Nifty hits one-week high

Indian stocks surged today, 3 October 2013, on 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 rupee surged against the dollar. The barometer index, the S&P BSE Sensex, hit its highest level in almost a week. The 50-unit CNX Nifty hit one-week high. The Sensex was provisionally up 381.14 points or 1.95%, up close to 315 points from the day's low and off about 30 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Except BSE FMCG index, all the other sectoral indices on BSE were in the green.

Indian stocks gained for the second day in a row today, 3 October 2013.

Indian stocks got a 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. ADP's report on Wednesday, 2 October 2013, showing weaker-than-expected growth in US private-sector jobs in September also fuelled expectations that the Fed will hold off on reducing the amount of monetary stimulus in the near future. 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.

Capital goods pivotals gained for the second day in a row. 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. Bank stocks rose across the board.

In the foreign exchange market, the rupee surged against the dollar tracking global dollar weakness. The partially convertible rupee was hovering at 61.75, sharply higher than 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.

As per provisional figures, the S&P BSE Sensex was up 381.14 points or 1.95% to 19,898.29. The index jumped 412.09 points at the day's high of 19,929.24 in late 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 128.95 points or 2.23% to 5,909, as per provisional figures. The index hit a high of 5,917.60 in intraday trade, its highest level since 26 September 2013. The index hit a low of 5,802.70 in intraday trade.

The total turnover on BSE amounted to Rs 1859 crore, higher than Rs 1501.20 crore on Tuesday, 1 October 2013.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,471 shares rose and 937 shares fell. A total of 152 shares were unchanged.

Among the 30-share Sensex pack, 27 stocks rose. Reliance Industries (up 2.64%), TCS (up 4.08%), and Tata Power Company (up 4.04%), surged.

Bajaj Auto jumped after the company reported better than expected September sales. The stock was up 5.36%. The company said before market hours today, 3 October 2013, that its total sales rose 2% to 3.67 lakh vehicles in September 2013 over September 2012. Motorcycle sales rose 3% to 3.23 lakh units in September 2013 over September 2012. Commercial vehicles sales fell 2% to 43,936 units in September 2013 over September 2012. Exports rose 10% to 1.46 lakh units in September 2013 over September 2012.

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 3.57%), Sail (up 7.09%), Jindal Steel & Power (up 3.92%), Hindalco Industries (up 4.29%), Hindustan Zinc (up 1.48%) and Bhushan Steel (up 0.16%), gained.

Sesa Sterlite surged 7.1%. The stock was the biggest gainer from the Sensex pack.

Bank stocks rose across the board. Among private bank stocks, HDFC Bank (up 4.14%), Yes Bank (up 5.05%), Axis Bank (up 5.83%) and ICICI Bank (up 2.85%), gained.

Kotak Mahindra Bank rose 1.95%. The bank early this week said that the bank has decided not to transfer any SLR security from AFS/HFT to HTM as permitted under Reserve Bank of India (RBI) circular though there is sufficient headroom to do so. Reserve Bank of India, vide its circular dated 23 August 2013 had, as a onetime measure, permitted banks to transfer SLR securities from AFS/HFT to HTM category during the current year up to the limit of 24.50% of net demand and time liabilities (NDTL). To mitigate impact of mark to market losses incurred by banks due to abnormal market conditions, the RBI also gave banks the option of valuing these securities for the purpose of such transfer, as at the close of business of 15 July 2013. Such transfers were to be done no later than 30 September 2013.

State Bank of India (SBI) rose 0.72%. The bank last week said that it has repurchased a principal amount of $147 million of $1 billion 3.25% bonds due 2018 (the 2018 Bonds). The 2018 Bonds were issued by SBI on 18 April 2013 and are listed on the Singapore Exchange Securities Trading. The repurchase of the Bond took place between 26 August 2013 and 26 September 2013. The bank is in the process of cancelling the repurchased 2018 Bonds and the aggregate outstanding principal amount of the 2018 Bonds following such cancellation will be $853 million, SBI said in a statement.

Punjab National Bank advanced 1.58%. The bank early this week said that the bank has decided to provide interest at uniform rate of 9% on all NRE term deposits of tenure 3 years and above up to 10 years, considering recent relaxations permitted by the Reserve Bank of India (RBI). These changes shall be effective from 1 October 2013.

Bank of Baroda gained 5.31%. The bank has raised the rates of interest payable on term deposits of below Rs 1 crore and Rs 1 crore and above of some maturities with effect from 1 October 2013.

Bank of India jumped 5.22%. The state-run bank after market hours on Tuesday, 1 October 2013, said that the bank has completed the allotment of Rs 500-crore BASEL-III compliant unsecured Tier-II Bonds of 10 years at a coupon rate of 9.8% per annum on private placement basis. The state-run bank also clarified that the present issue is in addition to the earlier issue of Rs 1000 crore completed on 25 September 2013. Both the issues have been rated AAA by CRISIL, the bank said.

Tata Motors rose 2.95%. The company's British luxury car unit Jaguar Land Rover (JLR) on Wednesday, 2 October 2013, said it has appointed John Edwards into the role of Managing Director of the newly created Individual Products Division with immediate effect. The new division will be responsible for designing and creating a portfolio of brand extending products, ranging from high value halo vehicles to lifestyle merchandise products. In his new role, John will be responsible for the company's 'Engineered To Order' division, accessories, licensing & merchandise activities, vehicle operations and heritage vehicles across both brands, JLR said in statement. On the new appointment, Jaguar Land Rover's Chief Executive, Dr Ralf Speth commented: "The introduction of the Individual Products Division is an exciting new opportunity for Jaguar Land Rover and is designed to sharpen our relentless focus on delivering outstanding products for our customers -- past, present and future. John brings a wealth of experience to the role which will be integral to supporting our future growth strategy."

Capital goods pivotals gained for the second day in a row. Bhel (up 1.27%) and L&T (up 3.62%), rose.

European stocks reversed initial gains on Thursday, 3 October 2013, as a shutdown of the US government entered a third day. Key benchmark indices in France and Germany were off 0.13% to 0.4%. In UK, the FTSE 100 index was up 0.15%.

Euro-area services output expanded more than initially estimated in September, as the 17-nation currency bloc's economic recovery gained momentum. An index based on a survey of purchasing managers in the services industry rose to 52.2, exceeding a Sept. 23 estimate of 52.1 and up from 50.7 in August, London-based Markit Economics said today. The gauge has been above 50, indicating growth, for two months.

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.

In Italy, Silvio Berlusconi said he would back the government of Prime Minister Enrico Letta in a confidence vote on Wednesday, a surprise move that has allowed the coalition government to avoid a collapse.

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 Hong Kong, Taiwan and Indonesia rose 0.71% to 1.73%. Key benchmark indices in Japan and Singapore fell 0.09% to 0.25%. 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 41 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.

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