A bout of volatility was witnessed as key benchmark indices recovered after trimming initial gains in morning trade. The barometer index, the S&P BSE Sensex, was up 80.62 points or 0.39%, up close to 100 points from the day's low and off about 15 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013.
Index heavyweight Reliance Industries (RIL) rose. Capital goods stocks rose on renewed buying. L&T gained after the company said it is evaluating alternatives for monetisation of certain assets of its subsidiary L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore.
The market edged higher in early trade as data released by the government after trading hours on Friday, 29 November 2013, showed a recovery in India's GDP growth in Q2 September 2013 from the lowest expansion in four years in Q1 June 2013. The S&P BSE Sensex hit its highest level in more than 1-1/2 week. The 50-unit CNX Nifty hit its highest level in almost two weeks. A bout of volatility was witnessed as key benchmark indices recovered after trimming initial gains in morning trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 745.16 crore on Friday, 29 November 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 80.62 points or 0.39% to 20,872.55. The index jumped 96.87 points at the day's high of 20,888.80 in early trade, its highest level since 20 November 2013. The index lost 21.42 points at the day's low of 20,770.51 in early trade.
The CNX Nifty was up 32.40 points or 0.52% to 6,208.50. The index hit a high of 6,208.80 in intraday trade, its highest level since 19 November 2013. The index hit a low of 6,171.15 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,196 shares rose and 507 shares dropped. A total of 97 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and rest fell. Jindal Steel & Power (up 2.27%), ICICI Bank (up 2.6%) and Sun Pharmaceutical Industries (up 1.84%) gained.
Index heavyweight Reliance Industries (RIL) rose 0.67% at Rs 858.60. Minister for Petroleum & Natural Gas Veerappa Moily last week that RIL may be allowed to raise gas prices from April 2014 as the company has offered financial guarantees to the government to settle any claims against it over a shortfall in its gas output. In June, the government approved a move to higher, market-related rates for locally-produced gas from April 2014, but the finance ministry later said prices for RIL should be capped because the company's gas production from the offshore D6 block was far below its supply commitment. RIL, which operates the D6 block off India's eastern coast, has reported a sharp decline in gas output since 2010. RIL and partner BP have cited geological complexities for the fall in output, but the oil regulator believes they failed to drill enough wells. Falling output had already prompted the government to disallow proportionate cost recovery to RIL, leading to arbitration proceedings over the issue.
Capital goods stocks rose on renewed buying. ABB (up 0.42%), BEML (up 1.39%), Punj Lloyd (up 1.69%) and Bhel (up 1.79%) gained.
L&T gained 1.02%, with the stock extending initial gains. The company after market hours on Friday, 29 November 2013, said it is evaluating alternatives for monetisation of certain assets of its subsidiary L&T Infrastructure Development Projects (L&T IDPL), including a potential initial public offering and listing in Singapore of selected road assets of L&T IDPL, through a business trust in Singapore. The proposed transactions are subject to various factors including approvals and market conditions and may or may not be completed, L&T said. In the meantime, shareholders and other investors are reminded to exercise caution when deal in the company's shares, pending any definite announcement from the company, L&T said in a statement.
L&T IDPL is primarily engaged in public-private partnership projects in India, with business interests spread across sectors involving roads and bridges, ports, metro rail, wind energy and power transmission lines. It has experience in identifying and assessing viability of projects, achieving financial closure, project management, operations and maintenance of infrastructure assets across various sectors as well as divestiture.
Financial Technologies (India) rose 1.02%. The company's net profit fell 61.16% to Rs 27.01 crore on 12.83% decline in total income to Rs 128.92 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced after market hours on Friday, 29 November 2013.
As on 30 September 2013, Financial Technologies (India) (FTIL)'s investments aggregating Rs 494.65 crore and loans and advances to/receivables aggregating Rs 1173.52 crore from certain subsidiaries and a joint venture (JV) company, which presently have accumulated losses, but are expected to be recovered, and have their values unlocked in the near future, since these companies are already at various stages of executing their business plans and operations, with expected profitability, FTIL said.
In view of the developments in respect of its subsidiary National Spot Exchange (NSEL), during the quarter, on conservative basis, the company has made provision towards diminution other than temporary in value of long term investments of Rs 44.99 crore for its investment in NSEL, the company said.
