Auto stocks nudge higher

Firmness continued on the bourses in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 246.71 points or 1.22%, off about 80 points from the day's high and up close to 140 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by a drop in crude oil prices after the US and five other world powers agreed with Iran on Sunday, 24 November 2013, to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program and ensuring the country's Islamist government doesn't rush to develop atomic weapons.

Auto stocks gained across the board. Ambuja Cements and ACC, both, gained after Ambuja Cements received shareholders' approval at an extraordinary general meeting (EGM) held on Saturday, 23 November 2013, to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore, and for the subsequent amalgamation of Holcim (India) with it. Shares of offshore oil services providers rallied.

The market surged in early trade as Asian stocks rose after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. The 50-unit CNX Nifty regained the psychological 6,000 mark. The market extended initial gains and hit fresh intraday high in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade. Firmness continued on the bourses in early afternoon trade.

The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month November 2013 series to December 2013 series. The near month November 2013 derivatives contract expire on Thursday, 28 November 2013.

Concerns over India's fiscal deficit and current account deficit eased as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit because the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation.

Iran and six world powers clinched a deal on Sunday, 24 November 2013, curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war. Aimed at ending a long festering standoff, the interim pact between Iran and the United States, France, Germany, Britain, China and Russia won the critical endorsement of Iranian clerical Supreme Leader Ayatollah Ali Khamenei. US President Barack Obama said the deal struck after marathon, tortuous and politically charged negotiations cut off Tehran's possible routes to a nuclear bomb. But Israel, Iran's arch-enemy, denounced the agreement as an "historic mistake". Iran's oil exports will be held to about 1 million barrels a day under sanctions that remain in force after the deal. The six-month agreement, which offers Iran about $7 billion in relief from sanctions in exchange for curbs on its nuclear program, leaves in place banking and financial measures that have hampered its crude exports. Sanctions on sales of refined products also remain, while Iran gains access to $4.2 billion in oil revenue frozen in foreign banks, the White House said. As part of the deal, the European Union (EU) will lift a ban on insurance for tankers transporting Iranian oil, making it easier for the Persian Gulf nation's six remaining customers to take delivery. The EU will continue to prohibit crude imports from Iran.

At 12:20 IST, the S&P BSE Sensex was up 246.71 points or 1.22% to 20,464.10. The index jumped 326.15 points at the day's high of 20,543.54 in morning trade, its highest level since 21 November 2013. The index rose 109.27 points at the day's low of 20,326.66 in early trade.

The CNX Nifty was up 77.25 points or 1.29% to 6,072.20. The index hit a high of 6,095.60 in intraday trade, its highest level since 21 November 2013. The index hit a low of 6,035.95 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,267 shares gained and 878 shares fell. A total of 137 shares were unchanged.

From 30-share Sensex pack, 28 stocks rose and only two fell. ICICI Bank (up 3.67%), L&T (up 3.11%) and Bhel (up 2.63%) edged higher from the Sensex pack.

Ambuja Cements rose 2.32%. ACC gained 1.77%. Ambuja Cements has received shareholders' approval at its extraordinary general meeting (EGM) held on Saturday, 23 November 2013, to buy a 24% stake in Holcim (India) from Holderind International for Rs 3500 crore, and for the subsequent amalgamation of Holcim (India) with it. Ninety per cent of shareholders voted in favour of Ambuja Cements buying a 24% stake in Holderind International for Rs 25.63 a share, Ambuja Cements said in a statement. On 19 November 2013, in a postal ballot voting process for approving the scheme of amalgamation between Holcim (India) and Ambuja Cements, the company had secured shareholders' approval, with 68.53% of minority shareholders voting in its favour. With this, Swiss cement maker Holcim has cleared the two hurdles of voting in the proposed restructuring of its Indian subsidiaries, Ambuja Cements and ACC, by securing a majority of the postal votes from Ambuja's minority shareholders. On 25 July 2013, Holcim decided to restructure its India operations to get Ambuja Cements and ACC to work better together, saving around Rs 900 crore. In a complex deal, Holcim planned to raise its stake in Ambuja Cements to 61.39% from just over 50%. Once the deal is completed, Ambuja will hold a 50.01% stake in ACC.

Auto stocks gained across the board. Tata Motors rose 2.21%. Maruti Suzuki India rose 1.41%. M&M rose 0.59%. Ashok Leyland advanced 1.3%.

Shares of two-wheeler makers also gained. Hero MotoCorp (up 2.57%) and Bajaj Auto (up 1.25%) rose.

Shares of offshore oil services providers rallied. Aban Offshore (up 14.27%), Dolphin Offshore (up 10.92%), GOL Offshore (up 6.49%), Deep Industries (up 6.48%), Global Offshore (up 7%), and Jindal Drilling (up 6.59%) jumped.

The government will launch the auction of the next round of oil and gas blocks under New Exploration Licensing Policy (NELP) in January 2014 as it looks to attract foreign investors to boost domestic production. DGH (Directorate General of Hydrocarbons) has carved out about 86 blocks, for which necessary clearances are being taken from the ministries concerned, reports suggest. During the previous nine rounds, the ministry awarded 254 blocks for exploration of oil and gas.

In the foreign exchange market, the rupee edged higher against the dollar as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped eased after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. India imports majority of its crude oil requirements. The partially convertible rupee was hovering at 62.62, compared with its close of 62.87/88 on Friday, 22 November 2013.

Bond prices rose as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped eased after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit because the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation. The yield on the most traded new 10-year federal paper, 8.83% GS 2023, was hovering at 8.7326%, lower than its close of 8.7828% on Friday, 22 November 2013. Bond yield and bond prices are inversely related.

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.

On political front, Mizoram assembly elections under revised schedule take place today, 25 November 2013, and counting of votes will be held on 9 December 2013. The assembly polls in Madhya Pradesh are also being held today, 25 November 2013. Elections in Rajasthan will be held on 1 December 2013. Delhi goes to polls on 4 December 2013. Polls in Chattisgarh are already over. Counting for Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan will be held as per schedule on December 8.

Asian stocks rose on Monday, 25 November 2013, as Iran agreed to limit its nuclear program. Key benchmark indices in Taiwan, Hong Kong, Indonesia, Japan, Singapore and South Korea rose by 0.07% to 1.54%.

China's Shanghai Composite fell 0.06% in choppy trade. China's declared intent to protect an air zone encompassing islands that are disputed with Japan escalated tensions between Asia's largest economies, risking damage to a resurgence in trade. China announced an air defense identification zone in the East China Sea effective Nov. 23 and said its military will take "defensive emergency measures" if aircraft enter the area without reporting flight plans or identifying themselves. Japan lodged a complaint as the US and South Korea expressed concern about China's actions.

Trading in US index futures indicated that the Dow could advance 48 points at the opening bell today, 25 November 2013. US stocks rose on Friday, 22 November 2013, with the S&P 500 index closing above 1,800 for the first time and extending gains into a seventh consecutive week.

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.

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