A bout of volatility was witnessed as key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade on bets today's report on US private-sector payrolls and the US government's data on monthly payroll due on Friday, 6 December 2013, will add to signs the US economic recovery is gaining momentum and spur the Federal Reserve to start reducing stimulus to the US economy. 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. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The barometer index, the S&P BSE Sensex, was down 86.92 points or 0.42%, up close to 30 points from the day's low and off close to 95 points from the day's high. The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade.
Cairn India rose along with crude oil prices. Shares of two wheeler makers declined. Index heavyweight Reliance Industries (RIL) dropped in volatile trade.
The market edged lower in early trade on weak Asian stocks. Key benchmark indices hovered in negative terrain in morning trade. A bout of volatility was witnessed as key benchmark indices edged lower once again after recouping almost entire intraday losses in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in early afternoon trade. The Sensex moved a narrow range in negative zone in afternoon trade. The Sensex moved into the positive zone for a brief period in mid-afternoon trade. A bout of volatility was witnessed as key benchmark indices extended losses and hit fresh intraday low in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was down 86.92 points or 0.42% to 20,768. The index lost 113.43 points at the day's low of 20,741.49 in mid-afternoon trade, its lowest level since 29 November 2013. The index rose 8.45 points at the day's high of 20,863.37 in mid- afternoon trade.
The CNX Nifty was down 22.70 points or 0.37% to 6,179.15. The index hit a low of 6,169.90 in intraday trade, its lowest level since 29 November 2013. The index hit a high of 6,209.15 in intraday trade.
The market breadth, indicating the overall health of the market, turned negative from positive in mid-afternoon trade. On BSE, 1,298 shares fell and 1,079 shares rose. A total of 177 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and rest rose. ICICI Bank (down 2%), Larsen & Toubro (down 1.69%) and Tata Motors (down 1.6%) edged lower from the Sensex pack.
Shares of two wheeler makers declined. Hero MotoCorp (down 0.32%) and Bajaj Auto (down 0.82%) declined.
Index heavyweight Reliance Industries (RIL) fell 0.26% to Rs 859.70. The stock hit high of Rs 867.25 and low of Rs 856 so far during the day.
Cairn India rose 0.34% as crude oil futures rose. US crude oil futures rose for a 4th straight day as TransCanada Corp. said it will start part of its Keystone XL pipeline next month and data showed United States crude inventories fell. US crude oil futures for January 2014 delivery were up $1.11 a barrel at $97.15 a barrel in the electronic trading today, 4 December 2013. The contract had surged $2.22 a barrel or 2.36% to settle at $96.04 a barrel on the New York Mercantile Exchange on Tuesday, 3 December 2013, its highest closing level since 31 October 2013. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms like Cairn India.
Mahindra Holidays & Resorts India rose 2.75% after the company announced the divestment of investment in the company's two Austrian subsidiaries. The announcement was made after market hours on Tuesday, 3 December 2013.
Mahindra Holidays & Resorts India said that BAH Hotelanlagen AG, Austria and MHR Hotel Management GmbH, Austria have ceased to be subsidiaries of the company with effect from 29 November 2013 in view of divestment of investment held by the company in these two subsidiary companies. Further, the company has informed that the existing arrangement for room inventory will continue between BAH Hotelanlagen AG (which has a hotel property "Bon Alpina" in Innsbruck, Austria) and the company. Accordingly, Club Mahindra members can continue to avail the room inventory in Bon Alpina, Mahindra Holidays & Resorts India said.
In the foreign exchange market, the rupee reversed initial losses against the dollar. The partially convertible rupee was currently hovering at 62.34, compared with its close of 62.36/37 on Tuesday, 3 December 2013.
Indian government bond prices dropped as crude oil futures rose on Tuesday, 3 December 2013, and on bets today's report on US private-sector payrolls and the US government's data on monthly payroll due on Friday, 6 December 2013, will add to signs the US economic recovery is gaining momentum and spur the Federal Reserve to start reducing stimulus to the US economy. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0936%, higher than its close of 9.069% on Tuesday, 3 December 2013. Bond yield and bond prices are inversely related.
