Sensex, Nifty attain highest closing level in almost two years

Key benchmark indices edged higher for the second day in a row as stocks rose across the globe after the House of Representatives on Tuesday, 1 January 2013, passed a bill to undo much of the fiscal cliff threatening the US economy which is the world's biggest economy. The barometer index, BSE Sensex and the 50-unit S&P CNX Nifty, both, attained their highest closing level in almost two years. The Sensex jumped 133.43 points or 0.68%, off close to 40 points from the day's high and up about 30 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Indian stocks rose for the second straight day. From a recent low of 19,426.71 on 31 December 2012, the Sensex has risen 287.53 points or 1.48% in two trading sessions. From a 52-week low of 15,664.91 on 6 January 2012, the Sensex has risen 4,049.33 points or 25.84%. 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) edged higher after a committee set up under the chairmanship of Dr. C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister to look into the Production Sharing Contract Mechanism in petroleum industry, suggested major changes in the current Production Sharing Contract Mechanism and gas pricing. Another index heavyweight and cigarette maker ITC edged lower. IDFC hit a 52-week high. Aviation shares were in demand. Bank stocks edged higher, with ICICI Bank and Axis Bank hitting 52-week high and Yes Bank and IndusInd bank hitting record high. In auto pack, Tata Motors scaled record high after the company on Tuesday, 1 January 2013, said the newly introduced Manza Club Class and Safari Storme passenger cars are growing well in their respective segments. Maruti Suzuki hit 52-week high ahead of the release of monthly sales data for December 2012. Bajaj Auto scaled record high after reporting 13% growth in total sales in December 2012. Hero MotoCorp edged higher after reporting sequential rise in sales in December 2012. Key benchmark indices surged in early trade after the House of Representatives voted Tuesday night to pass a bipartisan deal undoing the fiscal cliff of austerity measures in the United States, which began going into effect at the start of the year. The barometer index, BSE Sensex, hit its highest level in more than 20-1/2 months. The 50-unit S&P CNX Nifty hit its highest level in almost two years in early trade. A bout of volatility was witnessed as key benchmark regained strength after paring initial gains in morning trade. The market extended intraday gains in mid-morning trade. The market further extended gains in early afternoon trade, with Nifty breaching the psychological 6,000 mark after a survey showed India's manufacturing activity surged to a six-month high in December 2012. The 50-unit S&P CNX Nifty hit its highest level in almost two years above the psychological 6,000 mark. The barometer index, BSE Sensex, hit its highest level in almost 21 months. A bout of volatility was witnessed as key benchmark indices regained strength after trimming intraday gains in afternoon trade. Key benchmark indices pared gains in mid-afternoon trade. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 1 January 2012. FIIs bought shares worth Rs 680.10 crore from the secondary equity markets on Tuesday, 1 January 2013, as per data from Securities & Exchange Board of India. The BSE Sensex jumped 133.43 points or 0.68% to settle at 19,714.24, its highest closing level since 6 January 2011. The index jumped 175.87 points at the day's high of 19,756.68 in early afternoon trade. The index rose 105.69 points at the day's low of 19,686.50 in morning trade. The S&P CNX Nifty advanced 42.40 points or 0.71% to 5,993.25, its highest level since 6 January 2011. The index hit high of 6,006.05 and a low of 5,982 in intraday trade. The BSE Mid-Cap index rose 0.56% and underperformed the Sensex. The BSE Small-Cap index gained 0.9% and outperformed the Sensex. The total turnover on BSE amounted to Rs 2496 crore, higher than Rs 1860 crore on Tuesday, 2 January 2013. