Sensex provisionally ends a tad lower after seeing high volatility in late trade

A divergent trend was witnessed as the barometer index, the S&P BSE Sensex, registered small losses while the 50-unit CNX Nifty registered miniscule gains. High volatility was witnessed during the last one hour trade as key indices alternately swung between positive and negative zone. The barometer index, the S&P BSE Sensex, was provisionally off 19.99 points or 0.07% at 27,845.84. The Nifty was provisionally up 1.95 points or 0.02% at 8,324.15. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index rose 1.02%. The BSE Small-Cap index advanced 1.34%. Both these indices outperformed the Sensex.

Congress party's Rajya Sabha member Abhishek Manu Singhvi said in an interview to a news agency today, 3 November 2014, that the Congress party will conditionally support measures to pass a goods and services tax, allow more foreign investment in insurance and allocate coal mines transparently.

A latest survey showed that manufacturing activity in India picked up modestly in October 2014 amid stronger output and new order flows, particularly from overseas clients. Foreign portfolio investors (FPIs) bought shares worth massive Rs 1754.73 crore during the preceding trading session on Friday, 31 October 2014, as per provisional data.

Index heavyweight and cigarette major ITC slipped on high volume after a bulk deal was executed on the counter on BSE today, 3 November 2014. GAIL (India) dropped after a foreign brokerage reportedly downgraded the stock to 'sell' from 'outperform', citing stiff valuations. Maruti Suzuki India fell after the company reported fall in sales in October 2014. Realty shares extended recent gains triggered by the government recently announcing relaxation of rules for foreign investment in property development and construction sector.

Earlier, the Sensex and the 50-unit CNX Nifty had, both, scaled record high at the onset of the trading session after provisional data showed massive purchases of India stocks by FPIs during the preceding trading session on Friday, 31 October 2014.

In overseas markets, European stocks dropped as investors weighed latest corporate earnings. Asian stocks were mixed. US stocks jumped on Friday, 31 October 2014, sending the S&P 500 and Dow Jones Industrial Average into record territory, after a surprise stimulus plan from the Bank of Japan was announced.

In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in most Asian currencies against the dollar.

Brent crude oil prices edged lower as mixed Chinese data and a strong dollar pressured prices.

As per provisional closing, the S&P BSE Sensex was down 19.99 points or 0.07% at 27,845.84. The index gained 103.99 points at the day's high of 27,969.82 at the onset of the trading session, a record high for the index. The index fell 80.43 points at the day's low of 27,785.4 in late trade.

The CNX Nifty was up 1.95 points or 0.02% at 8,324.15. The index hit a high of 8,350.60 in intraday trade, a record high for the index. The index hit a low of 8,297.65 in intraday trade.

The market breadth indicating the overall health of the market was strong. On BSE, 1,832 shares gained and 1,149 shares fell. A total of 107 shares were unchanged.

The BSE Mid-Cap index was up 100.71 points or 1.02% at 9,935.31. The BSE Small-Cap index was up 146.29 points or 1.34% at 11,077.24. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 3489 crore, lower than turnover of Rs 3772.96 crore on Friday, 31 October 2014.

Index heavyweight and cigarette major ITC slipped 0.14% to Rs 354.75. The stock hit a high of Rs 357.95 and low of Rs 353.60 so far during the day. A bulk deal of 21.03 lakh shares was executed on the counter at Rs 355 per share at 11:45 IST on BSE today, 3 November 2014.

Dabur India rose 1.15% after consolidated net profit rose 15.1% to Rs 287.48 crore on 10.4% growth in net sales to Rs 1924.09 crore in Q2 September 2014 over Q2 September 2013. The Q2 result was announced during market hours today, 3 November 2014.

GAIL (India) dropped after a foreign brokerage reportedly downgraded the stock to 'sell' from 'outperform', citing stiff valuations. The stock tumbled 6.08%. According to brokerage a turnaround in GAIL (India)'s core business is unlikely in next two years.

