Trading for the week and month began on positive note as key benchmark edged higher after the outcome of a business survey showed that India's manufacturing activity returned to growth in November 2013 as a strong rise in orders pushed factories to step up production. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained their highest closing level in almost four weeks. The market breadth, indicating the overall health of the market, was positive. The Sensex garnered 106.08 points or 0.51%, up close to 127 points from the day's low and off about 43 points from the day's high. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013.
Indian stocks edged higher the third day in a row today, 2 December 2013. From a recent low of 20,420.26 on 27 November 2013, the Sensex has garnered 477.75 points or 2.34% in three trading sessions. The Sensex lost 372.59 points or 1.76% in November 2013. The Sensex has garnered 1,471.30 points or 7.57% in calendar 2013 so far (till 2 December 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,449.30 points or 19.77%. From a record high of 21,321.53 on 3 November 2013, the Sensex has fallen 423.52 points or 1.99%.
Shares of infrastructure companies rose after the Securities and Exchange Board of India (Sebi) on Friday, 29 November 2013, relaxed fundraising rules for infrastructure debt mutual funds in its continued bid to channel long-term capital to finance infrastructure projects in the country. L&T gained after the company said it is evaluating alternatives for monetisation of certain assets of its subsidiary L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore. Metal stocks edged higher as manufacturing in China continued to grow last month. PSU OMCs rose after raising diesel prices.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 747 crore from the secondary equity markets crore on Friday, 29 November 2013, as per data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex rose 106.08 points or 0.51% to settle at 20,898.01, its highest closing level since 5 November 2013. The index jumped 149.07 points at the day's high of 20,941 in mid-morning trade. The index lost 21.42 points at the day's low of 20,770.51 in early trade.
The CNX Nifty rose 41.75 points or 0.68% to settle at 6,217.85, its highest closing level since 5 November 2013. The index hit a high of 6,228.70 in intraday trade. The index hit a low of 6,171.15 in intraday trade.
The BSE Mid-Cap index rose 0.81% and the BSE Small-Cap index rose 1.09%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,464 shares rose and 1,007 shares dropped. A total of 164 shares were unchanged.
The total turnover on BSE amounted to Rs 1948 crore, lower than Rs 2061.58 crore on Friday, 29 November 2013.
The S&P BSE Oil & Gas index fell 0.38%, underperforming the Sensex. The S&P BSE PSU index (up 0.01%), the S&P BSE Consumer durables index (up 0.02%), the S&P BSE FMCG index (up 0.08%), the S&P BSE Power index (up 0.38%), the S&P BSE IT index (up 0.42%) and the S&P BSE Auto index (up 0.46%), underperformed the S&P BSE Sensex.
The S&P BSE Healthcare index (up 2%), the S&P BSE Capital goods index (up 1.61%), the S&P BSE Bankex (up 1.16%), the S&P BSE Metal index (up 1%) and the S&P BSE Teck index (up 0.64%), outperformed the S&P BSE Sensex.
Among the 30-share Sensex pack, 21 stocks rose and rest fell.
Shares of infrastructure companies rose after the Securities and Exchange Board of India (Sebi) on Friday, 29 November 2013, relaxed fundraising rules for infrastructure debt mutual funds in its continued bid to channel long-term capital to finance infrastructure projects in the country.
Madhucon Projects (up 20%), NCC (up 5.74%), Simplex Infrastructures (up 4.98%), Unity Infraprojects (up 4.08%), Lanco Infratech (up 3.91%), Valecha Engineering (up 2.73%), Sadbhav Engineering (up 2.45%), Hindustan Construction Company (up 1.84%), KNR Constructions (up 1.56%), Punj Lloyd (up 1.5%), GMR Infrastructure (up 1.47%), IVRCL (up 1.07%), GVK Power & Infrastructure (up 0.54%), IRB Infrastructure Developers (up 0.31%) and Jaiprakash Associates (up 0.19%), edged higher.
Sebi said that it will allow foreign feeder funds that get at least 20% of their managed assets from long-term investors such as sovereign wealth funds, pension funds and insurance funds to qualify as strategic investors.
L&T gained 2.22% to Rs 1,066.55. The company after market hours on Friday, 29 November 2013, said it is evaluating alternatives for monetisation of certain assets of its subsidiary L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore. The proposed transactions are subject to various factors including approvals and market conditions and may or may not be completed, L&T said. In the meantime, shareholders and other investors are reminded to exercise caution when deal in the company's shares, pending any definite announcement from the company, L&T said in a statement.
