Key benchmark indices edged higher for the second day in a row today, 6 May 2014 with the market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 5 May 2014. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled at over one week high. The S&P BSE Sensex, was up 63.30 points or 0.28%, up 32.77 points from the day's low and off 94.29 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Indian stocks rose for second day in a row today, 6 May 2014. The Sensex has gained 104.53 points, or 0.46% in two trading sessions from a recent low of 22,403.89 on 2 May 2014. The Sensex has risen 90.62 points or 0.4% so far in May 2014 (till 6 May 2014). The Sensex had risen 31.53 points or 0.14% in April 2014. The Sensex has gained 1,337.74 points or 6.31% in calendar year 2014 so far (till 6 May 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 5,059.71 points or 28.99%. From a record high of 22,939.31 on 25 April 2014, the Sensex has fallen 430.89 points or 1.87%.
Coming back to today's trade, index heavyweights Reliance Industries (RIL) and ITC, both, gained. Many capital goods stocks gained. HDFC dropped after announcing Q4 results.
The market edged higher in early trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in almost one week. It held firm in morning trade. It trimmed intraday gains in mid-morning trade. It hovered in positive terrain in early afternoon trade. Key benchmark indices firmed up after hitting fresh intraday low in afternoon trade. It continued to trade firm in mid-afternoon trade. It regained strength after trimming gains and hitting fresh intraday low in late trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 5 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 332.20 crore from the secondary equity markets on Monday, 5 May 2014 as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex was up 63.30 points or 0.28% to 22,508.42, its highest closing level since 28 April 2014. The index rose 157.59 points at the day's high of 22,602.71 in early trade, its highest level since 30 April 2014. The index gained 30.53 points at the day's low of 22,475.65 in late trade.
The CNX Nifty was up 15.95 points or 0.24% to 6,715.30, its highest closing level since 28 April 2014. The index hit a high of 6,743.45 in intraday trade, its highest level since 30 April 2014. The index hit a low of 6,710.90 in intraday trade.
The BSE Mid-Cap index rose 22.63 points or 0.31% to 7,370.69. The BSE Small-Cap index rose 34.74 points or 0.46% to 7,532.83. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1943 crore, lower than Rs 2435.17 crore on Monday, 5 May 2014.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,383 shares declined and 1,361 shares rose. A total of 135 shares were unchanged.
The S&P BSE Consumer Durables index (up 3.22%), the S&P BSE Oil & Gas index (up 1.1%), the S&P BSE Capital Goods index (up 0.99%), the S&P BSE Bankex (up 0.54%) and the S&P BSE FMCG index (up 0.46%) outperformed the Sensex.
The S&P BSE Healthcare index (up 0.12%), the S&P BSE Auto index (up 0.09%), the S&P BSE Metal index (up 0.07%), the S&P BSE Realty index (down 0.05%), the S&P BSE Power index (down 0.34%), the S&P BSE Teck index (down 0.46%) and the S&P BSE IT index (down 0.51%) underperformed the Sensex.
Among the 30-share Sensex pack, 15 stocks declined and rest of them rose.
Bharti Airtel (down 2.1%), Tata Power Company (down 1.27%) and Axis Bank (down 1.04%) edged lower from the Sensex pack.
ICICI Bank (up 1.9%), Tata Motors (up 1.09%) and Tata Steel (up 0.84%) edged higher from the Sensex pack.
Index heavyweight Reliance Industries (RIL) rose 2.19% to Rs 965.90. The stock hit high of Rs 967 and low of Rs 948. The stock was the biggest gainer from the Sensex pack.
Index heavyweight and cigarette maker ITC gained 0.83%.
Asian Paints fell 0.54%. The company announced after market hours on Monday, 5 May 2014 that the company has offered a Voluntary Retirement/Separation Scheme along with an alternate option of relocation to other factories/establishments of the company to all the workmen at the Bhandup plant in Mumbai. All workmen have accepted either the Voluntary Retirement/Separation Scheme or relocation to another factory/establishment of the company. The company has discontinued manufacturing activities at the plant with effect from 5 May 2014.
Emami dropped 1.82%. Emami announced after market hours on Monday, 5 May 2014 that its consolidated net profit rose 18.26% to Rs 111.15 crore on 1.32% fall in total income to Rs 464.14 crore in Q4 March 2014 over Q4 March 2013.
