Key benchmark indices retained positive zone in afternoon trade. The barometer index, the S&P BSE Sensex, was up 131.59 points or 0.62%, off 59.25 points from the day's high and up 131.49 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Indian stocks edged higher today, 2 January 2014, after a monthly survey showed that India's manufacturing sector ended 2013 on an encouraging footing as operating conditions improved for the second successive month in December 2013, as both output and new orders increased.
Bharti Airtel declined after two bulk deals were executed on the counter on BSE today, 2 January 2014. Mahindra & Mahindra (M&M) gained for the second day in a row after its Korean subsidiary SsangYong Motor reported sales volume data for December 2013. Pharma stocks rose on renewed buying.
Among side counters, shares of local search engine Just Dial surged. Arvind, Bajaj Electricals and Delta Corp hit 52-week high. Shares of tyre major CEAT hit record high.
The market edged higher in early trade. The Sensex extended initial gains and hit fresh intraday high in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in more than three weeks. Firmness continued on the bourses in mid-morning trade after the result of a survey showed that India's manufacturing sector ended 2013 on an encouraging footing as operating conditions improved for the second successive month in December 2013, as both output and new orders increased. The Sensex trimmed gains in early afternoon trade. The Sensex retained positive zone in afternoon trade.
At 13:15 IST, the S&P BSE Sensex was up 131.59 points or 0.62% to 21,272.07. The index jumped 190.84 points at the day's high of 21,331.32 in morning trade, its highest level since 9 December 2013. The index rose 0.10 points at the day's low 21,140.58 in early trade.
The CNX Nifty was up 40.45 points or 0.64% to 6,342.10. The index hit a high of 6,358.30 in intraday trade, its highest level since 10 December 2013. The index hit a low of 6,300.65 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,486 shares gained and 930 shares fell. A total of 119 shares were unchanged.
The total turnover on BSE amounted to Rs 1290 crore by 13:15 IST.
Among the 30-share Sensex pack, 21 stocks gained and the rest declined. Tata Steel (up 2.22%), Sesa Sterlite (up 2.2%) and SBI (up 2.03%) gained.
Coal India (down 1.18%), NTPC (down 1.13%) and Tata Power Company (down 0.89%) declined.
Bharti Airtel declined 0.77% to Rs 335 after two bulk deals were executed on the counter on BSE today, 2 January 2014. A bulk deal of 4.50 lakh shares was struck on the Bharti Airtel counter at Rs 334.50 per share at 10:58 IST on BSE today, 2 January 2014. Another bulk deal of 2.50 lakh shares was executed on the scrip at Rs 334.50 per share at 10:59 IST on BSE today, 2 January 2014. These bulk deals saw 0.0175% equity of Bharti Airtel changing hands.
Mahindra & Mahindra (M&M) rose 0.4%, with the stock gaining for the second day in a row.
M&M today, 2 January 2014, said SsangYong Motor's total sales rose 11.8% at 13,271 units in December 2013 over December 2012. The total sales of 13,271 units in December 2013 comprised sales of 6,584 units in the domestic market and 6,687 of exports with CKD kits. SsangYong Motor is a Korean subsidiary of M&M.
SsangYong Motor's total sales jumped 20.7% to 145,649 units in calendar year 2013 over calendar year 2012. SsangYong said its annual sales rose for the fourth consecutive year in 2013. The company stressed that such performance was largely driven by the successful launches of the face-lifted models which reflect consumer needs, settlement of healthy relations between labor and management, and the workers' efforts and cooperation in order to expand supply.
Lee Yoo-il, CEO of SsangYong Motor, commented: "We achieved a great upward trend for four straight years backed by the successful launches of the face-lifted models and the labor's efforts to increase the production. We will further expand our global sales this year through the differentiated marketing strategies and efforts to explore new overseas markets based on constructive labor-management relations."
Separately, M&M today, 2 January 2014, said that its total two-wheeler sales jumped 252% to 19,715 units in December 2013 over December 2012. Two-wheeler sales in the domestic market jumped 267% to 19,054 units in December 2013 over December 2012.
Volume growth is being driven by the innovative Mahindra Centuro motorcycle, which continues to receive an overwhelming response, M&M said. Mahindra Two Wheelers has been steadily expanding production of the Centuro to meet rising consumer demand, while also growing its sales and service touch points to over 1000 across the country in order to make the motorcycle more accessible to buyers, the company said.
Viren Popli, Executive Vice President, Mahindra Two Wheelers said: "Mahindra Two Wheelers is closing 2013 on a high note as increasing demand for the Centuro helped to propel it into the ranks of the top 10 motorcycles in the country within just 6 months of its launch. We have also won several prestigious awards that reflect growing consumer confidence in our technological innovations".
M&M during market hours on Wednesday, 1 January 2014, said that its total tractor sales rose 15% to 17,037 units in December 2013 over December 2012. Tractor sales in the domestic market rose 19% to 16,257 units in December 2013 over December 2012. Exports fell 26% at 780 units in December 2013 over December 2012.
M&M during market hours on Wednesday, 1 January 2014, also said that its total auto sales declined 13% to 39,611 units in December 2013 over December 2012.
Pharma stocks rose on renewed buying. Cipla (up 0.36%), Dr Reddy's Laboratories (up 0.22%), Lupin (up 0.09%), Ranbaxy Laboratories (up 3.33%) and Sun Pharmaceutical Industries (up 1.68%) gained.
Just Dial gained 4.46% to Rs 1,480.50 after hitting a record high of Rs 1,485.50 in intraday trade.
