Key benchmark indices languished in red in afternoon trade. The losses for the benchmark indices were small. The barometer index, the S&P BSE Sensex, was currently down 60.76 points or 0.21% at 28,502.06. The market breadth indicating the overall health of the market was positive. Brent extended losses from a four-year low. Fall in global crude oil prices augur well for India as the nation imports about 80% of its crude oil requirements.
Capital goods stocks gained. Shares of auto component makers edged higher on renewed buying. Shares of defence equipment makers also rose. Steel Authority of India (Sail) dropped in volatile trade as bidding continued for the sale of 5% stake of the government in the state-run steel major through the stock exchanges mechanism.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 474 crore yesterday, 4 December 2014, as per provisional data.
In overseas markets, Chinese stocks led gains in Asian stocks after media reports said that China's banking sector regulator has issued draft rules for banks are aimed at reducing funding costs for businesses as the economy slows. US stocks fell from record levels yesterday, 4 December 2014, as the European Central Bank (ECB) decided to hold off on additional stimulus after a monthly monetary policy review.
In the foreign exchange market, the rupee edged higher against the dollar on increased selling of the US currency by exporters and banks amid persistent foreign capital inflows.
Brent extended losses from a four-year low after Saudi Arabia cut January prices for US and Asian buyers, bolstering speculation the country is defending its market share. Deregulation of diesel price announced by the Indian 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.
At 13:15 IST, the S&P BSE Sensex was down 60.76 points or 0.21% at 28,502.06. The index fell 65.15 points at the day's low of 28,497.67 in afternoon trade. The index gained 88.93 points at the day's high of 28,651.75 in early trade.
The CNX Nifty was down 15.35 points or 0.18% at 8,549.05. The index hit a low of 8,546.70 in intraday trade. The index hit a high of 8,588.35 in intraday trade.
The market breadth indicating the overall health of the market was positive. 1,411 shares gained and 1,307 shares fell. A total of 111 shares were unchanged.
The BSE Mid-Cap index was up 29.50 points or 0.28% at 10,555.32. The BSE Small-Cap index was up 68.20 points or 0.59% at 11,539.45. Both these indices outperformed the Sensex.
Capital goods stocks gained. Crompton Greaves (up 0.47%), Themax (up 0.26%), BEML (up 1.68%), ABB India (up 0.96%), and L&T (up 1.1%) gained. Bharat Heavy Electricals (Bhel) fell 0.51%.
Steel Authority of India (Sail) declined 2.05% to Rs 83.60. The stock was volatile. The stock hit high of Rs 84.70 and low of Rs 83.50 so far during the day. As at 13:25 IST, bids were received for a total of 10.43 crore shares at an indicative price of Rs 83.53 per share for the Offer for Sale (OFS) of the state-run steel company's shares by the government, as per data from the stock exchanges. The government has put on the block 20.65 crore shares of Sail, representing a 5% stake through Offer for Sale (OFS) via the stock exchanges mechanism today, 5 December 2014. The OFS began at 9:15 IST and ends at 15:30 IST. The floor price for the offer for sale (OFS) has been fixed at Rs 83 per share.
Auto component makers gained. Amtek Auto (up 0.61%), Bharat Gears (up 10.51%), Bosch (up 1.42%), Exide Industries (up 0.53%), Sona Koyo Steering Systems (up 2.45%) and Subros (up 0.9%) gained.