Housing Development Finance Corporation (HDFC) dropped 1.26% after announcing Q4 results. The company's consolidated net profit rose 15.91% to Rs 2414.70 crore on 11.34% rise in total income to Rs 12296.02 crore in Q4 March 2014 over Q4 March 2013. Housing Development Finance Corporation (HDFC)'s consolidated net profit rose 19.7% to Rs 7947.82 crore on 13.41% growth in total income to Rs 40814.56 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). The result was announced during market hours.
HDFC said that the board of directors of the company at its meeting held today, 6 May 2014 has recommended a dividend of Rs 14 per share for the financial year ended 31 March 2014. The dividend if approved by the members will be dispatched/ remitted commencing from the day after the ensuing Annual General Meeting. HDFC said that the Register of Members & Share Transfer Books of the company will remain closed from 8 July 2014 to 21 July 2014 (both days inclusive) for the purpose of payment of dividend & 37th Annual General Meeting (AGM) of the company to be held on 21 July 2014.
Titan Company climbed 3.47% to Rs 271.05. The company's net profit rose 11.61% to Rs 206.44 crore on 7.04% increase in total income to Rs 2828.88 crore in Q4 March 2014 over Q4 March 2013. The company announced the result at the fag end of the trading session today.
Mr. Bhaskar Bhat, Managing Director of the Company stated that "The year 2013-14 was a challenging year given the economic environment that was subdued. The year also witnessed other adverse factors like the regulatory changes that impacted our jewellery business. The company will however continue to invest in strategic initiatives taking into account our long term and sustainable growth plans. Given the expectations of our stakeholders and aspirations of our employees, we move confidently into the new financial year with aggressive plans."
Many capital goods stocks gained. Bharat Heavy Electricals (Bhel) (up 0.03%), Crompton Greaves (up 2.8%), BEML (up 1.3%), L&T (up 1.3%) and Thermax (up 1.92%) rose. ABB India (down 1.56%) and Siemens (down 0.77%) declined.
Pipavav Defence and Offshore Engineering Company gained 2.09% on bargain hunting the stock tumbled 14.13% in the preceding three trading sessions to Rs 43.15 on 5 May 2014, from a recent high of Rs 50.25 on 29 April 2014.
Punj Lloyd rose 2.76% after the company said it bagged a Rs 1270 crore expressway project in Yemen. The company made the announcement during trading hours today, 6 May 2014. Punj Lloyd said it has received a letter of award for the construction of 42 kilometre (km), 2x3 lane dual carriageway project between Doraigh and Noubat Dokaim from Ministry of Public Works & Highways, Republic of Yemen. This project, valued at Rs 1270 crore ($211.41 million), is funded by Saudi Development Fund (SDF).
Located 60 km from the port city of Aden, the scope of work for this project comprises construction of 210 lane-km new carriageway greenfield project. The work involves excavation of over 10 million cubic meter, road paving, surface sealing, two major concrete overpass bridges, box & pipe culvert construction and associated infrastructure work.
Speaking on this achievement, President & CEO, Buildings & Infrastructure, MEA & CIS, Pardeep Tandon said, "This is the first major expressway project for Punj Lloyd in the Middle East. Our existing expertise in this sector coupled with our strong assets of equipment and manpower, was a strong determinant in our winning this order amidst tough global competition. This is an excellent opportunity for us to showcase our construction expertise in the Middle East market."
Yemen is also a repeat country for Punj Lloyd which has already executed work on the offsites and utilities of the prestigious Yemen LNG project. The dual carriageway project is reflective of the Group's intent to aggressively pursue global infrastructure opportunities.
With this new order, the Group's order backlog stands at Rs 23376 crore. The order backlog is the value of unexecuted orders on 31 December 2013 plus new orders received after that date.
Maruti Suzuki India rose 0.61%. Maruti Suzuki India said during market hours that production fell 1.87% to 1.03 lakh units in April 2014 over April 2013.
Shares of two-wheeler makers dropped. Bajaj Auto (down 0.72%) and Hero MotoCorp (down 1.49%) declined. TVS Motor Company rose 3.79%.
