After a range bound movement in mid-morning trade, key benchmark indices cut intraday losses in early afternoon trade, with the 50-unit CNX Nifty moving into positive zone from negative zone. The barometer index, the S&P BSE Sensex, was currently off 21.45 points or 0.08% at 28,422.56. The broad market depicted strength. The market breadth indicating the overall health of the market was strong with more than two gainers for every loser on BSE. The BSE Mid-Cap index was up 1.51%. The BSE Small-Cap index was up 1.45%. Both these indices outperformed the Sensex. Meanwhile, a monthly survey today, 3 December 2014, showed a pick in activity at Indian services companies last month.
Shares of public sector oil marketing companies (PSU OMCs) extended previous day's losses triggered by the government announcing increase in excise duty on petrol and diesel. Telecom stocks were mixed. Shares of companies whose fortunes are linked to orders from Indian Railways edged higher on renewed buying.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 106.82 crore yesterday, 2 December 2014, as per provisional data.
In overseas markets, Asian stocks nudged higher after US stocks edged higher overnight. US stocks moved higher yesterday, 2 December 2014, sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures edged higher after a steep slide during the previous trading session.
At 12:15 IST, the S&P BSE Sensex was down 21.45 points or 0.08% at 28,422.56. The index fell 73.28 points at the day's low of 28,370.73 in morning trade, its lowest level since 27 November 2014. The index gained 60.64 points at the day's high of 28,504.65 at onset of the day's trading session.
The CNX Nifty was up 2.55 points or 0.02% at 8,527.25. The index hit a low of 8,508.35 in intraday trade. The index hit a high of 8,540.60 in intraday trade.
The market breadth indicating the overall health of the market was strong with more than two gainers for every loser. On BSE, 1,758 shares gained and 819 shares fell. A total of 96 shares were unchanged.
The BSE Mid-Cap index was up 156.13 points or 1.51% at 10,512.24. The BSE Small-Cap index was up 163.70 points or 1.45% at 11,414.91. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1836 crore by 12:15 IST, compared with turnover of Rs 1368 crore by 11:15 IST.
TCS slipped 0.45%. TCS during market hours today, 3 December 2014, announced the launch of its latest solution, TCS BaNCS Digital, to help financial institutions reimagine the digital experience for their customers and build a seamless and interconnected bank. The solution will provide bank customers with an app and browser experience from a single platform and infrastructure, TCS said. The TCS BaNCS Digital solution comprises both enterprise and consumer apps delivered on hybrid architecture, TCS said.
Shares of public sector oil marketing companies (PSU OMCs) extended previous day's losses triggered by the government announcing increase in excise duty on petrol and diesel. Indian Oil Corporation (IOCL) (down 1.07%) and HPCL (down 0.63%) declined.
BPCL rose 0.48% to Rs 716.35. The stock was volatile. The stock hit a high of Rs 722 and low of Rs 712.10 so far during the day.
The government yesterday, 2 December 2014, announced a hike in excise duty on petrol by Rs 2.25 a litre and diesel by Re 1 a litre with immediate effect. It may be recalled that in mid-November 2014, the government had raised excise duty on petrol and diesel by Rs 1.50 a litre each.
Telecom stocks were mixed. Reliance Communications (up 1.09%), Tata Teleservices (Maharashtra) (up 1.54%), and Mahanagar Telephone Nigam (up 2.89%) edged higher. Bharti Airtel (down 0.43%) and Idea Cellular (down 0.21%) edged lower.
The Department of Telecom (DoT) has reportedly indicated that it wants to auction 3G spectrum along with other frequency bands in the sale scheduled for February 2015. As a first step, the DoT has asked telecom regulator to expedite the base price recommendations for the 2100 MHz band so that auction could be conducted along with the auction of spectrum in the 800 MHz,900 MHz, and1800 MHz bands, according to reports.
Shares of companies whose fortunes are linked to orders from Indian Railways edged higher on renewed buying. Texmaco Rail & Engineering (up 5.67%), Kernex Microsystems (India) (up 4.95%), Titagarh Wagons (up 4.03%), Kalindee Rail Nirman (Engineers) (up 7.56%), Stone India (up 4.99%), Hind Rectifiers (up 7.49%) and BEML (up 3.59%) gained.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.865, compared with its close of 61.89 during the previous trading session.
