dropped 9.83% to Rs 1058.25 after the company said its board deferred the proposed delisting of the firm's shares from the domestic stock exchanges. The company made the announcement after trading hours on Wednesday, 5 March 2014. AstraZeneca Pharma India (the company), the Indian arm of Swedish drug maker AstraZeneca Pharmaceuticals AB (AZP AB), has deferred its delisting from the stock exchanges, which had been proposed by its parent company last week. The company's board, at a meeting on Wednesday, 5 March 2014, decided to seek additional information on the delisting proposal from the parent. Pending receipt of such additional information, consideration of the promoter's letter dated 1 March 2014 was deferred, the Indian company said in a statement.
On Saturday, 1 March 2014, the company said that its board received a letter from AZP AB, promoter of the company, proposing to delist the equity shares of the company from Indian stock exchanges (BSE, NSE and Bangalore Stock Exchange). AZP AB holds 75% in the company.
Realty stocks edged higher for the second day in a row. DLF (up 5.01%), D B Realty (up 4.11%), HDIL (up 7.22%), Sobha Developers (up 0.97%), Prestige Estates Projects (up 12.23%) and Unitech (up 3.85%) gained.
Airline stocks rose as crude oil prices declined. Jet Airways (up 2.59%) and SpiceJet (up 6.73%) gained. Crude oil futures for April delivery were off 12 cents or 0.12% to $101.33 a barrel in electronic trading today. On Wednesday, 5 March 2014, crude oil for April delivery fell $1.88, or 1.8%, to settle at $101.45 a barrel on the New York Mercantile Exchange.
Jet fuel prices are linked to crude oil prices. PSU OMCs revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight. Aviation turbine fuel or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices.
Thomas Cook (India) rose 3.68% after the company said it has partnered with meet & greet service provider 'marhaba' to ensure a swift, smooth and safe passage for Indian travelers at Dubai, Abu Dhabi and Bahrain airports. The announcement was made during trading hours today, 6 March 2014.
In the foreign exchange market, the rupee rose sharply against the dollar after data released by the Reserve Bank of India (RBI) after trading hours on Wednesday, 5 March 2014, showed that India's current account deficit declined sharply in Q3 December 2013. The partially convertible rupee was hovering at 61.12, compared with its close of 61.75/76 on Wednesday, 5 March 2014.
Indian government bond prices rose on optimism a shrinking current-account deficit will boost the rupee and prompt foreign investors to buy more local debt. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7922%, lower than its close of 8.8419% on Wednesday, 5 March 2014. Bond yield and bond prices move in opposite direction.
India's current account deficit (CAD) narrowed sharply to $4.2 billion or 0.9% of GDP in Q3 December 2013, from $31.9 billion or 6.5% of GDP in Q3 December 2012. CAD in Q3 December 2013 was also lower than $5.2 billion or 1.2% of GDP in Q2 September 2013. The lower CAD was primarily on account of a decline in the trade deficit as merchandise exports picked up and imports moderated, particularly gold imports, the Reserve Bank of India (RBI) said.
On a BoP basis, merchandise exports rose 7.5% year-on-year to $79.8 billion in Q3 December 2013 on the back of significant growth especially in the exports of engineering goods, readymade garments, iron ore, marine products and chemicals. On the other hand, merchandise imports dropped 14.8% year-on-year at $112.9 billion in Q3 December 2013. The decline in imports in Q3 December 2013 was primarily led by a steep decline in gold imports, which amounted to $3.1 billion as compared to $17.8 billion in Q3 December 2012 and $3.9 billion in Q2 September 2013.
Net services receipts improved during Q3 December 2013, essentially reflecting a decline in payments on account of services imports. Net services at $18.1 billion in Q3 December 2013 recorded a growth of 8.9% year-on-year.
