Market surges on US fiscal cliff deal

Key benchmark indices surged on the first trading session of calendar 2013 after the US Senate approved an agreement early on Tuesday struck hours earlier by the White House and Senate Republicans to keep the world's biggest economy from falling off the fiscal cliff. The 50-unit S&P CNX Nifty attained its highest closing level in almost two years. The barometer index, BSE Sensex, attained its highest closing level in more than 20 months. The Sensex jumped 154.10 points or 0.79%, off close to 40 points from the day's high and up about 70 points from the day's low. The market breadth, indicating the overall health of the market, was strong. BSE Small-Cap and Mid-Cap indices, both, outperformed the Sensex. From a 52-week low of 15,358.02 on 2 January 2012, the Sensex has risen 4,222.79 points or 27.49%. The Sensex is off 31.37 points or 0.15% from a 52-week high of 19,612.18 hit on 11 December 2012. The Sensex advanced 86.81 points or 0.44% in December 2012. The barometer index jumped 3,971.79 points or 25.69% in calendar 2012. Coming back to today's trade, index heavyweight Reliance Industries (RIL) pared intraday gains in late trade. Another index heavyweight and cigarette maker ITC settled almost unchanged for the day. Realty stocks edged higher for second day in a row. Bank stocks edged higher, with ICICI Bank and Union Bank of India hitting 52-week high and Yes Bank hitting record high. Mahindra & Mahindra edged higher after reporting sales data for the month just gone by. Pidilite Industries hit record high. Metal stocks gained on upbeat Chinese manufacturing data from HSBC which was announced on Monday, 31 December 2012. Key benchmark indices surged in early trade after US policy makers reached an agreement late on Monday, 31 December 2012, to avert the imminent fiscal cliff of wide-reaching tax hikes and deep spending cuts in the world's biggest economy. The barometer, BSE Sensex, and the 50-unit S&P CNX Nifty, both, hit 3-week highs. The market extended initial gains to strike fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices extended intraday gains early afternoon trade after the US Senate early on Tuesday morning overwhelmingly approved an agreement struck hours earlier by the White House and Senate Republicans to avert the imminent fiscal cliff of wide-reaching tax hikes and deep spending cuts in the world's biggest economy. The barometer index, BSE Sensex hit its highest level in more than 20 months. The market pared gains in mid-afternoon trade. The market held firm in late trade. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained buyers of Indian stocks on Monday, 31 December 2012. FIIs bought shares worth Rs 869.50 crore from the secondary equity markets on Monday, 31 December 2012, as per data from Securities & Exchange Board of India. The BSE Sensex jumped 154.10 points or 0.79% to settle at 19,580.81, its highest closing level since 25 April 2011. The index jumped 197.05 points at the day's high of 19,623.76 in afternoon trade. The index rose 82.22 points at the day's low of 19,508.93 in early trade. The S&P CNX Nifty advanced 45.75 points or 0.77% to settle at 5,950.85, its highest closing level since 6 January 2011. The index hit high of 5,963.90 and a low of 5,935.20 in intraday trade. The BSE Mid-Cap index rose 1.19% and the BSE Small-Cap index gained 0.99%. Both these indices outperformed the Sensex. The total turnover on the BSE amounted to Rs 1850 crore, higher than Rs 1782 crore on Monday, 31 December 2012. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,930 shares rose and 977 shares fell. A total of 134 shares were unchanged. Among the 30-share Sensex pack, 27 gained while only three of them declined. Index heavyweight Reliance Industries rose 0.18% to Rs 840.65. The stock hit a high of Rs 846 and low of Rs 839.20. Russia's Spirit DPS said on 18 December 2012 that Indian telecom operator Infotel, a subsidiary of Reliance Group, has licensed its software TeamSpirit Voice and Video Engine. "Reliance intends to invest $10 billion in its LTE network and has turned to Spirit's software products for voice and video calls over LTE instead of waiting for phone makers who are slow in offering handsets transmitting voice and video in 4G networks. The lack of mobile devices supporting VoLTE (Voice-over-LTE) drives a growing number of carriers to implement a software-only product, which is more flexible, scalable and offers a quicker time to market. By using Spirit engines, Reliance will be able to offer its subscribers high-quality services as an alternative to Skype over cellular networks and attract new high-value subscribers that used services from other operators and commercial OTT service providers," Spirit DPS said in a statement. Index heavyweight and cigarette maker ITC gained 0.16% to Rs 287.25. The scrip hit a high of Rs 289.25 and low of Rs 286.60. The Ministry of Health and Family Welfare in