Intraday recovery gathered steam, with the 50-unit CNX Nifty hitting fresh intraday high in afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 29.07 points or 0.1% at 28,473.08. The broad market depicted strength. The market breadth indicating the overall health of the market was strong with more than two gainers for every loser on BSE. The BSE Mid-Cap index was up 1.59%. The BSE Small-Cap index was up 1.66%. Both these indices outperformed the Sensex. Meanwhile, a monthly survey showed a pick in activity at Indian services companies last month. Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements.
Shares of companies in insurance business gained on hopes the Indian government may get the Insurance Laws Amendment Bill that seeks to enhance foreign direct investment (FDI) limit in capital starved insurance sector passed during the onging winter session of parliament which began on 24 November 2014. Capital goods stocks gained across the board. Shares of defence equipment makers surged on media reports that a total of 41 proposals for an indicative cost of Rs 119719 crore have been cleared by the Defence Acquisition Council since June 2014.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 106.82 crore yesterday, 2 December 2014, as per provisional data.
Global crude prices fell overnight. The fall in crude oil prices augur well for India as the country imports majority of its crude oil requirements. Deregulation of diesel prices announced by the government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide 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.
In overseas markets, Asian stocks nudged higher after US stocks edged higher overnight. US stocks moved higher yesterday, 2 December 2014, sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
In the foreign exchange market, the rupee was almost currently unchanged against the dollar in choppy trade.
Brent crude oil futures edged higher after a steep slide during the previous trading session.
At 13:16 IST, the S&P BSE Sensex was up 29.07 points or 0.1% at 28,473.08. The index gained 60.64 points at the day's high of 28,504.65 at onset of the day's trading session. The index fell 73.28 points at the day's low of 28,370.73 in morning trade, its lowest level since 27 November 2014.
The CNX Nifty was up 16.70 points or 0.2% at 8,541.40. The index hit a high of 8,543.75 in intraday trade. The index hit a low of 8,508.35 in intraday trade.
The market breadth indicating the overall health of the market was strong with more than two gainers for every loser. On BSE, 1,825 shares gained and 913 shares fell. A total of 102 shares were unchanged.
The BSE Mid-Cap index was up 164.61 points or 1.59% at 10,520.72. The BSE Small-Cap index was up 186.73 points or 1.66% at 11,437.94. Both these indices outperformed the Sensex.
Cipla rose 0.06%. Cipla and Meda Pharmaceuticals Inc. said in a joint statement issued today, 3 December 2014, that they have sued Apotex Inc. and Apotex Corp. (Apotex) in Federal District Court in Delaware to enforce the Orange-Book listed patents covering Dymista (azelastine HCl/fluticasone propionate) Nasal Spray in response to Apotex's submission to the US Food and Drug Administration (FDA) of an Abbreviated New Drug Application (ANDA), and accompanying Paragraph IV certification, seeking approval to market a generic version of Meda's Dymista prior to expiration of the Dymista patents.
The complaint was filed within 45 days of receiving Apotex's Paragraph IV certification notice, thus triggering an automatic stay preventing the FDA from approving Apotex's ANDA for 30 months from receipt of the notice, unless ordered otherwise by a district court. Meda has the exclusive licenses to US patent covering the Dymista composition and its approved uses, which does not expire until 2026. Meda holds the New Drug Application (NDA) to manufacture and market Dymista in the US for the treatment of seasonal allergic rhinitis.
Shares of companies in insurance business gained on hopes the Indian government may get the Insurance Laws Amendment Bill that seeks to enhance foreign direct investment (FDI) limit in capital starved insurance sector passed during the ongoing winter session of parliament which began on 24 November 2014. ICICI Bank (up 0.78%), Bajaj Finserve (up 8.43 %), State Bank of India (up 0.53%), Aditya Birla Nuvo (up 2.37%), Max India (up 6.7%) and Reliance Capital (up 3.68%) surged. However, HDFC declined 1.58%.
Capital goods stocks also gained. Alstom India (up 0.02%), Punj Lloyd (up 1.9%), Thermax (up 2.54%), Havells India (up 4.18%), Siemens (up 0.45%), BEML (up 3.75%), L&T (up 0.45%) and Crompton Greaves (up 1.64%) gained.
Power equipment major Bharat Heavy Electricals (Bhel) surged 3.17%. Bhel during trading hours today, 3 December 2014, said it has successfully commission India's first indigenously-developed Phase Shifting Transformer (PST) at Kothagudem Thermal Power Station (KTPS) in Telangana. The remarkable benefits derived by transmission networks through deployment of PST, is an outstanding Smart Grid solution in true sense, Bhel said. This is a major development and has opened a new line of business for Bhel, the company said.
ABB India rose 2.5%. The company after market hours yesterday, 2 December 2014, said that the company has designed, manufactured, installed and commissioned a 1200- kilovolt (kV) circuit breaker, the highest AC voltage level in the world, and will support India's ultrahigh voltage grid plans. The circuit breaker is deployed at the 1,200 kV national test station constructed by Power Grid Corporation of India (PGCIL), India's central transmission utility, at Bina in the central Indian state of Madhya Pradesh.
