Market may edge higher in early trade

The market may edge higher in early trade on firm Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 24.50 points at the opening bell. Interest rate sensitive bank, auto and realty stocks will be in focus ahead of the Reserve Bank of India's (RBI) monetary policy review today, 3 June 2014

The Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review today, 3 June 2014, as the central bank waits for further proof that inflation is under control. While high inflation rates have come down in recent months, the central bank is waiting to see if they will flare up again. The RBI has said it wants the consumer price index inflation rate to cool to 8% by January and further to 6% a year after that. The central bank will want to see if the crucial monsoon rains this year will exacerbate or ease food price inflation. The RBI left the repo rate unchanged at 8% after a monetary policy review on 1 April 2014 as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.

 

Among corporate news, ITC turns ex-dividend today, 3 June 2014, for dividend of Rs 6 per share for the financial year ended 31 March 2014 (FY 2014).

Ashok Leyland said its total sales fell 9% to 6632 units in May 2014 over May 2013. Total sales of medium and heavy commercial vehicles (M&HCV) fell 1% to 4,884 units, while total sales of light commercial vehicles (LCV) declined 25% to 1,748 units in May 2014 over May 2013. The sales figures were announced after trading hours on Monday, 2 June 2014.

Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles fell 24% to 37,525 vehicles in May 2014 over May 2013. The company's domestic sales of Tata commercial and passenger vehicles fell 24% to 34,334 units in May 2014 over May 2013.

The company's sales of commercial vehicles fell 27% to 25,104 units in May 2014 over May 2013. The company's sales from exports fell 18% to 3,191 units in May 2014 over May 2013. The sales figures were announced after trading hours on Monday, 2 June 2014.

Tata Motors after trading hours on Monday, 2 June 2014, said that Mr Ravi Kant has retired as Non-Executive Vice Chairman from the company's board of directors on 31 May 2014 on attaining the age of 70 as per the company's retirement policy. The board of directors placed on record their appreciation of Mr Kant's contribution during his tenure with the company including as Managing Director for the period 29 July 2005 to 1 June 2009 and thereafter in his capacity as Non-Executive Vice Chairman, Tata Motors said in a statement.

Zee Entertainment Enterprises will be in focus after the Reserve Bank of India on Monday, 2 June 2014, said that foreign institutional investors (FIIs) can now invest up to 100% of the paid up capital of Zee Entertainment Enterprises under the Portfolio Investment Scheme, which is higher than the earlier ceiling of 49%. Zee Entertainment Enterprises has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs. This approval is given subject to the condition that the onus of compliance with FDI policy and FEMA regulations, including downstream investment would continue to remain on Zee Entertainment Enterprises, the Reserve Bank of India said in a press release.

Ipca Laboratories and Oncobiologics, Inc., USA (Oncobiologics) after trading hours on Monday, 2 June 2014, announced the creation of a two-part alliance for the development, manufacture and commercialization of biosimilar monoclonal antibody products. The financial terms of the agreement between the two companies were not disclosed. Under the first part of the agreement, Ipca will in-license and commercialize biosimilar products for India and other associated markets. These products will be developed by Oncobiologics to USFDA and EU regulatory standards for global commercialization. Initial manufacturing will occur in the US by Oncobiologics and later by Ipca in India. The biologics covered by the agreement are among the most popular therapies in the world for immunology and oncology disease indications, Ipca said in statement. The partnership is planning to launch the first product in 2017, the Indian pharmaceutical company said.

Under the second part of the agreement, Oncobiologics will replicate its biologics R&D and manufacturing facility in India to create a world-class capability for Ipca for further biosimilar commercialization. The Mumbai R&D facility will be designed for development and commercialization of complex monoclonal antibodies. The manufacturing facility will be located in Vadodara and will utilize the latest single-use manufacturing platform, Ipca said. The R&D facility will be operational from 2015 and the manufacturing facility will be operational by 2016.

The Eight Core Industries, having a combined weight of 37.90 % in the Index of Industrial Production (IIP), recorded a 4.2 % increase in output during April 2014. Coal production increased 3.3 %, while the electricity generation increased 11.2% in April 2014 over April 2013. The production of fertilizer increased 11.1%, while that of steel and cement also galloped 3.1% and 6.7% in April 2014. However, the output of crude Oil declined 0.1 %, while that of the natural gas and petroleum refinery also dipped 7.7% and 2.2% in April 2014.

Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for May 2014 tomorrow, 4 June 2014.

Finance minister Arun Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.

The First Meeting of the Special Investigating Team (SIT) was held on Monday under the Chairmanship of Mr. Justice M.B. Shah, former Judge of the Supreme Court. During the meeting, detailed modalities of proceeding further with the Supreme Court mandate were discussed and the roadmap decided. SIT was recently constituted to implement the decision of the Supreme Court on large amounts of money stashed abroad by evading taxes or generated through unlawful activities. The next meeting of the SIT will be convened shortly to take stock of the follow-up of the decisions taken in the First Meeting of SIT on Monday.

Key benchmark indices surged on the first trading session of the week on Monday, 2 June 2014 after a manufacturing sector survey showed that production volumes at Indian manufacturers continued to rise in the month just gone by. The S&P BSE Sensex garnered 467.51 points or 1.93% to settle at 24,684.85 on that day, its highest closing level since 26 May 2014.

Foreign institutional investors (FIIs) bought shares worth a net Rs 234.49 crore on Monday, 2 June 2014, as per provisional data from the stock exchanges.

Asian stocks rose on Tuesday as concern eased about a slowdown in China, the world's second-largest economy. Key benchmark indices in Indonesia, Taiwan, Japan, Hong Kong and China were up 0.01% to 0.76%. Key benchmark indices in Singapore and South Korea fell 0.06% to 0.09%.

A Chinese manufacturing gauge rose to a four-month high, signaling that the economy is stabilizing even as job cuts and weakness in the property market underscore pressure on the government to do more to support growth. A Purchasing Managers' Index from HSBC Holdings Plc and Markit Economics was at 49.4 in May, up from 48.1 in April.

The data came two days after a government gauge signaled the fastest growth in five months. Levels below 50 still signal contraction in the sector. China's official Purchasing Managers' Index rose to 50.8 in May, the highest level since December, a June 1 report showed.

China's non-manufacturing purchasing managers' index rose to 55.5 in May from a previously reported 54.8 in April, according data released by the Beijing-based National Bureau of Statistics and the China Federation of Logistics and Purchasing.

US stocks rose on Monday, with the Standard & Poor's 500 Index rising to a record as the Institute for Supply Management twice corrected the reading in its May manufacturing index.

Manufacturing expanded in May at the fastest pace this year as American assembly-line workers responded to increased orders by cranking up production. The Institute for Supply Management's factory index rose to 55.4 from the prior month's 54.9. Readings above 50 indicate expansion. The release of the data, watched closely by financial markets as a gauge of the economy's strength, was anything but smooth. Twice the Tempe, Arizona-based group had to amend its figures due to calculation errors.

The influential US nonfarm payroll data for May 2014 is due for release on Friday, 6 June 2014.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.

There are expectations that the European Central Bank (ECB) will announce new stimulus measures when the Governing Council of the ECB holds a monthly meeting on euro area interest rates on Thursday, 5 June 2014.

Bank of England's Monetary Policy Committee will probably keep its benchmark interest rate at a record-low 0.5% and leave its bond-purchase program unchanged at a monthly meeting on interest rates in UK on Thursday, 5 June 2014.

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