A bout of volatility was witnessed as key benchmark indices pared gains after hitting a fresh intraday high in afternoon trade as European stocks dropped in early trade there after US President Barack Obama secured more support in Congress for a military strike in Syria. The barometer index, the S&P BSE Sensex, was up 162.41 points or 0.89%, off about 216 points from the day's high and up close to 209 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Auto stocks were in demand.
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. A bout of volatility was witnessed as key benchmark indices pared gains after hitting a fresh intraday high in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was up 162.41 points or 0.89% to 18,397.07. The index jumped 377.94 points at the day's high of 18,612.60 in afternoon trade. The index fell 46.23 points at the day's low of 18,188.43 in early trade.
The CNX Nifty was up 46.55 points or 0.87% to 5,388. The index hit a high of 5,460.25 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 positive. On BSE, 1,177 shares rose and 850 shares fell. A total of 157 shares were unchanged.
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Among the 30-share Sensex pack, 21 stocks rose and only two of them fell. Bhel (up 4.23%), Bharti Airtel (up 3.30%), Hindalco Industries (up 2.54%), Reliance Industries (up 2.34%), TCS (up 2.19%) and Dr Reddy's Laboratories (up 1.81%), edged higher from the Sensex pack.
ITC (down 1.37%), Sun Pharmaceutical Industries (down 0.74%), Hindustan Unilever (down 0.40%), Sesa Goa (down 0.33%) and HDFC Bank (down 0.04%), edged lower from the Sensex pack.
Tata Motors jumped 4.52%. The company's total sales (including exports) of Tata commercial and passenger vehicles fell 30.93% to 49,611 units in August 2013 over August 2012. Total domestic sales fell 33.71% to 44,717 units in August 2013 over in August 2012. The company's sales from exports jumped 11.91% to 4,894 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) rose 2.33%. The company's total auto sales declined 17% to 37,897 units in August 2013 over August 2012. M&M's sales of Passenger Vehicles segment (which includes the UVs and Verito) declined 28% to 15,821 units in August 2013 over August 2012. The company's domestic sales declined 18% to 35,159 units in August 2013 over August 2012. The sale of four-wheeler commercial segment which includes passenger and load vehicles fell 4% to 13,718 units while that of three-wheelers declined 14% to 5,149 units in August 2013 over August 2012. Exports declined 9% to 2,738 units in August 2013 over August 2012.
M&M's domestic tractor sales rose 9% to 12,394 units in August 2013 over August 2012. Export sales dropped 27% to 840 units in August 2013 over August 2012. Total tractor sales rose 7% to 13,234 units in August 2013 over August 2012.
Ashok Leyland rose 3.72%. The company's total sales declined 24% to 7,139 units in August 2013 over August 2012. Ashok Leyland's sales of commercial vehicles excluding small commercial vehicle (SCV) Dost fell 25% to 4,939 units in August 2013 over August 2012. Sales of SCV Dost declined 22% to 2,200 units in August 2013 over August 2012.
Maruti Suzuki India fell 0.65%. The company's total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Two-wheeler major Hero MotoCorp rose 2.35%.
Bajaj Auto rose 1.01%. The company's total sales fell 9% to 3.12 lakh units in August 2013 over August 2012. Motorcycle sales declined 8% to 2.78 lakh units in August 2013 over August 2012. Commercial vehicles sales declined 17% to 33,605 units in August 2013 over August 2012. Exports rose 10% to 1.44 lakh units in August 2013 over August 2012.
The Reserve Bank of India (RBI) today, 4 September 2013, partially relaxed some of the restrictions imposed last month on capital outflows from residents, including allowing Indian companies more leeway if they are raising funds via external commercial borrowings. 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 67.10, 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.
US President Barack Obama secured more support in Congress on Tuesday, 3 September 2013, for a military strike in Syria. There are allegations that the Syrian government used chemical weapons against civilians last month. Obama had said over the weekend that a strike against Syria is necessary, but that he would seek approval from Congress before authorizing any use of force.
US crude oil futures for October delivery were off 57 cents or 53% at $107.97 a barrel.
European shares edged lower in early trade on Wednesday, 4 September 2013, after US President Barack Obama secured more support in Congress on Tuesday, 3 September 2013, for a military strike in Syria. Key benchmark indices in UK, France and Germany were down by 0.12% to 0.43%.
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 2.06%. Key benchmark indices in China and Japan rose by 0.21% 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 decline 11 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.
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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