Metal stocks gain after positive Chinese data

Key benchmark indices strengthened further and hit fresh intraday high in mid-morning trade. The rupee's surge against the dollar and gains in Asian stocks underpinned sentiment as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in almost a week. The Sensex was up 267.05 points or 1.37%, off about 40 points from the day's high and up close to 200 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Most Asian shares turned higher on Thursday, 3 October 2013, shaking off a weak start following an encouraging reading on non-manufacturing activity in China.

Indian stocks got additional boost from expectations that the US government's partial shutdown could lead to the US Federal Reserve postponing tapering of monetary stimulus to the US economy. The US government's partial shutdown has sparked concern it will slow economic growth in the world's biggest economy. Boston Fed President Eric Rosengren, a consistent backer of record stimulus who votes on policy this year, said on Wednesday, 2 October 2013, that the central bank refrained from tapering its bond purchases last month because growth was lower than forecast and fiscal policy posed a risk to the outlook. 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 amid concerns about the strength of the economic recovery. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.

Among IT stocks, TCS extended intraday gain. Metal and mining stocks rose as the latest data showed China's official non-manufacturing Purchasing Managers' Index rose to a six-month high in September. FMCG major Hindustan Unilever (HUL) extended Tuesday's losses triggered by its parent company Unilever Plc issuing a warning on Monday, 30 September 2013, that it now expects underlying sales growth of just 3% to 3.5% in the period as against estimates of 6% as a slowdown in its emerging markets accelerated in the July-September quarter. Lupin rose after the company's US subsidiary, Lupin Pharmaceuticals Inc. (LPI), launched its generic Gatifloxacin Ophthalmic Solution, 0.5%.

The market edged higher in early trade on firm Asian stocks. The market extended initial gains and hit fresh intraday high in morning trade. The market strengthened further and hit fresh intraday high in mid-morning trade.

In the foreign exchange market, the rupee strengthened against the dollar tracking global dollar weakness. The partially convertible rupee was hovering at 61.95, compared with its close of 62.46/47 on Tuesday, 1 October 2013. Indian financial markets were closed on Wednesday, 2 October 2013, on account of Mahatma Gandhi Jayanti.

At 11:20 IST, the S&P BSE Sensex was up 267.05 points or 1.37% to 19,784.20. The index jumped 306.80 points at the day's high of 19,823.95 in mid-morning trade, its highest level since 27 September 2013. The index gained 66.82 points at the day's low of 19,583.97 in early trade.

The CNX Nifty was up 90.55 points or 1.57% to 5,870.60. The index hit a high of 5,878.75 in intraday trade, its highest level since 27 September 2013. The index hit a low of 5,802.70 in intraday trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,265 shares rose and 635 shares fell. A total of 114 shares were unchanged.

Among the 30-share Sensex pack, 27 stocks rose and only three fell. Bajaj Auto (up 3.22%), Tata Motors (up 3.06%) and Wipro (up 3.06%), gained.

IT major TCS gained 4.05%, with the stock extending intraday gain.

Lupin rose 1.31% after the company's US subsidiary, Lupin Pharmaceuticals Inc. (LPI), announced today that it has launched its generic Gatifloxacin Ophthalmic Solution, 0.5%. Lupin had earlier received final approval from the United States Food and Drugs Administration (US FDA) to market a generic version of Allergan Inc.'s Zymaxid Ophthalmic Solution, 0.5%. Lupin's Gatifloxacin Ophthalmic solution 0.5% is the generic equivalent of Zymaxid Ophthalmic Solution of Allergan and is indicated for the treatment of bacterial conjunctivitis. Zymaxid Ophthalmic Solution, 0.5%, had annual US sales of approximately $62.3 million (IMS MAT Jun 2013). Lupin was the first applicant to file an ANDA for Zymaxid Ophthalmic Solution and as such will be entitled to 180 days of marketing exclusivity.

Commenting on the approval, Nilesh Gupta, Managing Director, Lupin said, "Having received approval earlier, we are happy to now launch this product. The product is the first of the ophthalmic products that Lupin is bringing to the market and bears testimony to our continued commitment to serving our customers and patients by bringing high quality, affordable medicines."