IT stocks edged lower. TCS (down 0.6%), Infosys (down 0.1%), Wipro (down 1.29%), Tech Mahindra (down 1.08%) dropped. HCL Technologies rose 0.37%.
Piramal Enterprises surged 2.9% after the company said its board of directors at its meeting held on Monday, 5 May 2014, recommended hefty dividend of Rs 52.50 per share for the financial year ended 31 March 2014. Piramal Enterprises reported a consolidated net loss of Rs 311.40 crore in Q4 March 2014, higher than net loss of Rs 200.40 crore in Q4 March 2013. Total operating income rose 19.4% to Rs 1121 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Monday, 5 May 2014.
Operating EBITDA (earnings before interest, taxation, depreciation and amortization) declined 26.54% to Rs 70.30 crore in Q4 March 2014 over Q4 March 2013.
Piramal Enterprises' financing costs rose 19.86% to Rs 269.70 crore in Q4 March 2014 over Q4 March 2013, as company raised funds for expanding its financial services businesses. These finance costs for the quarter include one-time financing charges of Rs 54 crore, the company said in a statement.
Revenue from pharmaceutical businesses rose 16.4% to Rs 765 crore in Q4 March 2014 over Q4 March 2013. Revenue from financial services (including investment income) rose 45.2% to Rs 181.90 crore in Q4 March 2014 over Q4 March 2013. Revenue from information management business rose 11.5% to Rs 174.10 crore in Q4 March 2014 over Q4 March 2013.
Piramal Enterprises reported a consolidated net loss of Rs 501.40 crore in the year ended 31 March 2014 (FY 2014), higher than net loss of Rs 227.30 crore in the year ended 31 March 2013 (FY 2013). Total operating income rose 27.5% to Rs 4520.20 crore in FY 2014 over FY 2013. Finance costs surged 82.53% to Rs 1049.60 crore in FY 2014 over FY 2013, as the company raised funds for expanding its financial services businesses. These financing costs include one-time financing charge of Rs 178 crore on account of discounting of receivables for investing in lending operations and in acquiring stakes in Shriram Group entities, Piramal Enterprises said in a statement.
Revenue from pharmaceutical businesses rose 14.9% to Rs 2877.20 crore in FY 2014 over FY 2013. Revenue from financial services (including investment income) rose 91.3% to Rs 743.70 crore in FY 2014 over FY 2013. Revenue from information management business rose 38.1% to Rs 899.30 crore in FY 2014 over FY 2013. FY 2013 results included the financial results of DRG only for ten months as DRG was acquired in June 2012, Piramal Enterprises said in a statement.
Piramal Enterprises' board of directors at its meeting held on Monday, 5 May 2014, approved a Scheme of Amalgamation for merger of the step-down wholly-owned subsidiaries viz. PHL Capital, Piramal Pharmaceutical Development Services, Oxygen Bio Research with the company. Since all the transferor companies are step down wholly owned subsidiaries of the Company, no shares are proposed to be issued pursuant to the merger. This Scheme is subject to requisite approvals, including under the Listing Agreement and by the Hon'ble High Courts. The merger being of step down wholly owned subsidiaries into the company, a specific dispensation will be sought from the Hon'ble High Courts from filing the application /petition by the company and accordingly, the company may not be required to file petition with the High Court, Piramal Enterprises said.
Piramal Enterprises' board of directors at its meeting held on Monday, 5 May 2014, recommended dividend of Rs 52.50 per share for FY 2014. In addition to normal dividend of Rs 17.50 per share, the Board has also recommended a substantial reward to shareholders through a special dividend of Rs 35 per share considering the strength of company's balance sheet. This will result in a total outlay of Rs 1059.93 crore including the dividend distribution tax, Piramal Enterprises said in a statement.
Shasun Pharmaceuticals surged by maximum permissible level of 10% at Rs 140.25 after the company acquired the global rights to develop and commercialise Ibuprofen the 12-hour extended release tablets from the US-based ScolrPharma. The company made the announcement during trading hours on Monday, 5 May 2014. The stock settled 0.20% lower at Rs 127.50 on Monday after rising as much as 4.46% in intraday that day.
