Key benchmark indices surged and the rupee rose against the dollar after it became clear that the two missiles that landed in the Mediterranean region on Tuesday, 3 September 2013, weren't part of a US led military strike in Syria, as investors had feared. The barometer index, the S&P BSE Sensex, jumped 332.89 points or 1.83%, off 45.05 points from the day's high and up 379.12 points from the day's low. Intraday volatility was high. The market breadth, indicating the overall health of the market, was positive.
The Sensex had tumbled 3.45% on Tuesday, 3 September 2013, after Russian news agencies reported that two missiles were launched in the Mediterranean region. Earlier, the Sensex had gained 918.05 points or 5.11% in four trading sessions to settle at 18,886.13 on Monday, 2 September 2013 from a recent low of 17,968.08 on 27 August 2013. The Sensex has declined 52.17 points or 0.28% in September 2013 so far (till 4 September 2013). The Sensex lost 725.98 points or 3.75% in August 2013. The Sensex has declined 859.16 points or 4.42% in calendar 2013 so far (till 4 September 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,876.07 points or 9.18%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has risen 1,316.75 points or 7.63%.
Coming back to today's trade, index heavyweight and cigarette maker ITC declined. Index heavyweight Reliance Industries rose on bargain hunting after tumbling 6.07% on Tuesday. IT stocks rose on positive US economic data overnight, with TCS and HCL Technologies hitting record high and Infosys attaining 52-week high. Metal and mining stocks edged higher as a private survey showed growth in China's services sector hit a five-month high in August.
Auto stocks also gained. Bank stocks rose on bargain hunting after Tuesday's steep losses. Capital goods pivotals gained on renewed buying. Realty stocks declined after the Reserve Bank of India (RBI) on Tuesday, 3 September 2013, tightened norms on banks' housing loans to individuals. Telecom stocks rallied.
The S&P BSE Sensex jumped 332.89 points or 1.83% to 18,567.55, its highest closing level since 2 September 2013. The index jumped 377.94 points at the day's high of 18,612.60 in afternoon trade. The index fell 46.23 points at the day's low of 18,188.43 in early trade.
The CNX Nifty jumped 106.65 points or 2% to 5,448.10, its highest closing level since 2 September 2013. The index hit a high of 5,460.25 in intraday trade. The index hit a low of 5,318.90 in intraday trade, its lowest level since 29 August 2013.
The total turnover on BSE amounted to Rs 1930 crore, lower than Rs 2183.96 crore on Tuesday, 3 September 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,367 shares rose and 924 shares fell. A total of 150 shares were unchanged.
The BSE Mid-Cap index rose 1.02% and the BSE Small-Cap index rose 0.71%. Both these indices underperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE Metal index (up 2.75%), the S&P BSE Healthcare (up 2.6%), the S&P BSE Auto index (up 2.47%), the S&P BSE Teck index (up 2.28%), the S&P BSE IT index (up 2.15%), the S&P BSE Oil & Gas index (up 2.09%), the S&P BSE Bankex (up 2.09%), the S&P BSE Power index (up 1.97%) outperformed the Sensex
The S&P BSE PSU index (up 1.67%), the S&P BSE Capital Goods index (up 1.45%), the S&P BSE Consumer Durables index (up 0.92%), the S&P BSE FMCG index (up 0.16%), the S&P BSE Realty index (down 0.41%) underperformed the Sensex.
Among the 30-share Sensex pack, 28 stocks rose and only two of them fell. ONGC (up 1.95%), NTPC (up 1.56%), and Coal India (up 1.45%), edged higher from the Sensex pack.
Index heavyweight Reliance Industries gained 2.04% on bargain hunting after tumbling 6.07% on Tuesday.
Gujarat Gas Company (GGCL) surged 4.6% after the company said it has entered into a memorandum of understanding with Gujarat State Petroleum Corporation for long-term gas procurement deal. The announcement was made after market hours on Tuesday, 3 September 2013. GGCL said as per the Memorandum of Understanding (MoU) signed with Gujarat State Petroleum Corporation (GSPC) on Tuesday, 3 September 2013, GSPC has agreed to supply 0.85 mmscm of gas per day to GGCL from 1 January 2014 to 30 June 2025. The price of gas will be determined in the relevant Gas Sales Contracts (GSC) and it is expected to be formula based. The MoU is effective till 31 December 2013 or the signing of the relevant GSCs, whichever is earlier.
