Key benchmark indices trimmed gains in in early afternoon trade. The market breadth, indicating the overall health of the market, was strong. The barometer index, the S&P BSE Sensex, was up 107.59 points or 0.52%, up close to 130 points from the day's low and off about 40 points from the day's high. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013. Also boosting sentiment was the outcome of a business survey that India's manufacturing activity returned to growth as a strong rise in orders pushed factories to step up production in the month just gone by. Gains in Asian stocks also boosted sentiment on the domestic bourses.
Asian stocks edged higher on Monday, 2 December 2013, as manufacturing in China continued to grow last month.
Bank stocks rose after the Reserve Bank of India (RBI) on Friday, 29 November 2013, said that commercial banks will now have the option to pay interest on savings accounts and term deposits at intervals shorter than quarterly intervals. Pharma stocks rose after the Union Cabinet on Friday, 29 November 2013, decided that the current policy on foreign direct investment (FDI) in brownfield and greenfield projects in the pharmaceutical sector will continue subject to the additional condition that in all cases of FDI in brownfield pharma, there will not be any non-compete clause in any of the inter se agreements.
ONGC dropped on reports that the Gujarat high court on Saturday, 30 November 2013, directed the company to pay royalty dues worth over Rs 10000 crore to the state government. Eicher Motors scaled record high.
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. A bout of volatility was witnessed as key benchmark indices recovered after trimming initial gains in morning trade. Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade after the outcome of a business survey showed that India's manufacturing activity returned to growth as a strong rise in orders pushed factories to step up production in the month just gone by. The Sensex, and the 50-unit CNX Nifty, both, hit 3-1/2-week high. The Sensex trimmed gains in early afternoon 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 12:20 IST, the S&P BSE Sensex was up 107.59 points or 0.52% to 20,899.52. The index jumped 149.07 points at the day's high of 20,941 in mid-morning trade, its highest level since 7 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 43.15 points or 0.7% to 6,219.25. The index hit a high of 6,228.70 in intraday trade, its highest level since 7 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, 1,331 shares rose and 806 shares dropped. A total of 132 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks rose and rest fell. Jindal Steel & Power (up 2.52%), L&T (up 2.21%) and Bhel (up 1.38%) gained.
ONGC dropped on reports that the Gujarat high court on Saturday, 30 November 2013, directed the company to pay royalty dues worth over Rs 10000 crore to the state government. The stock was off 2.86%. According to media reports, the Gujarat high court on Saturday, 30 November 2013, directed ONGC to pay dues worth over Rs 10000 crore to the state government towards differences in royalty of crude it has extracted since 2008. As per the Schedule of the Oilfields (Regulation and Development) Act, 1948, ONGC is bound to pay to the state government 20% royalty of the market value of crude oil it extracts from oil blocks. Gujarat has 66 such blocks, reports added.
Reports suggested that ONGC used to pay such royalty to the Gujarat government to the latter's satisfaction. The situation changed from 2004, when the Centre asked ONGC to provide crude to IOC and other PSUs, which were incurring losses due to offering subsidies on end products like diesel, kerosene and LPG, at a discounted rate. This discount remained at 70-75%. Since 2004, ONGC started paying royalty on the post-discount rate instead of the market value of the crude. This resulted in a big fall in royalty to Gujarat, which often complained before the Centre. Finally, it moved the high court in 2011, when the difference was computed to Rs 6000 crore. Special counsel Aspi Kapadia contended that ONGC sometimes supplied crude to other PSUs at a discount that went up to 96%. He claimed that the royalty should be given at pre-discount rate, which is market value of the crude.
A division bench has accepted the state government's demand and directed ONGC to make payment of the differences within two months. The court has also asked ONGC to pay royalty at pre-discount rate henceforth, reports said.
Coal India rose 0.7%. The company announced during market hours that on provisional basis, its coal production for November 2013 was 93% of target at 39.20 million tonnes. The company's offtake was 93% of target at 38.76 million tonnes in November 2013.
Bank stocks rose after the Reserve Bank of India (RBI) on Friday, 29 November 2013, said that commercial banks will now have the option to pay interest on savings accounts and term deposits at intervals shorter than quarterly intervals. Banks were hitherto required to pay interest on savings deposits and term deposits at quarterly or longer intervals.
HDFC Bank (up 0.42%) and ICICI Bank (up 2.73%) rose.
Among PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank rose 1.15% to 2.05%.
State Bank of India (SBI) rose 1.37%. SBI plans to raise up to Rs 9576 crore through issue of equity shares to institutional investors or a follow-on public offer or any other mode, the bank said on Friday, 29 November 2013. SBI said that the bank requires additional capital to match the anticipated growth in assets. Considering the business growth during the current year as well as that for the years to come, there is a strong need for higher capital as required under the Basel III norms, particularly Tier-I Capital, SBI said.
Pharma stocks rose after the Union Cabinet on Friday, 29 November 2013, decided that the current policy on foreign direct investment (FDI) in brownfield and greenfield projects in the pharmaceutical sector will continue subject to the additional condition that in all cases of FDI in brownfield pharma, there will not be any non-compete clause in any of the inter se agreements. Cipla (up 0.61%), Dr Reddy's Laboratories (up 0.31%), Lupin (up 1.63%), Ranbaxy Laboratories (up 6.05%) and Sun Pharmaceutical Industries (up 2.54%) gained.
Eicher Motors jumped 5.02% to Rs 4,921.35 after hitting record high of Rs 5,106.20 in intraday trade.
Amtek India surged 17.21% after the company reported strong quarter ended September 2013 result. The company's net profit surged 86.9% to Rs 55.13 crore on 48.9% increase in net sales to Rs 558.25 crore in the quarter ended September 2013 over the quarter ended September 2012. The result was announced after market hours on Friday, 29 November 2013.
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 62.175, compared with its close of 62.44/45 on Friday, 29 November 2013. A broad decline in dollar also aided gains in Indian currency.
Indian manufacturing returned to growth last month as a strong rise in orders pushed factories to step up production, a business survey showed on Monday, suggesting a slow economic recovery is on its way. The HSBC Manufacturing PMI, compiled by Markit, rose to 51.3 in November from October's 49.6. The PMI index is the highest since March and marks its first time above the watershed level of 50 that divides growth from contraction in four months. The new orders sub-index rose to 51.9 last month, its highest since April. In October it shrank to 48.9.
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.
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 higher on Monday, 2 December 2013, as manufacturing in China continued to grow last month. Key benchmark indices in Singapore, Indonesia, Hong Kong and Taiwan were up 0.09% to 1.36%. Key benchmark indices in South Korea and Japan were down 0.05% to 0.69%.
China's Shanghai Composite index fell 0.97% in choppy trade. 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. The HSBC China Manufacturing Purchasing Managers' Index had a final reading of 50.8 in November, compared with 50.9 in October.
Trading in US index futures indicated that the Dow could advance 20 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.
The US holiday shopping season started with estimated total spending over the Thanksgiving weekend falling to $57.4 billion, down 2.7% from a year ago, according to the National Retail Federation. The federation said it still expects total holiday sales through the year-end to rise 3.9% from a year ago.
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.
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