Shasun Pharmaceuticals, through its wholly-owned subsidiary, SVADS Holdings, Switzerland (SVADS) acquired the global rights from ScolrPharma, USA (Scolr), to develop and commercialize Ibuprofen 12 hour extended release OTC tablets (Asset) as well as the associated controlled release technology (CDT) along with global rights of Nuprin trademark, a well known brand in analgesics. The Asset, having completed a successful Phase III in the US is a differentiated long acting NSAIDS in the multi billion dollar global OTC analgesic market.
Shasun is the world's leading, vertically integrated manufacturer of Ibuprofen and its derivatives, from actives to formulated packaged products for both the Rx and OTC markets. This acquisition complements Shasun's strategy to expand its range of NSAIDS products through novel, safe and efficacious delivery technologies including transdermal applications across its Ibuprofen franchise, the company said in a statement.
City Union Bank rose 6.03% after the Reserve Bank of India allowed foreign institutional investors to purchase up to 35% of the paid-up capital of the company. The Reserve Bank of India (RBI) on Monday, 5 May 2014, notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 35% of the paid up capital of City Union Bank under the Portfolio Investment Scheme (PIS). City Union Bank has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs.
This approval is given subject to the condition that the onus of compliance with FDI policy and FEMA regulations including downstream investment would continue to remain on the Indian company, City Union Bank.
RBI is also advised that for FII/RFPI/QFI and NRI under Portfolio Investment Scheme, individual ceiling shall be 5% respectively and aggregate limit for all RFPI/FII/QFI shall be 35%.
City Union Bank will have to monitor individual limits of FII/FPI/QFI and NRI and also ensure that at no time its total foreign investment (direct as well as indirect) exceeds 49%, beyond which, it should seek prior FIPB approval, RBI said.
Further, RBI notified that the shareholding by FIIs, in City Union Bank have gone below the revised threshold limit stipulated under the extant Foreign Direct Investment (FDI) Policy. Hence, the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect.
FIIs held 21.54% stake in City Union Bank (as per the shareholding patterns as on 31 March 2013).
United Bank of India surged 5.04% after net profit galloped 1405.35% to Rs 469.37 crore on 14.38% growth in total income to Rs 3073.78 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Monday, 5 May 2014.
United Bank of India's ratio of gross non-performing assets (NPAs) to gross advances stood at 10.47% as on 31 March 2014 as against 10.82% as on 31 December 2013 and 4.25% as on 31 March 2013. The ratio of net NPAs to net advances stood at 7.18% as on 31 March 2014 as against 7.44% as on 31 December 2013 and 2.87% as on 31 March 2013.
The banks provisions and contingencies declined 64.85% to Rs 266.70 crore in Q4 March 2014 over Q4 March 2013. Provision coverage ratio stood at 52.25% as on 31 March 2014.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 9.81% as on 31 March 2014 as against 9.01% as on 31 December 2013.
United Bank of India reported a net loss of Rs 1213.45 crore in the year ended 31 March 2014 (FY 2014) compared to net profit of Rs 391.90 crore in the year ended 31 March 2013 (FY 2013). Total income rose 14.42% to Rs 11806.16 crore in FY 2014 over FY 2013.
In terms of the provisions of Circular dated 9 February 2011 issued by RBI on reopening of Pension Option to employees of Public Sector Banks and enhancement in Gratuity Limits, Rs 447.30 crore is being amortised over a period of 5 years with effect from financial year 2010-11. Accordingly, an amount of Rs 22.37 crore for the quarter ended 31 March 2014 (Rs 89.46 crore for the whole year) has been charged to profit & loss account. The unamortized liability as at 31 March 2014 stands at Rs 89.46 crore, United Bank of India said.
Pursuant to Reserve Bank of India (RBI)'s Circular dated 7 February 2014, the bank has utilized 33% of its countercyclical/floating provisions held as on 31 March 2013. As per the said RBI Circular, an amount of Rs 51.97 crore out of floating provision of Rs 157.48 crore held as at 31 March 2013 has been utilized for making specific provisions for non-performing assets, as per the policy approved by the Board, United Bank of India said.
Credit Analysis & Research rose 1.62% after the Reserve Bank of India allowed foreign institutional investors to purchase up to 74% of the paid-up capital of the company. The Reserve Bank of India (RBI) on Monday, 5 May 2014, notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 74% of the paid up capital of Credit Analysis & Research (CARE) under the Portfolio Investment Scheme (PIS). CARE has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing to enhance the limit for the purchase of its equity shares and convertible debentures by FIIs, RBI said in a statement.
