Key benchmark indices held firm in early afternoon trade as discussion began in Lok Sabha on Pension Bill. The barometer index, the S&P BSE Sensex, was up 343.65 points or 1.88%, up close to 390 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. Bank stocks rose on bargain hunting after Tuesday's steep losses. Capital goods pivotals gained on renewed buying. Tata Motors extended intraday gain.
A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red after opening higher. The market extended initial gains and hit fresh intraday high in morning trade. The Sensex spurted and hit fresh intraday high in mid-morning trade. The market held firm in early afternoon trade.
Discussion on Pension Bill began in Lok Sabha even as the Opposition shouted slogans over missing coal files. The government on Tuesday, 3 September 2013, introduced an amendment in parliament recommending 26% ownership by foreign companies in local businesses selling pensions. The threshold for foreign direct investment in pensions will be kept in line with the cap for insurance, which was opened to overseas companies in 2000. The legislation needs the approval of the lower and upper houses. The Pension Bill will also give statutory power to the country's pension regulator, which has been functioning as an interim body for a decade without parliamentary approval.
At 12:20 IST, the S&P BSE Sensex was up 343.65 points or 1.88% to 18,578.31. The index jumped 372.57 points at the day's high of 18,607.23 in mid-morning trade. The index fell 46.23 points at the day's low of 18,188.43 in early trade.
The CNX Nifty was up 111.25 points or 2.09% to 5,452.70. The index hit a high of 5,459.70 in intraday trade. The index hit a low of 5,318.90 in intraday trade, its lowest level since 29 August 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,229 shares rose and 685 shares fell. A total of 138 shares were unchanged.
Among the 30-share Sensex pack, 28 stocks rose and only two of them fell. Hindalco Industries (up 3.97%), Bharti Airtel (up 3.66%) and Reliance Industries (up 3.36%), gained.
Tata Motors jumped 5.23%, with the stock extending intraday gain.
Capital goods pivotals gained on renewed buying. L&T rose 1.85%. The company said during market hours on Monday, 2 September 2013, that its construction business secured new orders worth Rs 1141 crore in August 2013 in various business segments.
Bharat Heavy Electricals (Bhel) surged 7.12%. The company said during market hours on Monday, 2 September 2013, that the Board for Industrial and Financial Reconstruction (BIFR) vide order dated 29 August 2013 sanctioned the Modified Draft Rehabilitation Scheme envisaging merger of Bharat Heavy Plate and Vessels (BHPV) with Bhel.
Bank stocks rose on bargain hunting after falling sharply on Tuesday. Among private sector banks, ICICI Bank (up 2.81%), HDFC Bank (up 1.03%), Axis Bank (up 2.84%), Yes Bank (up 4.69%), and Kotak Mahindra Bank (up 2.97%), edged higher.
State Bank of India (SBI) gained 2.14%. The bank said after market hours on Monday, 2 September 2013, that it has acquired 23% shares of Bank State Bank of India, Indonesia (BSBII) in a recent deal with P. T. Ravindo Jaya. As per the present shareholding, State Bank of India holds 99% in BSBII and P. T. Ravindo Jaya holds 1%.
Among other PSU bank stocks, Bank of Baroda, Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank rose by 0.42% to 2.46%.
IndusInd Bank jumped 5.43% after the bank announced during market hours today, 4 September 2013, that IBM will provide innovative technology to enable IndusInd Bank to deepen customer relationships by delivering personalized, location-based recommendations and offers in real-time.
Ipca Laboratories jumped 3.84% to Rs 671.40 after the company said that the United States Food and Drug Administration (USFDA) has found acceptable the company's oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh. This will enable the company to commercialize oral solid dosage formulations in the US market from this formulations manufacturing facility, Ipca Laboratories said.
The Reserve Bank of India (RBI) today, 4 September 2013, issued certain clarifications with respect to the applicability of the revised guidelines in respect of overseas direct investment notified on 14 August 2013 to facilitate genuine outward investment requirements of the Indian companies. Among others, it has been clarified that in respect of funding of overseas direct investments by way of External Commercial Borrowings, instead of limit of 100% of the net worth, the earlier limit of 400% of the net worth will continue to apply, RBI said in a press release.
It is not the intention of the Reserve Bank of India to restrict bona-fide and genuine overseas direct investment transactions by Indian companies, the RBI said.
In the foreign exchange market, the rupee strengthened after earlier falling below 68 level as equities rose. The partially convertible rupee was hovering at 67.05, stronger than its close of 67.63/64 on Tuesday, 3 September 2013. The rupee had tumbled earlier in the day on renewed concerns of US military intervention in Syria.
Indian services activity shrank in August at its quickest pace since the depths of the global financial crisis as new business dried up, a survey showed, the latest evidence that Asia's third-largest economy is rapidly losing steam even as policymakers battle a full-blown currency crisis. The HSBC Services Purchasing Managers' Index (PMI) compiled by Markit, slipped to 47.6 in August, the weakest since April 2009, from 47.9 in July. A number below 50 denotes contraction.
Asian stocks edged lower in choppy trade on Wednesday, 4 September 2013. Key benchmark indices in Indonesia, Hong Kong, South Korea, Singapore and Taiwan shed by 0.04% to 1.98%. Key benchmark indices in China and Japan rose by 0.02% to 0.54%.
Growth in China's services sector hit a five-month high in August underpinned by new orders and business optimism, a private survey showed on Wednesday, adding to views that the world's second-largest economy had avoided a sharp slowdown. The Markit/HSBC Services Purchasing Managers' Index (PMI) climbed to 52.8 in August after seasonal adjustments, up from July's 51.3 and the highest since March. The reading was well above the 50 level that demarcates an acceleration in activity from a slowdown, although a sub-index for employment shrank.
Australia's economy expanded more than economists forecast last quarter as non-dwelling construction surged, providing a stronger growth momentum for the winner of this week's election. Second-quarter gross domestic product advanced 0.6% from the previous three months, when it rose a revised 0.5%, a Bureau of Statistics report released in Sydney today showed.
Trading in US index futures indicated that the Dow could gain 14 points at the opening bell on Wednesday, 4 September 2013. US stocks rose on Tuesday as better-than-forecast economic data overshadowed concern over possible military action against Syria. The Institute for Supply Management's manufacturing index increased to 55.7 in August, the strongest since June 2011, from 55.4 a month earlier. Readings above 50 indicate growth. Another report showed construction spending in the US increased in July to the highest level in four years, propelled by gains in residential real estate.
US House of Representatives Speaker John Boehner backed President Barack Obama's call for action against Syria, while Republican and Democratic leaders of the Senate's foreign relations panel agreed on a proposal backing a military strike. Obama urged Congress to take a prompt vote authorizing military action against Syria. He announced on August 31 that he'd seek support from Congress, after previously saying he had authority to order a military mission.
In addition, the Senate reached an agreement on a resolution authorizing military strikes against Syria. The resolution gives Obama 60 days to strike Syria, and is expected to be put to a vote on Wednesday, 4 September 2013.
The influential US nonfarm payroll report for August 2013 is due for release on Friday, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Meanwhile, a summit of leaders from the Group of 20 major economies begins in St. Petersburg on Thursday, 5 September 2013.
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