The Organization of Petroleum Exporting Countries (OPEC) holds a meeting in Vienna on today, 4 December 2013, to decide production quota. The OPEC is expected to assess the impact of rising US oil production and the potential return of Iranian oil barrels to the market. OPEC countries will have to accommodate any additional oil supply into the market without changes to the cartel's overall production ceiling of 30-million-barrels-a-day, Venezuela Oil Minister Rafael Ramirez said on 28 November 2013.
The downturn in services activity eased slightly in November although a dearth of new orders prompted firms to rein in hiring plans, a business survey showed on Wednesday. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, nudged up to 47.2 last month from 47.1 in October. While the services PMI reading was a little better than the previous month, it has now spent five straight months below the 50 mark that divides contraction from growth, prompting firms to freeze hiring plans. The employment sub-index fell to 49.9 in November from 50.1.
New business in November fell at a slightly slower pace than in October, but it was the fifth month running that demand has declined. For inflation, the survey showed a mixed picture, with firms ramping up their prices faster despite some moderation in rising input costs.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said: "Service sector activity remains subdued, but would at least appear to be stabilizing. The inflation picture is a bit mixed, with prices charged rising at a faster pace while input price inflation eased somewhat. Looking ahead, economic activity is expected to remain soft in coming months as high inflation, tighter financial conditions, and structural constraints continue to weigh on growth".
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 the political front, Delhi goes to polls today, 4 December 2013. Polls for assembly election in Chattisgarh, Rajasthan, Madhya Pradesh and Mizoram are already over. Counting of votes for assembly elections in Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan takes place on 8 December 2013. Counting of votes for assembly elections in Mizoram takes place on 9 December 2013.
The outcome of the assembly elections could provide clues as to which party comes to power in the national elections that are due by May 2014. Many investors are hoping the state elections will show strong support for the Bharatiya Janata Party whose prime ministerial candidate Narendra Modi is considered a pro-business leader.
The winter session of parliament begins tomorrow, 5 December 2013. The session will end on 20 December 2013. It will have 12 sittings in which government is likely to introduce a bill to create a separate Telangana.
European stocks rose on Wednesday, 4 December 2013, as investors awaited reports on US jobs, services and home sales. Key benchmark indices in France and Germany rose 0.18% to 0.3%. UK's FTSE 100 fell 0.02%.
The European Central Bank (ECB) holds its monthly monetary policy meeting tomorrow, 5 December 2013. The ECB unexpectedly cut the benchmark interest rate by a quarter-percentage point last month to a record-low 0.25% after inflation slowed in October to the least in four years.
UK's central bank -- Bank of England -- is also expected to keep its key policy rate steady at 0.5% after a monetary policy review tomorrow, 5 December 2013.
Asian stocks fell on Wednesday, 4 December 2013, with investors awaiting influential US job data later this week that may provide further evidence as to when the Federal Reserve will reduce stimulus to the US economy. Key benchmark indices in Indonesia, Hong Kong, Japan, Singapore and South Korea were down 0.76% to 2.17%. Key benchmark indices in China and Taiwan rose 0.3% to 1.31%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
Chinese President Xi Jinping said the environment for economic and social development next year isn't optimistic.
Trading in US index futures indicated that the Dow could advance 39 points at the opening bell on Wednesday, 4 December 2013. US stocks declined for a third day on Tuesday, 3 December 2013, as investors assessed reports on car and retail sales before US jobs data later this week that may offer clues on when the Federal Reserve will reduce stimulus.
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 Friday, 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.
Brazil's economy contracted in the third quarter for the first time since early 2009, falling short of expectations yet again as plunging investment underscored eroding confidence in what was recently one of the world's most promising emerging markets. The economy shrank 0.5% between July and September from the prior three months, government statistics agency IBGE said on Tuesday.
Powered by Capital Market - Live News