In the financial account, on net basis, foreign direct investment registered inflows of $6.1 billion and foreign portfolio investment recorded inflows $2.4 billion in Q3 December 2013. Within portfolio investment, the debt segment showed net outflow in Q3 which, however, was offset by higher net inflows of $6.2 billion under the category of equity. On a BoP basis, there was a net accretion of $19.1 billion to India's foreign exchange reserves in Q3 December 2013 as compared to a drawdown of $10.4 billion in the preceding quarter, the RBI said in a statement.
The turnaround in export growth and decline in imports from July 2013 onwards led to a sharp improvement in the trade deficit to $116.9 billion in April-December 2013, from $150 billion in April-December 2012. Contraction in the trade deficit, coupled with a rise in net invisibles receipts, resulted in a reduction of the CAD to $31.1 billion (2.3% of GDP) in April-December 2013, from $69.8 billion (5.2% of GDP) in April-December of 2012. Net inflows under the capital and financial account (excluding change in foreign exchange reserves) declined to $39.7 billion in April-December 2013, from $68.5 billion in corresponding period of 2012-13 owing to net outflows on account of portfolio investment, higher repayment of loans, and trade credit & advances. On BoP basis, foreign exchange reserves increased by $8.4 billion during April-December 2013, as compared with an accretion of $1.1 billion in April-December 2012.
Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
Business activity across emerging markets expanded in February at the slowest pace in five months, weighed down by weaker manufacturing in big developing countries such as Russia and China, a survey showed on Thursday, 6 March 2014. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys slipped for the third month running to 51.1 in February. It stayed under the 2013 average of 51.7 and well below a long-run level of 54. But the monthly index remained above the 50 threshold which marks the difference between expansion and contraction.
Based on data from purchasing managers at about 8,000 firms in 17 countries, the survey showed Chinese factory output stayed below the 50 mark. Manufacturing in Russia, India and Brazil hovered just above 50.
On the domestic political front, the Election Commission on Wednesday, 5 March 2014, announced the dates for 2014 Lok Sabha elections. The polls will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014.
The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh, including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
An estimated 81.4 crore voters will be eligible to vote in the coming elections after 9.71 crore new voters have been added to the rolls since the last elections. From the coming elections, candidates in a Parliamentary constituency in bigger states can spend up to Rs 70 lakh on their campaign, up from Rs 40 lakh in 2011. In the 2009 elections, it was Rs 25 lakh.
The 2014 Lok Sabha elections will see the introduction of "None of the Above" (NOTA) option in voting, which came into vogue in the assembly elections a few months ago.
European stocks edged higher on Thursday, 6 March 2014, as investors awaited the European Central Bank's interest-rate decision and US data on jobless claims. Key benchmark indices in France, Germany and UK were up 0.07% to 0.57%.
A monthly meeting of the Governing Council of the European Central Bank (ECB) is scheduled today, 6 March 2014, in Frankfurt to decide euro zone interest rates.
A two-day meeting of Bank of England's (BoE) Monetary Policy Committee (MPC) ends today, 6 March 2014, to decide interest rates in UK. Policy rates are expected to remain unchanged at record low. The UK's central bank slashed interest rates to record low of 0.5% at the height of the financial crisis in 2009. The BoE is also expected to keep its bond-purchase plan unchanged at 375 billion pounds ($626 billion).
European Union leaders will consider repercussions for Russia at an emergency meeting today, 6 March 2014, on the Ukraine crisis, after Russia's foreign minister fended off a US effort to ease tensions in the Crimean peninsula. Western nations are threatening Russia with sanctions over its military intervention in Crimea while pursuing diplomacy in an effort to defuse the situation.
On Wednesday, US Secretary of State John Kerry described his Paris meeting with his Russian counterpart Sergei Lavrov over Ukraine as "tough", but promised to continue talking. Mr Kerry said he was committed to working with Moscow to ease the crisis. However, he stressed afterwards that that Russia's violation of Ukrainian sovereignty "would not go unanswered".