FIIs held 15.66% stake in CARE (as per the shareholding patterns as on 31 March 2013).
Eveready Industries India declined 0.09%. Eveready Industries India reported a net profit of Rs 1.25 crore in Q4 March 2014 compared with a net loss of Rs 2.15 crore in Q4 March 2013. The Q4 result was announced after market hours on Monday, 5 May 2014.
Eveready Industries' operating income rose 13% to Rs 257.43 crore in Q4 March 2014 over Q4 March 2013. Operating EBITDA (earnings before interest, taxation, depreciation and amortization) rose 54.2% to Rs 15.59 crore in Q4 March 2014 over Q4 March 2013.
Eveready Industries' net profit surged 167.7% to Rs 13.60 crore on 11.4% growth in operating income to Rs 1153.41 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Operating EBITDA rose 38.6% to Rs 90.59 crore in FY 2014 over FY 2013.
During the quarter and the year, the product categories of batteries and lighting products saw healthy turnover growth - contributing to the sales gain, Eveready Industries said. Growth of EBIDTA and profits is a reflection of better price realization and cost conservation, the company said in a statement.
The company had significant adverse impact on input costs during the current year on account of the steep rupee depreciation in the recent past. However, it could pass on the impact to the market by taking up prices of batteries and flashlights in 2 rounds, Eveready Industries said in a statement.
Eveready Industries said that market has absorbed these price increases and outlook for batteries & flashlights appears stable. Another round of price increase has already been implemented effective April 2014, the company added.
Eveready is also basing its growth for the year on the new products especially the various lighting products and devices. The company is hopeful that these should result in sustainable improvement in sales as well as in margins, Eveready Industries said in a statement.
Also, given the above operational improvement and tight working capital management, the company was able to reduce its borrowings by Rs 50 crore during the financial year, Eveready Industries said. The end of the year borrowing stood at Rs 225 crore. The company stands by its plans to reduce debts substantially in the coming year with profits from planned improved operations, Eveready Industries said in a statement.
Eveready Industries India said that at the meeting of the Board of Directors of the company held on Monday, 5 May 2014, Mr. Amritanshu Khaitan, was appointed as Managing Director of the company with effect from 5 May 2014, subject to approval of the members at the next Annual General Meeting of the company and/or Central Government, as may be required.
Torrent Power jumped 6.04% to Rs 107.95. The company will announce year ended March 2014 (FY 2014) results on 12 May 2014.
Pantaloons Fashion & Retail slumped 4.53% after the company reported net loss of Rs 70.75 crore in Q4 March 2014, higher than net loss of Rs 59.52 crore in Q4 March 2013. The result was announced after market hours on Monday, 5 May 2014. Pantaloons Fashion & Retail's net sales rose 2.02% to Rs 400.61 crore in Q4 March 2014 over Q4 March 2013.
The company reported net loss of Rs 187.73 crore in the year ended March 2014, higher than net loss of Rs 68.89 crore during the previous year ended March 2013. Net sales rose 29.59% to Rs 1628.62 crore in the year ended March 2014 over the year ended March 2013.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.1050, compared with its close of 60.22 on Monday, 5 May 2014.
April data indicated that business activity across the Indian private sector fell again Markit Economics said today, 6 May 2014. The seasonally adjusted HSBC India Composite Output Index rose from 48.9 in March to 49.5. Despite being consistent with a marginal rate of reduction, this was the second consecutive sub-50.0 reading recorded. Manufacturing production increased at a softer rate in April, whereas service sector output decreased further.
Up from 47.5 in March to 48.5 in April, the headline HSBC Business Activity Index adjusted for seasonal factors indicated a slower contraction of output in the Indian service sector. Nevertheless, the latest reduction was the tenth in as many months. According to survey participants, a difficult economic climate, combined with the elections and a further drop in new orders had all contributed to the latest fall in business activity. Output decreased in two of the six monitored service categories, these being Financial Intermediation and Transport & Storage.