October 2012 notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. The Ministry of Health and Family Welfare said in a statement on 22 October 2012 that three sets of warnings each have been notified for smoking as well as smokeless forms of tobacco product packages. The well-designed health warnings and messages are part of a range of measures to communicate health risks due to tobacco use. Pictorial health warnings communicate health risks in a visible way, provoke a greater emotional response and increase the motivation of tobacco users to quit and to decrease their tobacco consumption, the ministry's statement said. Graphic warning labels have a greater impact than text-only labels and can be recognized by low-literacy audiences and children, the statement added. Among other FMCG stocks, Hindustan Unilever, Dabur India and Marico rose by 0.37% to 1.12%. The Ministry of Agriculture on 28 December 2012 that the sowing of rabi or winter crop is picking up. Crops have been sown in 25 lakh hectare since 21 December 2012, the Ministry of Agriculture said in a statement adding that wheat sowing is reported to be in full swing is major wheat-growing states. As per latest reports received from states, rabi crops have been sown in nearly 542 lakh hectare and wheat in 272.8 lakh hectare so far, the Ministry of Agriculture said. While the sowing of wheat and pulses lags behind that in the last rabi season, sowing of coarse cereals and oilseed crops is higher, the statement from the ministry said. FMCG firms derive substantial revenue from rural India. Godrej Consumer Products (GCPL) fell 0.03%. The company said after trading hours on Monday, 31 December 2012, that Keyline Brands, its subsidiary in the United Kingdom, has acquired the Soft & Gentle brand from Colgate-Palmolive. Invoiced sales for the brand in calendar year 2011 were 21 million pounds. Soft & Gentle is the UK's 4th largest female deodorant brand (by market share) and retains strong brand equity with retailers and consumers in the UK. The brand offers a truly 'feminine' position in the market on an innovative fragrance platform. The acquisition is being funded by low cost debt and the impact on GCPL's consolidated debt to equity ratio is 0.03, GCPL said in a statement. Commenting on the acquisition, Mr. Adi Godrej, Chairman, GCPL said: "The acquisition of Soft & Gentle by Keyline Brands will add profitable scale to our UK business. Over the last few years, Keyline Brands has delivered good performance and grown in double digits in a very tough market environment that is witnessing little to no growth. Our UK business has historically had a higher mix of distributed brands than owned brands. Strategically, we have been working on changing the mix towards owned brands and building more scale in the business. With the Soft & Gentle acquisition, the salience of owned brands will become greater than that of distributed brands. We expect this acquisition to be accretive in year one. We have a strong team in the UK that will work on leveraging the synergies from the acquisition and driving the future growth of the Soft & Gentle brand. I am optimistic that our UK business will continue to outperform the market." Anand Rangaswamy, Managing Director of Keyline Brands, added: "As the number 4 female deodorant brand in the UK (by market share), Soft & Gentle enjoys strong latent brand equity. The brand was launched for the UK market in 1976 as the first 'non-sting' anti-perspirant for women with consumer loyalty built over 3 decades. We believe we can use the strong latent brand equity combined with updating the fragrance technology, developing further range extensions within the female personal care category and creating an integrated above the line support campaign to engage consumers and drive strong growth for the brand. The brand also enjoys excellent distribution and will provide synergies for the other brands in our portfolio. Our UK team looks forward to harnessing the synergies and driving the business to full potential." Tata Global Beverages (TGB) gained 0.69%. The company's chief executive and managing director Mr. Harish Bhat said in a 2012 year-end review that the big opportunity for TGB is that consumers in every part of the world are increasingly seeking health and wellness. This trend has dovetailed into the world of natural beverages such as tea, coffee and water, he said. The big threat for the company is that commodity costs of tea and coffee have entered a phase of volatility which is likely to continue for some more time. The company's brands have to be constantly re-imagined to make them appeal to the ever-changing tastes of consumers, he said. Capital goods shares rose on renewed buying. ABB, Bhel, BEML, L&T and Siemens rose by between 0.64% to 1.9%. Reliance Anil Dhirubhai Ambani (ADA) Group shares were in demand. Reliance Infrastructure, Reliance Broadcast Network, Reliance Capital, Reliance MediaWorks and