On Wednesday, the UN special envoy in Crimea, Robert Serry, was forced to cut his mission short after he was threatened by pro-Russian armed men in Crimea's regional capital, Simferopol. Nato chief Anders Fogh Rasmussen on Wednesday said he would be conducting a "full review" of the alliance's co-operation with the Kremlin.
Asian stocks edged higher on Thursday, 6 March 2014, with shares of telecommunications companies leading gains. Key benchmark indices in China, Singapore, Japan, South Korea, Indonesia, Taiwan and Hong Kong were up 0.22% to 1.59%.
China's Finance Minister Lou Jiwei today, 6 March 2014, said economic growth below the government's target is acceptable, with employment, not the exact level of expansion, being key. China's Premier Li Keqiang yesterday, 5 March 2014, kept China's annual growth target unchanged at 7.5% for 2014.
Trading in US index futures indicated that the Dow could advance 25 points at the opening bell on Thursday, 6 March 2014. US stocks finished a choppy trading day on Wednesday generally lower with blue-chips falling the most, as investors reacted mildly to mostly disappointing economic reports.
US companies added 139,000 workers in February, fewer than the market estimates, a sign that employers were waiting for a pickup in demand before boosting headcount, a report from the ADP Research Institute in Roseland, New Jersey showed on Wednesday.
Separate data indicated that service industries in the US expanded in February at the slowest pace in four years, reflecting a plunge in hiring that shows the biggest part of the economy is struggling as harsher weather weighs on consumers and businesses. The Institute for Supply Management's non- manufacturing index slipped to 51.6 in February from 54 the previous month.
The Federal Reserve said the economy in most regions grew last month even as harsh winter weather impeded hiring, disrupted supply chains, and kept customers away from stores and auto dealerships. Eight of the Fed's 12 districts "reported improved levels of activity, but in most cases the increases were characterized as modest to moderate," the central bank said in its Beige Book business survey.
Federal Reserve Chair Janet Yellen vowed on Wednesday to do all that she can to boost the US economy that is running well short of the central bank's objectives. "The economy continues to operate considerably short of these objectives" of maximum employment and stable prices, Yellen said according to prepared remarks at a swearing-in ceremony at the central bank in Washington. "The economy is stronger and the financial system is sounder," added Yellen, who succeeded Ben Bernanke on February 1. "We have come a long way, but we have farther to go."
"Too many Americans still can't find a job or are forced to work part-time," Yellen said on Wednesday, underscoring her long-standing focus on the troubled labor market. "I promise to never forget the individual lives, experiences and challenges that lie behind the statistics we use to gauge the health of the economy," she said. "When we make progress toward our goals, each job that is created lifts this burden for someone who is better equipped to be a good parent, to build a stronger community, and to contribute to a more prosperous nation."
Turning to Wall Street reforms, Yellen said the Fed will move forward "quickly and responsibly" to complete the work that remains to safeguard the financial system.
Richard Fisher, president of the Federal Reserve Bank of Dallas, on Wednesday said he was concerned about "eye-popping levels" of some stock market metrics, and said the central bank has to monitor the signs carefully to make sure another bubble isn't forming. In his speech in Mexico City, Fisher said some indicators like the price-to-projected forward earnings, price-to-sales ratios and market capitalization as a percentage of GDP, are at levels not seen since the dot-com boom of the late 1990s. He noted that margin debt is pushing up against all-time records. "We must monitor these indicators very carefully so as to ensure that the ghost of 'irrational exuberance' does not haunt us again," Fisher said. While a few Fed officials have mentioned unease about stock prices, Fisher's comments are the most pointed to date. Fisher did not spare the bond market, saying that narrow spreads between corporate and Treasury debt "reflect lower risk premia on top of already abnormally low nominal yields." Fisher is a voting member of the Fed's monetary policy committee this year. He has been a strong opponent of the Fed's latest round of asset purchases.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
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