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,797 shares rose and 1,166 shares fell. A total of 138 shares were unchanged. Among the 30-share Sensex pack, 23 gained while only seven of them declined. Index heavyweight Reliance Industries (RIL) rose 0.84% to Rs 847.75. The stock hit a high of Rs 855.90 and low of Rs 843. A committee set up under the chairmanship of Dr C. Rangarajan, Chairman, Economic Advisory Council to the Prime Minister to look into the Production Sharing Contract Mechanism in petroleum industry, has suggested major changes in the current Production Sharing Contract Mechanism and gas pricing. With regard to gas pricing, the committee has suggested an unbiased arm's length price based on an average of two prices, which can be interpreted as alternative estimates of an arm's length price for the Indian producer. The relevant price in this context would be the price producers receive in other gas-producing destinations. One price would be derived from the volume-weighted net-back price to producers at the exporting country well-head for Indian imports for the trailing 12 months. The other would be the volume-weighted price of US's Henry Hub, UK's NBP and Japan Custom Cleared (on net-back basis, since it is an importer) prices for the trailing 12 months. The arm's length price thus computed as the average of the two price estimates would apply equally to all sectors, regardless of their prioritisation for supply under the Gas Utilisation Policy, the committed has said in its report. The suggested formula will apply to pricing decisions made in future, and can be reviewed after five years when the possibility of pricing based on direct gas-on-gas competition may be assessed, the committee has said. Since cost recovery is at the root of the current Production Sharing Contract (PSC) Mechanism, the committee has proposed to dispense with cost recovery mechanism and replacing it with sharing of the overall revenues of the contractor without setting off any costs. The share will be determined through a competitive bid process for future PSCs. The bids will be made in a bid matrix, in which the bidder will offer different percentage revenue shares for different levels of production and price levels. The bids will have to be progressive with respect to both volume of production and price level. This will ensure that as the contractor earns more, Government gets progressively higher revenue, and will also safeguard government interest in case of a windfall arising from a price surge or a surprise geological find. Investor interests should remain unaffected, since investors will be free to bid the Government share, and they will also have a more hassle-free operational environment. The committee has also recommended that an extended tax holiday of 10 years, as against 7 years already available for all blocks, be granted for blocks having a substantial portion involving drilling offshore at a depth of more than 1,500 metres, since cost of a single well can be as high as $150 million. Further, the committee has recommended extending the timeframe for exploration in future PSCs for frontier, deep-water (offshore, at more than 400 m depth) and ultra-deep-water (offshore, at more than 1,500 m depth) blocks from eight years currently, to ten years. FMCG stocks declined as investors shunned defensive stocks on increasing risk appetite. Index heavyweight and cigarette maker ITC shed 0.61% to Rs 285.50. The scrip hit a high of Rs 289.25 and low of Rs 284.75. 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, Nestle India and Marico shed by 0.09% to 0.65%. 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 in 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 0.42%. The company early this week said 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. Tata Global Beverages (TGB) gained 3.7%, with the stock extending recent gains. 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. Reliance Power (RPower) rose 0.84% after the company said during market hours today, 2 January 2013, that it has synchronised the second of the two 300 megawatts (MW) units of its Butibori Thermal Power Project near Nagpur in Maharashtra. The unit was synchronized on 2 January 2013 in the early hours and simultaneously coal firing of the unit has been achieved, RPower said. Power generated from the plant will be distributed to industrial and distribution utilities and will help reduce the demand supply gap in Maharashtra, the company said in a statement. The plant is among the most compact-sized thermal plants in the country with its 600 MW capacity requiring not more than 275 acres of plant land, RPower said. The Butibori power plant is environment friendly with zero effluent discharge. The entire ash generated by the plant will be utilised by Reliance group's own cement plant, the company said. Telecom stocks were mostly higher. MTNL, Tata Teleservices (Maharashtra), Idea Cellular, and Bharti Airtel gained by 0.23% to 1.65%. IT stocks were mostly lower. IT major Tata Consultancy Services shed 0.06%. 