Total outstanding loan of Rs 210.83 crore and interest thereon of Rs 1.79 crore, aggregating Rs 212.62 crore as on 30 September 2013, are dependent on the recovery by NSEL from defaulted members and NAFED and the recovery of amount from NSEL will be reviewed periodically, FTIL said.
There are some writ petitions, public interest litigation (PIL), civil suits filed against NSEL, wherein FTIL has also been made a formal party in these writ petitions and civil suits only, it being the holding company of NSEL, the company said. FTIL further added that it is a separate and independent legal entity and, as such, has no responsibility or liability whatever towards the dues of or claims against NSEL.
The writ petitions and civil suits are primarily against the various defaulting members of NSEL, failing which the claim has been made against NSEL as guarantor and failing which against other parties including FTIL. Therefore, at this stage, there are no direct ascertainable financial claims against the company, and hence, direct financial implications on the company, if any, that may arise due to ultimate payment default on NSEL cannot be ascertained, FTIL said.
In the foreign exchange market, the rupee edged higher against the dollar as data released by the government after trading hours on Friday, 29 November 2013, showed a recovery in India's GDP growth in Q2 September 2013 from the lowest expansion in four years in Q1 June 2013. The partially convertible rupee was hovering at 62.25, compared with its close of 62.44/45 on Friday, 29 November 2013.
India's Gross Domestic Product (GDP) increased at improved pace of 4.8% in Q2 September 2013, compared with 4.4% growth recorded in Q1 June 2013. The economic activities which registered significant growth in Q2 September 2013 over Q2 September 2012 were 'agriculture, forestry and fishing' at 4.6%, 'electricity, gas and water supply' at 7.7% 'construction' at 4.3%, 'financing, insurance, real estate and business services' at 10% and 'community, social and personal services' at 4.2%.
The fiscal deficit touched Rs 4.58 lakh crore during April-October 2013, or 84.4% of the full-year target, data released by the government after trading hours on Friday, 29 November 2013, showed. In the annual budget presented in February, Finance Minister P. Chidambaram had committed to narrow the fiscal deficit to 4.8% of gross domestic product (GDP) this fiscal year from 4.9% a year ago.
Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for November 2013 on today, 2 December 2013. The HSBC Manufacturing PMI compiled by Markit was unchanged at 49.6 in October, remaining below the watershed 50 mark that separates growth from contraction.
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.
Asian stocks edged lower on Monday, 2 December 2013. Key benchmark indices in Singapore, South Korea, and Japan were down 0.02% to 0.52%. Key benchmark indices in Indonesia, Hong Kong and Taiwan were up 0.03% to 0.51%.
China's Shanghai Composite index fell 1.65%. China's securities regulator said 50 companies will be ready for initial public offerings by the end of January 2014 as authorities prepare to lift a more than one-year ban on new listings in the world's second-biggest economy. It will take about a year to review more than 760 companies that are seeking first-time share sales, the China Securities Regulatory Commission said in a statement on its website on Nov. 30. The regulator also issued regulations on reverse mergers and said it may begin a trial program for letting companies sell preferred stock.
New rules that pave the way for a switch to a registration-based system for IPOs and letting investor demand determine pricing underscore the Communist Party's pledge to allow markets to play a decisive role in allocating resources. China, the world's largest IPO market in 2010, hasn't had a new listing since October 2012 as the CSRC cracked down on fraud and misconduct among advisers and companies.
Chinese manufacturing growth beat analyst estimates in November, indicating the nation's economic recovery is sustaining momentum amid government efforts to rein in credit growth. The Purchasing Managers' Index was 51.4, the National Bureau of Statistics and China Federation of Logistics and Purchasing said on Sunday. A separate gauge from HSBC Holdings Plc and Markit Economics today also indicated a reading above the 50 level dividing expansion from contraction.
Trading in US index futures indicated that the Dow could gain 21 points at the opening bell on Monday, 2 December 2013. US stocks ended mostly lower on Friday as the Dow Jones Industrial Average and the S&P 500 index dipped in thin holiday trading, but technology stocks helped lift the Nasdaq Industrial Composite index to a 13-year high.
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 on 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.
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