Key benchmark indices registered small losses after staging a strong intraday rebound. Gains in European stocks aided intraday rebound on the domestic bourses. The market breadth, indicating the overall health of the market, turned positive from negative in late trade. The Sensex shed 37 points or 0.18%, up about 120 points from the day's low and off about 35 points from the day's high.
Indian stocks fell for the third day in a row today, 3 January 2014. The Sensex has lost 319.35 points or 1.5% in three trading days from a recent high of 21,170.68 on 31 December 2013. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,402.62 points or 19.5%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 632.41 points or 2.94%.
Coming back to today's trade, index heavyweight Reliance Industries trimmed intraday losses in late trade. Shares of public sector oil refining-cum-marketing companies (PSU OMCs) fell on reports that the government is considering a proposal to raise the quota of subsidized LPG cylinders to 12 per household in a year from the current limit of 9. Metal and mining stocks dropped for the second day in a row after a gauge of China's non-manufacturing industries declined.
Foreign institutional investors (FIIs) bought shares worth a net Rs 726.60 crore from the secondary equity markets on Thursday, 2 January 2014, as per data from Securities & Exchange Board of India.
The S&P BSE Sensex lost 37 points or 0.18% to settle at 20,851.33, its lowest closing level since 19 December 2013. The index dropped 157 points at the day's low 20,731.33 in afternoon trade. The index fell 3.15 points at the day's high of 20,885.18 in late trade.
The CNX Nifty shed 10 points or 0.16% to settle at 6,211.15, its lowest closing level since 19 December 2013. The index hit a high of 6,221.70 and a low of 6,171.25 in intraday trade.
The BSE Mid-Cap index rose 0.63% and the BSE Small-Cap index gained 0.6%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2178 crore, lower than Rs 2636.11 crore on Thursday, 2 January 2014.
The market breadth, indicating the overall health of the market, turned positive from negative in late trade. On BSE, 1,274 shares rose and 1,182 shares fell. A total of 168 shares were unchanged. Earlier, the breadth had turned negative from positive in mid-morning trade.
Among the 30-share Sensex pack, 16 stocks fell and rest of them rose.
Index heavyweight and cigarette major ITC fell 0.17% to Rs 314.85. The stock hit a high of Rs 315.65 and low of Rs 311. A block deal of 3.62 lakh shares was executed in the counter on BSE at Rs 313 per share at 13:53 IST.
Tata Power Company and Reliance Infrastructure, both, dropped for second day in a row after the Delhi government on 1 January 2014 ordered CAG audit of their finances. Tata Power Company dropped 3.83%. Reliance Infrastructure lost 0.96%. Rejecting the contention of private power distributors, the Delhi government on 1 January 2014 ordered a CAG audit of their finances. Delhi Chief Minister Arvind Kejriwal had early this week announced that the power tariffs in Delhi will be slashed by 50% for up to 400 units. The Delhi government will provide the subsidy and the money will be directly paid to the distribution companies. The cut in electricity tariffs, part of the AAP manifesto for the 4 December state assembly election, will entail a cost of Rs 61 crore over next three months.
Just Dial jumped 7.32% to Rs 1,603.50 after hitting a record high of Rs 1,648 in intraday trade. The scrip has jumped 40.61% from a recent low of Rs 1,140.35 on 16 December 2013.
Havells India gained 2.44% to Rs 815.50 after hitting a record high of Rs 817.60 in intraday trade.
Biotechnology major Biocon jumped 4.83% to Rs 483.35. The stock hit a record high of Rs 487 in intraday trade.
Bank stocks pivotals edged lower after Prime Minister Dr. Manmohan Singh expressed concern about the failure in controlling persistent inflation.
State Bank of India declined 1.52%. The state-run bank after market hours on Thursday, 2 January 2014, said that the Executive Committee of the Central Board of the bank at its meeting held on Thursday, 2 January 2014, has accorded its approval for the issuance and allotment of 1.12 crore equity shares at an issue price of Rs 1782.74 per share to the Government of India (GoI) on preferential basis. The committee also approved the allotment of Basel III compliant Tier 2 bonds of Rs 2000 crore, issued for 120 months (10 year bullet), at an annually payable coupon of 9.69%, by way of private placement.
