Key benchmark indices regained positive terrain in early afternoon trade after reports monsoon could arrive on India's southeast coast in the next day or so. The monsoon is important for the farm sector, as around 70% of the country's farmlands are rain-fed. The rains have an impact on the whole economy, as rural spending on consumer goods depends on the rainfall. The barometer index, the S&P BSE Sensex, was up 11.67 points or 0.05%, up close to 170 points from the day's low and off about 10 points from the day's high. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Mid-Cap and Small-Cap indices were up more than 1% each.
Some pharma majors declined. PSU OMCs gained as crude oil prices declined with BPCL scaling record high. Shree Cement scaled record high.
A bout of volatility was witnessed in initial trade as key benchmark indices regained positive terrain after slipping into the red after opening higher. Key benchmark indices edged lower and hit fresh intraday low in morning trade. The Sensex trimmed intraday losses in mid-morning trade. It regained positive terrain in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 192.56 crore on Wednesday, 4 June 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 11.67 points or 0.05% to 24,817.50. The index rose 25.96 points at the day's high of 24,831.79 in early trade. The index fell 160.95 points at the day's low of 24,644.88 in morning trade, its lowest level since 3 June 2014.
The CNX Nifty was up 13.05 points or 0.18% to 7,415.30. The index hit a high of 7,418.15 in intraday trade. The index hit a low of 7,360.50 in intraday trade, its lowest level since 3 June 2014.
The BSE Mid-Cap index was up 104.32 points or 1.18% at 8,970.60. The BSE Small-Cap index was up 146.09 points or 1.54% to 9,634.80. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 1,874 shares rose and 777 shares fell. A total of 83 shares were unchanged.
Some pharma majors declined. Cipla (down 1.17%), Dr Reddy's Laboratories (down 1.23%), Divi's Laboratories (down 0.08%), Cadila Healthcare (down 0.02%) and Sun Pharmaceutical Industries (down 0.13%) declined. Ranbaxy Laboratories (up 0.16%) and Lupin (up 0.6%) gained.
PSU OMCs gained as crude oil prices declined. HPCL (up 2.75%) and Indian Oil Corporation (IOCL) (up 2.45%) gained. BPCL rose 2.9% to Rs 593.45 after hitting record high of Rs 604.55 in intraday trade.
US crude oil futures for July delivey fell 21 cents to $102.43 a barrel in electronic trade today. Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
PSU OMCs hiked diesel prices by 50 paise a litre, excluding state levies, with effect from 1 June 2014.
The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of June effective 2 June 2014 will go down to Rs 2.80 per litre. This was Rs 4.41 per litre during the second fortnight of May 2014 w.e.f. 16 May 2014. In the case of PDS Kerosene, the under-recovery for the first fortnight of June 2014 will be Rs 32.87 per litre, lower than Rs 33.84 per litre in the preceding fortnight. In case of domestic LPG, the under-recovery for the first fortnight of June 2014 will be Rs 432.71 per cylinder, lower than Rs 449.13 per cylinder in the preceding fortnight. The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas has reviewed international prices of crude oil and petroleum products during the 2nd fortnight of May 2014.
Oil Marketing Companies (OMCs), effective from 2nd June 2014, are now incurring combined daily under-recovery of about Rs 262 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is less than Rs 318 crore daily under-recoveries during the preceding fortnight.
Shree Cement surged 8.17% to Rs 7,801.10 after hitting record high of Rs 7,955 in intraday trade.
Ramkrishna Forgings lost 4.79% as the stock turned ex-dividend today, 5 June 2014, for dividend of Rs 1 per share for the year ended 31 March 2014.
Capital First declined 0.57% as the stock turned ex-dividend today, 5 June 2014, for dividend of Rs 2 per share for the year ended 31 March 2014.
KSK Energy Ventures surged 4.53% to Rs 117.70 after the firm said it has approved an issue price of Rs 99 per share as part of QIP issue of 4.04 crore equity shares aggregating to approximately Rs 400 crore. The announcement was made after market hours on Wednesday, 4 June 2014. KSK Energy Ventures after trading hours on Wednesday, 4 June 2014, said that the QIP Committee of the board of directors of the company has closed the bids and approved an issue price of Rs 99 per share, which includes premium of Rs 89 per share, in connection with the proposed issue and allotment of 4.04 crore equity shares aggregating to approximately Rs 400 crore.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.30, compared with its close of 59.33/34 on Wednesday, 4 June 2014.
India's southern coast could witness the arrival of this year's monsoon in the next day or so after sporadic rains in recent days heralded the arrival of the wet season that is crucial to farmers in Asia's third-largest economy. "Conditions have turned favourable for the monsoon onset in about 24 hours," an official of the India Meteorological Department (IMD) told one of the leading media agency on Thursday.
