Sensex, Nifty register small losses

Amid a divergent trend in various constituents of the index, key benchmark indices edged lower. The barometer index, the S&P BSE Sensex, was provisionally off 44.01 points or 0.16% at 27,871.87. The market breadth indicating the overall health of the market was negative. As per media reports, at least a dozen new ministers are set to be inducted by Narendra Modi government as part of the cabinet expansion that is likely to take place on Sunday, 9 November 2014. Meanwhile, the Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus from tax.

Index heavyweight and cigarette major ITC edged lower in volatile trade. Telecom stocks were in demand. Bharti Airtel rose in volatile trade after the company said it has decided to terminate the discussions with regard to the transaction for acquiring subscribers of Loop Mobile. Hero MotoCorp dropped on buzz private equity firm Bain Capital Partners sold nearly 4% stake in the company via bulk deal on NSE today, 7 November 2014. Power generation stocks edged lower.

Earlier, the barometer index, the Sensex and 50-unit CNX Nifty, had trimmed losses after both the indices hit one-week low in morning trade.

In overseas markets, European stocks rose with investors hoping the highly anticipated US jobs data later during the global day will give them more to cheer about, after a dovish European Central Bank sent markets higher yesterday, 6 November 2014. Asian stocks were mixed. US stocks edged higher yesterday, 6 November 2014, with the S&P 500 and Dow Jones Industrial Average climbing to record levels for the second straight day after European Central Bank president Mario Draghi hinted at monetary stimulus of as much as euro 1 trillion for eurozone economy.

In the foreign exchange market, the rupee edged lower against the dollar on broad strength in dollar.

Brent crude futures dropped on a stronger dollar and on lower oil demand forecast by the Organization of the Petroleum Exporting Countries (OPEC).

As per provisional closing, the S&P BSE Sensex was down 44.01 points or 0.16% at 27,871.87. The index lost 176.32 points at the day's low of 27,739.56 in morning trade, its lowest level since 31 October 2014. The index gained 65.05 points at the day's high of 27,980.93 in early trade.

The CNX Nifty was down 1.30 points or 0.02% at 8,337. The index hit a low of 8,290.25 in intraday trade, its lowest level since 31 October 2014. The index hit a high of 8,360.35 in intraday trade.

The market breadth indicating the overall health of the market was negative. On BSE, 1,563 shares declined and 1,446 shares gained. A total of 103 shares were unchanged.

The BSE Mid-Cap index was up 35.08 points or 0.35% at 9,999.69, outperforming the Sensex. The BSE Small-Cap index was off 43.81 points or 0.39% at 11,117.17, underperforming the Sensex.

The total turnover on BSE amounted to Rs 3923 crore, lower than Rs 4410.82 crore on Wednesday, 5 November 2014. The stock market was closed yesterday, 6 November 2014, on account of Gurunanak Jayanti.

Index heavyweight and cigarette major ITC fell 0.77% to Rs 355.60. The stock hit high of Rs 360.60 and low of Rs 352.95 so far during the day.

Hero MotoCorp lost 1.87% to Rs 2,902. As per reports, private equity firm Bain Capital Partners sold 85.60 lakh shares or nearly a 4% stake in Hero MotoCorp at Rs 2,875 per share in bulk deal on NSE today, 7 November 2014. As of 30 September 2014, Bain Capital held 5.77% or 1.15 crore shares in Hero MotoCorp.

Bharti Airtel rose 1.22% to Rs 390. The stock was volatile. The stock hit high of Rs 392 and low of Rs 379.05. Bharti Airtel after market hours on Wednesday, 5 November 2014, in a clarification with regard to news item titled Bharti Airtel Calls off Rs 700 cr Deal with Loop" said that under the agreements executed with Loop Mobile (Loop), the transaction was conditional upon DoT approval which has not been received. In light the fact that Loop's mobile license is to expire at the end of this month, Bharti Airtel has decided to terminate the discussions with regard to the transaction for acquiring subscribers of Loop, the company said. A formal communication to this effect has been released to Loop at 5:19 PM IST on 5 November 2014, Bharti Airtel said.

