Key benchmark indices slipped into the red in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently below the psychological 21,000 mark, having alternately moved above and below that mark in intraday trade so far. The Sensex, was down 14.55 points or 0.07%, off close to 110 points from the day's high and up about 20 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.
Index heavyweight Reliance Industries (RIL) declined. Shares of private banks fell. Shares of PSU banks rose. PSU stocks rose on strong demand from investors for follow on public offer of state-run Power Grid Corporation of India.
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. It hovered in positive terrain in mid-morning trade. It slipped into the red in early 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 12:20 IST, the S&P BSE Sensex was down 14.55 points or 0.07% to 20,943.26. 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 down 1.15 points or 0.02% to 6,239.85. The index hit a low of 6,230.75 in intraday trade, its lowest level since 4 December 2013. The index hit a high of 6,268.15 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 1,060 shares rose and 967 shares dropped. A total of 145 shares were unchanged.
From the 30-share Sensex pack, 17 rose and rest fell. Hindalco Industries (down 1.44%), HDFC (down 1.4%) and Bharti Airtel (down 1.1%) declined.
Index heavyweight Reliance Industries (RIL) fell 0.33% to Rs 867. The stock hit high of Rs 874.40 and low of Rs 865.55 so far during the day.
Shares of private banks fell. ICICI Bank (down 0.02%), HDFC Bank (down 0.71%), Kotak Mahindra Bank (down 0.21%) ad Yes Bank (down 0.98%) declined.
Shares of PSU banks rose. State Bank of India, Canara Bank, Union Bank of India, Bank of India and Bank of Baroda gained 0.18% to 2%.
Punjab National Bank rose 1.13% to Rs 588.30. The bank after trading hours on Thursday, 5 December 2013, said it is seeking approval of shareholders at EGM to be held on 16 December 2013 for allotment of 85.96 lakh equity shares to the majority shareholder viz. the Government of India (GoI) at issue price of Rs 581.63 per share. The state-run bank said the issue price and the number of shares to be issued to GoI has been revised due to change in the relevant date due to the last moment change in holiday on account of Muharram from 14 November 2013 to 15 November 2013.
Maruti Suzuki India rose 0.39%. The company announced during market hours that production fell 10.25% to 93,900 units in November 2013 over November 2012. The company had said on 2 December 2013 its total sales declined 10.7% to 92,140 units in November 2013 over November 2012. Domestic sales dropped 5.9% to 85,510 units in November 2013 over November 2012. Export sales declined 46.2% to 6,630 units in November 2013 over November 2012.
PSU stocks rose on strong demand from investors for follow on public offer of state-run Power Grid Corporation of India. State Trading Corporation of India, Hindustan Copper, Andrew Yule & Company, MMTC, Bhel, BEML, Engineers India, ITI, Shipping Corporation of India, HMT, ONGC, Oil India, Coal India, NHPC, NTPC, Neyveli Lignite Corporation, BPCL, HPCL and IOCL rose 0.19% to 6.78%.
Power Grid Corporation of India (PGCIL) rose 1.66% to Rs 97.75 on strong response from institutional investors to the company's follow-on public offer (FPO). The FPO was subscribed 4.77 times till Thursday, 5 December 2013. The FPO received bids for a total 375.73 crore shares by the end of the third day of the bidding for the issue on Thursday, 5 December 2013, compared with 78.70 crore shares on offer, as per NSE data. Thursday was the last day of bidding for the FPO by institutional investors. The portion reserved for institutional investors i.e. Qualified Institutional Buyers (QIBs) was subscribed 9.09 times.
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.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was currently hovering at 61.63, 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 9.1245%, 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.
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 0.8%. Key benchmark indices in Japan and Hong Kong rose 0.24% 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 32 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 Nov. 30.
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.
In Europe, 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 has also kept interest rates at a record low of 0.5%, despite signs that the UK economy is improving.
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