After alternately swinging between positive and negative zone in intraday trade, key benchmark indices eked out small gains. The overall movement for the key indices during the trading session was within a relatively narrow range. The barometer index, the S&P BSE Sensex, was provisionally up 11.04 points or 0.04% at 28,455.05. Shares of a number of side counters rose. Shares of construction firms, hospitality shares and auto component makers were in demand. Shares of companies whose fortunes are linked to orders from Indian Railways were also in demand.
The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.39%. The BSE Small-Cap index was up 1.64%. Both these indices outperformed the Sensex.
Meanwhile, a monthly survey showed a pick in activity at Indian services companies last month. Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements.
Auto stocks were in demand on renewed buying. Eicher Motors scaled a record high after a foreign brokerage reportedly resumed coverage on the stock with a 'buy' rating, citing strong demand for Royal Enfield. TVS Motor Company jumped after a foreign brokerage reportedly resumed coverage on the stock with a 'buy' rating and added it to conviction list.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 106.82 crore yesterday, 2 December 2014, as per provisional data.
Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements. Deregulation of diesel prices announced by the government in October 2014 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.
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In overseas markets, European stocks edged higher amid bets that the European Central Bank will expand stimulus. Asian stocks were mixed. US stocks moved higher yesterday, 2 December 2014, sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude oil futures edged higher after a steep slide during the previous trading session.
As per provisional closing, the S&P BSE Sensex was up 11.04 points or 0.04% at 28,455.05. The index gained 60.64 points at the day's high of 28,504.65 at onset of the day's trading session. The index fell 73.28 points at the day's low of 28,370.73 in morning trade, its lowest level since 27 November 2014.
The CNX Nifty was up 12.95 points or 0.15% at 8,537.65. The index hit a high of 8,546.95 in intraday trade. The index hit a low of 8,508.35 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,930 shares gained and 1,082 shares fell. A total of 119 shares were unchanged.
The BSE Mid-Cap index was up 143.75 points or 1.39% at 10,499.86. The BSE Small-Cap index was up 184.67 points or 1.64% at 11,435.88. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3917 crore, higher than Rs 3334.72 crore on Tuesday, 2 December 2014.
ABB India rose 3.09%. The company during market hours today, 3 December 2014, said it has bagged orders worth Rs 334 crore from public utilities, Bihar Grid Corporation (BGCL) and West Bengal State Electricity Transmission Company (WBSETCL), to build new transmission and distribution substations that will boost power supply in the region.
Auto stocks were in demand on renewed buying. Maruti Suzuki India (up 0.89%), Ashok Leyland (up 0.46%) and Mahindra & Mahindra (up 1.42%) edged higher.
Tata Motors shed 0.33% to Rs 527.25. The stock was volatile. The stock hit a high of Rs 538.60 and low of Rs 526.50. Tata Motors after market hours on Tuesday, 2 December 2014, announced that it has received an order for 1,542 Sumo Gold utility vehicles from various police and law enforcement agencies across the country. As one of the country's largest selling utility vehicles, the Sumo Gold is one of the most powerful entry-level utility vehicles, conceived keeping in mind comfort and robust all-round performance, the company said in a statement.
Meanwhile, Tata Motors British luxury car unit Jaguar Land Rover (JLR) yesterday, 2 December 2014, announced that it started construction of its 750 million reais state-of-the-art manufacturing facility in the state of Rio de Janeiro (Brazil) and confirmed plans to build its first overseas Education Business Partnership Centre there. JLR is the first British automotive company to invest in a manufacturing factory in Brazil. In the programme's first phase, the new manufacturing facility in Itatiaia will employ 400 people and will have an annual capacity of around 24,000 vehicles.
Eicher Motors jumped 7.14% to Rs 15,375, also its record high, after a foreign brokerage resumed coverage on the stock with a 'buy' rating, citing strong demand for Royal Enfield.
Among two-wheeler stocks, Bajaj Auto rose 0.08%.
Hero MotoCorp shed 1%. Hero MotoCorp after market hours on Tuesday, 2 December 2014 said the company has roped in golf champion Tiger Woods as its brand ambassador.