L&T IDPL is primarily engaged in public-private partnership projects in India, with business interests spread across sectors involving roads and bridges, ports, metro rail, wind energy and power transmission lines. It has experience in identifying and assessing viability of projects, achieving financial closure, project management, operations and maintenance of infrastructure assets across various sectors as well as divestiture.
Metal stocks edged higher as manufacturing in China continued to grow last month. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power (up 4.01%), Tata Steel (up 1.9%), JSW Steel (up 1.78%), NMDC (up 1.21%), Sail (up 0.73%), Sesa Sterlite (up 0.44%) and Bhushan Steel (up 0.14%), gained.
In mid-November 2013, China released a broad outline for structural reform of the economy.
PSU OMCs rose after raising diesel prices. BPCL (up 1.42%), HPCL (up 0.81%) and Indian Oil Corporation (IOCL) (up 0.67%), edged higher. PSU OMCs have raised diesel prices by 50 paise per litre from Sunday, 1 December 2013. The price increase excludes local sales tax or VAT. The price of diesel in Delhi will be hiked by 57 paise, including tax, to Rs 53.67 per litre, while it will cost Rs. 60.70 a litre in Mumbai.
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.
The Reserve Bank of India (RBI) today, 2 December 2013, said that beginning last week, the Public Sector Oil Marketing Companies (PSU OMCs) have started accessing the foreign exchange (FX) market for their entire daily dollar demand. Going forward, the PSU OMCs have been advised to smoothen their daily dollar demand so that the upcoming bunched up demands on any particular day is covered in advance in the forward forex market or covered on days with low demand, the RBI said in a statement. Apart from covering in the forward markets, the PSU OMCs have also been advised to utilize the revolving lines of credit made available by banks with the specific objective of tiding over humps in dollar demands, the RBI said. The central bank also said that it will consider opening the swap window to PSU OMCs on the rare days when there is a pronounced spurt in dollar demand in the FX market.
Given the backdrop of broad stability returning to the forex market, on the basis of an ongoing review of the demand conditions in the market, PSU OMCs have been allowed to source dollars even beyond their normal daily requirements, the RBI said. This process has already been put in place last week and it is expected that the excess demand of the PSU OMCs will be funneled to meet their swap (second leg) commitments over a period of time, the central bank said. As indicated earlier, the RBI is closely monitoring the market and will continue to keep all options open regarding settlement of PSU OMC swaps, including rupee settlement, depending upon the evolving flow dynamics in the market, the RBI said.
ONGC dropped on reports that the Gujarat high court on Saturday, 30 November 2013, directed the company to pay royalty dues worth over Rs 10000 crore to the state government. The stock fell 1.54% to Rs 293.90. According to media reports, the Gujarat high court on Saturday, 30 November 2013, directed ONGC to pay dues worth over Rs 10000 crore to the state government towards differences in royalty of crude it has extracted since 2008. As per the Schedule of the Oilfields (Regulation and Development) Act, 1948, ONGC is bound to pay to the state government 20% royalty of the market value of crude oil it extracts from oil blocks. Gujarat has 66 such blocks, reports added.
Reports suggested that ONGC used to pay such royalty to the Gujarat government to the latter's satisfaction. The situation changed from 2004, when the Centre asked ONGC to provide crude to IOC and other PSUs, which were incurring losses due to offering subsidies on end products like diesel, kerosene and LPG, at a discounted rate. This discount remained at 70-75%. Since 2004, ONGC started paying royalty on the post-discount rate instead of the market value of the crude. This resulted in a big fall in royalty to Gujarat, which often complained before the Centre. Finally, it moved the high court in 2011, when the difference was computed to Rs 6000 crore. Special counsel Aspi Kapadia contended that ONGC sometimes supplied crude to other PSUs at a discount that went up to 96%. He claimed that the royalty should be given at pre-discount rate, which is market value of the crude.
A division bench has accepted the state government's demand and directed ONGC to make payment of the differences within two months. The court has also asked ONGC to pay royalty at pre-discount rate henceforth, reports said.
Coal India rose 0.72%. The company announced during market hours that on provisional basis, its coal production for November 2013 was 93% of target at 39.20 million tonnes. The company's offtake was 93% of target at 38.76 million tonnes in November 2013.