Index heavyweight and cigarette maker ITC declined 0.74%.
Marico lost 1.64% to Rs 206.55 after a block deal of 7.03 lakh shares was executed on BSE at Rs 205 per share at 11:35 IST on BSE today, 4 September 2013. The block deal constitutes 0.1% of Marico's equity.
IT stocks rose on positive US economic data, the biggest outsourcing market for the Indian IT firms. TCS rose 3.39% to Rs 2,068.65 after hitting a record high of Rs 2,075.85 in intraday trade today, 4 September 2013.
Infosys gained 2.02% to Rs 3,095 after hitting a 52-week high of Rs 3,139.50 in intraday trade today, 4 September 2013.
HCL Technologies rose 1.87% to Rs 1,042 after hitting a record high of Rs 1,050.50 in intraday trade today, 4 September 2013. The company after market hours today, 4 September 2013, said that Direct Energy, a leading energy and energy services company in North America, has reached an agreement with the company to implement and manage its residential billing and customer care operations in the Alberta market. The underlying solution will leverage a variety of leading technologies, including multiple technologies from SAP. HCL will provide infrastructure hosting, application management and business process services.
The agreement is an outcome based model which includes efficiencies gained through customer-focused self-service channels. This will enhance delivery on current and future customer expectations while providing new capabilities to strengthen customer retention and acquisition. In addition, optimization initiatives are expected to reduce overall operating costs for Direct Energy.
Wipro fell 0.1%.
Auto stocks moved higher. Tata Motors jumped 4.31%. The company's total sales (including exports) of Tata commercial and passenger vehicles fell 30.93% to 49,611 units in August 2013 over August 2012. Total domestic sales fell 33.71% to 44,717 units in August 2013 over in August 2012. The company's sales from exports jumped 11.91% to 4,894 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) rose 1.54%. The company's total auto sales declined 17% to 37,897 units in August 2013 over August 2012. M&M's sales of Passenger Vehicles segment (which includes the UVs and Verito) declined 28% to 15,821 units in August 2013 over August 2012. The company's domestic sales declined 18% to 35,159 units in August 2013 over August 2012. The sale of four-wheeler commercial segment which includes passenger and load vehicles fell 4% to 13,718 units while that of three-wheelers declined 14% to 5,149 units in August 2013 over August 2012. Exports declined 9% to 2,738 units in August 2013 over August 2012.
M&M's domestic tractor sales rose 9% to 12,394 units in August 2013 over August 2012. Export sales dropped 27% to 840 units in August 2013 over August 2012. Total tractor sales rose 7% to 13,234 units in August 2013 over August 2012.
Ashok Leyland rose 4.79%. The company's total sales declined 24% to 7,139 units in August 2013 over August 2012. Ashok Leyland's sales of commercial vehicles excluding small commercial vehicle (SCV) Dost fell 25% to 4,939 units in August 2013 over August 2012. Sales of SCV Dost declined 22% to 2,200 units in August 2013 over August 2012.
Maruti Suzuki India gained 0.53%. The company's total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Two-wheeler major Hero MotoCorp rose 1.56%.
Bajaj Auto gained 3.23%. The company's total sales fell 9% to 3.12 lakh units in August 2013 over August 2012. Motorcycle sales declined 8% to 2.78 lakh units in August 2013 over August 2012. Commercial vehicles sales declined 17% to 33,605 units in August 2013 over August 2012. Exports rose 10% to 1.44 lakh units in August 2013 over August 2012.
Metal and mining stocks edged higher as a private survey showed growth in China's services sector hit a five-month high in August. China is the world's largest consumer of copper and aluminum. Hindalco Industries (up 4.12%), Jindal Steel & Power (up 2.7%), Hindustan Zinc (up 5.04%), NMDC (up 3.4%), Sail (up 2.93%), JSW Steel (up 2.7%), Tata Steel (up 2.83%) and Sesa Goa (up 1.36%), edged higher.
Maharashtra Seamless lost 3.8% as the stock turned ex-dividend today, 4 September 2013, for a dividend of Rs 6 per share for the year ended 31 March 2013.
Capital goods pivotals gained on renewed buying. L&T rose 0.56%. The company said during market hours on Monday, 2 September 2013, that its construction business secured new orders worth Rs 1141 crore in August 2013 in various business segments.
Bhel spurted 5.95%. The stock was the biggest gainer from the Sensex pack.
