Key benchmark indices reversed losses and hit fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 27.93 points or 0.13%, up close to 100 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The rupee recouped almost entire initial losses against the dollar after data released by the Reserve Bank of India (RBI) on Monday, 2 December 2013, showed that India's current account deficit narrowed sharply in Q2 September 2013.
Capital goods stocks rose on renewed buying. L&T gained after the company said its construction division has secured orders valued at Rs 1471 crore across various business segments in November and December 2013. Metal stocks extended Monday's gains triggered by data showing that manufacturing activity in China continued to grow last month. Shares of tyre maker CEAT scaled record high.
A bout of volatility was witnessed in early trade as key benchmark indices trimmed losses after a lower opening. Volatility continued as key benchmark indices slipped into the red after reversing initial losses in morning trade. The Sensex regained positive terrain and hit fresh intraday high in mid-morning trade.
At 11:20 IST, the S&P BSE Sensex was up 27.93 points or 0.13% to 20,925.94. The index rose 28.84 points at the day's high of 20,926.85 in mid-morning trade. The index lost 71.28 points at the day's low of 20,826.73 in early trade.
The CNX Nifty was up 1.70 points or 0.03% to 6,219.55. The index hit a high of 6,222.15 in intraday trade. The index hit a low of 6,194.25 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,117 shares rose and 864 shares dropped. A total of 140 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks rose and rest fell. GAIL (India) (up 2.2%), Maruti Suzuki India (up 1.42%) and Wipro (up 0.71%) gained.
Metal stocks extended Monday's gains triggered by data showing that manufacturing activity in China continued to grow last month. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power (up 3.58%), JSW Steel (up 0.16%), NMDC (up 1.01%), Sail (up 0.58%), Sesa Sterlite (up 0.46%), Hindustan Copper (up 0.14%), Hindustan Zinc (up 0.36%) and National Aluminum Company (up 0.65%), gained. Tata Steel fell 0.01%.
China last month released a broad outline for structural reform of the economy.
Capital goods stocks rose on renewed buying. ABB (up 1.31%), Bhel (up 1.26%), Crompton Greaves (up 1.9%) and Punj Lloyd (up 3.69%) gained.
L&T rose 0.29%, with the stock extending Monday's gains. The company said during market hours that its construction division has secured orders valued at Rs 1471 crore across various business segments in November and December 2013.
L&T late last week said it is evaluating alternatives for monetisation of certain assets of its subsidiary L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore. The proposed transactions are subject to various factors including approvals and market conditions and may or may not be completed, L&T said. In the meantime, shareholders and other investors are reminded to exercise caution when deal in the company's shares, pending any definite announcement from the company, L&T said in a statement.
L&T IDPL is primarily engaged in public-private partnership projects in India, with business interests spread across sectors involving roads and bridges, ports, metro rail, wind energy and power transmission lines. It has experience in identifying and assessing viability of projects, achieving financial closure, project management, operations and maintenance of infrastructure assets across various sectors as well as divestiture.
CEAT rose 1.08% to Rs 296 after hitting record high of Rs 298.40 in intraday trade.
In the foreign exchange market, the rupee recouped almost entire initial losses against the dollar after data released by the Reserve Bank of India (RBI) on Monday, 2 December 2013, showed that India's current account deficit narrowed sharply in Q2 September 2013. The partially convertible rupee was hovering at 62.33, compared with its close of 62.315/325 on Monday, 2 December 2013.
The Reserve Bank of India (RBI) after trading hours on Monday, 2 December 2013, said that based on preliminary figures, India's current account deficit (CAD) narrowed sharply to $5.2 billion or 1.2% of GDP in Q2 September 2013, from $21 billion or 5% of GDP in September 2012. The CAD was also much lower than 4.9% of GDP in Q1 June 2013, the RBI said. 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 merchandise trade deficit (BoP basis) contracted to $33.3 billion in Q2 September 2013, from $47.8 billion a year ago. Net invisibles during Q2 September 2013 improved, essentially reflecting a rise in net services exports, the RBI said. Net services exports at $18.4 billion recorded a growth of 12.5% year-on-year in Q2 September 2013, mainly on account of 'computer services'.
Contraction in the trade deficit coupled with a rise in net invisibles receipts resulted in a reduction of the CAD to $26.9 billion or 3.1% of GDP during the period April-September 2013, from $37.9 billion or 4.5% of GDP during the period April-September 2012, the RBI said.
The Eight Core Industries having a combined weight of 37.9% in the Index of Industrial Production (IIP) contracted by 0.6% in October 2013, compared with a growth of 7.8% growth in October 2012, posting lowest growth in last 12-months.
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.
Asian stocks edged lower on Tuesday, 3 December 2013, after stronger US manufacturing data boosted speculation the Federal Reserve may pare stimulus to the US economy sooner than anticipated. Key benchmark indices in Indonesia, Hong Kong, Taiwan and South Korea were down 0.01% to 1.07%. Key benchmark indices in China, Japan and Singapore rose 0.07% to 0.65%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
China's non-manufacturing purchasing managers' index fell to 56 last month from 56.3 in October, according to a report released today by the National Bureau of Statistics and the China Federation of Logistics and Purchasing. A reading above 50 indicates expansion.
Australia's central bank left its benchmark interest rate unchanged at a record low and said the currency is still uncomfortably high, even after a 4% decline since its previous meeting. Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5%, the Reserve Bank of Australia said in a statement today in Sydney.
Trading in US index futures indicated that the Dow could slide 14 points at the opening bell on Tuesday, 3 December 2013. US stocks dropped on Monday amid data showing manufacturing unexpectedly climbed last month and reports on holiday retail sales. The Institute for Supply Management's factory index rose to 57.3 in November from 56.4 a month earlier, the Tempe, Arizona-based group's report showed. Manufacturing accounts for about 12% of the economy. A separate report from Markit Economics showed the final November index of US manufacturing increased to 54.7 from 51.8 the previous month.
Purchases at US stores and websites fell 2.9 percent to $57.4 billion during the four days beginning with the Nov. 28 Thanksgiving holiday, according to a survey commissioned by the National Retail Federation.
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 US government will release the influential US non-farm payrolls data for November 2013 on Friday, 6 December 2013. The Fed has said improvement in the labor market is a key factor in its policy assessment.
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.
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