Reliance Power gained by between 1.45% to 4.98%. Telecom stocks gained on fresh buying. MTNL, Tata Teleservices (Maharashtra), and Bharti Airtel gained by 0.83% to 1.33%. Idea Cellular was flat. Realty stocks edged higher for second day in a row. DLF (up 2.3%), Indiabulls Real Estate (up 3.94%), Unitech (up 3.86%), HDIL (up 3.41%), Oberoi Realty (up 5.1%), Godrej Properties (up 0.88%), and Parsvnath Developers (up 3.1%) gained. The Reserve Bank of India said on 17 December 2012 that upon a review of the policy related to External Commercial Borrowings (ECB) and keeping in view the announcement made in the Union Budget for the Year 2012-13, it has decided to allow External Commercial Borrowings (ECB) for low cost affordable housing projects as a permissible end-use, under the approval route. For the financial year 2012-13, an aggregate limit of $1 billion is fixed for ECB under the low cost affordable housing scheme which includes ECBs to be raised by developers/builders and NHB/specified Housing Finance Companies (HFCs), RBI said. This limit will be reviewed annually, RBI said. A low cost affordable housing project for the purpose of ECB would be a project in which at least 60% of the permissible FSI would be for units having maximum carpet area up to 60 square meters. Bank stocks rose across the board. India's largest private sector bank by net profit ICICI Bank advanced 2.15% to Rs 1,161.70. The stock had hit 52-week high of Rs 1,162 in intraday trade today, 1 January 2013. HDFC Bank rose 0.82%. The private sector bank has lowered its base rate--or the minimum rate of interest it can charge borrowers--by 0.1 percentage point, factoring in a reduction in its funding cost. HDFC Bank's new base rate at 9.7% is the lowest in India. The reduction in base rate took effect from Monday, 31 December 2012. The benchmark prime lending rate (BPLR), the main rate for the bank's old borrowers, has also been cut by 10 bps to 18.2%. Axis Bank rose 0.33%. The private sector bank after market hours on Monday, 31 December 2012, said its board of directors has passed a resolution approving allotment of Unsecured Redeemable Non-Convertible Subordinated Debentures aggregating to Rs 2500 crore (including green shoe option of Rs 1500 crore) on private placement basis as the bank's lower Tier II capital. The debentures will be listed on BSE and NSE. Axis Bank on 17 December 2012, said its board of directors approved raising Tier-I capital of the bank by issue of equity shares not exceeding 4.58 crore equity shares through GDRs/QIP issue and preferential issue to promoters of the bank. Yes Bank gained 3.07% to Rs 478.45. The stock hit record high of Rs 478.50 in intraday trade today, 1 January 2013. PSU bank stocks saw an across the board surge. State Bank of India (SBI) gained 1.69%. The bank on 24 December 2012 said it has signed a Preliminary Non-Binding Memorandum of Understanding with Russian Direct Investment Fund (RDIF), to facilitate advancing bilateral economic cooperation and trade between Russia and India which is aimed at exploring investment opportunities in both the countries. The modalities of the Joint Venture are expected to be further discussed and finalised between the parties in due course. The fund will be operationalised on receipt of requisite regulatory approvals, SBI said in a statement. Among other PSU bank stocks, Allahabad Bank (up 2.59%), Andhra Bank (up 3.73%), Canara Bank (up 4.34%), Bank of India (up 4.91%), Bank of Baroda (up 1.76%) and Punjab National Bank (up 2.69%) edged higher. Union Bank of India rose 2.83% to Rs 281.95 after striking a 52-week high of Rs 283.50. Union Bank of India's board of directors at a meeting held on 27 December 2012, approved raising equity capital of bank through preferential allotment/qualified institutional placements/rights issue of shares. Earlier, Union Bank of India's board at a meeting held on 24 December 2012 approved raising of additional capital funds not exceeding Rs 1500 crore during the year 2012-13 by way of issue of Tier I and Tier II capital bonds as per eligibility. The Reserve Bank of India (RBI) said on 28 December 2012 that it has rescheduled the start date for implementation of Basel III to 1 April 2013 from 1 January 2013. India will also closely monitor the progress on Basel III implementation in other countries, particularly the major ones who are the members of the Basel Committee, RBI said. Metal stocks gained on upbeat Chinese manufacturing data from HSBC which was announced on Monday, 31 December 2012. China is the world's largest consumer of copper and aluminum. Hindalco Industries (up 2.72%), Jindal Steel & Power (up 3.46%), Sail (up 2.21%), Sterlite Industries (India) (up 2.01%), Hindustan Zinc (up 0.44%) and JSW Steel (up 2.01%), gained. Tata Steel rose 2.52%. Chief executive of Tata Steel Europe, Dr. Karl-Ulrich Köhler, has said in a 2012 year-end review that after a brief recovery in demand and a short-lived