Bank stocks rose after the Reserve Bank of India (RBI) on Friday, 29 November 2013, said that commercial banks will now have the option to pay interest on savings accounts and term deposits at intervals shorter than quarterly intervals. Banks were hitherto required to pay interest on savings deposits and term deposits at quarterly or longer intervals.
Axis Bank (up 3.09%), and ICICI Bank (up 1.97%) rose. HDFC Bank was almost unchanged for the day at Rs 661.05.
Among PSU bank stocks, Bank of Baroda (up 1.08%), Punjab National Bank (up 1.06%), Bank of India (up 0.87%), Federal Bank (up 0.63%) and Union Bank of India (up 0.5%), edged higher.
State Bank of India (SBI) rose 0.06%. SBI plans to raise up to Rs 9576 crore through issue of equity shares to institutional investors or a follow-on public offer or any other mode, the bank said on Friday, 29 November 2013. SBI said that the bank requires additional capital to match the anticipated growth in assets. Considering the business growth during the current year as well as that for the years to come, there is a strong need for higher capital as required under the Basel III norms, particularly Tier-I Capital, SBI said.
Eicher Motors jumped 6.83% to Rs 5,006.10. The stock hit a record high of Rs 5,106.20 in intraday trade. The stock has risen 19.48% in five sessions from Rs 4,189.95 on 25 November 2013.
Swan Energy rose 1.9% to Rs 110 after the company said it has been selected by the Gujarat Maritime Board as the developer for a greenfield project in Gujarat. Swan Energy announced after market hours on Friday, 29 November 2013, that the Gujarat Maritime Board (GMB) has selected the company as the developer of Greenfield LNG Port Terminal with Floating Storage and regassification Unit (FSRU) project at Jafrabad, Gujarat on built-own-operate-transfer (BOOT) basis.
Tata Motors clocked a highest turnover of Rs 56.26 crore on BSE. State Bank of India (Rs 55.83 crore), Tata Steel (Rs 52.53 crore), Bosch (Rs 50.02 crore) and Ranbaxy Laboratories (Rs 48.50 crore), were the other turnover toppers on BSE in that order.
Unitech reported highest volumes of 55.29 lakh shares on BSE. Sintex Industries (47.50 lakh shares), Cals Refineries (38.59 lakh shares), South Indian Bank (29.51 lakh shares) and Jaiprakash Associates (27.80 lakh shares), were the other volume toppers on BSE in that order.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade after the Reserve Bank of India said that beginning last week, the Public Sector Oil Marketing Companies (PSU OMCs) have started accessing the FX market for their entire daily dollar demand. The partially convertible rupee was hovering at 62.2825, compared with its close of 62.44/45 on Friday, 29 November 2013. The rupee hit a high of 61.965 intraday trade so far, its highest level since 19 November 2013.
The Reserve Bank of India (RBI) today, 2 December 2013, said that beginning last week, the Public Sector Oil Marketing Companies (PSU OMCs) have started accessing the foreign exchange (FX) market for their entire daily dollar demand. Going forward, the PSU OMCs have been advised to smoothen their daily dollar demand so that the upcoming bunched up demands on any particular day is covered in advance in the forward forex market or covered on days with low demand, the RBI said in a statement. Apart from covering in the forward markets, the PSU OMCs have also been advised to utilize the revolving lines of credit made available by banks with the specific objective of tiding over humps in dollar demands, the RBI said. The central bank also said that it will consider opening the swap window to PSU OMCs on the rare days when there is a pronounced spurt in dollar demand in the FX market.
Given the backdrop of broad stability returning to the forex market, on the basis of an ongoing review of the demand conditions in the market, PSU OMCs have been allowed to source dollars even beyond their normal daily requirements, the RBI said. This process has already been put in place last week and it is expected that the excess demand of the PSU OMCs will be funneled to meet their swap (second leg) commitments over a period of time, the central bank said. As indicated earlier, the RBI is closely monitoring the market and will continue to keep all options open regarding settlement of PSU OMC swaps, including rupee settlement, depending upon the evolving flow dynamics in the market, the RBI said.
