Market edges higher post US govt shutdown

Markets edged higher even as the US Govt directed all government agencies to shut down late Monday after Congress failed to find a compromise on a government spending bill.

Market edged higher on hope that US will continue its monthly bond-buying program at its current pace, as economic activity is likely to take a hit post government shutdown.

At 11:18AM, the 30-share Sensex was up 64 points at 19,427 and the 50-share Nifty was up 14 points at 5,749.

The manufacturing activity continued to contract for the second consecutive month in September after deteriorating for the first time in four-years in August, according to the widely-tracked HSBC Purchasing Managers' Index (PMI) released today.

The PMI for manufacturing, although marginally up from the previous month, stood at 49.6 points in September from 48.5 points in August, indicating moderate contraction in the sector

Most Asian markets continued to trade firm with Shanghai Composite, Nikkei and Straits Times up between 0.4-0.6% each while Hang Seng was down 1.5%.

The rupee gained against the dollar as narrower current account deficit numbers for the April-June quarter helped boost sentiments.

While CAD widened for the first quarter as compared to the previous one but the deficit is likely to come down in the subsequent quarters as gold imports restrictions imposed by the government will start yielding results.

The rupee was trading at 62.35 compared to previous day's close 62.60.
 
Capital goods, auto and banks continued to remain the top performers among the sectoral indices on the BSE, up more than 1% followed by realty, Healthcare, IT and Consumer Durables are other gainers. Meanwhile, Metal, FMCG, Oil and Gas and power indices were among the top losers.

Financials were among the top gainers on value buying at lower levels and shortcovering after recent losses. HDFC Bank, ICICI Bank, SBI and HDFC contribute the most to Sensex gains along with TCS, Infosys and index heavyweight Reliance Industries.

Auto stocks firmed up on expectation of higher sales in September. Maruti Suzuki India has moved higher by 3% at Rs 1,399 after reporting 20% year-on-year increase in total sales in September at 104,964 units as against 87,323 units in the same month last year. Other gainers include, Mah&Mah, Tata Motors, Bajaj Auto and Hero MotoCorp were up 0.6-3% each.

Hindustan Unilever (HUL) is trading lower by 3% at Rs 609 after its parent company Unilever said it expects underlying sales growth of 3 to 3.5% in July-September quarter due to weakening in the market growth of many emerging countries.

BHEL was up 4.3% on short covering at lower levels after losses in the previous sessions.

Among other shares, Tata Communications has surged 5% to Rs 197 after the Tata Group telecom company said that VSNL SNOSPV Pte Ltd, a wholly owned subsidary has entered into exclusive discussions with the British major Vodafone's South African subsidiary Vodacom to sell its entire stake in Neotel.

Apollo Tyres has slipped 6% to Rs 62.70 after Cooper Tire and Rubber Company (CTB) shareholders approved the proposed merger with the company with more than 74% majority.

In the broader market the mid-cap and small-cap indices were trading marginally higher.

Market breadth was positive with 906 gainers and 666 losers on the BSE