A bout of volatility was witnessed as key benchmark indices regained positive zone after slipping into the red from green for a brief period in early afternoon trade. The market breadth indicating the overall health of the market turned negative from positive. The barometer index, the S&P BSE Sensex, was currently up 17.30 points or 0.06% at 28,711.29. Foreign portfolio investors (FPIs) bought shares worth a net Rs 935.86 crore during the previous trading session on Friday, 28 November 2014, as per provisional data.
Global crude oil prices tumbled. Fall in crude oil prices augur well for India as the country imports 80% of its crude oil requirement. However, the weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
Sun Pharmaceutical Industries rose after the company before market hours today, 1 December 2014 announced that Foreign Investment Promotion Board (FIPB) has approved the proposal of the company for issuing equity shares of the company to the non-resident investors of Ranbaxy Laboratories pursuant to the merger of Ranbaxy Laboratories into Sun Pharmaceutical Industries through the scheme of arrangement between Ranbaxy Laboratories and Sun Pharmaceutical Industries. Ranbaxy Laboratories surged after company announced the launch of Infimab, the first Remicade (Infliximab) biosimilar in India.
Shares of paint makers extended recent rally as global crude oil prices fell. Shares of Asian Paints and Berger Paints scaled record high.
Earlier, key benchmark indices had trimmed gains amid volatility in early trade. The 50-unit CNX Nifty had trimmed gains after hitting record high.
In overseas markets, Asian stocks fell as a Chinese manufacturing gauge dropped and American holiday spending slowed. Trading in US equity index futures indicated a decline in US stocks at the opening bell later in the global day today, 1 December 2014, as a surge in Thanksgiving Day holiday sales failed to carry through the Black Friday weekend.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength in the greenback.
Brent crude oil futures hit four-year low, extending a steep sell-off after the Organization of Petroleum Exporting Countries (OPEC) decided not to cut production last week. Indian government's decision in October 2014 to decontrol diesel prices 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. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
At 12:15 IST, the Sensex was up 17.30 points or 0.06% at 28,711.29. The index jumped 115.65 points at the day's high of 28,809.64 in early trade. The index shed 21.26 points at the day's low of 28,672.73 in morning trade.
The Nifty was up 9.40 points or 0.11% at 8,597.65. The index hit a high of 8,623 in intraday trade, a record high for the index. The index hit a low of 8,583.50 in intraday trade.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,228 shares declined and 1,214 shares gained. A total of 63 shares were unchanged.
The BSE Mid-Cap index was up 26.86 points or 0.26% at 10,297.47, outperforming the Sensex. The BSE Small-Cap index was up 2.19 points or 0.02% at 11,272.98, underperforming the Sensex.
The total turnover on BSE amounted to Rs 1479 crore by 12:15 IST, compared with turnover of Rs 1136 crore by 11:15 IST.
Sun Pharmaceutical Industries rose 1.21%. Sun Pharmaceutical Industries before market hours today, 1 December 2014, announced that Foreign Investment Promotion Board (FIPB) has approved the proposal of the company for issuing equity shares of the company to the non-resident investors of Ranbaxy Laboratories pursuant to the merger of Ranbaxy Laboratories into Sun Pharmaceutical Industries through the scheme of arrangement between Ranbaxy Laboratories and Sun Pharmaceutical Industries.
Ranbaxy Laboratories surged 3.45%. Ranbaxy Laboratories today, 1 December 2014, announced the launch of Infimab, the first Remicade (Infliximab) biosimilar in India. The announcement was made during market hours today, 1 December 2014. Infimab is being introduced in the Indian market through a licensing partnership with EPIRUS Biopharmaceuticals, Inc. a US and Swiss-based Biopharmaceutical Company focused on the global development and commercialization of biosimilar monoclonal antibodies. Infimab will be manufactured by Reliance Life Sciences at a facility in Mumbai. Infimab marks Ranbaxy's entry into mAb (Monoclonal Antibodies) biologics, and will help the company provide greater access to quality biologic medicines in management of conditions like rheumatoid arthritis, Ranbaxy said in a statement.
Shares of paint makers extended recent rally as global crude oil fell. Shalimar Paints (up 8.75%), Akzo Nobel India (up 4.38%) and Kansai Nerolac Paints (up 3.39%) edged higher.
Sector bellwether Asian Paints jumped 4.85% to Rs 779.80. The stock hit a record high of Rs 785 in intraday trade.
Berger Paints jumped 8.68% to Rs 427.10 after scaling a record high of Rs 433.05 in intraday trade.
Falling crude oil prices augur well for paints makers. Titanium dioxide is a key raw material for paint companies and is derived from crude oil.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength in the greenback. The partially convertible rupee was hovering at 62.1375, compared with its close of 62.035 during the previous trading session on Friday, 28 November 2014.
Brent crude oil futures touched a fresh four-year low, extending a steep sell-off after Organization of Petroleum Exporting Countries (OPEC) decided not to cut production last week. Brent for January settlement was off $1.81 a barrel at $68.34 a barrel. The contract had dropped $2.43 a barrel to settle at $70.15 on Friday, 28 November 2014, the lowest close since 25 May 2010.
