A bout of volatility was witnessed as key benchmark indices alternately swung between positive and negative zone in mid-afternoon trade. Yet, the overall movement for the key indices was within in a relatively narrow range. The barometer index, the S&P BSE Sensex, was currently up 23.08 points or 0.08% at 28,467.09. Shares of a number of side counters rose. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.61%. The BSE Small-Cap index was up 1.7%. 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.
Index heavyweight Reliance Industries (RIL) extended intraday gains. Tyre stocks were in demand on renewed buying, with MRF hitting record high. Among side counters, shares of biscuits major Britannia Industries, Bajaj Finserv and Castrol India scaled record high.
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. 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.
In overseas markets, European stocks reversed initial gains. 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.
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In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude oil futures edged higher after a steep slide during the previous trading session.
At 14:18 IST, the S&P BSE Sensex was up 23.08 points or 0.08% at 28,467.09. 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 15.50 points or 0.18% at 8,540.20. 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, 1,897 shares gained and 978 shares fell. A total of 117 shares were unchanged.
The BSE Mid-Cap index was up 166.66 points or 1.61% at 10,522.77. The BSE Small-Cap index was up 191.33 points or 1.7% at 11,442.54. Both these indices outperformed the Sensex.
Index heavyweight Reliance Industries gained 0.93% to Rs 971.45. The stock hit a high of Rs 973.60 and low of Rs 960.90 so far during the day.
Tyre stocks were in demand on renewed buying. Apollo Tyres (up 1.17%), Balkrishana Industries (up 0.82%), Goodyear India (up 0.13%), JK Tyre & Industries (up 1.13%) and TVS Srichakra (up 4.7%) gained.
MRF jumped 7.59% to Rs 36,897 after scaling a record high of Rs 37,160 in intraday trade.
CEAT dropped 4.79% to Rs 855.15. Shares allotted by the company to institutional investors under Qualified Institutional Placement (QIP) were admitted for trading on the bourses today, 3 December 2014. CEAT had priced the issue of a total of 44.94 lakh shares to institutional investors at Rs 890 per share.
Shriram Transport Finance Company surged 3.98% to Rs 1,157.05 after scaling a record high of Rs 1,160.45 in intraday trade.
Bajaj Finserv jumped 8.46% to Rs 1,247.80 after scaling a record high of Rs 1,249.80 in intraday trade.
Shares of biscuits major Britannia Industries gained 3.52% to Rs 1,806.50 after scaling a record high of Rs 1,825 in intraday trade.
Castrol India advanced 3.29% to Rs 522 after scaling a record high of Rs 527.85 in intraday trade.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.92, 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 53 cents a barrel at $71.07 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 today, 3 December 2014, reversed initial gains. Key benchmark indices in UK and France were off by 0.05% to 0.06%. In Germany, the DAX index was up 0.17%.
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 Singapore, Indonesia and Hong Kong were off 0.13% 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 10 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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