Key benchmark indices eked out small gains on the last trading session of 2013. The barometer index, the S&P BSE Sensex, was provisionally up 27.97 points or 0.13%, up about 50 points from the day's low and off close to 60 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Gains in Asian and European stocks supported domestic bourses.
Among IT stocks, Wipro scaled 52-week high. Shares of power generation and power distribution companies edged higher. Index heavyweight Reliance Industries rose. Shares of Tata group organized retailer Trent edged higher after the Foreign Investment Promotion Board (FIPB) on Monday, 30 December 2013, approved UK-based Tesco Plc's proposal to enter the Indian multi-brand retail segment in joint venture with Trent. Shares of other organised retailers also rose.
A bout of volatility was witnessed as key benchmark indices trimmed gains after a firm start. Volatility continued as key benchmark indices regained positive terrain soon after reversing initial gains in morning trade. The Sensex trimmed gains in mid-morning trade. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. A bout of volatility was witnessed in as key benchmark indices regained positive zone soon after reversing intraday gains in afternoon trade. Key benchmark indices moved in narrow range in positive zone in mid-afternoon trade. The Sensex regained positive terrain after slipping into the red for a brief period in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 116.06 crore on Monday, 30 December 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 27.97 points or 0.13% to 21,170.98. The index rose 87.87 points at the day's high of 21,230.88 in early trade. The index fell 20.33 points at the day's low of 21,122.68 in morning trade.
The CNX Nifty was up 12.05 points or 0.19% to 6,303.15, as per provisional figures. The index hit a high of 6,317.30 in intraday trade. The index hit a low of 6,287.30 in intraday trade.
The total turnover on BSE amounted to Rs 1646 crore, lower than Rs 2561.37 crore on Monday, 30 December 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,496 shares gained and 1,062 shares fell. A total of 161 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks gained and rest of them declined. AXIS Bank (up 1.12%), L&T (up 0.72%) and Dr Reddy's Laboratories (up 0.69%) edged higher from the Sensex pack.
Wipro rose 1.25% to Rs 559 after hitting 52-week high of Rs 561.25 in intraday trade.
Index heavyweight Reliance Industries rose 0.98% to Rs 894.05. The stock hit a high of Rs 898 and low of Rs 886.10.
Shares of two-wheeler majors -- Bajaj Auto and Hero MotoCorp--edged higher. Bajaj Auto rose 0.48%. Hero MotoCorp gained 0.36%.
TVS Motor Company fell 3.74% on profit booking. The stock had surged 14.84% on Monday, 30 December 2013.
Shares of power generation and power distribution companies edged higher. Power Grid Corporation of India (up 0.51%), GVK Power & Infrastructure (up 1.5%), Tata Power Company (up 2.53%), NTPC (up 0.4%), Reliance Infrastructure (up 0.27%), Torrent Power (up 2.71%), JSW Energy (up 2.92%), and Reliance Power (up 0.21%) gained.
Shares of power finance firms rose. Power Finance Corporation (up 4.02%) and Rural Electrification Corporation (up 3.96%) gained.
Canara Bank rose 2.02%. The state-run bank after market hours on Monday, 30 December 2013, announced increase in lending rates. The bank has raised its base rate to 10.20% from 9.95%, with effect from 1 January 2014. The bank has raised its benchmark prime lending rate (PLR) to 14.45% from 14.20% from 1 January 2014.
The state-run bank also announced increase in term deposit rates for the maturity bucket 180 days to 269 days, to 7.4% from 7%, for deposits of less than Rs 1 crore. The hike in rate is effective from 1 January 2014.
Shares of Tata group organized retailer Trent edged higher after the Foreign Investment Promotion Board (FIPB) on Monday, 30 December 2013, approved UK-based Tesco Plc's proposal to enter the Indian multi-brand retail segment in joint venture with Trent. The stock was up 0.58%.
Trent had announced on 17 December 2013 that the company is in discussions with British retailer Tesco regarding an investment by Tesco in Trent Hypermarket (THL) which operates the Star Bazaar retail business and is engaged in multi-brand retail trading. Trend had announced at that time that Trent and Tesco will each own a 50% stake in THL.THL currently operates 16 stores across the Southern and Western regions of India. The proposed partnership will operate and build on the existing portfolio of Star Bazaar stores in Maharashtra and Karnataka, Trent had said on 17 December 2013.
Shares of other organised retailers also rose. Future Retail (up 7.31%) and Shoppers Stop (up 0.98%) gained.
Hospitality shares were in demand. Taj GVK Hotels, Hotel Leela Ventures, Indian Hotels, EIH, EIH Associated Hotels and Royal Orchid Hotel rose 1.58% to 14.48%.
Deep Industries rose 3.63% after the company said it allotted 29.50 lakh convertible warrants of Rs 34 each on a preferential basis to five promoter group entities. The company made the announcement during trading hours today, 31 December 2013.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade after the Foreign Investment Promotion Board (FIPB) on Monday, 30 December 2013, cleared Vodafone and Tesco's investment proposals, worth around $1.7 billion in total. The partially convertible rupee was hovering at 61.82, compared with its close of 61.91/92 on Monday, 30 December 2013.
