Key benchmark indices surged in early trade after exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. The state elections are considered a barometer for the national elections that are scheduled to be held before the end of May 2014. BJP's prime ministerial candidate for general elections in 2014 -- Narendra Modi -- is considered a pro-business leader. The barometer index, the S&P BSE Sensex, moved past the psychological 21,000 mark. The Sensex was up 398.39 points or 1.92%, up close to 110 points from the day's low and off close to 55 points from the day's high. The market breadth, indicating the overall health of the market, was strong. All the shares from 30-share Sensex pack rose. In the foreign exchange market, the rupee strengthened past 62 against the dollar in early trade.
Bharti Airtel edged higher in early trade after the company on Wednesday said that its wholly-owned subsidiary -- Bharti Airtel International (Netherlands) B.V. (Bharti) -- has priced euro 750 million 4% Guaranteed Senior Notes due 2018 (the Notes). Cairn India rose after the company appointed Mr. Mike Yeager, former CEO of the global petroleum business at BHP Billiton as Chairman, Operations Review Board, Cairn India. Wipro gained after the company said it will discontinue manufacturing of Wipro branded desktops, laptops and servers.
The Bharatiya Janata Party (BJP) has emerged as the biggest winner in four key state elections, exit polls forecast on Wednesday, a possible blow to the ruling Congress ahead of a general election due next year. Assembly elections in Delhi, Madhya Pradesh, Rajasthan, Chhattisgarh and Mizoram were held over the past month. Despite the gains predicted for the BJP it was unable to win a majority of seats in the capital Delhi, two polls showed. One poll suggested the race was close in Chhattisgarh. While the exact results varied from exit poll to exit poll, the general trend was clear: The ruling Congress party recorded embarrassing declines in support in Delhi as well as the western state of Rajasthan. Meanwhile voters in Madhya Pradesh and Chhattisgarh voted basically on the same lines they voted five years ago, backing the main opposition party, the BJP.
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 results are being closely watched by markets as a potential indicator of the mood of voters in the world's biggest democracy before the 2014 general election.
At 9:31 IST, the S&P BSE Sensex was up 398.39 points or 1.92% to 21,107.10. The index jumped 456.89 points at the day's high of 21,165.60 in early trade. The index rose 283.54 points at the day's low of 20,992.25 in opening trade.
The CNX Nifty was up 120.35 points or 1.95% to 6,281.30. The index hit a high of 6,300.55 in intraday trade. The index hit a low of 6,262.40 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 926 shares rose and 269 shares dropped. A total of 40 shares were unchanged.
All the shares from 30-share Sensex pack rose. L&T (up 3.56%), HDFC (up 2.8%) and Bhel (up 2.38%) edged higher.
Wipro gained 0.56% after the company after market hours on Wednesday, 4 December 2013, said it will discontinue manufacturing of Wipro branded desktops, laptops and servers in its endeavor to strengthen its position as a system integrator and increase its focus on IT solutions and services. Wipro said that the company took this decision after evaluating the changing market scenario and customer needs. Wipro will, however, be present in the PC market by providing suitable brands as a part of its solution offerings in large integrated deals.
Bharti Airtel rose 1.02% after the company after trading hours on Wednesday, 4 December 2013, said that its wholly-owned subsidiary -- Bharti Airtel International (Netherlands) B.V. (Bharti) -- has priced euro 750 million 4% Guaranteed Senior Notes due 2018 (the Notes). The Notes will be fully and unconditionally guaranteed by Bharti Airtel. The Notes attracted huge investor interest with an order-book aggregating over euro 3.8 billion from high quality investor accounts, Bharti Airtel said in a statement. The Notes have been priced at 300 basis points over the 5-year EUR Mid Swap with a fixed coupon of 4% per annum to yield 4.055%. Bharti will apply the net proceeds to refinance its existing debt.
