A bout of volatility was witnessed as key benchmark indices regained positive terrain soon after reversing initial gains in morning trade. The barometer index, the S&P BSE Sensex, was up 52.32 points or 0.25%, up close to 70 points from the day's low and off close to 35 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Firmness in Asian stocks supported domestic bourses.
Pharma stocks rose on renewed buying. Realty stocks fell for the second day in a row. 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.
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.
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.
At 10:20 IST, the S&P BSE Sensex was up 52.32 points or 0.25% to 21,195.33. 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.
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The CNX Nifty was up 15.05 points or 0.24% to 6,306.15. 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 market breadth, indicating the overall health of the market, was strong. On BSE, 1,105 shares gained and 600 shares fell. A total of 105 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks gained and rest of them declined. Tata Power Company (up 1.91%), Reliance Industries (up 1.1%) and Coal India (up 1%) edged higher from the Sensex pack.
ONGC rose 0.07%. Royal Dutch Shell Plc announced on Monday, 30 December 2013, that it has completed the acquisition of an additional 23% interest in the Parque das Conchas (BC-10) project offshore Brazil for $1 billion. Regulatory approvals have been obtained and Shell will now hold a 73% operating interest. The purchase is effective 1 January 2013. Partner ONGC, previously holding a 15% working interest, will now hold a 27% working interest, Shell said in a statement. This purchase is the result of pre-empting a third party's bid for Petrobras' 35% interest in BC-10, Shell said.
Currently, BC-10 is producing approximately 50,000 boe/d. Since coming on-stream in 2009, BC-10 has produced more than 80 million barrels of oil equivalent (boe). Phase 2 of the project, to tie-in the Argonauta O-North field, came online on 1 October 2013, with an expected peak production of 35,000 boe per day. Final Investment Decision for Phase 3 of the BC-10 project was taken in July 2013 and once online is expected to reach a peak production of 28,000 boe, Shell said.
Pharma stocks rose on renewed buying. Cipla (up 0.46%), Dr Reddy's Laboratories (up 0.42%), Lupin (up 0.45%), Ranbaxy Laboratories (up 1.33%) and Sun Pharmaceutical Industries (up 0.13%) gained.
Glenmark Pharmaceuticals rose 1.12%. Glenmark Pharmaceuticals and Glenmark Generics Inc., USA today, 31 December 2013, said that Cephalon Inc. has filed a patent infringement suit on 26 December 2013 in the US District for the District of Delaware, seeking to prevent Glenmark from commercialising its Abbreviated New Drug Application (ANDA) Bendamustine Hydrochloride product, a generic version of Treanda, prior to expiration of the Orange Book patents. A complaint against Glenmark has been filed on US patent 8,445,524. This lawsuit was filed under the provisions of the Hatch-Waxman Act, Glenmark Pharmaceuticals said in a statement.
Bendamustine is indicated for the treatment of patients with chronic Lymphocytic Leukemia. The ANDA has been filed from Glenmark's Argentina lyophilized injectable facility. For the twelve month period ending September 2013, Treanda achieved sales of $659 million in the United States, according to IMS Health data.
Realty stocks fell for the second day in a row. DLF (down 0.84%), HDIL (down 0.47%) and Sobha Developers (down 0.18%) dropped. Unitech rose 0.33%.
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 3.02%.
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.
In the foreign exchange market, the rupee edged higher against the dollar 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 61.885, compared with its close of 61.91/92 on Monday, 30 December 2013.
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 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.
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.
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 0.87%. Taiwan's Taiwan Weighted fell 0.1%. 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.
Trading in US index futures indicated that the Dow could gain 3 points at the opening bell 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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