Brent crude oil futures edged higher after a steep slide during the previous trading session. Brent for January settlement was up 17 cents a barrel at $70.71 a barrel. The contract had dropped $2 a barrel to settle at $70.54 during the previous trading session.
Meanwhile, a monthly survey released today, 3 December 2014, showed a pick in activity at Indian services companies last month. Rising from 50 in October to 52.6 in November, the seasonally adjusted HSBC India Services PMI Business Activity Index was consistent with a solid expansion in service sector activity in November. Moreover, the latest reading was the highest in five months, albeit below the series average. The services sector contributes about 60% to India's gross domestic product.
Commenting on the India Services PMI survey, Pranjul Bhandari, Chief India Economist at HSBC said: "Service sector activity grew in November, as new business rose for the seventh month running. Despite the uptick in order flows, business sentiment deteriorated, reminding us that continued policy action that addresses investor concerns is needed to sustain growth momentum. Meanwhile, prices dipped on falling commodity prices and increased competition".
The Ministry of Finance after trading hours yesterday, 2 December 2014, said that it is encouraging that the Reserve Bank of India (RBI) has taken note of the structural change in the outlook for inflation. Responding to the Monetary Policy Statement issued by the RBI, the finance ministry said that the government looks forward to the RBI supporting the revival of growth and employment. In the weeks ahead, the government and RBI will work towards a monetary policy framework that will help institutionalize the gains achieved on the inflation front, so as to reduce inflationary expectations and further support the revival of investment and growth, the finance ministry said in a statement.
The RBI kept its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review, yesterday, 2 December 2014, saying it still needs more proof that inflation is under control before it can start lowering lending rates. In the statement accompanying the rate decision, RBI Governor Raghuram Rajan said that the current slowdown in consumer prices may be short-lived. Rajan said the risk to the January 2016 target of 6% appear evenly balanced under the current policy stance.
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.
Meanwhile, a high level official panel headed by Parthasarathi Shome in its report submitted to the government yesterday, 2 December 2014, suggested reintroduction of the fringe benefit tax (FBT). Reintroducing FBT would be an effective measure to widen the direct tax base, the committee said in its report. This is a good temporary administrative measure for enhancing tax collection, until rising income tax collection makes it unnecessary, the committee said.
The committee said that cash economy is a major problem in the Indian economic system as large scale transactions reportedly take place in cash, especially in land dealings and the construction sector. A nonintrusive verification system should be designed so that more cases of capital gains liability are detected, the committee said in its report.
Asian stocks edged higher today, 3 December 2014, after US stocks edged higher overnight. Key benchmark indices in Singapore, Taiwan, China, Japan, and South Korea were up 0.26% to 1.55%. Key benchmark indices in Indonesia and Hong Kong were off 0.27% to 0.69%.
The HSBC China services purchasing managers index rose to 53 in November from 52.9 in October, HSBC Holdings PLC said today, 3 December 2014 pointing to modest economic resilience outside the nation's factory sector. A reading above 50 indicates month-to-month expansion while a level below that points to contraction. New orders in the service sector grew at their fastest pace in 30 months, compared with a much weaker showing in factory activity, HSBC said.
Meanwhile, China's official nonmanufacturing purchasing managers' index rose to 53.9 in November from 53.8 in October, data from the China Federation of Logistics and Purchasing showed today, 3 December 2014.
Trading in US index futures indicated a flat opening of US stocks later in the global day today, 3 December 2014. US stocks edged higher on Tuesday, 2 December 2014 sending the Dow Jones Industrial Average to a record, as biotechnology and energy companies rallied and data on construction spending boosted confidence in the economy.
November car and light truck sales were second-highest in eight years, according to figures from Autodata. Sales rose to a seasonally adjusted annual rate of 17.2 million in November, up from 16.5 million in October and the best level since August.
In economic news, data released on Tuesday, 2 December 2014 showed construction spending grew more than estimated in October. Construction spending rose 1.1% in October to a seasonally adjusted annual rate of $971 million.
In Europe, the European Central Bank (ECB) is scheduled to undertake its monthly monetary policy review tomorrow, 4 December 2014. The ECB has pledged more stimulus if needed to revive inflation.
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