Incoming new work at service providers dropped at a softer rate in April, and one that was modest overall. Panelists reporting lower new business linked this to weaker demand and the elections. Conversely, new orders received by manufacturers increased. Private sector companies registered lower new business for the second month running, although the rate of reduction eased to a marginal pace.
Indian services companies indicated that payroll numbers fell in April, amid evidence of lower new business inflows. Despite being fractional, the latest drop in staffing levels ended a four-month sequence of job creation. Workforce numbers in the private sector as a whole were broadly unchanged.
Input prices faced by Indian services firms continued to rise in April, with panelists reporting higher prices paid for food, packaging materials, fuel and paper. Although solid, the rate of inflation was weaker than the series long-run average. Input price inflation in the manufacturing economy moderated. Subsequently, the rise in input costs across the private sector as a whole softened to the slowest since last June.
Output charge inflation at service providers accelerated to the strongest in five months during April, as companies attempted to protect margins amid increased cost burdens. That said, the index measuring output prices registered below its long-run trend. Average tariffs across the private sector as a whole also rose, with inflation being the strongest in five months.
Unfinished business in the Indian service sector rose for the second month in succession during April, with firms reporting delayed payments from clients. Nonetheless, the rate of backlog accumulation was modest and little-changed since March. Work-in-hand in the private sector rose for the second month running.
Business sentiment in the service sector remained positive in April, with survey respondents indicating that a combination of planned increases in marketing budgets, the launch of new services and forecasts of stronger demand are all expected to result in output growth over the course of the next year. There were also mentions that economic conditions are anticipated to improve after the elections.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: While the Business Activity Index improved, it remained below the water line. This points to still subdued service sector activity. Meanwhile, the slight uptick in inflation readings suggests that inflation pressures are still lingering, which calls for the RBI to continue its starring contest with inflation.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Most European stocks edged lower on Tuesday. UK's FTSE 100 fell 0.15%. France's CAC 40 slipped 0.13%. Germany's DAX was flat.
Euro zone businesses had a solid start to the second quarter of the year with activity picking up at its fastest pace in almost three years, surveys showed on Tuesday, suggesting a broad-based recovery is taking hold in the bloc. While Germany continued to lead the upturn, businesses in Spain and Ireland grew at their fastest pace since before the financial crisis.
Survey compiler Markit said the Composite Purchasing Managers' Index pointed to second-quarter growth of 0.5 percent, which would be the strongest in three years.
A monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled on Thursday, 8 May 2014. The Composite PMI, widely seen as a good gauge of growth, rose to 54.0 in April, as expected, from March's 53.1. It has held above the 50 mark that divides growth from contraction for 10 months in a row. Burgeoning new orders provided the boost, with the related sub-index rising to a 35-month high of 52.7 in April, while firms took on staff at the fastest pace since September 2011.
The index for the euro zone's vast service industry rose to a 34-month high of 53.1 in April from 52.2 in March thanks to a surge in new business to its highest since June 2011 and a slight rise in employment. Services business activity in France, Germany, Italy, Ireland and Spain all grew together for the first time since May 2011.
The European Central Bank (ECB) will hold monetary policy meeting on Thursday, 8 May 2014, in Brussels, Belgium. The ECB is expected to keep its key policy rates on hold.
Asian stocks were mostly higher on Tuesday, with trading volume curbed by holidays in Japan, Hong Kong and South Korea. Key benchmark indices in China, Singapore and Taiwan were up 0.03% to 0.47%. Indonesia's Jakarta Composite was down 0.17%.
Australia's central bank left its benchmark interest rate unchanged at a record low as tame consumer prices and anticipated cuts to government spending give policy makers room to spur employment-intensive industries. Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5% as predicted.
Trading in US index futures indicated that the Dow could gain 20 points at the opening bell on Tuesday, 6 May 2014. US stocks edged higher on Monday on the back of positive economic data. The Institute for Supply Management's US services sector index rose to 55.2 in April, the fastest pace in eight months and easily topping forecasts. A reading above 50 indicates expansion. The data added to evidence that the US economy is emerging from a particularly harsh winter-induced slowdown and provided a welcome offset to worries about China.
Federal Reserve Chair Janet Yellen is due to testify to lawmakers tomorrow, 7 May 2014 after the US central bank pressed ahead April 30 with reductions to its monthly bond-buying, while holding its short-term interest-rate target at near zero.
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