pick-up, Tata Steel Europe has seen declining momentum since the March 2012 quarter. Demand in Europe is weak and getting weaker, he said. He said that Tata Steel Europe has made substantial progress in its five-year management improvement programme. The programme has already generated benefits of £200 million since it was launched at the beginning of 2011 and that the company has doubled the pace this year, he said. By itself, this is probably not enough to cope with the challenges that the company faces, he said. Dr. Köhler said that the company is focused on market differentiation, supported by operational excellence and technical innovation. He said that the company has a road map to develop new products and that the company has closed the gap with its competitors in Europe massively over the last two years. He said that the company's market strategies are working. Tata Steel Europe has enhanced the ratio of its differentiated products from below 20 percent to something closer to 30 percent now, and the company is working to drive it to 50 percent, he said. Tata Steel Europe has lowered its controllable costs, though this has yet to be reflected in the bottom line, he said. Tata Steel chief executive Hemant Nerurkar said that the company will soon be in position to increase production and sales by more than a million tonnes in India over last year's levels. TVS Motor Company rose 1.91%. The company today, 1 January 2013, said its total sales declined 8.33% to 1.56 lakh units in December 2012 over December 2011. Domestic sales stood at 1,34,566 units in December 2012, lower than 146,747 units of December 2011. The company registered total two wheeler sales of 1,51,735 units in December 2012, lower than 1,67,905 units recorded in December 2011. Motorcycle sales of the company grew by 6% with sales of 60,210 units in December 2012, against 56,662 units in December 2011. Scooters registered sales of 30,398 units in December 2012, lower than 44,804 units in the same month of the previous year. The company's total three wheeler sales jumped 78% to 4,486 units in December 2012 over December 2011. The company's total exports for the month of December 2012 stood at 20,251 units, lower than 22,481 units in the same month of the previous year. Two wheeler exports reported for the month of December 2012 was 17,169 units, lower than 21,158 units in December 2011. Mahindra & Mahindra rose 1.1%. The company said during trading hours today, 1 January 2013, its auto sales rose 6% to 45,297 units in December 2012 over in December 2011. Domestic sales stood at 42,307 units during December 2012, as against 39,891 units during December 2011, an increase of 6%. The passenger vehicles segment (which includes the utility vehicles and Verito) registered a growth of 18%, having sold 22,761 units in December 2012, as against 19,341 units during December 2011. The 4 wheeler commercial segment, which includes the passenger and load categories, registered a sale of 13706 units, while the 3 wheeler segment clocked 5209 units in December 2012. Exports for the month of December 2012 stood at 2990 units, a growth of 4% over December 2011. Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said: "High interest rates, rising fuel prices and an overall slowdown in economic growth has kept consumer sentiment low during 2012. This is also evident in the auto industry sales performance for December, which traditionally has been a lean month. We do hope that corrective measures are announced and implemented soon bringing in the much needed buoyancy and growth for the industry. At Mahindra, we are happy to maintain our growth momentum even during these challenging times." M&M's total tractor sales declined 10.46% to 14,759 units in December 2012 over December 2011. Domestic tractor sales declined 10.46% to 13,712 units in December 2012 over December 2011. Pidilite Industries advanced 4.91% to Rs 227.50. The stock hit record high of Rs 228.70 in intraday trade today, 1 January 2013. Cement stocks edged higher as cement companies will start unveiling data on cement dispatches in December 2012 from today, 1 January 2013. UltraTech Cement, Ambuja Cement, ACC, India Cements, Birla Corporation, Mangalam Cement, Kakatiya Cement, JK Lakshmi Cement, Jaiprakash Associates and Prism Cement rose by 0.06% to 7.81%. IT stocks rose after the US Senate early on Tuesday morning overwhelmingly approved an agreement struck hours earlier by the White House and Senate Republicans to avert the imminent fiscal cliff of wide-reaching tax hikes and deep spending cuts in the world's biggest economy. US is the biggest outsourcing market for the Indian IT firms. HCL Technologies rose 0.5%. IT major Tata Consultancy Services rose 0.39%. TCS chief executive N Chandrasekaran said in a 2012 year-end review that the challenge before the company is to scale up its presence significantly in geographies like China, Japan, Latin America, Europe and the