AXIS Bank (down 0.95%) and ICICI Bank (down 0.75%) declined. HDFC Bank rose 0.99%.
Indian Bank fell 1.79%. UCO Bank (up 2.38%) and Vijaya Bank (up 0.75%) gained. The Union Cabinet on Thursday gave its approval for conversion of Perpetual Non-Cumulative Preference Shares (PNCPS) held by Government of India (GoI) in Indian Bank, UCO Bank and Vijaya Bank amounting to Rs 400 crore, Rs 1823 crore and Rs 1200 crore respectively into equity shares of these banks in favour of GoI, subject to approval of shareholders and also Securities and Exchange Board of India (SEBI) and other authorities.
Conversion of PNCPS subscribed by GoI in Indian Bank, UCO Bank and Vijaya Bank into equity shares in the first instance and subsequently in other Public Sector Banks where GOI has invested in PNCPS, PCPS and IDPIs, would enhance the Tier-1 capital of the PSBs thereby making available more funds at their disposal to meet the credit requirement of the productive sectors of economy, a government statement said. It will also provide impetus to the economy by including the under-banked rural and semi-urban areas, it said.
The conversion is proposed to be done in the Financial Year 2013-14 subject to approval of shareholders and also the Securities and Exchange Board of India (SEBI) and other authorities.
Three PSBs namely, UCO Bank, Vijaya Bank and Indian Bank have requested for conversion of PNCPSs held by GoI into equity. The Reserve Bank of India (RBI) has been consulted in the matter. RBI, in its comments on the proposals, advised that the Government may consider permitting conversion of PNCPSs into equity subject to approval of shareholders and also Securities and Exchange Board of India (SEBI) and other authorities.
Pharma stocks were mixed. Cipla (down 0.04%) and Dr Reddy's Laboratories (down 1.1%), declined.
Lupin (up 2.97%), Sun Pharmaceutical Industries (up 1.05%) and Ranbaxy Laboratories (up 3.45%) gained.
Claris Lifesciences rose 0.86% after the company said its board will meet on 7 January 2014, to consider a proposal for buyback of the equity shares. The company made the announcement after market hours on Thursday, 2 January 2014.
IT stocks rose. Wipro (up 0.77%), TCS (up 2.76%), Tech Mahindra (up 1.15%) and HCL Technologies (up 0.76%) gained.
Infosys rose 2.61%. The company announced after market hours that it has appointed Mr. B. G. Srinivas and Mr. U. B. Pravin Rao as Presidents of the company, reporting to Mr. S. D. Shibulal, Chief Executive Officer & Managing Director. These appointments are effective immediately. The business portfolios will be realigned under the two Presidents.
Financial services, insurance, manufacturing, engineering services, energy & communications, Infosys public services, Infosys Lodestone, strategic global sourcing, marketing and alliances will report to Mr. Srinivas.
Retail, consumer packaged goods and logistics, life sciences, resources and utilities, services, growth markets, cloud & mobility, quality & productivity and Infosys Leadership Institute wil report to Mr. Rao.
In addition, Mr. Srinivas will focus on global markets and Mr. Rao will focus on global delivery and service innovation. In view of these changes, the Executive Council, as a forum, will cease to exist with effect from 1 April 2014, Infosys said.
Infosys unveils Q3 December 2013 results on 10 January 2014. At the time of announcement of Q2 September 2013 results in October 2013, Infosys had forecast 9% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014). At that time, the company had issued a forecast of 21% to 22% growth in revenue in rupee terms based on the assumption of rupee dollar conversion rate of 62.61 for the rest of the fiscal year.
Capital goods stocks dropped. Bhel (down 1.92%), ABB (down 0.63%), L&T (down 2.33%), Crompton Greaves (down 1.7%) and BEML (down 3.04%) declined.
Auto stocks were mixed. Mahindra & Mahindra (M&M) declined 3.85%. M&M on Thursday, 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.
Separately, M&M on Thursday, 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.