The RBI also said that the swap windows for FCNR (B) funds and banks' overseas borrowings have been closed. The two swap windows have mobilized a sum of $34 billion. Since the RBI swap windows are now closed, going forward, any new funds raised from FCNR deposits or from banks' borrowings will flow directly into the market instead of to RBI's FX reserves, the central bank said in a statement.
Indian manufacturing returned to growth last month as a strong rise in orders pushed factories to step up production, a business survey showed on Monday, suggesting a slow economic recovery is on its way. The HSBC Manufacturing PMI, compiled by Markit, rose to 51.3 in November from October's 49.6. The PMI index is the highest since March and marks its first time above the watershed level of 50 that divides growth from contraction in four months. The new orders sub-index rose to 51.9 last month, its highest since April. In October it shrank to 48.9.
"Manufacturing activity picked up, led by a rise in new domestic orders, which helped pull up output growth," said Leif Eskesen, chief economist for India at survey sponsor HSBC. Both input and output costs rose at a softer pace in November, the survey showed. Eskesen said the RBI would be getting closer to the end of its tightening cycle if the trend of easing inflation continues.
India's Gross Domestic Product (GDP) increased at improved pace of 4.8% in Q2 September 2013, compared with 4.4% growth recorded in Q1 June 2013. The economic activities which registered significant growth in Q2 September 2013 over Q2 September 2012 were 'agriculture, forestry and fishing' at 4.6%, 'electricity, gas and water supply' at 7.7% 'construction' at 4.3%, 'financing, insurance, real estate and business services' at 10% and 'community, social and personal services' at 4.2%.
The fiscal deficit touched Rs 4.58 lakh crore during April-October 2013, or 84.4% of the full-year target, data released by the government after trading hours on Friday, 29 November 2013, showed. In the annual budget presented in February, Finance Minister P. Chidambaram had committed to narrow the fiscal deficit to 4.8% of gross domestic product (GDP) this fiscal year from 4.9% a year ago.
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.
European stocks dropped on Monday, 2 December 2013, as a report showed that Spanish manufacturing unexpectedly declined last month. Key benchmark indices in Germany, France and UK were off 0.05% to 0.65%.
Manufacturing in the euro area expanded for a fifth month. The final reading of Markit Economics' factory index rose to 51.6 in November from 51.3 in October. Today's reading was above the initial estimate of 51.5. In Spain, the gauge fell to 48.6, the lowest since May.
Asian stocks edged higher on Monday, 2 December 2013, as manufacturing in China continued to grow last month. Key benchmark indices in Singapore, Indonesia, Hong Kong and Taiwan were up 0.09% to 1.54%. Key benchmark indices in South Korea and Japan were down 0.04% to 0.69%.
China's Shanghai Composite index fell 0.59% in choppy trade. China's securities regulator said 50 companies will be ready for initial public offerings by the end of January 2014 as authorities prepare to lift a more than one-year ban on new listings in the world's second-biggest economy. It will take about a year to review more than 760 companies that are seeking first-time share sales, the China Securities Regulatory Commission said in a statement on its website on Nov. 30. The regulator also issued regulations on reverse mergers and said it may begin a trial program for letting companies sell preferred stock.
New rules that pave the way for a switch to a registration-based system for IPOs and letting investor demand determine pricing underscore the Communist Party's pledge to allow markets to play a decisive role in allocating resources. China, the world's largest IPO market in 2010, hasn't had a new listing since October 2012 as the CSRC cracked down on fraud and misconduct among advisers and companies.
Chinese manufacturing growth beat analyst estimates in November, indicating the nation's economic recovery is sustaining momentum amid government efforts to rein in credit growth. The Purchasing Managers' Index was 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said on Sunday. A separate gauge from HSBC Holdings Plc and Markit Economics today also indicated a reading above the 50 level dividing expansion from contraction. The HSBC China Manufacturing Purchasing Managers' Index had a final reading of 50.8 in November, compared with 50.9 in October.
Trading in US index futures indicated a flat opening of US stocks on Monday, 2 December 2013. US stocks ended mostly lower on Friday as the Dow Jones Industrial Average and the S&P 500 index dipped in thin holiday trading, but technology stocks helped lift the Nasdaq Industrial Composite index to a 13-year high.
The US holiday shopping season started with estimated total spending over the Thanksgiving weekend falling to $57.4 billion, down 2.7% from a year ago, according to the National Retail Federation. The federation said it still expects total holiday sales through the year-end to rise 3.9% from a year ago.
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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