Shares of defence equipment makers surged on media reports that a total of 41 proposals for an indicative cost of Rs 119719 crore have been cleared by the Defence Acquisition Council since June 2014. Bharat Electronics (up 5.74%), Astra Microwave Products (up 5.73%), Taneja Aerospace & Aviation (up 8.82%), Bharat Forge (up 1.63%), Dynamatic Technologies (up 0.04%), Walchandnagar Industries (up 5%) and Pipavav Defence & Offshore Engineering Company (up 2.41%), edged higher. Tata Power Company declined 0.22%.
In the foreign exchange market, the rupee was almost currently unchanged against the dollar in choppy trade. The partially convertible rupee was hovering at 61.8875, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged higher after a steep slide during the previous trading session. Brent for January settlement was up 35 cents a barrel at $70.89 a barrel. The contract had dropped $2 a barrel to settle at $70.54 during the previous trading session.
Meanwhile, a monthly survey released today, 3 December 2014, showed a pick in activity at Indian services companies last month. Rising from 50 in October to 52.6 in November, the seasonally adjusted HSBC India Services PMI Business Activity Index was consistent with a solid expansion in service sector activity in November. Moreover, the latest reading was the highest in five months, albeit below the series average. The services sector contributes about 60% to India's gross domestic product.
Commenting on the India Services PMI survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition".
The Ministry of Finance after trading hours yesterday, 2 December 2014, said that it is encouraging that the Reserve Bank of India (RBI) has taken note of the structural change in the outlook for inflation. Responding to the Monetary Policy Statement issued by the RBI, the finance ministry said that the government looks forward to the RBI supporting the revival of growth and employment. In the weeks ahead, the government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth, the finance ministry said in a statement.
The RBI kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review, yesterday, 2 December 2014, saying it still needs more proof that inflation is under control before it can start lowering lending rates. In the statement accompanying the rate decision, RBI Governor Raghuram Rajan said that the current slowdown in consumer prices may be short-lived. Rajan said the risk to the January 2016 target of 6% appear evenly balanced under the current policy stance.
The Indian government intends to get the Insurance Laws Amendment Bill that seeks to enhance FDI limit in capital starved insurance sector passed during the winter session of parliament which began on 24 November 2014. The government is also likely to introduce the constitutional amendment bill for the goods & services tax in the winter session of parliament.
Meanwhile, a high level official panel headed by Parthasarathi Shome in its report submitted to the government yesterday, 2 December 2014, suggested reintroduction of the fringe benefit tax (FBT). Reintroducing FBT would be an effective measure to widen the direct tax base, the committee said in its report. This is a good temporary administrative measure for enhancing tax collection, until rising income tax collection makes it unnecessary, the committee said.
The committee said that cash economy is a major problem in the Indian economic system as large scale transactions reportedly take place in cash, especially in land dealings and the construction sector. A nonintrusive verification system should be designed so that more cases of capital gains liability are detected, the committee said in its report.
Asian stocks edged higher today, 3 December 2014, after US stocks edged higher overnight. Key benchmark indices in Singapore, Taiwan, China, Japan, and South Korea were up 0.01% to 1.55%. Key benchmark indices in Indonesia and Hong Kong were off 0.27% to 0.84%.
The HSBC China services purchasing managers index rose to 53 in November from 52.9 in October, HSBC Holdings PLC said today, 3 December 2014 pointing to modest economic resilience outside the nation's factory sector. A reading above 50 indicates month-to-month expansion while a level below that points to contraction. New orders in the service sector grew at their fastest pace in 30 months, compared with a much weaker showing in factory activity, HSBC said.
Meanwhile, China's official nonmanufacturing purchasing managers' index rose to 53.9 in November from 53.8 in October, data from the China Federation of Logistics and Purchasing showed today, 3 December 2014.
Trading in US index futures indicated Dow could fall 3 points at the opening bell later in the global day today, 3 December 2014. US stocks edged higher on Tuesday, 2 December 2014 sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
In an appearance at the WSJ CEO Council meeting in Washington, Federal Reserve Vice Chairman Stanley Fischer yesterday, 2 December 2014, said that the US central bank is closer to getting rid of its forward guidance that interest rates would be kept close to zero for a considerable time. But Fischer did not comment on whether the forward guidance would be changed at the next policy meeting in two weeks.
In addition to closely monitored US jobs data for November due on Friday, 5 December 2014, investors are awaiting data later this week such as US private sector jobs report for November and the US Federal Reserve Beige Book, both scheduled for release later in the global day today, 3 December 2014.
In Europe, the European Central Bank (ECB) is scheduled to undertake its monthly monetary policy review tomorrow, 4 December 2014. The ECB has pledged more stimulus if needed to revive inflation.
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