Commenting on the development, Mr. Harjeet Kohli, Group Treasurer of Bharti, said: "It is heartening to be the first Indian corporate to access the European IG credit market. The overwhelming response from investors across Europe for this inaugural issue highlights the strength of our credit. This transaction helps us continue to diversify sources of funding and the EUR financing also acts as a natural hedge to many of our African businesses where local currency is pegged to Euros".
Cairn India rose 0.52%. The company after market hours on Wednesday, 4 December 2013, announced the appointment of Mr. Mike Yeager, former CEO of the global petroleum business at BHP Billiton as Chairman, Operations Review Board, Cairn India. Mike will work closely with the Cairn management team to deploy the best global technology and practices to unlock the full potential of the world class Rajasthan block and other existing assets and steer their efficient development, Cairn India said in a statement. Mike brings in more than 38 years of rich and diverse experience in reputed organisations like Exxon Mobil, BHP Billiton and the United States Marine Corps. In his last assignment, he was the CEO of the Petroleum business at BHP Billiton,which he joined after a 25 year stint with Exxon Mobil, the company said in a statement.
Mr. P. Elango, Whole Time Director, Cairn India, said: "I am excited with Mike Yeager joining us as Chairman, Operations Review Board at Cairn India. Mike's leadership and guidance will further enhance the quality of overall strategic and operational planning for optimal business results. His rich global experience will help Cairn to build a stronger E&P portfolio and attract top global talent. Mike's on-boarding will enhance the global outlook, strategic and operational leadership capacity at Cairn and prepare it for pursuing and fulfilling its aggressive growth agenda".
In the foreign exchange market, the rupee edged higher against the dollar in early deals after exit polls on Wednesday, 4 December 2013, predicted a strong showing for the Bharatiya Janata Party (BJP) in the recently concluded assembly elections in four states viz. Rajasthan, Madhya Pradesh, Chhattisgarh and New Delhi. The state elections are considered a barometer for the national elections that are scheduled to be held before the end of May 2014. BJP's prime ministerial candidate for general elections in 2014 -- Narendra Modi -- is considered a pro-business leader. The partially convertible rupee was currently hovering at 61.65, compared with its close of 62.05/06 on Wednesday, 4 December 2013.
On macro front, 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.
The winter session of parliament begins today, 5 December 2013, and it will possibly be the last session before the General Elections in 2014. The session will end on 20 December 2013. The UPA wants to push the Lokpal and the Women's Reservation Bills to garner maximum brownie points before the Lok Sabha elections next year. But Samajwadi Party chief Mulayam Singh Yadav has reiterated his opposition to the Women's Reservation Bill. The Bharatiya Janata Party wants discussion on the Patna serial blasts and women's security, but is opposed to any move to the bring the Communal Violence Bill. However, this Bill is something that the ruling coalition wants to bring especially after the Muzaffarnagar violence.
Other important bills like the Judicial Standards and Accountability Bill, 2012, the Insurance Laws (Amendment) Bill, 2008, the Indo-Bangla land boundary agreement discussion and voting on supplementary grants for both railways and general are all pending. The challenge before the UPA is to pack all of these in 12 working days.
Asian stocks declined on Thursday after strong US economic data raised uncertainty among investors over when the Federal Reserve may taper its stimulus program. Key benchmark indices in Indonesia, Hong Kong, Japan, Singapore, South Korea, China and Taiwan shed 0.12% to 1.15%.
US stocks fell a fourth day on Wednesday, the longest slump in 10 weeks for the Standard & Poor's 500 Index, as investors weighed economic data for clues on the timing of Federal Reserve stimulus cuts amid optimism over a budget deal.
Data showed companies boosted payrolls in November by the most in a year.US companies added 215,000 jobs in November, topping estimates, a private survey showed yesterday. A separate report indicated service industries in the US expanded at a slower pace than forecast in November, showing uneven progress in the biggest part of the economy. Purchases of new US homes surged in October by the most in three decades, signaling buyers are starting to take higher mortgage rates in stride.
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 tomorrow, 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 today, 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 today, 5 December 2013.
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