The Confederation of Indian Industry (CII) on Monday, 30 December 2013, said that the CII Business Confidence Index (CII-BCI) rose sharply to 54.9% in Q3 December 2013, from 45.7% in Q2 September 2013. The pick-up in BCI for the current quarter comes as a major relief for the economy which has been braving the onslaught of the slowdown for the last several quarters and awaiting the return of growth, the CII said in a statement. The survey also strikes a note of caution as the downside risks to growth have still not abated and supply side bottlenecks continue to pose a problem, CII said. "With some positive signals emanating from the global economy, which finds a resonance in our improved export performance and is causing our current account deficit to decline, we believe that the slowdown in the domestic economy may have bottomed out in the second quarter and the trend could reverse henceforth", observed Mr. Chandrajit Banerjee, Director General, Confederation of Indian Industry.
The 85th Business Outlook Survey is based on the responses from over 174 industry members. Majority of the respondents (63%) belong to large-scale firms, while 12% are from medium-scale firms and 25% were from small-scale. Further, 65% of the respondents were from manufacturing sector while 35% were from services.
The survey reveals that 58% of the respondents expect an increase in their sales in the third quarter of 2013-14, much higher than 45% who witnessed the same during the previous quarter. As regards the input cost in the current quarter, majority of the respondents also expect it to increase. The silver lining, however, is that the percentage of respondents who expect expenses on raw materials, electricity, and wages and salaries to increase has declined significantly from the last quarter, CII said.
Against the backdrop of an expected improvement in sales growth and moderation in inputs cost, majority of the respondents (43%) expect an increase in their pre-tax profit margin in the third quarter, much higher than 31% in the previous quarter.
Another positive signal emerging from the survey is that an improvement in capacity utilization is expected in the current quarter, CII said. As compared to 56% respondents experiencing less than 75% capacity utilization in the second quarter, only 45% respondents expect capacity utilization to fall below 75% in the third quarter, CII said. Underlining the need for continuing policy intervention to step up investment, 53% of firms did not expect their capacity to expand in the current quarter.
What is also encouraging is to note that the export prospects look positive in the current quarter whereas imports are seen to be restrained, CII said. 53% of firms expected their exports to increase in the current quarter, up from 49% in the previous quarter. Similarly, 56% of the respondents didn't expect their imports to increase during the current quarter.
In the 85th Business Outlook Survey, domestic economic/political instability, slackening consumer demand, high level of corruption, persistent high inflation and risk from exchange rate volatility emerged as the top five current concerns in order of severity to most firms, CII said.
The next major trigger for the 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.
Prime Minister Dr. Manmohan Singh will hold a press conference on 3 January 2014. The press conference is likely to set the tone for the Congress party's election agenda in 2014, according to reports. Dr. Singh is likely to officially opt himself out of the prime minister's race after the 2014 elections, reports suggest.
Amidst demands that the Congress party should reveal its prime ministerial candidate for the 2014 Lok Sabha elections, Information and Broadcasting Minister Manish Tiwari today, 31 December 2013, said that the decision will be taken and announced at the appropriate time.
European stocks edged higher on Tuesday, 31 December 2013, amid shortened trading hours for New Year's Eve before American consumer confidence and housing data. Key benchmark indices in France and UK were up 0.04% to 0.23%. The stock market in Germany was closed for holiday.
Asian stocks edged higher on the last trading session of the year on Tuesday, 31 December 2013, as energy shares advanced. Key benchmark indices in China, Hong Kong and Singapore were up 0.26% to 0.88%. Taiwan's Taiwan Weighted fell 0.14%. Stock markets in Japan, South Korea, Indonesia, Thailand, the Philippines and Vietnam were closed for holidays.
China is scheduled to post its manufacturing purchasing managers' index for December 2013 tomorrow, 1 January 2014.
China's central bank on Monday, 30 December 2013, said it would continue with a "prudent" monetary policy, maintain an appropriate level of liquidity and bring about the "reasonable growth" of credit. The People's Bank of China (PBOC) made the comments in a statement on its website following a quarterly monetary policy meeting.
The PBOC said financial markets have been steady, while domestic prices have been "basically stable." China's consumer price inflation this year has been benign, and has not exceeded the officially targeted ceiling of 3.5% in any single month. The PBOC also said it would carry out further interest rate liberalization and exchange rate reform, though it did not give any timetable. China took a step toward interest rate reform in July, scrapping most controls on lending rates, but a cap on the interest paid on bank deposits remains. The central bank continues to intervene heavily in foreign currency markets to control the exchange rate.
The PBOC said it would closely monitor changes in domestic and international liquidity conditions. The global economy is expected to continue to recover at a slow pace, the PBOC said, although uncertainties remain.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 31 December 2013. US stocks finished little changed on Monday, 30 December 2013, although the Dow Jones Industrial Average managed to eke out its 51st record close of 2013 in the next-to-last trading session of the year, while shares of Twitter extended a decline. The National Association of Realtors said its index of pending home sales rose 0.2% in November to 101.7, slightly above a 10-month low of 101.5 in October, but down from 103.3 in November 2012. The data had little impact on stocks.
The US stock market is closed tomorrow, 1 January 2014, for New Year's Day holiday.
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.
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