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 declined 0.73%. India's second largest software services exporter by revenues Infosys fell 0.03%. The company announces Q3 results on Friday, 11 January 2013. HCL Technologies rose 0.72%. Capital goods shares rose on renewed buying. BEML, Thermax, L&T, Siemens and Bhel rose by between 1.07% to 2.38%. Realty stocks reversed initial gains. DLF, D B Realty and Sobha Developers fell by between 0.02% to 1.94%. Unitech was flat. 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. Metal stocks extended recent gains triggered by 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, Jindal Steel & Power, Sail, Sterlite Industries (India) and Hindustan Zinc rose by between 0.67% to 3.67%. Tata Steel rose 0.02%. 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. PSU OMCs edged higher. HPCL, BPCL and Indian Oil Corporation gained by between 1.69% to 2.9%. The Ministry of Petroleum and Natural Gas after trading hours on Tuesday, 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. Auto stocks were in demand. Small car maker Maruti Suzuki India rose 3.16% to Rs 1,564. The stock hit 52-week high of Rs 1,565.70 in intraday trade today, 2 January 2013. Tata Motors rose 0.66% to Rs 318.50 after scaling a record high of Rs 320.85 in intraday trade today, 2 January 2013. The company's total sales (including exports) of Tata commercial and passenger vehicles declined 20.3% to 65,582 units in December 2012 over December 2011. The company's exports totaled 3,882 vehicles in December 2012. The company's domestic sales of Tata commercial and passenger vehicles for December 2012 were 61,700 units. The company's sales of commercial vehicles in December 2012 in the domestic market were 47,515 units. LCV sales were 37,649 units, while M&HCV sales stood at 9,866 units. Passenger vehicles sales dropped 50.94% to 14,185 units in December 2012 over December 2011. The company said the newly introduced Manza Club Class and Safari Storme are growing well in their respective segments. Due to increasing demand, the Safari Storme has been released only in the NCR region, Punjab, Uttar Pradesh, Rajasthan, Madhya Pradesh, Chhattisgarh, Maharashtra and Goa, and is being expanded in phases, Tata Motors said. Sales of the Nano/Indica/Indigo range were 11,257 units in December 2012. The Sumo/ Safari/ Aria/ Venture range sales were 2,928 units for the month just gone by. Mahindra & Mahindra shed 0.56%. The company on Tuesday, 1 January 2013, said 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 13,706 units, while the 3 wheeler segment clocked 5,209 units in December 2012. Exports for the month of December 2012 stood at 2,990 units, a growth of 4% over December 2011. 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. Bajaj Auto advanced 3.32% to Rs 2,208. The stock had hit record high of Rs 2,214 in intraday trade today, 2 January 2013. Bajaj Auto's total sales rose 13% to 3.43 lakh shares in December 2012 over December 2011. Motorcycle sales rose 13% to 2.98 lakh units in December 2012 over December 2011. Three-wheeler sales rose 9% to 45,596 units in December 2012 over December 2011. Bajaj Auto's exports rose 5% to 1.26 lakh units in December 2012 over December 2011. Hero MotoCorp rose 0.1%. The company's total sales rose 8% to 5.41 lakh units in December 2012 over November 2012. Sales remained flat on year-on-year basis. Bank stocks rose across the board. India's largest private sector bank by net profit ICICI Bank advanced 1.28% to Rs 1,173.95. The stock hit 52-week high of Rs 1,176 in intraday trade today, 2 January 2013. HDFC Bank rose 0.39%. 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 1.67% to Rs 1385 after hitting a 52-week high of Rs 1394.40 in intraday trade today, 2 January 2013. The private sector bank early this week 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 2.56% to Rs 489.40. The stock hit record high of Rs 489.40 in intraday trade today, 2 January 2013. IndusInd Bank rose 1.8% to Rs 432.05. The stock hit record high of Rs 437 in intraday trade today, 2 January 2013. PSU bank stocks also edged higher. State Bank of India (SBI) gained 0.99%. 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 1.57%), Andhra Bank (up 0.98%), Canara Bank (up 1.43%), Bank of Baroda (up 0.1%) and Punjab National Bank (up 1.56%) edged higher. Union Bank of India fell 1.19% to Rs 278, with the stock reversing direction after striking a 52-week high of Rs 288 in intraday trade today, 2 January 2012. 