Rally in index heavyweight and cigarette major ITC took key benchmark indices higher. Shares of the cigarette major jumped on reports the government may put on hold its plan to ban sales of single cigarettes. With modest gains, the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, reached their highest closing level in almost a week. The Sensex garnered 120.11 points or 0.42% to settle at 28,562.82. The market breadth indicating the overall health of the market was positive. Chinese stocks led a rally in Asian shares.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 417.17 crore from the secondary equity markets yesterday, 3 December 2014.
Meanwhile, India's finance ministry after trading hours yesterday, 3 December 2014, announced the setting up of a High Level Committee (HLC) to interact with trade and industry on tax laws.
Bank stocks edged higher in volatile trade. PSU OMCs were in demand. Telecom stocks declined. ABB India galloped to 52-week high on reports of optimistic comments by ABB's global CEO. Bharat Electronics also scaled record high. IT stocks declined. Capital goods stocks were mixed. ONGC declined in volatile trade.
Earlier, the 50-unit CNX Nifty had surged to record high in early trade on firm Asian stocks.
In overseas markets, European stocks edged higher in choppy trade, with an improving US economic outlook and expectations of further stimulus from the European Central Bank helping the market. Asian stocks edged higher amid fresh signs of resilience in the US economy, the world's biggest economy. In the US yesterday, 3 December 2014, big gains in energy, materials and industrials sectors helped propel the S&P 500 and Dow Jones Industrial Average to record levels.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures rose after a US government-supply report yesterday, 3 December 2014, showed an unexpected decline in US crude inventories last week.
The S&P BSE Sensex jumped 120.11 points or 0.42% to settle at 28,562.82, its highest closing level since 28 November 2014. The index jumped 366.07 points at the day's high of 28,808.78 at onset of the day's trading session. The index rose 6.24 points at the day's low of 28,448.95 in mid-morning trade.
The CNX Nifty gained 26.75 points or 0.31% to settle at 8,564.40, its highest closing level since 28 November 2014. The index hit a high of 8,626.95 in intraday trade, a record high for the index. The index hit a low of 8,526.40 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,498 shares gained and 1,458 shares fell. A total of 118 shares were unchanged.
The BSE Mid-Cap index rose 25.96 points or 0.25% to settle at 10,525.82. The BSE Small-Cap index gained 35.37 points or 0.31% to settle at 11,471.25. Both these indices underperformed the Sensex.
The S&P BSE Bankex (up 0.76%), and the BSE FMCG index (up 3%) outperformed the Sensex. The S&P BSE IT index (down 0.48%), the S&P BSE Consumer Durables index (down 0.53%), the S&P BSE Metal index (up 0.29%), the S&P BSE Capital Goods index (up 0.4%), the S&P BSE Auto index (up 0.13%), the S&P BSE Realty index (down 0.21%), the S&P BSE Oil & Gas index (down 0.29%), the S&P BSE Power index (up 0.06%), and the S&P BSE Teck index (down 0.62%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 3949 crore, higher than Rs 3936.82 crore yesterday, 3 December 2014.
Metal and mining stocks declined. JSW Steel (down 0.12%), Tata Steel (down 0.3%), National Aluminium Company (down 1.28%), Jindal Steel & Power (down 0.81%) and Hindalco Industries (down 1.84%) edged lower.
Sesa Sterlite (up 2.8%), Hindustan Zinc (up 5.01%) and Hindustan Copper (up 1.03%) rose.
Steel Authority of India (Sail) lost 0.35% to settle at Rs 85.35. The stock was volatile. The scrip hit high of Rs 86.80 and low of Rs 82.90. The government after trading hours yesterday, 3 December 2014, announced an offer for sale (OFS) of upto 20.65 crore equity shares or 5% stake in Sail through a sale on the separate window provided by the BSE and NSE tomorrow, 5 December 2014. As much as 10% of the offered shares have been reserved for retail investors, who can buy shares worth up to Rs 2 lakh in the share sale. Retail investors will be allocated shares at a discount of 5% to the bid price entered by them. The floor price for the OFS would be determined after market hours today, 4 December 2014.