Bharati Shipyard rose 0.73%, with the stock extending yesterday's 11.67% jump. ABG Shipyard gained 5.16%, with the stock extending yesterday's 3.45% rise. Minister of State for Shipping Pon. Radhakrishnan informed the Lok Sabha on Thursday, 4 December 2014, that the government has requested the Reserve Bank of India (RBI) and the Ministry of Finance (Department of Financial Services) to sanction a special dispensation for five years i.e. up to 31 March 2020 to treat repeat restructuring of shipyards, after failure of first Corporate Debt Restructuring (CDR) as equivalent to first restructuring. The reason for including the proposal is that during market downturns, such as the situation prevalent today, shipyards may need to opt for CDR mechanism to restructure their loans. However, when first restructuring fails, the loans become NPAs and hence bankers find it difficult to undertake repeated restructuring, Radhakrishnan said. Other steps taken by the government to revive shipbuilding industry include extension of the Shipbuilding Subsidy Scheme of 2002-2007 from October 2009 till 31 March 2014 for liquidation of committed liabilities for ship-building contracts secured during 2002-2007 under the scheme.
Shares of defence equipment makers rose. Pipavav Defence and Offshore Engineering Company (up 9.99%), Dynamatic Technologies (up 5/.19%), Bharat Electronics (up 3.18%), Astra Microwave Products (up 1.49%), Tata Power Company (up 0.73%) and Walchandnagar Industries (up 0.03%) edged higher. Defence Minister Manohar Parrikar in a written statement to Rajya Sabha on 2 December 2014 said that a total of 41 proposals for an indicative cost of Rs 119719.53 crore have been cleared by the Defence Acquisition Council (DAC) since June 2014.
In the foreign exchange market, the rupee edged higher against the dollar on increased selling of the US currency by exporters and banks amid persistent foreign capital inflows. The partially convertible rupee was hovering at 61.8425, compared with its close of 61.935 during the previous trading session.
Brent extended losses from a four-year low after Saudi Arabia cut January prices for US and Asian buyers, bolstering speculation the country is defending its market share. Brent for January settlement was off 31 cents a barrel at $69.33 a barrel. The contract had lost 28 cents a barrel to settle at $69.64 yesterday, 4 December 2014, the lowest close since May 2010.
State-owned Saudi Arabian Oil Co., also known as Saudi Aramco, yesterday, 4 December 2014, reduced its official selling prices for all oil grades bound for Asia in January by between $1.50 and $1.90 a barrel, compared with December. It also cut prices for all crude grades to the US by between 10 cents and 90 cents a barrel. Saudi Arabia is the biggest and most influential member of the Organization of the Petroleum Exporting Countries (OPEC), which late last month decided to maintain output levels despite a global oversupply.
Meanwhile, five members of the Indian security forces were reportedly killed in a suicide attack on an army artillery camp in northern Kashmir early today, 5 December 2014, as militants step up violence in the disputed region near the border with Pakistan.
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.
Chinese stocks led gains in Asian stocks today, 5 December 2014, after media reports said that China's banking sector regulator has issued draft rules for banks are aimed at reducing funding costs for businesses as the economy slows. Key benchmark indices in China, Singapore, Hong Kong, Indonesia, and Japan were up 0.19% to 1.32%. South Korea's Kospi was flat. In Taiwan, the Taiwan Weighted index fell 0.2%.
Trading in US index futures indicated that the Dow could gain 5 points at the opening bell today, 5 December 2014. US stocks fell from record levels yesterday, 4 December 2014, as the European Central Bank (ECB) decided to hold off on additional stimulus after a monthly monetary policy review.
In economic news, US jobless claims in the week ended Nov. 29 fell by 17,000 to 297,000, the Labor Department said yesterday, 4 December 2014. US government's monthly nonfarm payrolls report for November will be out later in the global day today, 5 December 2014.
In Europe, European Central Bank (ECB) left its key interest rate unchanged at 0.05% after a monthly monetary policy review yesterday, 4 December 2014, and announced that it will wait until 2015 to consider additional market supportive measures, including buying European sovereign debt.
Industrial orders in Germany were significantly stronger than expected in October, driven by domestic demand and pointing toward accelerating growth in Europe's largest economy in the fourth quarter. Industrial orders rose 2.5% on the month of October in price, seasonal-and work-day-adjusted terms, the Ministry of Economy said today, 5 Deceber 2014.
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