Meanwhile, United Arab Emirates' Oil Minister Suhail Mohamed Faraj Al-Mazrouei reportedly said that OPEC has no target price it would seek to defend.
Manufacturing operating conditions in India improved for the thirteenth month in a row in November 2014, supported by stronger growth of output and new work intakes, a survey showed today, 1 December 2014. Rising from 51.6 in October 2014 to 53.3 in November 2014, the headline seasonally adjusted HSBC India Purchasing Managers' Index (PMI) - a composite indicator designed to give an accurate overview of manufacturing operating conditions - reached a 21-month peak in November. The latest improvement in business conditions was solid overall and the thirteenth in consecutive months, the survey showed.
Pranjul Bhandari, Chief India Economist at HSBC said that a sharp rise in input prices paid by manufacturers in November 2014 was surprising, but future prints may be lower as falling commodity prices eventually lead to softer intermediate good prices. He also said that the pick-up in output prices charged by manufacturers in November 2014 could partly be signalling some revival in pricing power among businesses. Higher output and an uptick in final prices should convince the Reserve Bank of India to stay on hold at a monetary policy meeting tomorrow, 2 December 2014, Bhandari said.
India's economic growth eased in Q2 September 2014 mainly due to moderation in the growth of the agricultural and industrial sectors, data released by the Central Statistical Office after trading hours on Friday, 28 November 2014, showed. The GDP grew 5.3% in Q2 September 2014, compared with 5.7% expansion in Q1 June 2014. The services sector growth has shown improvement for the second straight quarter in Q2 September 2014. On the demand side, the net foreign demand weakened, while the domestic investment demand growth slowed sharply to remain flat from 7% in Q1 June 2014. However, the domestic private consumption and government consumption growth improved in Q2 September 2014.
GDP growth in the first half of current fiscal year stood at 5.5%, compared with 4.9% expansion during the corresponding period in the previous year. India's GDP grew 4.7% in 2013-14.
The government plans to introduce the nationwide Goods and Service Tax (GST) in April 2016, the Minister of State for Finance, Jayant Sinha, said in written reply to a question in Lok Sabha on Friday, 28 November 2014. The various aspects of GST design are being discussed in the Empowered Committee of State Finance Ministers so that there is broad consensus regarding modalities of its implementation, the government said. GST has been so designed that credit of taxes paid at every stage of value addition from the point of manufacture to the point of consumptions can be availed at the next stage. GST is essentially a tax on value addition and there is seamless transfer of input tax credit across the value chain. Due to the seamless transfer of input tax credit from one stage to another in the chain of value addition, there is an in-built mechanism in the design of GST that would incentivize tax compliance by traders.
According to the government, GST will simplify and harmonise the indirect tax regime in the country. It is expected to reduce cost of production and inflation in the economy, therby making the Indian trade and industry more competitive domestically as well as internationally. It is also expected that introduction of GST will foster a common or seamless Indian market and contribute significantly to the growth of the economy, according to the government.
The government is likely to introduce the constitutional amendment bill for GST during the ongoing winter session of parliament.
Sinha also said in written reply to another question in Lok Sabha on Friday, 28 November 2014, that a series of reforms have been initiated by the government and that many more reforms are on the anvil.
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.
The Reserve Bank of India (RBI) undertakes monetary policy review tomorrow, 2 December 2014. The central bank aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 5.52% in October 2014 from 6.46% in September 2014, data released by the government on 12 November 2014 showed.
Asian stocks fell today, 1 December 2014, as a Chinese manufacturing gauge dropped and American holiday spending slowed. Key benchmark indices in Singapore, Taiwan, China, Hong Kong and South Korea were off 0.08% to 2.11%. Key benchmark indices in Indonesia and Japan were up 0.12% to 0.75%.
The HSBC China manufacturing Purchasing Managers' Index, a gauge of nationwide manufacturing activity, fell to a six-month low of 50 in November from 50.4 in October, HSBC Holdings PLC said today, 1 December 2014. A reading below 50 indicates a contraction in manufacturing activity from the previous month, whereas a reading above indicates expansion.
China's official manufacturing Purchasing Managers Index fell to 50.3 in November compared with 50.8 in October, the National Bureau of Statistics, said today, 1 December 2014.
Japan's economy may have contracted in the third quarter but probably not by as much as surprising preliminary data showed last month, a key survey of business spending suggests. Japanese firms boosted their capital spending by 3.1% in the July to September period from the previous three-month period, the Ministry of Finance's survey of financial statistics of corporations showed today, 1 December 2014.
Trading in US index futures indicated that the Dow could fall 62 points at the opening bell today, 1 December 2014. US stocks posted a mixed finish in a holiday-shortened session on Friday, 28 November 2014, as energy shares got slammed a day after the Organization of the Petroleum Exporting Countries (OPEC) did nothing to alleviate a global supply glut. The Dow Jones Industrial Average eked out a gain of 0.49 point to end at 17,828.24, marking another record close.
Consumer spending in the United States fell to $50.9 billion over the four days through 30 November 2014, down from $57.4 billion in 2013, the National Retail Federation said in a statement today, 1 December 2014. It's the second year in a row that sales declined during the period, which had long been famous for long lines and frenzied crowds.
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