Metal and mining stocks gained as latest data showed China's official non-manufacturing Purchasing Managers' Index rose to a six-month high in September. China is the world's largest consumer of copper and aluminum. Tata Steel (up 2.59%), Sail (up 1.55%), Jindal Steel & Power (up 2.47%), Sesa Sterlite (up 5.1%), Hindalco Industries (up 1.81%), Hindustan Zinc (up 0.72%) and Bhushan Steel (up 0.14%), gained.

FMCG major Hindustan Unilever (HUL) extended Tuesday's losses triggered by its parent company Unilever Plc issuing a warning on Monday, 30 September 2013, that it now expects underlying sales growth of just 3% to 3.5% in the period as against estimates of 6% as a slowdown in its emerging markets accelerated in the July-September quarter. The stock was off 1.27%.

Unilever attributed the emerging markets slowdown to a significant currency weakening. Unilever said developed markets remained 'flat to down,' representing no change to its previous forecast.

In April-June quarter, Unilever had reported underlying sales growth of 5% with volume growth of 3%, while Hindustan Unilever's (HUL) domestic consumer business grew at 7% with 4% underlying volume growth.

Most Asian shares turned higher on Thursday, 3 October 2013, shaking off a weak start following an encouraging reading on non-manufacturing activity in China. Key benchmark indices in Japan, Hong Kong, Taiwan and Indonesia rose 0.33% to 1.66%. Singapore's Straits Times fell 0.19%. Markets in South Korea were closed for the National Foundation Day holiday. Markets in mainland China are closed till 7 October 2013 for National Day holidays.

China's official non-manufacturing Purchasing Managers' Index rose to a six-month high of 55.4 in September from 53.9 in August, adding to a growing roster of evidence that China's economy has turned a corner in recent months.

The Philippines won a rating upgrade from Moody's Investors Service, completing the nation's ascent to investment rank as President Benigno Aquino leads a growth resurgence that's outpacing the rest of Southeast Asia. The rating on the nation's government debt was raised one level to Baa3, Moody's said in a statement today. The outlook on the rating is positive. The upgrade puts the Philippines on par with Turkey and Spain.

Trading in US index futures indicated that the Dow could fall 19 points at the opening bell on Thursday, 3 October 2013. US stocks fell on Wednesday as investors watched for progress on ending an impasse over federal spending that shut down the government a second day. The US government has been in partial shutdown for two days after lawmakers failed to agree on a federal budget.

A meeting between President Barack Obama and congressional leaders ended Wednesday night with no deal to re-open the US government. House Speaker John Boehner told reporters that Obama repeated he wouldn't negotiate about passing a funding bill. With the Senate gaveled out for the day, the stalemate continued and meant the government shutdown would continue for a third day on Thursday.

A report showed companies added fewer workers than projected in September, indicating the job market is struggling to gain momentum. The 166,000 increase in employment followed a revised 159,000 rise in August that was smaller than initially estimated, according to the ADP Research Institute in Roseland, New Jersey.

Meanwhile, the US is creeping up against its debt limit. Treasury Secretary Jack Lew on Tuesday night reiterated that the government will lose the ability to borrow on Oct. 17.

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 amid concerns about the strength of the economic recovery.

Moody's Investors Service lowered its outlook on Brazil's sovereign rating to stable from positive, citing deteriorating debt and investment ratios and evidence the economy is going through a low-growth period. "Even though there are signs that the Brazilian economy may be starting to recover, Moody's view is that, if and when the upturn materializes, it is unlikely that it will be strong enough to restore a positive trend in Brazil credit metrics," Moody's said in a statement dated 2 October 2013. Moody's affirmed Brazil's Baa2 government bond rating.

In Europe, the European Central Bank kept its benchmark interest rate unchanged at a record low on Wednesday, 2 October 2013, as the euro area recovers from its longest-ever recession. The Governing Council meeting in Paris on 2 October 2013 left the main refinancing rate at 0.5% for a fifth month after cutting it by a quarter point in May. The central bank was "particularly attentive" to any moves in market rates which could threaten economic recovery or push inflation too low, Mario Draghi told a news conference.

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