Prime Minister Narendra Modi will reportedly visit Washington to meet President Barack Obama in September, signalling a new start in ties with a leader once denied a visa by the United States.
Modi on Wednesday, 4 June 2014, held discussions with Secretaries of all the Ministries and senior officers of the Departments of the Government of India. Such a meeting has taken place after more than eight years, the Prime Minister's Office (PMO) said in a statement. The Prime Minister listened extensively to suggestions and comments of the Secretaries for nearly two and a half hours. He empathized with the sentiment expressed by the Secretaries and their anguish in not being able to realize their true potential because of circumstances. However, he expressed full faith in their commitment and competence to build a better future for the country.
He called upon the senior bureaucrats to simplify and streamline the administrative rules and procedures to make them people-friendly. He emphasized the need for a team spirit and urged the Secretaries to be leaders of their teams. He also encouraged the officers to take decisions and assured them that he would stand by them. He added that in the process of governance, ideas should be converted into institutions because institutions last longer than individuals. However, he clarified that there may be rules and processes which have become outdated, and instead of serving the process of governance, they are leading to avoidable confusion. He stressed upon the need to identify and do away with such archaic rules and procedures. He even added that the process of governance of his government should begin with cleaning-up of the offices, improving the workplace, which would automatically result in a better work culture and efficient services to the citizens.
The Prime Minister emphasized the need for use of technology for greater efficiency and effectiveness in administration. He further added that in a democracy, redressal of citizens' grievances is very important, and information technology can help greatly in this regard. He also added that through use of technology, and better understanding among departments, administrative and schematic convergence is possible. Only through collective action, faster results can be achieved. The Prime Minister offered that he would always be ready to give an account of the work being done by him. The senior bureaucrats echoed this sentiment and welcomed a similar standard of accountability.
The Prime Minister said that he was accessible to all officers and encouraged them to approach him with their inputs and ideas.
The Reserve Bank of India (RBI)'s third bi-monthly monetary policy statement is scheduled on 5 August 2014. The RBI kept repo rate, its main lending rate, unchanged at 8% after a monetary policy review on 3 June 2014. The central bank at that time signaled it would ease monetary policy if inflation slows faster than targeted.
Finance Minister Arun Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
Most Asian stocks edged lower on Thursday, 5 June 2014, as investors await a European Central Bank policy decision later in the global day. Key benchmark indices in Indonesia, Singapore, Hong Kong, and Indonesia were off 0.13% to 0.65%. Key benchmark indices in China, Taiwan and Japan rose 0.08% to 0.42%.
HSBC/Markit's measure of the China service sector eased to 50.7 in May from April's 51.4, though that was still above the 50-point level that is supposed to separate growth from contraction.
Trading in US index futures indicated that the Dow could gain 4 points at the opening bell on Thursday, 5 June 2014. US stocks edged up on Wednesday with the S&P 500 index ending at a new record as investors brushed off weaker-than-expected labor market data and focused on an acceleration in services-sector growth.
Service industries in the US expanded at the fastest pace in nine months in May. The Institute for Supply Management said its services sector index rose to 56.3 last month from 55.2 in April as new orders, order backlogs and hiring increased. It was the highest reading in nine months. The Federal Reserve said in its Beige Book review of regional conditions that the world's largest economy expanded at a modest to moderate pace last month. The Beige Book, released two weeks before policy makers meet, supported Fed Chair Janet Yellen's view that the US economy is rebounding from a 1% contraction in the first quarter caused largely by harsh winter weather. The Commerce Department said the trade gap increased 6.9% to $47.2 billion in April as imports hit a record high and exports slipped. It was the largest deficit in two years.
A private report showed employment rose less than economists projected. Private employers added 179,000 jobs to their payrolls last month after hiring 215,000 workers in April, according to payrolls processor ADP.
The influential US nonfarm payroll data for May 2014 is due for release tomorrow, 6 June 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
In Europe, expectations are that ECB will announce new stimulus measures when the Governing Council of the ECB holds a monthly meeting on euro area interest rates today, 5 June 2014.
Bank of England's Monetary Policy Committee will probably keep its benchmark interest rate at a record-low 0.5% and leave its bond-purchase program unchanged at a monthly meeting on interest rates in UK today, 5 June 2014.
German factory orders rebounded in April from the biggest plunge in more than a year, signaling that growth in Europe's largest economy remains on track. Orders, adjusted for seasonal swings and inflation, increased 3.1% from March, when they declined 2.8%, the Federal Statistics Office in Wiesbaden said today.
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