Maruti Suzuki India fell 1.54%. Maruti Suzuki India's total sales fell 1.1% to 1.03 lakh units in October 2014 over October 2013. Maruti Suzuki India's domestic sales rose 1% to 97,069 units in October 2014 over October 2013. The company's exports fell 23.5% to 6,904 units in October 2014 over October 2013. The sales figures were announced on Saturday, 1 November 2014.

The company said that owing to festivals and state elections during October 2014, Maruti Suzuki had 19 working days during the month. This limited the availability of vehicles during the month. In October 2013, Maruti Suzuki had 24 working days. Maruti said its retail sales during October 2014 were robust at around 1.08 lakh units, which was a growth of more than 10% over October 2013. Retail sales during October 2014 were about 10% higher than wholesales of 97,069 during October 2014, Maruti said.

In exports, shipment of around 1,000 units to Algeria and Egypt was rescheduled to November 2014 due to cyclonic conditions in Gujarat area. The impact of the aforementioned factors is reflected in the sales numbers for October 2014, the company said in a statement.

Meanwhile, Maruti Suzuki today, 3 November 2014, announced the launch of the peppier, more fuel efficient, next generation Alto K10. Maruti said that the popular auto gear shift technology, which offers convenience of automatic transmission, is being introduced in the new Alto K10.

The Alto K10 will come in six variants priced at between Rs 3.06 lakh to 3.81 lakh ex-showroom (Delhi).

Realty shares extended recent gains triggered by the government announcing relaxation of rules for foreign investment in property development and construction sector. Unitech (up 10.76%), Housing Development & Infrastructure (HDIL) (up 6.01%), Indiabulls Real Estate (up 5.06%), Oberoi Realty (up 1.35%) and Godrej Properties (up 2.98%) edged higher.

DLF rose 2.89% to Rs 128.10. The stock was volatile. The stock hit high of Rs 129.40 and low of Rs 120.20.

The Union Cabinet on 29 October 2014 announced relaxation of rules for foreign investment in property development and construction. 100% foreign direct investment (FDI) under automatic route will be permitted in the construction development sector. In case of development of serviced plots, there is no condition of minimum land. In case of construction-development projects, a minimum floor area will be 20,000 sq. meters. The investee company will be required to bring minimum FDI of $5 million within six months of commencement of the project. Subsequent tranches of FDI can be brought till the period of ten years from the commencement of the project or before the completion of the project, whichever expires earlier. The investor will be permitted to exit on completion of the project or after three years from the date of final investment, subject to development of trunk infrastructure.

Trading for this week will be truncated as the stock market remains shut tomorrow, 4 November 2014, on account of Muharram. Stock market also remains closed on Thursday, 6 November 2014, on account of Gurunanak Jayanti.

In the foreign exchange market, the rupee edged lower against the dollar, tracking weakness in most Asian currencies against the dollar. The partially convertible rupee was hovering at 61.3975, compared with its close of 61.36 during the previous trading session on Friday, 31 October 2014.

Brent crude oil prices edged lower as mixed Chinese data and a strong dollar pressured prices. Brent crude for December delivery was off 15 cents at $85.71 a barrel. The contract had fallen 38 cents to settle at $85.86 a barrel during the previous trading session on Friday, 31 October 2014.

The government's decision last month to decontrol diesel prices and a sharp decline in global crude oil prices recently will help India in containing its fiscal deficit. The fall in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. A slump in Brent crude since the end of June contributed to consumer-price index slowing to 6.46% in September 2014, the least since 2012. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent.

Adjusted for seasonal influences, the headline HSBC India Purchasing Managers' Index - a composite indicator designed to give a single-figure snapshot of manufacturing operating conditions - rebounded from September's nine-month low of 51 to 51.6 in October. The latest reading was consistent with a moderate improvement in business conditions during the month, the survey showed. Manufacturing activity picked up modestly amid stronger output and new order flows, particularly from overseas clients. However, firms continued to trim purchases and refrained from aggressive inventory accumulation, according to the survey.

The growth rate of India's eight core industries, which have a combined weight of 37.9% in the Index of Industrial Production (IIP), slowed down to 1.9% in September 2014 due to fall in output of crude oil, natural gas, refinery products and fertiliser, data released by government on Friday, 31 October 2014 showed. The core sector had grown by 9% in September 2013.