TVS Motor Company rose 6.33% to Rs 247 after a foreign brokerage resumed coverage on the stock with a 'Buy' rating and added it to conviction list. The brokerage said TVS Motor Company could benefit from strong scooter segment growth, motorcycle launches and margin expansion.
BPCL shed 0.69%. BPCL at the fag end of trading hours today, 3 December 2014, said 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.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.88, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged higher after a steep slide during the previous trading session. Brent for January settlement was up 68 cents a barrel at $71.22 a barrel. The contract had dropped $2 a barrel to settle at $70.54 during the previous trading session.
Meanwhile, a monthly survey released today, 3 December 2014, showed a pick in activity at Indian services companies last month. Rising from 50 in October to 52.6 in November, the seasonally adjusted HSBC India Services PMI Business Activity Index was consistent with a solid expansion in service sector activity in November. Moreover, the latest reading was the highest in five months, albeit below the series average. The services sector contributes about 60% to India's gross domestic product.
Commenting on the India Services PMI survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition".
The Ministry of Finance after trading hours yesterday, 2 December 2014, said that it is encouraging that the Reserve Bank of India (RBI) has taken note of the structural change in the outlook for inflation. Responding to the Monetary Policy Statement issued by the RBI, the finance ministry said that the government looks forward to the RBI supporting the revival of growth and employment. In the weeks ahead, the government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth, the finance ministry said in a statement.
The RBI kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review, yesterday, 2 December 2014, saying it still needs more proof that inflation is under control before it can start lowering lending rates. In the statement accompanying the rate decision, RBI Governor Raghuram Rajan said that the current slowdown in consumer prices may be short-lived. Rajan said the risk to the January 2016 target of 6% appear evenly balanced under the current policy stance.
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.
Meanwhile, a high level official panel headed by Parthasarathi Shome in its report submitted to the government yesterday, 2 December 2014, suggested reintroduction of the fringe benefit tax (FBT). Reintroducing FBT would be an effective measure to widen the direct tax base, the committee said in its report. This is a good temporary administrative measure for enhancing tax collection, until rising income tax collection makes it unnecessary, the committee said.
The committee said that cash economy is a major problem in the Indian economic system as large scale transactions reportedly take place in cash, especially in land dealings and the construction sector. A nonintrusive verification system should be designed so that more cases of capital gains liability are detected, the committee said in its report.
European stocks edged higher today, 3 December 2014, amid bets that the European Central Bank will expand stimulus. Key benchmark indices in Germany and France were up by 0.21% to 0.24%. In UK, the FTSE 100 index was off 0.05%.
The European Central Bank (ECB) is scheduled to undertake its monthly monetary policy review tomorrow, 4 December 2014.
Asian stocks were mixed today, 3 December 2014. Key benchmark indices in Taiwan, China, Japan and South Korea were up 0.21% to 1.55%. Key benchmark indices in Indonesia, Singapore and Hong Kong were off 0.19% to 0.95%.
The HSBC China services purchasing managers index rose to 53 in November from 52.9 in October, HSBC Holdings PLC said today, 3 December 2014 pointing to modest economic resilience outside the nation's factory sector. A reading above 50 indicates month-to-month expansion while a level below that points to contraction. New orders in the service sector grew at their fastest pace in 30 months, compared with a much weaker showing in factory activity, HSBC said.
Meanwhile, China's official nonmanufacturing purchasing managers' index rose to 53.9 in November from 53.8 in October, data from the China Federation of Logistics and Purchasing showed today, 3 December 2014.
Trading in US index futures indicated Dow could fall 9 points at the opening bell later in the global day today, 3 December 2014. US stocks edged higher on Tuesday, 2 December 2014 sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
Federal Reserve Vice Chairman Stanley Fischer yesterday, 2 December 2014, reportedly said that the US central bank is closer to getting rid of its forward guidance that interest rates would be kept close to zero for a considerable time. But Fischer did not comment on whether the forward guidance would be changed at the next policy meeting in two weeks.
In addition to closely monitored US jobs data for November due on Friday 5 December 2014, investors are awaiting data later this week such as US private sector jobs report for November and the US Federal Reserve Beige Book, both scheduled for release later in the global day today, 3 December 2014.
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