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. IDFC rose 3.06% to Rs 178.50 after hitting a 52-week high of Rs 179.65 in intraday trade today, 2 January 2013. Aviation stocks were in demand. SpiceJet (up 3.88%), Kingfisher Airlines (up 4.98%) and Jet Airways (India) (up 0.49%) gained. Shares of jewellery retailers rose on expectations of pick up in jewellery sales during the ongoing wedding season. Typically, the wedding season runs from November to February in India. Gitanjali Gems, Tribhovandas Bhimji Zaveri (TBZ), Thangamayil Jewellery, Titan Industries, PC Jeweller and Shree Ganesh Jewellery House rose by 0.59% to 8.09%. Finance Minister P Chidambaram today, 2 January 2013, said that gold imports constitute a substantial chunk of the imports and is a huge drain on the Current Account. He said the government may be left with no choice but to make it a little more expensive to import gold. India doesn't produce any gold and meets its demand through imports. 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. Finance Minister P Chidambaram today, 2 January 2013, said attracting foreign funds to India has become an economic imperative. "While the current account deficit (CAD) is indeed worrying, I think it is within our capacity to finance the current account deficit (CAD), thanks to FDI, FII and ECB. I would like to once again underscore the crucial importance of FDI and FII. As I have said before, attracting foreign funds to India has become an economic imperative. I am confident that even if the year ends with a slightly larger CAD than last year, we would be able to finance the CAD without drawing upon reserves". The government today, 2 January 2013, constituted the Fourteenth Finance Commission. Former Reserve Bank of India Governor Dr. Y. V. Reddy has been appointed as the Chairman of the Fourteenth Finance Commission. The Commission will make recommendations to the Centre regarding the sharing of union taxes, principles governing Grants-in-aid to states and transfer of resources to local bodies. India's manufacturing activity surged to a six-month high in December, boosted by strong factory output and a spike in new orders, both of which hit their highest levels since June, a business survey showed on Wednesday, 2 January 2013. The HSBC Markit India Manufacturing PMI, which gauges the business activity of India's factories but not its utilities, jumped to 54.7 in December from 53.7 in November, its biggest monthly rise since January 2012. The PMI index has now stayed above the 50 mark that separates growth from contraction for almost four years. 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 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. 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 stock markets rallied on Wednesday, 2 January 2012, on news US lawmakers reached a last-minute budget deal. Key benchmark indices in UK, France and Germany were up by 1.97% to 2.35%. UK manufacturing unexpectedly grew at the fastest pace in 15 months in December as domestic demand strengthened. A gauge of factory activity rose to 51.4 from a revised 49.2 in November, Markit Economics and the Chartered Institute of Purchasing and Supply said in London today. Asian stocks edged higher on Wednesday, 2 January 2013, after the House of Representatives voted Tuesday night to pass a bipartisan deal undoing the fiscal cliff of austerity measures in the United States, which began going into effect at the start of the year. Key benchmark indices in Hong Kong, Singapore, South Korea, Taiwan and Indonesia were up by 0.69% to 2.89%. Mainland Chinese and Japanese stock markets remained closed for holidays. 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. Meanwhile, HSBC data showed PMIs for South Korea and Taiwan climbed back above 50 in December. Korean PMI rose to 50.1 from 48.2 in November, while the index for Taiwan shot up to 50.6 from 47.4 in November. Trading in US index futures indicated that the Dow could surge 182 points at the opening bell on Tuesday, 2 January 2013. The House of Representatives voted Tuesday night to pass a bipartisan deal undoing the fiscal cliff of austerity measures in the United States, which began going into effect at the start of the year. The final vote tally was 257 to 167, though a majority of Republican House members voted against the bill. The passage came after the Senate approved the measure by a large bipartisan majority of 89-8 in the wee hours Tuesday morning, as lawmakers scrambled to avert much broader tax hikes and heavy spending cuts. The bill now heads to the White House, where President Barack Obama is expected to sign it into law. But, US missed the 31 December 2012 deadline for action, meaning that the US has technically gone over the cliff. 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. The fiscal cliff deal 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. Markit Economics will unveil final US Manufacturing PMI for December 2012 today, 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.