Rural Electrification Corporation jumped 6.56%. The company announced after market hours on Tuesday, 3 September 2013, that its wholly-owned subsidiary, REC Transmission Projects Company (RECTPCL), transferred its wholly-owned subsidiary, Vizag Transmission (VTL), to Power Grid Corporation of India. RECTPCL has received an acquisition price of Rs 15.41 crore from Power Grid Corporation of India towards acquisition of VTL along with its all assets and liabilities.
Jaiprakash Associates climbed 6.28% on media reports that the company's deal with UltraTech Cement is expected to be announced by tomorrow, 5 September 2013. According to recent media reports, UltraTech Cement is close to buying Jaiprakash Associates' Gujarat cement plant for about Rs 3700 crore. Both the companies have been in discussions for the 4.8 million tonne per annum plant for more than a year, reports added. The deal will help Jaiprakash Associates to reduce debt and help UltraTech Cement to ramp up capacity.
Shares of UltraTech Cement rose 2.51% to Rs 1,477.75.
Bank stocks rose on bargain hunting after falling sharply on Tuesday. Among private sector banks, ICICI Bank (up 4.3%), HDFC Bank (up 0.27%), Axis Bank (up 2.44%), Yes Bank (up 2.87%), ING Vysya Bank (up 7.07%) and Kotak Mahindra Bank (up 1.97%), edged higher.
State Bank of India (SBI) gained 1.21%. The bank said after market hours on Monday, 2 September 2013, that it has acquired 23% shares of Bank State Bank of India, Indonesia (BSBII) in a recent deal with P. T. Ravindo Jaya. As per the present shareholding, State Bank of India holds 99% in BSBII and P. T. Ravindo Jaya holds 1%.
Among other PSU bank stocks, Bank of Baroda (up 1.03%), Canara Bank (up 1.05%), Union Bank of India (up 1.53%), Bank of India (up 1.67%) and Punjab National Bank (up 0.62%) edged higher.
IndusInd Bank jumped 4.88% after the bank announced during market hours today, 4 September 2013, that IBM will provide innovative technology to enable IndusInd Bank to deepen customer relationships by delivering personalized, location-based recommendations and offers in real-time.
Pharma stocks rose on a weak rupee. Cipla (up 3.27%), Dr Reddy's Laboratories (up 3.49%), Ranbaxy Laboratories (up 8.75%), Lupin (up 4.54%) and Sun Pharmaceutical Industries (up 1.82%) gained.
A majority of revenues for the pharma companies comes from exports. A falling rupee means that when the dollar earnings are converted into rupees, the revenue gets a boost.
Ipca Laboratories jumped 8.24% after the company said that the United States Food and Drug Administration (USFDA) has found acceptable the company's oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh. This will enable the company to commercialize oral solid dosage formulations in the US market from this formulations manufacturing facility, Ipca Laboratories said.
Zee Entertainment Enterprises lost 1.52% to Rs 217.60 after a block deal of 5 lakh shares was executed on BSE at Rs 216.05 per share at 10:25 IST on BSE today, 4 September 2013. The block deal constitutes 0.05% of Zee Entertainment Enterprises' equity.
Realty stocks declined after the Reserve Bank of India (RBI) on Tuesday, 3 September 2013, tightened norms on banks' housing loans to individuals. DLF (down 0.94%), Sobha Developers (down 7.12%), Indiabulls Real Estate (down 0.63%), Godrej Properties (down 2.99%), Oberoi Realty (down 0.65%) and D B Realty (down 0.09%) declined. But, Unitech rose 1.85%.
RBI said for housing loans from banks to individuals should be closely linked to the stages of construction. The central bank said such loan products, popularly called 80:20 or 75:25 schemes, are likely to expose the banks as well as their home loan borrowers to additional risks. Upfront disbursals of lump sum loans should not be made in case of incomplete or under-construction housing projects, the central bank added.
Hanung Toys & Textiles was locked at 5% upper circuit at Rs 15.67 after the company said its board of directors at a meeting held on Tuesday, 3 September 2013, decided to withdraw its proposal of a 2-for-1 stock split. The announcement was made after market hours on Tuesday, 3 September 2013. Hanung Toys & Textiles said that its board has decided to withdraw stock-split proposal as the company's stock price has fallen steeply. The purpose of sub-division was to make the company's share more affordable for the small retail investors to invest in the company.