Congress party's Rajya Sabha member Abhishek Manu Singhvi said in an interview to a news agency today, 3 November 2014, that the Congress party will conditionally support measures to pass a goods and services tax, allow more foreign investment in insurance and allocate coal mines transparently. "We will give constructive support in principle, but with the very specific caveat that both god and the devil lie in the details. These are bills which we have moved, and we are not hypocritical", Singhvi said.

Opposition support is crucial to Narendra Modi government's efforts to revive the economy after winning the biggest Indian election mandate in 30 years. While his BJP controls the lower house of parliament, it holds less than a fifth of seats in the 245-member upper house. During the last parliamentary session in August, opposition lawmakers blocked the government's attempt to pass a bill that would raise the foreign ownership cap in the insurance sector to 49% from 26%. Bowing to opposition pressure, the government had in August agreed to refer the Insurance Bill to the 15-member Select Committee. The committee is expected to submit its report by the third week of November.

Finance Minster Arun Jaitley on Friday, 31 October 2014, said that major priorities of the government will be to revive and sustain higher GDP growth, increase savings, fiscal consolidation, keeping the current account deficit (CAD) at moderate level, reviving investment cycle, encouraging growth in manufacturing sector, augmenting supply response to contain inflation especially food inflation, boosting infrastructure sector and exports, rationalize subsidies and reforms in direct and indirect taxes among others. The Finance Minister was speaking at the first meeting of the Consultative Committee attached to the Ministry of Finance on the subject "Sustaining Growth Momentum - The Road Ahead". Jaitley said that the major priority of the government is to bring back growth momentum into country's economy. He said that the Indian economy has potential for achieving and sustaining higher growth. For 2014-15 the Finance Minster expects GDP growth in the range of 5.5% to 5.9%. He said the recent decline in international oil prices and prices of domestic food items point towards lower inflation in the coming months. The Finance Minister informed that the capital flows to finance the CAD is adequate and further moderation in CAD can be expected in 2014-15 due to lower oil prices.

European stocks took a breather today, 3 November 2014, after last week's sharp gains triggered by a surprise stimulus plan from the Bank of Japan. Key benchmark indices in UK, Germany and France were off 0.36% to 0.41%.

Activity in the eurozone's manufacturing sector picked up very modestly in October, but largely because businesses cut their prices. The headline measure from data firm Markit's monthly survey of purchasing managers at manufacturers rose to 50.6 in October from 50.3 in September. A reading above 50 for the Purchasing Managers Index indicates an expansion in activity, while a reading below that level signals a contraction. The final measure was slightly below the preliminary estimate of 50.7 released in October.

Asian stocks were mixed today, 3 November 2014. Key benchmark indices in China, Singapore and Taiwan were up 0.34% to 0.41%. Key benchmark indices in Hong Kong, South Korea and Indonesia were off 0.08% to 0.58%. Stock market in Japan was closed for holiday.

The HSBC China Manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, rose to a final reading of 50.4 in October from 50.2 in September, HSBC Holdings PLC said today, 3 November 2014. The final reading was unchanged from HSBC's preliminary 50.4 for October, announced on 23 October 2014. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates expansion.

The official manufacturing Purchasing Managers' Index was 50.8 in October, lower that September's reading was 51.1, Chinese government data showed on Saturday, 1 November 2014.

A gauge of China's services industry fell to a nine-month low in October, joining manufacturing in signaling a broadening economic slowdown. The government's non-manufacturing Purchasing Managers' Index fell to 53.8 last month from 54 in September.

Trading in US index futures indicated that the Dow could fall 35 points at the opening bell today, 3 November 2014. US stocks jumped on Friday, 31 October 2014, sending the S&P 500 and Dow Jones Industrial Average into record territory, after a surprise stimulus plan from the Bank of Japan was announced.

Data on Friday, 31 October 2014, showed consumer spending in the US unexpectedly dropped in September as incomes rose at the slowest pace of the year. The Institute for Supply Management-Chicago Inc.'s business barometer rose to 66.2 in October from 60.5 in the prior month. A reading less than 50 signals contraction.

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