Capital goods pivotals edge higher in early trade

A bout of initial volatility was witnessed as key benchmark indices alternately swung between gains and losses. The barometer index, the S&P BSE Sensex, was up 15.71 points or 0.08%, up close to 40 points from the day's low and off about 45 points from the day's high. The market breadth, indicating the overall health of the market, was strong.

Capital goods pivotals edged higher in early trade. Tata Motors gained after the company's British luxury car unit Jaguar Land Rover (JLR) on Tuesday, 24 September 2013, unveiled details of its future plans for advanced research and development in the UK.

The market may remain volatile in the immediate future as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire tomorrow, 26 September 2013.

At 9:30 IST, the S&P BSE Sensex was up 15.71 points or 0.08% to 19,935.92. The index rose 58.28 points at the day's high of 19,978.49 in early trade. The index declined 23.06 points at the day's low of 19,897.15 in early trade.

The CNX Nifty was up 5.15 points or 0.09% to 5,897.60. The index hit a low of 5,885.70 in intraday trade. The index hit a high of 5,910.40 in intraday trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 614 shares rose and 349 shares dropped. A total of 65 shares were unchanged.

Among the 30-share Sensex pack, 19 stocks rose and rest of them fell. Tata Power Company (up 2.04%), Hero MotoCorp (up 1.14%) and Sesa Goa (up 0.77%), gained.

Capital goods pivotals edged higher. Bhel rose 2.13%. L&T rose 1.15%.

Tata Motors gained 1.96%. The company's British luxury car unit Jaguar Land Rover (JLR) on Tuesday, 24 September 2013, unveiled details of its future plans for advanced research and development in the UK which will now be focused on a new cutting-edge technology, innovation and education centre in Warwick. The National Automotive Innovation Campus (NAIC) is designed to create a large-scale collaborative research environment, JLR said in a statement. JLR is the lead partner in the project investing 50 million pounds, along with Tata Motors European Technical Centre (TMETC), WMG (Warwick Manufacturing Group) and the UK Government's Higher Education Funding Council England (HEFCE).

ONGC dropped 0.49%. Oil India rose 0.86%. The Cabinet Committee on Economic Affairs on Tuesday approved the proposal of the Ministry of Petroleum and Natural Gas on the policy on exploration and exploitation of shale gas and oil by National Oil Companies (NOCs) on acreages under the nomination regime. This policy will allow NOCs to carry out exploration and exploitation of unconventional hydro-carbon resources particularly shale gas and oil in their already awarded onland Petroleum Exploration License/Petroleum Mining Lease (PEL/PML) acreages under the nomination regime.

NOCs shall apply for grant of shale gas and oil rights in their interested PEL/PML acreages and are required to undertake a mandatory minimum work programme, the government said in a statement. The company is permitted three assessment phases of a maximum period of three years each. Royalty, Cess and Taxes would be payable at par with conventional oil/gas being produced from the respective areas, the government said.

It is well acknowledged that production requirements and profile for shale oil and gas is different from conventional gas and oil. In view of this and the fact that the technologies required for production have been developed in the recent past, it was felt that a policy be put in place to achieve early development of these resources and to address issues arising out of E&P activities in shale gas and oil, the government said in a statement.

TCS declined 0.51%. The company announced after market hours on Tuesday, 24 September 2013, that the company, Saudi Aramco and GE launched the first all-female business process services center in Riyadh, Kingdom of Saudi Arabia. The center will be staffed by Saudi females, with TCS and GE owning 76% and 24% equity in the new venture, which will initially serve Saudi Aramco and GE as anchor clients. The new business process services center will serve as a building block to localize the business process outsourcing (BP0) industry in the Kingdom. The three partners will work together with the intention of scaling up the new venture to create up to 3,000 jobs for Saudi professional females. GE will create up to 1,000 employment opportunities for this initiative.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.68, compared with its close of 62.7525/7625 on Tuesday, 24 September 2013.

Asian stocks dropped on Wednesday, 25 September 2013, as concern that US lawmakers will fail to arrange a budget deal preventing a government shutdown next week weighed on sentiment. Key benchmark indices in Indonesia, Japan, Singapore, Taiwan and South Korea were off 0.08% to 0.73%. Key benchmark indices in China and Hong Kong rose 0.26% to 0.27%.

US stocks ended mostly lower on Tuesday, 24 September 2013, with the Dow Jones Industrial Average and the S&P 500 extending their losing streaks to four days, as a drop in consumer confidence and worries over a Washington debt-ceiling fight outweighed a rise in home prices and easing concerns over the Middle East.

Investors are worried about the latest squabbling in Washington over a new budget for the fiscal year that starts on 1 October 2013 and, more importantly, over whether to lift the debt ceiling. Ratings firm Moody's Investors Service on Tuesday said a failure by the US government to raise the country's debt limit would result in a worse outcome for financial markets than a government shutdown.

The Conference Board's index of US consumer confidence slumped in September to a four-month low and a separate report showed a gauge of manufacturing in the region covered by the Federal Reserve Bank of Richmond shrank in September. The Case-Shiller report on US home prices showed prices rose in July, but at a slower pace.

The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus.

US President Barack Obama on Tuesday said that the US is committed to finding diplomatic solutions for the Syria conflict and for the ongoing dispute with Iran over its nuclear program.

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