Other telecom stocks were in demand. Idea Cellular (up 2.47%) and Reliance Communications (up 2.03%) gained.

Power generation stocks edged lower. Reliance Infrastructure (down 0.29%), Tata Power Company (down 0.92%), CESC (down 0.41%), NTPC (down 0.34%), Reliance Power (down 2.22%), Jaiprakash Power Ventures (down 4.55%), JSW Energy (down 0.32%) edged lower. Adani Power rose 0.21%.

Minister of State for Power, Coal and Renewable Energy Piyush Goyal yesterday, 6 November 2014, said that the government was pursuing a two-pronged strategy of improving the utilization of existing power generation units in the country by improving plant load factor and freeing up stranded power generation units and improving access to fuel supplies for power generation units. The government was also improving the electricity mix with greater focus on renewable energy sources, Goyal said while addressing a session on "Lighting India" at the India Economic Summit being organized by the World Economic Forum and the Confederation of Indian Industry in New Delhi.

Goyal said that measures were being taken to double the output of coal from Coal India over the next five years. This will help enhance the utilization of existing thermal power plants, Goyal said. Goyal said that the government was planning to invest $250 billion in the power sector over the next five years.

Shares of Coal India fell 0.97%.

In the foreign exchange market, the rupee edged lower against the dollar on broad strength in dollar. The partially convertible rupee was hovering at 61.65, compared with its close of 61.42 during the previous trading session on Wednesday, 5 November 2014. The currency market was shut yesterday, 6 November 2014, on account of Gurunanak Jayanti.

Brent crude futures dropped on a stronger dollar and on lower oil demand forecast by the Organization of the Petroleum Exporting Countries (OPEC). A stronger greenback makes it more expensive for holders of other currencies to buy dollar-denominated commodities. Brent for December delivery was off 33 cents at $82.53 a barrel. The contract had fallen 9 cents a barrel to settle at $82.86 a barrel yesterday, 6 November 2014.

OPEC expects its crude production to fall by 1.8 million barrels a day by the end of 2017 to 28.2 million barrels a day, it said in its annual outlook report. In general, it is expected that the US recovery will provide a significant support factor for medium-term global economic growth, the cartel said, but added that weak data from Brazil, Russia, India and China have lowered the medium-term forecast for these countries.

Meanwhile, as per media reports, at least a dozen new ministers are set to be inducted by Narendra Modi government as part of the cabinet expansion that is likely to take place on Sunday, 9 November 2014. Goa Chief Minister Manohar Parrikar is tipped to get the defence portfolio. Currently Finance Minister Arun Jaitley is handling the defence portfolio. BJP general secretary JP Nadda's name is doing the rounds as a possible environment minister. Jayant Sinha, who is the son of former finance minister Yashwant Sinha, is tipped to become minister of state for finance.

Prime Minister Narendra Modi is also likely to induct some representatives of the BJP allies into the union cabinet. According to reports, Suresh Prabhu might get an important cabinet berth, possibly rural development.

Reserve Bank of India (RBI) Deputy Governor H.R. Khan reportedly said today, 7 November 2014, that India's inflation has a long way to go before it eases because of high input costs. The reasons for elevated food price inflation remain structural, he said. Khan, in a speech in Mumbai, also noted rural inflation was high because of supply chain issues. Khan also warned against too much complacency in markets, but he did not elaborate.

Prime Minister Narendra Modi today, 7 November 2014, said that the government is working towards revitalizing the textile sector through a scientific approach, coupled with infusion of appropriate technology. He said so after laying the foundation stone of the Trade Facilitation Centre and Crafts Museum, and inaugurating the Powerloom Service Centre in Varanasi in Uttar Pradesh.