CEAT was locked at 5% upper circuit at Rs 353.45, also its record high.
Arvind surged 4% to Rs 144.25 after hitting a 52-week high of Rs 144.90 in intraday trade.
Bajaj Electricals rose 2.47% to Rs 232.70 after hitting a 52-week high of Rs 235.50 in intraday trade.
Delta Corp rose 4.16% to Rs 116.40 after hitting a 52-week high of Rs 121.85 in intraday trade.
Shanthi Gears (up 15.44%), Allcargo Logistics (up 11.35%), HCL Infosystems (up 9.36%), Sanwaria Agro Oils (up 8.44%) and Welspun India (up 7.65%) were among the top gainers from the BSE Small-Cap index.
TVS Motor Company (up 6.12%), Allahabad Bank (up 5.65%), Indian Bank (up 4.42%), CMC (up 3.65%) and Ashok Leyland (up 3.45%) were among the top gainers from the BSE Mid-Cap index.
In the foreign exchange market, the rupee reversed initial gains against the dollar. The partially convertible rupee was hovering at 62.035, weaker than its close of 61.90/91 on Wednesday, 1 January 2014.
Bond prices edged higher. The yield 10-year federal paper, 8.83% GS 2023, was hovering at 8.8153%, lower than its close of 8.8445% on Wednesday, 1 January 2014. Bond yield and bond prices are inversely related.
The Indian manufacturing sector ended 2013 on an encouraging footing, according to a monthly survey from Markit Economics. Operating conditions improved for the second successive month in December, as both output and new orders increased. Consequently, firms raised their workforce numbers further in the latest month.
Down slightly from 51.3 in November to 50.7 in December, the seasonally adjusted HSBC India Manufacturing Purchasing Managers' Index (PMI) signalled a second consecutive monthly improvement in business conditions. Although weaker than its long-run trend, the PMI average for the final quarter of the year at 50.5 was greater than that seen for Q3 at 49.4. Manufacturing production rose for the second month running, but at only a marginal rate. Supporting the latest increase in total output was a further gain in incoming new business. Sector data indicated that the overall expansion in production volumes was largely centred on the consumer goods sub-sector, Markit Economics said.
New orders placed at Indian manufacturers rose in December, albeit marginally. Panelists linked higher levels of new work to improved domestic and overseas demand. However, the latest increase was mainly focused in the consumer goods category. Export order growth was registered for the third consecutive month. Although quickening since November, the overall rate of expansion was modest and below the series average.
Indian manufacturing employment rose in December, stretching the current period of job creation to three months. However, the rate of growth was only marginal. All three broad areas of the goods-producing sector registered higher staffing levels.
Price indicators moved lower in December. Average purchasing costs increased at the slowest pace for four months, but the overall rate of inflation remained robust. Most of the increase was attributed by surveyed companies to higher prices paid for raw materials such as metals, chemicals and textiles. Output prices rose for the seventh month in a row, although competition between manufacturers meant that the rate of increase was historically muted.
December data pointed to a further, albeit fractional, rise in purchasing activity. Consumer goods was the only sub-category of the manufacturing economy to post higher input buying. The overall increase in quantity of purchases was insufficient to prevent a drop in holdings of raw materials. Pre-production inventories fell for the first time since September, but the rate of contraction was moderate. Conversely, stocks of finished goods rose in December. The overall increase was, however, unchanged from the fractional rate seen in November. Backlogs of work rose again during the latest survey period, with the rate of accumulation climbing to a six-month high. Anecdotal evidence highlighted raw material shortages at vendors and power cuts, Markit Economics said.
Commenting on the India Manufacturing PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Manufacturing activity decelerated slightly in December as a slowdown in domestic order flows led to slower output growth. By sector, however, the consumer goods segment held up. Despite the deceleration in order flows, backlogs of work picked up due to raw material shortages and power outages. Inflation gauges were broadly steady, although they declined marginally. Today's numbers show that growth remains moderate and struggles to take off due to lingering structural constraints. Even so, inflation pressures remain firm and are proving sticky. RBI may yet again have to flex its muscles and tighten monetary policy to bring down the elevated level of inflation".
The next major trigger for the market is Q3 December 2013 corporate earnings. The Q3 earnings season will begin around mid-January 2014 and continue till mid-February 2014. Investors and analysts will closely watch the management commentary that would accompany the result to see if there is any revision in their future earnings forecast of the company for the current year and/or the next year.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
Asian stocks were mixed on Thursday, 2 January 2014. Key benchmark indices in China, Hong Kong, and South Korea were off 0.14% to 2.2%. Key benchmark indices in Taiwan, Singapore and Indonesia were up 0.01% to 1%. Japanese stock markets were closed for holiday.
China's manufacturing purchasing managers' index came in at 51 for December, the National Bureau of Statistics and the nation's logistics federation said yesterday, 1 January 2014. A separate manufacturing PMI report from HSBC Holdings Plc and Markit Economics today showed the gauge coming in at 50.5, from 50.8 in November.
Singapore's economy contracted more than expected in the fourth quarter as manufacturing activity weakened, data showed on Thursday, casting some doubt on market expectations for a slight pick-up in growth over 2014. According to advance estimates from Singapore's Ministry of Trade and Industry, GDP contracted an annualised and seasonally adjusted 2.7% in the final quarter of 2013 from the July-September period. That reversed a 2.2% expansion in the third quarter.
The US stock market was closed on Wednesday, 1 January 2014, for New Year's Day holiday.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014.
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