Firmness continued on the bourses in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 367.56 points or 1.78%, off close to 85 points from the day's high and up about equal points from the day's low an. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. In the foreign exchange market, the rupee strengthened past 62 against the dollar.
Strides Arcolab tumbled after the company completed sale of its Agila Specialties Division to Mylan Inc. for a total consideration of up to $1.75 billion. Cipla edged higher after the company said its wholly-owned subsidiary -- Cipla Holding B.V. -- has acquired 100% stake in Celeris d.o.o., Croatia, a distributor of Cipla's products in Croatia. Realty stocks edged higher on renewed buying. Swan Energy rose after company's board of directors at a meeting held on Wednesday, 4 December 2013, approved 2-for-1 stock split.
The market surged in early trade after exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. The Sensex hit 4-1/2-week above the psychological 21,000 mark. The 50-unit CNX Nifty hit its highest level in more than four weeks. The market trimmed initial gains in morning trade. Firmness continued on the bourses in mid-morning trade.
Indian stocks surged today, 5 December 2013, after exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. The state elections are considered a barometer for the national elections that are scheduled to be held before the end of May 2014. BJP's prime ministerial candidate for general elections in 2014 -- Narendra Modi -- is considered a pro-business leader.
The Bharatiya Janata Party (BJP) has emerged as the biggest winner in four key state elections, exit polls forecast on Wednesday, 4 December 2013, a possible blow to the ruling Congress ahead of a general election due next year. Assembly elections in Delhi, Madhya Pradesh, Rajasthan, Chhattisgarh and Mizoram were held over the past few weeks. The elections were marked by record high turnout in most states. Despite the gains predicted for the BJP it was unable to win a majority of seats in the capital Delhi, two polls showed. One poll suggested the race was close in Chhattisgarh. While the exact results varied from exit poll to exit poll, the general trend was clear: The ruling Congress party recorded embarrassing declines in support in Delhi as well as the western state of Rajasthan. Meanwhile voters in Madhya Pradesh and Chhattisgarh voted basically on the same lines they voted five years ago, backing the main opposition party, the BJP.
Counting of votes for assembly elections in Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan takes place on Sunday, 8 December 2013. Counting of votes for assembly elections in Mizoram takes place on 9 December 2013. The results are being closely watched by markets as a potential indicator of the mood of voters in the world's biggest democracy before the 2014 general election.
At 11:25 IST, the S&P BSE Sensex was up 367.56 points or 1.78% to 21,077.01. The index jumped 456.89 points at the day's high of 21,165.60 in early trade, its highest level since 3 November 2013. The index rose 283.54 points at the day's low of 20,992.25 in opening trade.
The CNX Nifty was up 114.80 points or 1.86% to 6,275.75. The index hit a high of 6,300.55 in intraday trade, its highest level since 5 November 2013. The index hit a low of 6,262.40 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,268 shares rose and 742 shares dropped. A total of 113 shares were unchanged.
From 30-share Sensex pack, 26 stocks rose and only four fell. ICICI Bank (up 6.03%), HDFC Bank (up 4.1%) and L&T (up 4.13%) edged higher.
Some pharma stocks edged lower. Dr Reddy's Laboratories (down 0.43%) and Sun Pharmaceutical Industries (down 0.17%) declined. Ranbaxy Laboratories rose 0.06%.
Strides Arcolab tumbled 10.64% after the company said it has completed sale of its Agila Specialties Division to Mylan Inc. for a total consideration of up to $1.75 billion. Strides Arcolab said that since the initial announcement of transaction pertaining to the sale of its Agila Specialties Division, the company's board of directors approved final transaction terms to include a hold back of $250 million contingent upon satisfaction of certain regulatory conditions. Consequent to the warning letter received by the company for one of its units in Bangalore, Strides has agreed to a hold back of $250 million, which will be contingent upon satisfaction of certain regulatory conditions related to the injectable facilities in India. The company expects those contingent conditions will be satisfied sometime in 2014.
Since the initial announcement of this transaction, Strides now expects an additional expenditure of $150 million. This includes cost towards acquisition of additional assets from its erstwhile partners and an estimated remediation cost related to its regulatory commitments post the warning letter.