NMDC rose 1.12%. The company after trading hours today, 4 December 2014, announced a reduction in price of lump ore by Rs 200 a tonne to Rs 4,200 a tonne for the current month. The state-run iron ore miner reduced prices of fines by Rs 100 per tonne to Rs 3,060 per tonne.
NMDC's production rose 10.03% to 19.08 million tonnes for the period April-November 2014, over the corresponding previous year period. Sales rose 7.69% to 19.88 million tonnes for the period April-November 2014, over the corresponding previous year period.
Index heavyweight and cigarette major ITC jumped 5.44% to Rs 382.75. The stock hit high of Rs 383.60 and low of Rs 373. As per reports, the government has indicated that it is in favour of wider consultations before bringing any amendments to the existing laws to restrict the sale of loose cigarettes. As per reports, objections by some MPs, including some Union ministers, and farmers associations may put the health ministry's proposal to ban sale of loose cigarettes on hold. It may be recalled that the health ministry had last month accepted a panel's proposal to ban loose cigarettes to deter smoking.
Bank stocks edged higher in volatile trade. Among PSU bank stocks, State Bank of India (SBI) (up 0.66%), Andhra Bank (up 1.61%), Punjab National Bank (up 0.66%), Canara Bank (up 1.37%), Bank of India (up 1.69%) and Union Bank of India (up 1.8%) gained. Bank of Baroda shed 0.31%.
Among private bank stocks, Kotak Mahindra Bank (up 1%), Yes Bank (up 2.41%), IndusInd Bank (up 1.99%) and ING Vysya Bank (up 0.09%) gained.
Axis Bank ended unchanged for the day at Rs 498.90 after hitting record high of Rs 502.70 in intraday trade.
ICICI Bank rose 0.68% to Rs 361.05 after scaling a record high of Rs 366.30 in intraday trade. ICICI Bank has reportedly reduced the interest rate on retail term deposit, with maturity between 390 days and two years by 25 basis points to 8.75%. The new rate is effective from 28 November 2014. Following this revision, the bank now offers a maximum of 8.75% interest on term deposits of up to Rs 1 crore, from 9% earlier.
HDFC Bank rose 0.84%. HDFC Bank has reportedly lowered its retail term deposit rates by 25-50 basis points on various maturities. The rate cut is effective from 1 December 2014 and is applicable on retail term deposits with maturity between 46 days and one year.
Coal India fell 0.21%. Minister of state for Power, Coal & New and Renewable Energy (Independent Charge) Piyush Goyal today, 4 December 2014, said in a written reply to a question in the Lok Sabha that Coal India has been indicated a gross target to produce 1000 Mt. of coal by 2019-20, which is about double the amount of present level of coal production. The expected growth is to come from identified future projects. Goyal further stated that the envisaged growth is possible in the brown field as well as green field areas and is expected to be achieved through on timely completion of 'New Railway Infrastructure Projects', faster environment & forestry clearances, completion of Rehabilitation & Resettlement with the help of State Government, Improvement in Law & Order situation apart from technology improvement in mining and related infrastructure.
The Union Cabinet has already approved divestment of 10% stake in Coal India.
PSU OMCs were in demand. HPCL rose 0.52%.
BPCL gained 2.15%. BPCL at the fag end of trading session yesterday, 3 December 2014, announced that its board of directors have given their approval for diversification into Petrochemicals at an estimated capital cost of Rs 4588 crore. BPCL plans to produce niche petrochemicals such as Acrylic Acid, Acrylates and Oxo Alcohols, that are predominantly being imported into the country, at its Kochi Refinery facility, using the Polymer Grade Propylene that will be available after the ongoing Integrated Refinery Expansion Project (IREP) is completed, the company said. The major end uses are in paints and coatings, adhesives, plasticisers, solvents, water treatment etc. The unit is expected to come on stream during the Financial Year 2018-19. The project proposal will now be submitted for obtaining environmental clearance, BPCL said.
