PSU OMCs gain as Brent crude hits 16-month low

After hitting record high amid initial volatility, key benchmark indices retained positive zone in morning trade. The barometer index, the S&P BSE Sensex was up currently up 82.91 points or 0.31% at 27,102.30. The market breadth indicating the overall health of the market was strong. The market sentiment was boosted by provisional data showing that foreign funds remained net buyers of Indian stocks during the previous trading session. PSU OMCs gained after a sharp slide in crude oil prices yesterday, 2 September 2014. IT stocks advanced on positive economic data in the US. Metal stocks advanced after better-than-expected economic data from China. Maruti Suzuki India gained as the company is set to open customer bookings for the much awaited mid-sized premium sedan Ciaz from today, 3 September 2014, across its nationwide network.

Key indices pared most of the initial gains soon after firm opening took the Sensex and the Nifty hit yet another record high. Benchmark indices recovered from lower level later. An overnight sharp slide in crude oil prices and positive global cues triggered a firm opening on the domestic bourses.

Asian stocks rose after reports showed faster expansion in China's service industries last month and as US manufacturing expanded at the fastest pace in three years last month.

At 10:15 IST, the S&P BSE Sensex was up 82.91 points or 0.31% at 27,102.30. The index jumped 129.51 points at the day's high of 27,148.90 in early trade, a record high for the index. The index rose 47.63 points at the day's low of 27,067.02 in intraday trade.

The CNX Nifty was up 19 points or 0.24% at 8,102.05. The index hit a high of 8,121.65 in intraday trade, a record high for the index. The index hit a low of 8,092.25 in intraday trade.

The market breadth indicating the overall health of the market was strong. On BSE, 1,328 shares gained and 843 shares fell. A total of 68 shares were unchanged.

The BSE Mid-Cap index was up 56.79 points or 0.6% at 9,580.56. The BSE Small-Cap index was up 46.25 points or 0.44% at 10,538.67. Both these indices outperformed the Sensex.

Among 30-share Sensex pack, 14 stocks advanced while remaining declined.

PSU OMCs gained on decline in crude oil prices. BPCL (up 1.44%), HPCL (up 2.22%), and Indian Oil Corporation (up 2.19%) gained.

Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.

IT stocks advanced after positive economic data in US, the biggest outsourcing market for Indian IT firms. TCS (up 1.65%), Infosys (up 1.65%), Wipro (up 1.56%), MindTree (up 1.16%), MphasiS (up 0.63%), and HCL Technologies (up 1.16%) gained.

Metal stocks advanced after better-than-expected economic data from China. Tata Steel (up 1.68%), Hindalco Industries (up 1%), Hindustan Zinc (up 0.15%), and JSW Steel (up 0.31%) gained. Steel Authority of India (down 0.24%) and Jindal Steel & Power (down 0.23%) declined.

NMDC rose 0.4%. NMDC's total iron ore production rose to 12.10 million tonne for five months from April-August 2014, from 10.83 million tonnes during the five months from April-August 2013. Sales rose to 13.57 million tonnes for five months from April-August 2014, from 11.44 million tonne during the five months from April-August 2013. The company announced the data after trading hours on Tuesday, 2 September 2014.

Meanwhile, NMDC kept price of iron ore unchanged for September 2014. NMDC said it has rolled over the August 2014 price of lump ore (Rs 4600 per tonne) and fines (Rs 3160 per tonne) to the month of September 2014.

Meanwhile, NMDC said that the company has subscribed to its full entitlement of shares of the rights offer of Legacy Iron Ore. Accordingly, after the allotment of shares by Legacy, NMDC is holding 115.34 crore shares with a voting power of 78.56% in Legacy.

Sesa Sterlite rose 1.1%. The company after market hours on Tuesday, 2 September 2014 said that its board of directors will meet on Friday, 5 September 2014, inter alia, to consider enabling approval for raising of funds through issue of eecurities including convertible debentures, bonds, warrants, NCDs etc.

Maruti Suzuki India rose 0.07%. The company during market hours yesterday, 2 September 2014, said that it will open customer bookings for the much awaited mid-sized premium sedan Ciaz from Wednesday, 3 September 2014, across its nationwide network. Ciaz will be available in petrol and diesel fuel options.

The market sentiment was also boosted by provisional data showing that foreign funds remained net buyers of Indian stocks during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on Tuesday, 2 September 2014, as per provisional data from the stock exchanges.

A decline in crude oil prices added to positive sentiment on the domestic bourses. India imports about 80% of its crude oil requirement. Brent crude futures slumped to a 16-month low yesterday, 2 September 2014, on concern slower manufacturing from Europe to China will curb global oil demand. Brent for October settlement was up 35 cents at $100.69 a barrel. The contract slipped $2.45 a barrel to settle at $100.34 a barrel on Tuesday, 2 September 2014, the lowest close since 1 May 2013. Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation.

On macro front, HSBC Services PMI for August 2014 is due today, 3 September 2014. The Services PMI had declined to 52.20 in July 2014, from 54.40 in June 2014.

Asian markets were trading higher today, 3 September 2014 after data underscored that the US economy continues to gather gradual momentum. Key indices in Japan, China, Hong Kong, Taiwan, Singapore, and Indonesia were up 0.18% to 1.21%. In South Korea, the Seoul Composite index was off 0.13%.

The HSBC China services Purchasing Managers' Index rose to a 17-month high of 54.1 in August from 50 in July, HSBC Holdings PLC said today, 3 September 2014, while cautioning that sub-index readings pointed to a mixed picture of economic recovery. The HSBC Composite Output Index posted at 52.8, up from 51.6 in July, and signalled a robust rise in activity levels. Furthermore, it was the strongest expansion of business activity in 17 months.

China's official non-manufacturing activity slightly recovered in August, with the sector's purchasing managers' index (PMI) rebounding to 54.4 in August from 54.2 in July, official data showed today, 3 September 2014.

Trading in US index futures indicated that the Dow could gain 9 points at the opening bell on Wednesday, 3 September 2014. US stocks mostly fell on Tuesday, 2 September 2014, with the S&P 500 holding above 2,000 after rising to another intraday record, as energy companies dropped along with the price of oil and investors fretted whether the European Central Bank would make further monetary policy moves this week.

Among economic data, the Institute for Supply Management said its US manufacturing activity index rose to 59 in August, the strongest since March 2011.

Separately, US construction spending staged a strong rebound in July, rising by the largest amount in more than two years. Construction spending rose 1.8% in July, the biggest one-month gain since May 2012, the Commerce Department reported Tuesday, 2 September 2014. It followed a 0.9% decline in June, the largest setback in a year.

In Europe, a monthly meeting of the European Central Bank (ECB) is scheduled tomorrow, 4 September 2014. There are expectations that the European Central Bank (ECB) will announce quantitative easing in the coming months to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.

Powered by Capital Market - Live News