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. Gains in Asian stocks also boosted sentiment on the domestic bourses as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit 3-1/2-week high. The Sensex was up 130.30 points or 0.63%, up close to 150 points from the day's low and off about 20 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 29 November 2013.
Asian stocks edged higher in choppy trade on Monday, 2 December 2013, as manufacturing in China continued to grow last month.
PSU OMCs rose after raising diesel prices. Maruti Suzuki India dropped after the company reported decline in sales in November 2013. Mahindra & Mahindra (M&M) reversed initial losses after the company reported a decent growth in tractor sales for the month just gone by. Idea Cellular rose after the company after trading hours on Friday, 29 November 2013, said its board has approved increase in the aggregate investment limit of foreign institutional investors from 24% to 49% of the paid-up equity capital of the company.
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 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 11:20 IST, the S&P BSE Sensex was up 130.30 points or 0.63% to 20,922.23. 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 47.70 points or 0.77% to 6,223.80. 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, 1,281 shares rose and 707 shares dropped. A total of 108 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks rose and rest fell. Jindal Steel & Power (up 3.55%), ICICI Bank (up 2.78%) and Sun Pharmaceutical Industries (up 2.38%) gained.
Mahindra & Mahindra (M&M) reversed initial losses after the company reported a decent growth in tractor sales for the month just gone by. The stock was up 0.58%. Mahindra & Mahindra's total tractor sales rose 13% to 23,119 units in November 2013 over November 2012. Domestic tractor sales rose 13% to 22,343 units in November 2013 over November 2012. M&M announced the monthly tractor sales data on Sunday, 1 December 2013.
Speaking on the sector's monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, Mahindra & Mahindra, said: "Following the festive season, we are happy to keep up our sales momentum with a growth of 13% in November 2013. On the back of a good monsoon, we expect the robust demand for tractors to continue during the remaining months of this financial year."
M&M separately said its total automobile sales declined 18% to 39,255 units in November 2013 over November 2012. The company's domestic sales dropped 22.44% to 36,261 units in November 2013 over November 2012. Exports jumped 115.7% to 2994 units in November 2013 over November 2012. The Passenger Vehicles segment (which includes UVs and Verito) sales fell 31.83% to 16,771 units in November 2013 over November 2012. The 4-wheelers commercial segment had sold 13,186 units while the 3-wheelers segment clocked 5,861 units in November 2013.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra, said: "Post the festive season month of October, the auto industry has turned to further de-growth and continues to remain subdued. Unless some concrete measures are provided for its revival, we do not foresee any immediate turnaround. Factors such as increase in input costs and the depreciating rupee have not helped in any way. At Mahindra, we continue to focus on operational excellence to augment our overall performance and remain cautiously optimistic of the situation".
Maruti Suzuki India dropped 0.39% after the company reported decline in sales in November 2013. The company's total sales dropped 10.7% to 92,140 units in November 2013 over November 2012. Domestic sales declined 5.9% to 85,510 units in November 2013 over November 2012. Exports slumped 46.2% to 6,630 units in November 2013 over November 2012. The sales figures were announced by the company during market hours.
PSU OMCs rose after raising diesel prices. HPCL (up 0.58%), Indian Oil Corporation (IOCL) (up 0.67%) and BPCL (up 0.75%), edged higher. PSU OMCs have raised diesel prices by 50 paise per litre from Sunday, 1 December 2013. The price increase excludes local sales tax or VAT. The price of diesel in Delhi will be hiked by 57 paise, including tax, to Rs 53.67 per litre, while it will cost Rs. 60.70 a litre in Mumbai.
PSU OMCs suffer under recoveries 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.
Idea Cellular rose after the company after trading hours on Friday, 29 November 2013, said its board has approved increase in the aggregate investment limit of foreign institutional investors (FIIs) from 24% to 49% of the paid-up equity capital of the company. The stock was 1.03%. An Extraordinary General Meeting of the shareholders of the company has been convened on 26 December 2013, inter-alia, for obtaining approval of the shareholders for the proposed increase in FII investment ceiling in the company's equity.
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 62.25, 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 in choppy trade 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 0.01% to 1.24%. Key benchmark indices in South Korea and Japan were down 0.18% to 0.66%.
China's Shanghai Composite index fell 0.73% 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 22 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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