Indian Oil Corporation (IOCL) rose 0.45%. IOCL announced after market hours yesterday, 3 December 2014, that company along with Mangalore Refinery and Petrochemicals (MRPL) have signed a non-binding Memorandum of Understanding (MoU) with State Trading Corporation (STC), a government entity of Mauritius for exploring the possibilities for setting up oil storage terminal(s) in Mauritius through a joint venture company. For this purpose, a detailed feasibility study and market study would be carried out. The MoU executed on 27 November 2014 does not have any material impact on the financials of IOCL at present, the company said.
Capital goods stocks were mixed. Crompton Greaves (up 0.65%) and Siemens (up 7.87%) gained. Havells India (down 1.79%) and L&T (down 0.71%) declined.
Bharat Heavy Electricals (Bhel) fell 1.56%. Bhel during market hours today, 4 December 2014, said that with the commissioning of the last of the six units of 68 megawatts (MW) hydro generating unit of Rampur Hydro Electric Project (HEP) in Himachal Pradesh, the company has commissioned the 412 MW hydro power plant of SJVN. Bhel said that the company is presently executing hydro power projects of around 5,000 MW which are under various stages of implementation. Significantly, so far, more than 500 hydro generating sets of various ratings have been contracted on Bhel in India and abroad, with a cumulative capacity of more than 26,000 MW, out of which, equipment for about 5,000 MW generating capacity has been contracted outside India, Bhel said.
ABB India galloped 12.98% to Rs 1,315.05 after hitting a 52-week high of Rs 1,396.70 in intraday trade. Reports quoted ABB's global CEO Ulrich Spiesshofer as saying that the company is planning to double exports from India in next 3-5 years and that exports are likely to form nearly 50% of India business. Spiesshofer said that there are no plans to delist ABB India from Indian bourses.
Bharat Electronics jumped 11.38% to Rs 2,929.70 after scaling a record high of Rs 2,975 in intraday trade.
IT stocks declined. Tech Mahindra (down 0.2%), Wipro (down 0.22%), HCL Technologies (down 1.75%) and Infosys (down 0.96%) declined. TCS rose 0.06%.
Ranbaxy Laboratories declined 0.48%. With respect to news article titled "Germany bars antibiotic drug from Ranbaxy's Madhya Pradesh plant", the company stated that the news item is misleading and clarified that the development pertains only to the company's cephalosporin injectable unit at Dewas in Madhya Pradesh. The European authorities along with those from Australia and Canada carried out an inspection in June 2014 of all the facilities in Dewas. Well before that time, the company had already decided to stop producing cephalosporin injectables at Dewas. Since then, the agencies have approved all its facilities for manufacturing Dosage Forms and APIs (Active Pharmaceutical Ingredients) at Dewas including that for oral cephalosporins with the only exception of the cephalosporin injectable unit.
The company stated that its decision to discontinue manufacture of Cephalosporin injectables would not have a significant impact on the company's business. The company also said that the current approvals cover all other facilities (Dosage Forms and APIs) at Dewas, including those producing penem API & injections and oral cephalosporins.
ONGC shed 0.28% to Rs 370.85. The stock hit high of Rs 378.20 and low of Rs 369.30. Oil Minister Dharmendra Pradhan reportedly said yesterday, 3 December 2014, that the government is considering reworking the subsidy-sharing formula for ONGC in a bid to lower its discount burden and boost the state-owned oil firm's profit. State run upstream oil and gas companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
The government has already finalised 5% stake sale in ONGC.
Telecom stocks declined. Bharti Airtel (down 2.08%), Idea Cellular (down 2.6%), and Reliance Communications (down 1.41%) declined.
Bharati Shipyard jumped 11.67%. ABG Shipyard rose 3.45%. Minister of State for Shipping Pon. Radhakrishnan informed the Lok Sabha today, 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.
The Sensex snapped three-day losing streak today, 4 December 2014. From a record closing high of 28,693.99 on 28 November 2014, the Sensex had declined 251.28 points or 0.87% in three trading sessions to settle at 28,442.71 yesterday, 3 December 2014. The Sensex has declined 131.17 points or 0.45% in this month so far (till 4 December 2014). The Sensex has gained 7,392.14 points or 34.91% in calendar year 2014 so far (till 4 December 2014). From a record high of 28,822.37 struck on Friday, 28 November 2014, the Sensex has fallen 259.55 points or 0.9%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 8,599.70 points or 43.07%.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.90, compared with its close of 61.91 during the previous trading session.