The Reserve Bank of India (RBI) today, 4 September 2013, partially relaxed some of the restrictions imposed last month on capital outflows from residents, including allowing Indian companies more leeway if they are raising funds via external commercial borrowings. It has been clarified that in respect of funding of overseas direct investments by way of External Commercial Borrowings, instead of limit of 100% of the net worth, the earlier limit of 400% of the net worth will continue to apply, RBI said in a press release.
It is not the intention of the Reserve Bank of India to restrict bona-fide and genuine overseas direct investment transactions by Indian companies, the RBI said.
In the foreign exchange market, the rupee strengthened after earlier falling below 68 level as equities rose. The partially convertible rupee was hovering at 67.0225, stronger than its close of 67.63/64 on Tuesday, 3 September 2013. The rupee had tumbled earlier in the day on renewed concerns of US military intervention in Syria.
Indian services activity shrank in August at its quickest pace since the depths of the global financial crisis as new business dried up, a survey showed, the latest evidence that Asia's third-largest economy is rapidly losing steam even as policymakers battle a full-blown currency crisis. The HSBC Services Purchasing Managers' Index (PMI) compiled by Markit, slipped to 47.6 in August, the weakest since April 2009, from 47.9 in July. A number below 50 denotes contraction.
US President Barack Obama secured more support in Congress on Tuesday, 3 September 2013, for a military strike in Syria. There are allegations that the Syrian government used chemical weapons against civilians last month. Obama had said over the weekend that a strike against Syria is necessary, but that he would seek approval from Congress before authorizing any use of force.
US crude oil futures for October delivery were off 79 cents or 0.73% at $107.75 a barrel.
European shares edged lower on Wednesday, 4 September 2013, after US President Barack Obama secured more support in Congress on Tuesday, 3 September 2013, for a military strike in Syria. Key benchmark indices in UK, France and Germany were down by 0.5% to 0.73%.
The euro-area economy returned to growth in the second quarter after a record-long recession, driven by a rebound in exports from the 17-nation currency bloc. Gross domestic product rose 0.3% from the previous three months, in line with an August 14 estimate, the European Union's statistics office in Luxembourg said today. From a year earlier, the economy shrank a revised 0.5%.
UK services growth unexpectedly accelerated last month to the fastest pace since 2006 as companies reported a surge in demand. A gauge of activity increased to 60.5 from 60.2 in July, Markit Economics and the Chartered Institute of Purchasing and Supply said in a statement today in London.
Spain's service industries expanded for the first time in more than two years in August, even as companies continued to cut jobs amid concerns over the strength of the recovery. The Purchasing Managers' Index rose to 50.4 in August from 48.5 in July, the first reading above the 50-point mark that separates expansion from contraction since June 2011, London-based Markit Economics said in a statement on its website.
Asian stocks edged lower in choppy trade on Wednesday, 4 September 2013. Key benchmark indices in Indonesia, Hong Kong, South Korea, Singapore and Taiwan shed by 0.04% to 2.17%. Key benchmark indices in China and Japan rose by 0.21% to 0.54%.
Growth in China's services sector hit a five-month high in August underpinned by new orders and business optimism, a private survey showed on Wednesday, adding to views that the world's second-largest economy had avoided a sharp slowdown. The Markit/HSBC Services Purchasing Managers' Index (PMI) climbed to 52.8 in August after seasonal adjustments, up from July's 51.3 and the highest since March. The reading was well above the 50 level that demarcates an acceleration in activity from a slowdown, although a sub-index for employment shrank.
Australia's economy expanded more than economists forecast last quarter as non-dwelling construction surged, providing a stronger growth momentum for the winner of this week's election. Second-quarter gross domestic product advanced 0.6% from the previous three months, when it rose a revised 0.5%, a Bureau of Statistics report released in Sydney today showed.
Trading in US index futures indicated that the Dow could decline 11 points at the opening bell on Wednesday, 4 September 2013. US stocks rose on Tuesday as better-than-forecast economic data overshadowed concern over possible military action against Syria. The Institute for Supply Management's manufacturing index increased to 55.7 in August, the strongest since June 2011, from 55.4 a month earlier. Readings above 50 indicate growth. Another report showed construction spending in the US increased in July to the highest level in four years, propelled by gains in residential real estate.
The influential US nonfarm payroll report for August 2013 is due for release on Friday, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Meanwhile, a summit of leaders from the Group of 20 major economies begins in St. Petersburg on Thursday, 5 September 2013.