India's Ministry of Urban Development yesterday, 6 November 2014, said that Singapore has shown keen interest in partnering with India in the urban development sector, including development of a new smart satellite city and a new capital for the state of Andhra Pradesh. Top leadership of Singapore conveyed their areas of interest during the extensive talks that the Minister of Urban Development M.Venkaiah Naidu held with Singapore's Prime Minister Lee Hsien Loong and former Prime Minister and Emeritus Minister Goh Chok Tong in separate meetings in Singapore yesterday, 6 November 2014.

Meanwhile, the Indian government is reportedly considering dropping a provision in the tax treaty between India and Cyprus that exempts capital gains made in India by investors from Cyprus from tax. India, which has blacklisted the tax haven for not sharing information on bank accounts, will lift this restriction only if Cyprus agrees to scrap the capital gains exemption. A team of officials from the external affairs ministry will reportedly travel to Cyprus this month. India is also concerned at the misuse of the tax benefit by investors from third countries that route their investments via Cyprus into the South Asian nation to take advantage of the tax exemption.

European stocks rose today, 7 November 2014, with investors hoping the highly anticipated US jobs data later during the global day will give them more to cheer about, after a dovish European Central Bank sent markets higher yesterday, 6 November 2014. Key benchmark indices in UK and Germany were up 0.17% to 0.71%. In France, the CAC 40 index was off 0.06%.

The latest data showed that Germany's industrial production rose less than expected in September, potentially augmenting growth concerns about Europe's largest economy. In monthly terms, industrial output increased by 1.4% in September, data provided by the country's economy ministry showed today, 7 November 2014. Data for August was revised upward to show a decline of only 3.1%, versus the 4% drop originally reported.

French industrial output was stable in September as a rise in energy production offset a decline in the production of agricultural and other goods, official data showed today, 7 November 2014. Industrial production in the eurozone's second largest economy was flat in September compared with August, the national statistics agency Insee said. Insee revised down the industrial production figure for August to a 0.2% contraction from a previous reading of no change that month.

The European Central Bank, left interest rates unchanged after a policy meeting yesterday, 6 November 2014. The ECB's key lending rate, known as the refi rate, was left at 0.05%, while the rate the ECB pays on deposits held at the central bank remains at minus-0.2%. ECB President Mario Draghi said policy makers will be ready to implement further measures if needed as he signaled officials may cut growth forecasts next month. Speaking at a press conference in Frankfurt yesterday, 6 November 2014, Draghi said that the Governing Council is unanimous in its commitment to using additional unconventional instruments within its mandate.

The Bank of England yesterday, 6 November 2014, held the size of its bond-buying program steady and left its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee maintained its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($599 billion).

Asian stocks were mixed today, 7 November 2014. Key benchmark indices in Singapore, China, Hong Kong and Indonesia were off 0.14% to 0.93%. Key benchmark indices in Taiwan, Japan and South Korea were up 0.18% to 0.52%.

China's central bank vowed to lower funding costs for corporate borrowers amid increasing pressure on the nation's slowing economy. In a report published yesterday, 6 November 2014, on third-quarter monetary policy, the People's Bank of China also confirmed it had already conducted two rounds of liquidity injections into the country's banking system in September and October totaling 769.5 billion yuan ($125.9 billion) in a bid to guide interest rates lower and support economic growth. A report on the central bank's website indicated that the central bank had pumped the funds with a tenor of 3 months at an interest rate of 3.5% into the country's state, midsize and smaller lenders.

Trading in US index futures indicated that the Dow could rise 20 points at the opening bell today 7 November 2014. US stocks edged higher yesterday, 6 November 2014, with the S&P 500 and Dow Jones Industrial Average climbing to record levels for the second straight day after European Central Bank president Mario Draghi hinted at monetary stimulus of as much as euro 1 trillion for eurozone economy. In economic news, the number of Americans applying for new jobless benefits lingered below 300,000 for the eighth straight week amid the lowest level of layoffs in years. US productivity in the third quarter grew at a 2% annual pace, preliminary data show, marking the fourth sizable increase in the past five quarters.

The influential US nonfarm payrolls report for October will be released later in the global day today, 7 November 2014.

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