Middle East. There are plenty of opportunities in all these markets and the aim is to address them, he said. He said that TCS is winning lots of transformation deals in Europe. He said that TCS is always looking at inorganic growth opportunities, but they have to make business sense. India's third largest software services exporter by revenues Wipro gained 0.63%. But, India's second largest software services exporter by revenues Infosys fell 0.44%. The company announces Q3 results on 11 January 2013. Oil exploration firms rose as US crude oil futures advanced to 2-month high on Monday, 31 December 2012. Cairn India, ONGC and Oil India gained by between 0.13% to 0.69%. US crude oil futures for February 2013 delivery gained $1.02 a barrel or 1.12% to settle at $91.82 a barrel on the New York Mercantile Exchange on Monday, 31 December 2012, its highest closing level since 18 October 2012. There is no trading today, 1 January 2013, on account of New Year's Day holiday. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms. PSU OMCs fell as US crude oil futures advanced to 2-month high on Monday, 31 December 2012. HPCL (down 0.05%) and Indian Oil Corporation (down 1.15%) declined. BPCL rose 0.32%. State-run oil marketing companies (PSU OMCs) suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol. The Ministry of Petroleum and Natural Gas today, 1 January 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for the first fortnight of January 2013, effective 1 January 2013, has decreased to Rs 9.03 per litre from Rs 9.28 per litre for the 2nd fortnight of December 2012. In case of Domestic LPG, the under-recovery for January 2013 remains unchanged at Rs 490.50 cylinder. The Under-recovery on PDS Kerosene, too, has remained at same level of Rs 30.64 per litre for January 2013, the ministry said. PSU OMCs are currently (effective 01 January 2013) incurring daily under-recovery of about Rs 389 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. Indian companies will start unveiling Q3 December 2012 results from mid-January 2013. Investors and analysts will closely watch the management commentary that would accompany the result which could cause revision in their future earnings forecast of the company for the current year and or next year. Infosys announces Q3 results on 11 January 2013. Axis Bank announces Q3 results on 15 January 2013. Bajaj Auto unveils Q3 results on 16 January 2013. HDFC Bank unveils Q3 results on 18 January 2013. HDFC unveils Q3 results on 21 January 2013. The government last week announced additional incentives to boost India's exports. The Planning Commission last week lowered its economic growth forecast for the country for the five years through 2017 to 8% from a previous estimate of 8.2%. Mr. Singh said that this is an "ambitious target," especially since it will follow growth of less than 6% in 2012. Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for December 2012 tomorrow, 2 January 2013. The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges the business activity of India's factories but not its utilities, rose to 53.7 in November 2012 from 52.9 in October 2012. Readings above 50 denote growth. Markit Economics will unveil HSBC India Services PMI and HSBC India Composite PMI for December 2012 on Friday, 4 January 2013. The HSBC services Purchasing Managers' Index, based on a survey of around 400 companies, fell to 52.1 in November 2012 from October's 53.8, to register a 13-month low. Services make up nearly 60% of India's economic output. The year-on-year inflation measured by monthly consumer price index-industrial workers (CPI-IW) eased to 9.55% for November 2012, from 9.6% for October 2012, the Ministry of Labour & Employment said after trading hours on Monday, 31 December 2012. Among the components of CPI-IW, food inflation edged up to 10.85% in November 2012 from 9.91% in October 2012. The Reserve Bank of India (RBI) undertakes Third Quarter Review of Monetary Policy 2012-13 on 29 January 2013. RBI kept its key policy rate viz. the repo rate unchanged at 8% after mid-quarter monetary policy review on 18 December 2012. The central bank said that in view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onwards. Liquidity conditions will be managed with a view to supporting growth as stated in the Second Quarter Review (SQR) of Monetary Policy 2012-13 on 30 October 2012, thereby preparing the ground for further shifting the policy stance to support growth, RBI said. Overall, recent inflation patterns and projections provide a basis for reinforcing October guidance about policy easing in the fourth quarter, RBI said. However, risks to inflation remain and accordingly, even as the policy emphasis shifts towards growth, the policy stance will remain sensitive to these risks, RBI said. RBI said it is closely monitoring the evolving growth-inflation dynamic and will update the formal numerical assessment of its growth and inflation projections