Key benchmark indices hovered in negative terrain in morning trade as weakness in Asian stocks dampened investor sentiment. The barometer index, the S&P BSE Sensex, was down 51.57 points or 0.25%, up close to 15 points from the day's low and off close to 35 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee edged lower against the dollar as crude oil futures rose. Government bond prices dropped as crude oil futures rose.
IT stocks gained as rupee edged lower against the dollar. PSU OMCs declined as crude oil prices rose. Shares of tyre maker CEAT scaled record high.
The market edged lower in early trade on weak Asian stocks. Key benchmark indices hovered in negative terrain in morning trade.
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. 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.
At 10:20 IST, the S&P BSE Sensex was down 51.57 points or 0.25% to 20,803.35. The index lost 65.48 points at the day's low of 20,789.44 in early trade, its lowest level since 2 December 2013. The index declined 15.47 points at the day's high of 20,839.45 in opening trade.
The CNX Nifty was down 15.95 points or 0.26% to 6,185.90. The index hit a low of 6,180.05 in intraday trade, its lowest level since 2 December 2013. The index hit a high of 6,196.55 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,001 shares rose and 674 shares dropped. A total of 127 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks fell and rest rose. ICICI Bank (down 1.75%), L&T (down 1.35%) and Sun Pharmaceutical Industries (down 0.87%) declined.
IT stocks gained as rupee edged lower against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. TCS (up 0.17%), Infosys (up 0.43%), HCL Technologies (up 0.03%) and Wipro (up 0.48%) gained.
PSU OMCs declined as crude oil prices rose. BPCL (down 1.74%), HPCL (down 2.08%) and Indian Oil Corporation (down 0.32%) declined.
US crude oil prices rose as TransCanada Corp. said it will start part of its Keystone XL pipeline next month and data showed US crude inventories fell. US crude oil futures for for January delivery were up $1.21 a barrel or 1.26% at $97.25 a barrel. The contract rose $2.22, or 2.4%, to $96.04 on Tuesday, 3 December 2013, the highest close since Oct. 31. Brent crude oil futures for January delivery were up 26 cents at $112.62 a barrel.
Higher crude oil prices could increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
CEAT rose 2.81% to Rs 308.80 after hitting record high of Rs 309.30 in intraday trade today, 4 December 2013.
In the foreign exchange market, the rupee edged lower against the dollar as crude oil futures rose. The partially convertible rupee was hovering at 62.40, compared with its close of 62.36/37 on Tuesday, 3 December 2013.
Government bond prices dropped as crude oil futures rose. The yield on 10-year benchmark federal paper, 7.16% GS 2023, was hovering at 9.0849%, 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.
Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for November 2013 today, 4 December 2013. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, rose to 47.1 in October from 44.6 in September, which was the weakest reading since April 2009.
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.
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 0.14% to 1.75%. Key benchmark indices in China and Taiwan rose 0.42% to 1.27%. 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 gain 16 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.
In Europe, 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.
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.
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