M&M on 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 on 1 January 2014 also said that its total auto sales declined 13% to 39,611 units in December 2013 over December 2012.
Ashok Leyland jumped 6.78% after the company reported a 16.74% rise in its total vehicle sales at 6,275 units in December 2013 over November 2013.
Sales dropped 14% to 6,275 units in December 2013 over December 2012. Sales of medium and heavy commercial vehicles fell 26% at 3,890 units in December 2013 over December 2012. Light commercial vehicles sales rose 16% to 2,385 units in December 2013 over December 2012. The sales figures were announced after market hours on Thursday, 2 Janaury 2014.
Maruti Suzuki India rose 1.65%. The company on 1 January 2014 said that its total sales fell 4.4% to 90,924 units in December 2013 over December 2012. Domestic sales rose 5.5% to 86,613 units in December 2013 over December 2012. Exports fell 67% to 4,311 units in December 2013 over December 2012.
Tata Motors dropped 2.49%. The total sales (including exports) of Tata commercial and passenger vehicles plunged 42.28% at 37,852 units in December 2013 over December 2012. Tata Motors' exports declined 26.79% at 2,842 units in December 2013 over December 2012. Tata Motors announced the monthly sales volume data on standalone basis after trading hours on Thursday, 2 January 2014.
Hero MotoCorp rose 0.77%, with the stock reversing initial losses triggered by the company's weak December sales. The company announced after market hours on Thursday, 2 Janaury 2014, that its total sales fell 3.06% to 5.24 lakh units in December 2013 over December 2012. The company sold record 61.83 lakh two-wheelers in calendar year 2013.
Hero MotoCorp said that the management has put together plans to further consolidate the company's leadership position in the two-wheeler industry. Year 2014 will be action-packed with radically new product launches from the company, entry into new markets backed by new, clutter-breaking campaign and continued network expansion.
Bajaj Auto rose 0.03%. The company said before market hours that its total sales declined 13% to 2.97 lakh units in December 2013 over December 2012. The company's total exports rose 20% to 1.5 lakh units in December 2013 over December 2012. Motorcycles sales fell 13% to 2.6 lakh units in December 2013 over December 2012. Commercial vehicles sales fell 19% to 37,131 units in December 2013 over December 2012.
TVS Motor Company rose 1.15%. The company's total sales rose 2% at 1.59 lakh units in December 2013 over December 2012. Total exports rose 27% to 20,251 units in December 2013 over December 2012.
Total two wheeler sales rose 1% to 1.53 lakh units in December 2013 over December 2012. Domestic two wheeler sales declined 1.4% to 1.32 lakh units in December 2013 over December 2012. Two wheeler exports registered a growth of 21% to 20,694 units in December 2013 over December 2012.
Scooters sales grew 38% to 41,817 units in December 2013 over December 2012. Motorcycle sales declined 4.37% to 57,576 units in December 2013 over December 2012.
Three wheeler sales surged 37% to 6,137 units in December 2013 over December 2012.
Reliance Communications (RCom) rose 1.08% after the company said it has fully repaid another syndicated external commercial borrowing (ECB) loan of $500 million (about Rs 3100 crore) on the scheduled due date today, 3 January 2014. RCom had earlier this year made full scheduled repayment of 2 other syndicated ECB loans aggregating $1 billion (Rs 6200 crore), and bilateral ECB loans of more than $310 million (about Rs 1900 crore). With these repayments RCom has now fully liquidated the borrowings from 23 foreign banks and financial institutions. The announcement was made during trading hours.
Shares of public sector oil refining-cum-marketing companies (PSU OMCs) fell on reports that the government is considering a proposal to raise the quota of subsidized LPG cylinders to 12 per household in a year from the current limit of 9. HPCL (down 1.98%), BPCL (down 2.81%) and Indian Oil Corporation (down 1.02%) declined.
