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Tyre stocks rally on weakness in natural rubber prices

A bout of volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period in mid-morning trade. Gains in Asian stocks supported domestic bourses. The S&P BSE Sensex was currently above the psychological 21,000 mark, having alternately swung above and below that mark in intraday trade. The Sensex was up 32.25 points or 0.15%, off close to 40 points from the day’s high and up about 60 points from the day’s low. The market breadth, indicating the overall health of the market, was strong.

Tata Motors, Asian Paints and Motherson Sumi Systems scaled record high. Tyre shares gained for the second day in a row on weakness in natural rubber prices. Some realty stocks edged lower.

A bout of volatility was witnessed in early trade as key benchmark regained positive terrain after slipping into the red after opening higher. The Sensex retained positive zone after striking fresh intraday high in morning trade. A bout of volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red for a brief period in mid-morning trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 162.53 crore on Tuesday, 5 November 2013, as per provisional data from the stock exchanges.

At 11:20 IST, the S&P BSE Sensex was up 32.25 points or 0.15% to 21,008.66. The index rose 70.59 points at the day’s high of 21,045.38 in morning trade. The index fell 30.29 points at the day’s low of 20,944.50 in early trade, its lowest level since 30 October 2013.

The CNX Nifty was up 3.40 points or 0.05% to 6,256.55. The index hit a high of 6,269.70 in intraday trade. The index hit a low of 6,239.65 in intraday trade, its lowest level since 31 October 2013.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,180 shares rose and 758 shares fell. A total of 124 shares were unchanged.

Among the 30-share Sensex pack, 16 stocks rose and rest of them fell. Sun Pharmaceutical Industries (up 2.35%), TCS (up 1.75%) and Tata Power Company (up 2.7%), edged higher.

Tata Motors rose 0.7% to Rs 398.90 after hitting record high of Rs 400.70 in intraday trade.

Asian Paints gained 0.17% to Rs 547 after hitting record high of Rs 551 in intraday trade.

Motherson Sumi Systems rose 3.82% to Rs 284.05 after hitting record high of Rs 285 in intraday trade.

Some realty stocks edged lower. HDIL (down 1.72%), DLF (down 1.37%) and Unitech (down 0.28%), declined.

Tyre shares gained for the second day in a row on weakness in natural rubber prices. CEAT (up 8.04%), JK Tyre & Industries (up 4.02%), MRF (up 0.9%) and Apollo Tyres (up 2.29%), edged higher.

Rubber futures on for delivery in April 2014 settled at 255.7 yen a kilogram on the Tokyo Commodity Exchange on Tuesday, 5 November 2013, the lowest close for a most-active contract since 4 October 2013. Natural rubber is a key raw material in tyre making.

In the foreign exchange market, the rupee edged lower against the dollar, tracking global gains in the dollar after a gauge of service industries climbed more than forecast in October, adding to the case for the Federal Reserve to taper monthly bond purchases. The partially convertible rupee was hovering at 61.865, compared with its close of 61.625/635 on Tuesday, 5 November 2013.

Indian government bond prices dropped as faster-than-estimated expansion in a US services gauge stoked speculation the world’s largest economy is strong enough to allow the US Federal Reserve to reduce stimulus for the US economy earlier than analysts had projected. The yield on the benchmark government paper viz. 7.16% GS 2023 was hovering at 8.7783%, higher than its close of 8.7368% on Tuesday, 5 November 2013. Bond yield and bond prices are inversely related.

Asian stocks edged higher on Wednesday, 6 November 2013, as Japanese shares were boosted by the yen weakening against the dollar and Commonwealth Bank of Australia posted a surge in profit. Key benchmark indices in China, Hong Kong, Taiwan, Indonesia and Japan rose 0.11% to 0.83%. Key benchmark indices in Singapore and South Korea shed 0.04% to 0.08%.

China’s leaders will meet in Beijing on November 9-12 to map out economic policies as the country heads for its slowest annual growth in more than two decades.

Indonesia’s economy expanded less than 6% last quarter as higher interest rates weighed on consumption and exports fell. Gross domestic product increased 5.62% in the three months ended Sept. 30 from a year earlier, the Central Bureau of Statistics said in Jakarta today. That compares with 5.81% growth for the second quarter.

Trading in US index futures indicated that the Dow could advance 58 points at the opening bell on Wednesday, 6 November 2013. US stocks closed mostly lower on Tuesday, 5 November 2013, after a gauge of service industries climbed more than forecast in October, adding to the case for the Federal Reserve to taper monthly bond purchases.

The US Institute for Supply Management’s gauge of service industries climbed more than strategists predicted, data showed yesterday, stoking concern that the world’s biggest economy is faring well enough for the Fed to consider reducing asset purchases. Fed policy makers last week signaled diminishing concern over higher borrowing costs as they maintained their $85 billion in monthly bond-buying and sought more evidence of sustained growth before paring stimulus.

The US government will on Friday, 8 November 2013, release nonfarm payrolls figures for October 2013. The job data is a key economic indicator that has been watched closely in recent months to see whether the US Federal Reserve will roll back its bond-buying program.

In Europe, the European Union yesterday cut its forecast for euro-area growth next year and raised its unemployment estimate as the economy struggles to regain momentum after a record-long recession.

The European Central Bank (ECB) holds a monetary policy meeting tomorrow, 7 November 2013. The ECB is seen retaining its key policy rate at a record-low 0.5%.

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