Intraday volatility continued as key benchmark indices once again slipped into the red in early afternoon trade. The barometer index, the S&P BSE Sensex, was down 24.14 points or 0.12%, off close to 55 points from the day's high and up close to 50 points from the day's low. Weakness in Asian stocks dampened investor sentiment.
Asian stocks dropped today, 3 December 2013, as signs the US economy is strengthening fueled speculation that the Federal Reserve will soon start tapering stimulus. 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. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Index heavyweight and cigarette maker ITC edged lower. Another index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Most pharma pivotals dropped. Alstom T&D India rose after the company said it has secured an order worth approximately Rs 79 crore from Power Grid Corporation of India. Eicher Motors scaled record high. The market breadth, indicating the overall health of the market, was positive.
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. Key benchmark indices once again slipped into the red in early afternoon trade
At 12:20 IST, the S&P BSE Sensex was down 24.14 points or 0.12% to 20,873.87. The index lost 71.28 points at the day's low of 20,826.73 in early trade. The index rose 29.04 points at the day's high of 20,927.05 in mid-morning trade.
The CNX Nifty was down 13.40 points or 0.22% to 6,204.45. The index hit a low of 6,194.25 in intraday trade. The index hit a high of 6,225.40 in intraday trade
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,104 shares rose and 1,074 shares dropped. A total of 149 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks fell and rest rose. NTPC (down 1.56%), M&M (down 1.37%) and HDFC (down 1.06%) declined.
Most pharma stocks dropped. Cipla (down 0.31%), Dr Reddy's Laboratories (down 1.35%) and Sun Pharmaceutical Industries (down 0.93%) declined. Ranbaxy Laboratories rose 0.65%.
Index heavyweight and cigarette maker ITC was off 0.7% at Rs 319. The scrip hit high of Rs 321.05 and low of Rs 318 so far during the day.
Another index heavyweight Reliance Industries reversed initial losses. The stock was up 0.77% at Rs 861.50. The scrip hit high of Rs 861.90 and low of Rs 851.15 so far during the day.
State-run GAIL (India) rose 2.53% after the company said its talks with Ophir Energy PLC for a stake in its offshore gas assets in Tanzania are continuing and won't be affected by a share sale deal with Singapore state-owned firm Pavilion Energy last month. "There are still options available with Ophir in Tanzania. They have sold 20%, but still have 20% stake in three blocks," Prabhat Singh, marketing director for GAIL, told reporters on the sidelines of a conference today, 3 December 2013. "We are in negotiations for a stake," he said.
Ophir Energy PLC sold a share of a giant natural-gas discovery off the coast of Tanzania to Singapore state-owned firm Pavilion Energy for $1.3 billion, marking the first major transaction in Tanzania's natural-gas sector. The deal was initially seen as a setback for GAIL's ambitions in Tanzania, where it has been talking with Ophir for buying a stake.
Post the deal with the Singapore firm in Tanzania, Ophir holds a 20% stake in blocks 1, 3 and 4, an 80% operating interest in block 7 and a 70% operating interest in East Pande. Blocks 1, 3 and 4 are a joint venture with the BG Group, which holds 60% and operates the block.
Alstom T&D India rose 2.62% after the company said it has secured an order worth approximately Rs 79 crore from Power Grid Corporation of India. The new order was announced after market hours on Monday, 2 December 2013.
Alstom T&D India said it has won an order worth approximately Rs 79 crore from Power Grid Corporation of India (PGCIL) to provide 14 shunt reactors for the 765 kilovolt (kV) electrical substations at Kanpur and Jhatikara in Uttar Pradesh. The projects are due for delivery in 2015.
All 765 kV equipment for these projects will be manufactured in Alstom's transformer and reactor manufacturing facility at Vadodara in India, the company said.
Commenting on the order, Mr. Rathin Basu, Managing Director, Aistom T&D India said, "This contract further reinforces the confidence that Powergrid has in Alstom's capability to deliver 765 kV products and solutions from its state of the art manufacturing facilities".
Eicher Motors rose 3.34% to Rs 5,173.55 after hitting record high of Rs 5,294.95 in intraday trade today, 3 December 2013.
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 62.34, 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 Q2 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 0.26% to 1.05%. Key benchmark indices in China, Japan and Singapore rose 0.15% to 0.77%. 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 15 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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