Brent crude oil futures rose after a US government-supply report yesterday, 3 December 2014, showed an unexpected decline in US crude inventories last week. Brent for January settlement was up 40 cents a barrel at $70.32 a barrel. The contract had slipped 62 cents a barrel to settle at $69.92 yesterday, 3 December 2014.
The finance ministry after trading hours yesterday, 3 December 2014, announced the setting up of a High Level Committee (HLC) to interact with trade and industry on tax laws. The HLC will interact with trade and industry on regular basis and ascertain areas where clarity in tax laws is required. The HLC will give recommendations to the CBDT/CBEC for issuance of appropriate clarifications by way of circulars, instructions etc. on tax issues. The CBDT/CBEC will issue the required clarifications, circulars, instructions etc. within a period of 2 months from the date of receipt of recommendations of the HLC, the finance ministry said in a statement. The term of the committee shall be for one year from the date of its constitution, subject to further extensions, as may be considered appropriate by the Department of Revenue, Ministry of Finance.
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.
European stocks edged higher in choppy trade today, 4 December 2014, with an improving US economic outlook and expectations of further stimulus from the European Central Bank helping the market. Key benchmark indices in UK, France and Germany were up 0.11% to 0.59%.
The European Central Bank (ECB) reviews interest rates today, 4 December 2014, amid speculation policy makers will add to stimulus measures to ward off deflation.
Separately, the Bank of England is seen keeping its interest rates at a record low after a monetary policy review today, 4 December 2014.
Asian stocks edged higher today, 4 December 2014, amid fresh signs of resilience in the US economy, the world's biggest economy. Key benchmark indices in Singapore, Taiwan, Japan, Indonesia and South Korea were up 0.04% to 0.94%.
Chinese stocks surged on prospects a jump in trading will boost profits at brokerages. In mainland China, the Shanghai Composite index jumped 4.31% to settle at 2,899.46, its highest closing level since May 2011. Hong Kong's Hang Seng index jumped 1.72%.
In Japan, the result of polls by Japanese news organizations today, 4 December 2014, showed that Japanese Prime Minister Shinzo Abe 's ruling Liberal Democratic Party is poised for a landslide victory in Dec. 14 parliamentary elections in Japan. The poll results come despite some disappointing economic news recently for Abe and his pro-growth Abenomics platform built on measures such as monetary easing and measures such as labor-market liberalization. All the polls cautioned that many voters have yet to make up their minds, meaning the final outcome could change. All the polls predicted that the Japan Communist Party, which currently has eight seats, would make gains.
Trading in US index futures indicated that the Dow could rise 12 points at the opening bell today, 4 December 2014. Big gains in energy, materials and industrials sectors, following a rebound in oil and gold prices, helped propel the S&P 500 and Dow Jones Industrial Average to record levels yesterday, 3 December 2014.
In economic data, a private report showed hiring in the US topped 200,000 workers for the seventh time in eight months, while the Federal Reserve's Beige Book indicated widespread hiring. Service industries in the US expanded last month at the second-fastest pace in more than nine months.
US government's monthly nonfarm payrolls report for November will be out tomorrow, 5 December 2014.
Federal Reserve Bank of Dallas President Richard Fisher yesterday, 3 December 2014, said that he'd like the US central bank to revisit its recently revised plans for raising borrowing costs in way that could help ease conditions in the bond market. In remarks in Dallas, Fisher, who will retire from the Fed next March, said he'd like the central bank to think again about its current plan to stop reinvesting the proceeds of maturing Treasury and mortgage bonds into new holdings only after it begins to raise short-term interest rates. The Fed's ongoing reinvestment process is designed to keep its $4.5 trillion balance sheet size steady. If it didn't buy new securities with the proceeds of its maturing holdings, the balance sheet would automatically begin to shrink. In a plan updated in September, the Fed said the reinvestment process would stop only after the Fed begins to raise short-term rates.
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