PSU OMCs reported a total of Rs 60907 crore as under-recoveries during first half of 2013-14 on Diesel, PDS Kerosene and Domestic LPG, the Ministry of Petroleum and Natural Gas said early this month.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Metal and mining stocks dropped for the second day in a row after a gauge of China's non-manufacturing industries declined. China is the world's largest consumer of copper and aluminum. Sesa Sterlite (down 0.55%), JSW Steel (down 1.46%), Tata Steel (down 1.64%), Hindalco Industries (down 1.7%), National Aluminum Company (down 0.8%), Hindustan Copper (down 0.5%), NMDC (down 1.28%) Sail (down 0.56%), Bhushan Steel (down 0.93%) and Jindal Steel & Power (down 1.39%) edged lower.
Index heavyweight Reliance Industries fell 1.18% to Rs 865. The stock hit a high of Rs 873.45 and low of Rs 856.40.
Hindustan Construction Company jumped 4.35% after the company won a contract worth Rs 442.52 crore from IRCON International. The company made the announcement after market hours on Thursday, 2 January 2014
In a rare news conference Prime Minsiter Manmohan Singh today, 3 January 2014, took to the stump to defend his economic policies and promised recovery. He also said he would "hand the baton over to a new prime minister," after general elections this year, ruling out a third term.
Dr. Singh said that the country is set for better times ahead in terms of economic growth. The cycle of global economic growth is turning for the better, he said. "Many of the steps we have taken to address our domestic constraints are coming into play", he said. India's own growth momentum will revive, Dr. Singh said.
"As we enter the New Year we will continue to implement our policies, with vigor and commitment, aiming to revive growth, promote enterprise, generate employment, eliminate poverty and ensure the safety and security of all our people, particularly women and children. Our Government will work ceaselessly till its last day", Dr. Singh said.
Dr. Singh said that he is concerned that the government has not been as successful to the extent required in generating employment in the manufacturing sector. "This is an aspect of performance which we are working hard to correct. We need a much stronger effort in support of small and medium enterprises which can be a major source of good quality employment. Our Manufacturing Strategy gives high priority to this objective for the future", Dr. Singh said.
He also expressed concern about the failure in controlling persistent inflation. Dr. Singh said that the Food Security Act will to some extent shield the common man from rising food prices. "The worry about inflation is legitimate but we should also recognize that incomes for most people have increased faster than inflation. I have already mentioned that real wages in rural areas have increased faster than before. Per-capita consumption in both rural and urban areas has increased significantly", Dr. Singh said.
The next major trigger for the stock 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.
European stocks reversed initial losses on Friday, 3 January 2014, after Next Plc -- UK's second-largest clothing retailer -- raised its full-year forecast and announced a special dividend after holiday sales exceeded the company's expectations. Key benchmark indices in Germany, France and UK were up 0.13% to 0.52%.
Final readings on Thursday, 2 January 2014, confirmed that manufacturing in the euro zone expanded last month at the fastest pace since May 2011, while output in Germany, the currency bloc's largest economy, expanded for a sixth consecutive month.
Asian stocks dropped on Friday, 3 January 2014, after US equities retreated from record highs and a gauge of China's non-manufacturing industries declined. Key benchmark indices in Hong Kong, Taiwan, Singapore, Indonesia, China and South Korea were off 0.77% to 2.24%. Japanese stock markets were closed for a holiday.
China's non-manufacturing gauge fell to a four-month low in December, after data earlier this week showed two measures of factory output in the world's second-largest economy declined. China's purchasing managers' index for the non-manufacturing sector fell to 54.6, the lowest reading since August, from 56 in November.
Trading in US index futures indicated that the Dow could advance 12 points at the opening bell on Friday, 3 January 2014. Stocks on Wall Street closed sharply lower on the first trading day of 2014 on Thursday, 2 January 2014, after data pointed to a slowdown in manufacturing expansion in China and the United States.
Data indicated applications for US unemployment benefits declined last week to the lowest level in a month. Jobless claims fell by 2,000 to 339,000 in the period ended Dec. 28, Labor Department data showed. A separate report showed the Institute for Supply Management's factory index fell to 57 in December from the prior month's 57.3, which was the highest since April 2011. Readings above 50 indicate expansion.
Federal Reserve Chairman Ben Bernanke, who is slated to leave his post at the end of the month, is scheduled to speak later today, 3 January 2014, at an economics conference in Philadelphia.
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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