Strides Arcolab also said that a meeting of the Board of Directors of the company will be held on 10 December 2013 to consider declaration of special dividend.
Cipla rose 0.37% after the company said during market hours that Cipla Holding B.V., a wholly owned subsidiary of the company, has acquired 100% stake in Celeris d.o.o., Croatia. Celeris d.o.o. is the distributor of company's products in Croatia.
Realty stocks edged higher on renewed buying. HDIL (up 3.67%), D B Realty (up 1.89%), DLF (up 2.51%), Sobha Developers (up 1.77%), and Unitech (up 3.19%) gained.
Swan Energy rose 2.42% after the company said its board of directors at a meeting held on Wednesday, 4 December 2013, approved 2-for-1 stock split. The announcement was made after market hours on Wednesday, 4 December 2013. Swan Energy last week said 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.
Mirc Electronics was locked at 5% upper circuit at Rs 5.39 after the company said its board at a meeting held on Wednesday approved raising of funds upto Rs 33 crore by rights issue of equity shares to the existing shareholders. The announcement was made after market hours on Wednesday, 4 December 2013.
Mirc Electronics said that the terms of the rights issue viz. issue price, issue size, record date, timing of the issue and other matters shall be decided by the Committee constituted for the said purpose. The company will convene an Extra-ordinary general meeting on 20 January 2014 for obtaining the approval of the shareholders for the rights issue.
In the foreign exchange market, the rupee edged higher against the dollar after exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. The state elections are considered a barometer for the national elections that are scheduled to be held before the end of May 2014. BJP's prime ministerial candidate for general elections in 2014 -- Narendra Modi -- is considered a pro-business leader. The partially convertible rupee was currently hovering at 61.67, compared with its close of 62.05/06 on Wednesday, 4 December 2013.
Government bond prices rose tracking gains in rupee against the dollar. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0627%, lower than its close of 9.0897% on Wednesday, 4 December 2013. Bond yield and bond prices are inversely related.
On macro front, 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.
The winter session of parliament begins today, 5 December 2013, and it will possibly be the last session before the General Elections in 2014. The session will end on 20 December 2013. The UPA wants to push the Lokpal and the Women's Reservation Bills to garner maximum brownie points before the Lok Sabha elections next year. The Bharatiya Janata Party wants discussion on the Patna serial blasts and women's security, but is opposed to any move to bring the Communal Violence Bill.
Other important bills like the Judicial Standards and Accountability Bill, 2012, the Insurance Laws (Amendment) Bill, 2008, the Indo-Bangla land boundary agreement discussion and voting on supplementary grants for both railways and general are all pending. The challenge before the UPA is to pack all of these in 12 working days.
Asian stocks declined on Thursday, 5 December 2013, as strong US economic data overnight triggered speculation that the Federal Reserve will bring forward cuts to monetary stimulus for the US economy. Key benchmark indices in Indonesia, Hong Kong, Japan, Singapore, China and Taiwan shed 0.14% to 0.98%. South Korea's Kospi rose 0.04%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Trading in US index futures indicated that the Dow could slide 10 points at the opening bell on Thursday, 5 December 2013. US stocks fell a fourth day on Wednesday, the longest slump in 10 weeks for the Standard & Poor's 500 Index, as investors weighed economic data for clues on the timing of Federal Reserve stimulus cuts amid optimism over a budget deal.
Data showed companies boosted payrolls in November by the most in a year. US companies added 215,000 jobs in November, topping estimates, a private survey showed yesterday. A separate report indicated service industries in the US expanded at a slower pace than forecast in November, showing uneven progress in the biggest part of the economy. Purchases of new US homes surged in October by the most in three decades, signaling buyers are starting to take higher mortgage rates in stride.
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 tomorrow, 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.
In Europe, the European Central Bank (ECB) holds its monthly monetary policy meeting today, 5 December 2013. The ECB unexpectedly cut the benchmark interest rate by a quarter-percentage point last month to a record-low 0.25% after inflation slowed in October to the least in four years.
UK's central bank -- Bank of England -- is also expected to keep its key policy rate steady at 0.5% after a monetary policy review today, 5 December 2013.
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