A bout of volatility was witnessed as key benchmark indices recovered after paring intraday gains in morning trade. The S&P BSE Sensex was up 72.20 points or 0.37%, up 120.44 points from the day's low and off 28.08 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Shares of Maruti Suzuki India fell after the company reported fall in total sales in June 2013 over June 2012. Cement stocks gained ahead of the release of monthly dispatches data for June starting today, 1 July 2013.
Key benchmark indices moved into positive after a lower start triggered by weak Asian stocks. Key benchmark indices pared gains after hitting three-week high in morning trade. A bout of volatility was witnessed as key benchmark indices recovered after paring intraday gains in morning trade.
The market sentiment was boosted by provisional data showing that foreign fund turned net buyers of Indian stocks on Friday, 28 June 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1124.31 crore on Friday, 28 June 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was up 72.20 points or 0.37% to 19,468.01. The index gained 100.28 points at the day's high of 19,496.09 in morning trade, its highest level since 10 June 2013. The index fell 48.24 points at the day's low of 19,347.57 in early trade.
The CNX Nifty was up 21.20 points or 0.36% to 5,863.40. The index hit a high of 5,870.35 in intraday trade, its highest level since 10 June 2013. The index hit a low of 5,822.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,142 shares gained and 567 shares fell. A total of 96 shares were unchanged.
The total turnover on BSE amounted to Rs 511 crore by 11:20 IST compared to Rs 331 crore by 10:20 IST.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined.
Auto stocks were mixed ahead of release of monthly sales figures for June from today, 1 July 2013.
Maruti Suzuki India fell 0.56%. The company reported 12.6% fall in total sales to 84,455 units in June 2013 over June 2012. The announcement was made during market hours today, 1 July 2013. The company's domestic sales fell 7.8% to 77,002 units in June 2013 over June 2012. Exports declined 43% to 7,453 units in June 2013 over June 2012.
Tata Motors rose 0.83%. M&M was unchanged at Rs 967.
Hero MotoCorp (HMC) rose 1.02%. The company before market hours today, 1 July 2013, said it has incorporated a wholly owned subsidiary in USA by the name of HMCL (NA), Inc. (HMCL (NA)) inter alia for the purpose of investing in Erik Buell Racing, inc. (EBR). HMCL (NA) has agreed to invest $25 million in EBR for a total stake of 49.2% in the share capital of EBR. The first tranche of $15 million has been invested by HMCL (NA) on 28 June 2013. The second tranche of $10 million is proposed to be invested within the next 9 months.
Bajaj Auto slipped 0.5%. The company on 25 June 2013 said workmen at its Chakan plant in Pune have stopped coming to work. Bajaj Auto said the workers had earlier given a notice for a stoppage of work at the plant from the morning shift of 28 June 2013. The reason for the strike was that management had refused to concede their demand that all the workmen working in Bajaj Auto should each be given an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 per share, Bajaj Auto added. The workmen have, however, stopped coming to the Chakan plant from 25 June 2013, itself, without assigning any reason for this stoppage, the company said in a filing.
Cement stocks gained ahead of release of monthly sales figures for June from today, 1 July 2013. JK Lakshmi Cement (up 2.63%), India Cement (up 2.11%), Shree Cement (up 1.63%), Ambuja Cement (up 1.23%), ACC (up 0.54%) and UltraTech Cement (up 1.39%) edged higher.
Shares of diamond jewellery maker Gitanjali Gems was locked at 5% lower circuit at Rs 224.70, also its 52-week low. The stock has witnessed a steep slide recently.
Indian factory activity remained weak in June as output contracted for the second month running and order books shrank for the first time in over four years, a survey showed on Monday. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged up to 50.3 in June from 50.1 in May. While export orders came in at a faster pace last month, domestic demand took a hit from the faltering economy. The latest PMI showed inflationary pressures, which eased in the previous few months, have started to pick up again with input and output costs both rising in June.
Asian stocks dropped on Monday, 1 July 2013, as a further slowdown in manufacturing activity in China, South Korea and Taiwan raised concerns about the health of those economies. Key benchmark indices in China, Indonesia, Taiwan, Singapore and South Korea were down 0.05% to 0.7%. The Hong Kong markets were closed to mark the anniversary of the territory's handover from the UK to China.
Two separate surveys in China showed a further loss of momentum in factory activity. An officially sponsored reading of the manufacturing Purchasing Managers' Index for June dropped to 50.1 from 50.8 in May. Another survey by HSBC showed the monthly PMI falling to 48.2 in June from 49.2 in May. A reading below 50 shows a deterioration in activity, while one above signals an improvement.
Meanwhile, separate HSBC surveys in South Korea and Taiwan also indicated weakened conditions for local manufacturers, with both affected by the slowdown in China. In South Korea, the June PMI dropped to 49.4, down from 51.1 in May, while in Taiwan, the June PMI came in at 49.5, up sharply from 47.1 in May but still below the 50-point threshold.
In Japan, the Nikkei 225 index rose 0.52%. The Bank of Japan's quarterly tankan survey showed an improvement in sentiment at both large manufacturers and non-manufacturers, with the former showing positive sentiment for the first time since mid 2011.
Trading in US index futures indicated a flat opening of US stocks on Monday, 1 July 2013. US stocks ended mostly weaker on Friday, 28 June 2013, but posted their strongest first half of any year since 1998 after reaching record highs in May supported by the Federal Reserve's massive monetary stimulus.
In recent weeks, investors have been preoccupied with when the Federal Reserve may start pulling back monetary stimulus as the economy improves further. Federal Reserve Gov. Jeremy Stein on Friday suggested that the central bank's first tapering move could come in September, although he only used the month as a hypothetical start date in a speech to the Council on Foreign Relations. Jeffrey Lacker, president of the Richmond Fed, said there's likely to be more market volatility over the outlook for monetary policy in coming months, but these moves shouldn't interfere with a modest economic recovery. John Williams, president of the San Francisco Fed Bank, said it's better to "wait a bit" before tapering asset purchases. Their comments follow relatively soothing Fed speeches on Thursday, 27 June 2013, in which three officials chastised markets for overreacting to the central bank's statement. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
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