for 2012-13 as part of the third quarter review in January 2013. It remains to be seen if the Union Budget for 2013-2014 due in February 2013 is a reformist budget or a populist budget. Given that next general elections in India must be held before May 2014, it will be the last full-fledged budget of the Congress-led UPA government at the Centre and hence could be a populist one. European and Asian stock markets were closed today, 1 January 2013, for the New Year's Day holiday. China's official monthly manufacturing survey, released Tuesday, showed conditions in December unchanged from the month before, even as a privately compiled version of the survey showed improvement. The government-sponsored manufacturing Purchasing Managers' Index sat unchanged at 50.6 in December, according to the China Federation of Logistics & Purchasing. While the result was still above the 50 mark that divides expansion from contraction, the lack of improvement contrasted with HSBC's own China manufacturing PMI, out Monday, which jumped to 51.5 from November's 50.5. Chinese stock markets were closed Tuesday for the New Year's Day holiday. US stocks on Monday rallied to yearly gains on expectations that US leaders will reach budget deal. The White House and Senate Republicans reached an agreement late Monday to avert the imminent fiscal cliff of wide-reaching tax hikes and deep spending cuts. The US Senate early on Tuesday morning overwhelmingly approved a fiscal-cliff agreement struck hours earlier by the White House and Senate Republicans. Senators missed a midnight deadline for action, and the House of Representatives won't reconvene until later Tuesday meaning that the US has technically gone over the cliff. The House of Representatives will hold a special session tomorrow, 1 January 2013. The agreement would raise tax rates on household incomes of more than $450,000, extend unemployment benefits, and delay across-the-board spending cuts for two months but would let a 2% payroll-tax cut lapse and do nothing to address the US borrowing limit. Both sides trumpeted the deal even as each party suffered a few defections in the Senate vote. Eighty-nine senators voted for the bill and eight voted against, including Democrat Tom Harkin and Republican Rand Paul. In a statement after the vote, President Barack Obama said: "While neither Democrats nor Republicans got everything they wanted, this agreement is the right thing to do for our country and the House should pass it without delay". Senate Republican Leader Mitch McConnell of Kentucky said that while the bill was imperfect it avoided "the largest tax increase in American history". Action on the bill now moves to the House of Representatives, where Republican leaders are reserving the right to amend its language. "Decisions about whether the House will seek to accept or promptly amend the measure will not be made until House members -- and the American people -- have been able to review the legislation," said a statement from House Speaker John Boehner and other top Republicans. Earlier Monday, President Barack Obama said that the agreement would permanently set higher tax rates on upper incomes, extend unemployment insurance and prolong tax credits for clean-energy companies and families with children. In remarks at the White House, Obama acknowledged that hopes had faded for a bigger deal to reduce the US budget deficit, but he laid out a piecemeal strategy for deficit reduction. Monday's deal also delays the spending-cut side of the fiscal cliff for two months, until a new agreement can be reached. Under the budget sequester, automatic spending cuts of about $50 billion to military expenditures and another $50 billion to domestic spending would take place in 2013 alone. By excluding the US debt ceiling, the agreement sets Washington up for another intense round of bargaining. The US will reach its borrowing limit in late February or early March, and Congress would need to approve an increase. Republicans want spending cuts in exchange for raising the debt limit. Obama last month asked for permanent authority to increase the US borrowing limit, a move swiftly rejected by Republicans. Late Monday, Treasury Secretary Timothy Geithner took action to put off hitting the $16.4 trillion legal borrowing authority. Geithner said he suspended investment in the Civil Service Retirement and Disability Fund, one of a series of measures that the Treasury chief had previously indicated would help avoid reaching the limit until late February or early March. Without the actions, the government would have hit the debt limit Monday. US stock market remains closed today, 1 January 2013, for the New Year's Day holiday. Markit Economics will unveil final US Manufacturing PMI for December 2012 tomorrow, 2 January 2013. Data released by Markit Economics on 14 December 2012 showed that the Markit Flash US Manufacturing PMI had risen to eight-month high of 54.2 in December 2012.