Volatility ruled the roost as key benchmark indices regained positive terrain in morning trade as mostly higher Asian stocks supported domestic bourses. The barometer index, the BSE Sensex, and the 50-unit CNX Nifty, both, reversed direction after hitting their lowest level in more than three weeks. The Sensex was up 46.49 points or 0.24%, up close to 160 points from the day's low and off about 40 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Maruti Suzuki India rose after the car major reported higher sales for the month just gone by. The stock also got a boost from a reduction in petrol price announced by PSU OMCs on Monday. Bhel extended intraday gain. Metal stocks declined as official Chinese factory gauge rose less than economists forecast in September. Tata Communications surged after Vodacom and the shareholders of Neotel announced that they have entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA. Tata Communications has a strategic investment in Neotel. Shipping stocks fell after the Baltic Dry Index, which tracks rates to ship dry commodities, fell 2.1% in London on Monday, 30 September 2013.
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the red after a firm opening triggered by higher Asian stocks. Key benchmark indices regained positive terrain in morning trade.
At 10:20 IST, the S&P BSE Sensex was up 46.49 points or 0.24% to 19,426.26. The index rose 86.41 points at the day's high of 19,466.18 in early trade. The index declined 115.05 points at the day's low of 19,264.72 in morning trade, its lowest level since 6 September 2013.
The CNX Nifty was up 13.95 points or 0.24% to 5,749.25. The index hit a high of 5,762.40 in intraday trade. The index hit a low of 5,700.95 in intraday trade, its lowest level since 6 September 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 860 shares rose and 617 shares fell. A total of 98 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks rose and rest of them fell.
Maruti Suzuki India rose 3.1% after the company said its total sales rose 11.7% to 1.04 lakh units in September 2013 over September 2012. Maruti Suzuki India said its domestic sales rose 1.8% to 90,399 units in September 2013 over September 2012. Exports surged 180.8% to 14,565 units in September 2013 over September 2012.
Shares of the car major also got a boost from a reduction in petrol price announced by PSU OMCs on Monday.
Bhel surged 4.11%, with the stock extending intraday gains.
Metal stocks declined as official Chinese factory gauge rose less than economists forecast in September. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power (down 2.1%), Sesa Sterlite (down 2.21%), Bhushan Steel (down 0.01%), Tata Steel (down 0.09%), Sail (down 0.7%), Hindalco Industries (down 1.79%), and Hindustan Zinc (down 2.89%), declined.
Tata Communications surged 4.68% to Rs 196.90 after Vodacom and the shareholders of Neotel announced that they have entered into exclusive discussions regarding a potential acquisition of 100% of the shares of Neotel by Vodacom SA. Tata Communications which has a strategic investment in Neotel, made the announcement after market hours on Monday, 30 September 2013.
Vodacom and Neotel said that the finalisation of the transaction is subject to the successful conclusion of commercial negotiations and receiving the requisite regulatory and corporate approvals. This transaction, if concluded, would stimulate greater competition in the South African fixed telecommunications sector and will accelerate the provision of high speed data links. It would also result in the combined entity being able to offer an expanded product range and, as a consequence, enhanced customer choice, a joint statement from the two companies said.
Vodacom is an African mobile communications company providing voice, messaging, data and converged services to around 50 million active customers, Vodacom is majority owned by Vodafone, one of the world's largest mobile communications companies by revenue. Vodacom is listed on the JSE and its head office is in Johannesburg, South Africa.
Neotel is South Africa's first converged communications network operator. It provides a range of value-added voice, internet and data services for businesses, wholesale network operators and providers and retail customers using its IP Next Generation Network, powered by Neotel's high-performance fibre optic backbone. Neotel connects the major centres in South Africa to each other and to the world, directly linking its infrastructure into Tata Communications' global Tier 1 network.
Sunil Joshi, Neotel CEO, said, "We believe this presents an exciting and attractive opportunity for all parties, especially our customers to whom we will be able to offer more meaningful and innovative products and services. This transaction, if concluded, would further enable Neotel to extend its footprint in South Africa and add the mobile capability that our customers require for their business' growth in a new world of converged communications. If completed and approved, this transaction will support Government's ICT priorities to increase investment in the next generation of telecommunications services and facilitate growth in the broader economy."
Speaking about the transaction, Vodacom Group CEO Shameel Joosub said, "There are a number of important steps that we still need to complete in order to conclude the transaction. If the deal is implemented, Vodacom intends to put significant investment into the combined entity to provide high-speed fixed connectivity to many more businesses and consumers. By further building on the capabilities within Neotel, we would also aim to develop entirely new services such as fibre to the home and business. Neotel has access to over 15,000km of fibre-optic cable, including 8,000km of metro fibre in Johannesburg, Cape Town and Durban. Spectrum is also an important consideration as the combined entity could use this resource more efficiently, and in doing this we can keep pace with South Africa's rapidly growing demand for mobile data. This transaction is all about providing greater choice and better infrastructure for South Africa's businesses and consumers."
Separately, Tata Communications before market hours today, 1 October 2013, announced an agreement with Arkadin, one of the world's largest and fastest growing collaboration service providers. Arkadin has become an official APAC provider of Tata Communications' recently launched jamvee conferencing -0 an on-demand unified communication service which enables, for the first time, anyone, anywhere, to instantly access a business video meeting on any device. The partnership agreement with Arkadin will first roll-out in Australia and New Zealand followed by the rest of the Asia Pacific region, Tata Communications said in a statement.
Shipping stocks fell after the Baltic Dry Index, which tracks rates to ship dry commodities, fell 2.10% in London on Monday, 30 September 2013. Mercator (down 1.81%), Great Eastern Shipping Company (down 0.12%) and Shipping Corporation of India (down 0.4%), edged lower.
The stock market remains closed tomorrow, 2 October 2013, on account of Mahatma Gandhi Jayanti.
Markit Economics will unveil HSBC India Manufacturing Purchasing Managers' Index (PMI), which gauges the business activity of India's factories, for September 2013 today, 1 October 2013.
In the foreign exchange market, the rupee edged higher against the dollar, with the Indian currency finding support from data showing a lower-than-expected current account deficit in Q1 June 2013. The partially convertible rupee was hovering at 62.36, compared with its close of 62.60/61 on Monday, 30 September 2013.
India's current account deficit (CAD) widened to $21.8 billion or 4.9% of GDP in Q1 June 2013 from $16.9 billion or 4% of GDP in Q1 June 2012, data released by the Reserve Bank of India (RBI) after trading hours on Monday, 30 September 2013, showed. The CAD was $18.1 billion in Q4 March 2013. The RBI said that the year-on-year rise in CAD in Q1 June 2013 was due to a rise in imports and some decline in merchandise exports. Merchandise trade deficit (balance of payments basis) widened to $50.5 billion in Q1 June 2013 from $43.8 billion in Q1 June 2012. The trade deficit, coupled with a slow recovery in net invisibles (income and services), led to widening of CAD on year-on-year basis in Q1 June 2013, the RBI said. On balance of payments (BoP) basis, there was a slight drawdown in foreign exchange reserves of $0.3 billion in Q1 June 2013 as against an accretion of $0.5 billion in Q1 June 2012.
Bond prices rose after The Reserve Bank of India (RBI) on Monday, 30 September 2013, said will infuse Rs 10000 crore into the banking system through open-market operations next week to ease liquidity constraints. The yield on the federal benchmark paper 7.16% GS 2023 was hovering at 8.6978%, lower than its close of 8.7658% on Monday, 30 September 2013. Bond yield and bond prices are inversely related.
Based on the current assessment of prevailing and evolving market conditions, the RBI will purchase government securities for an aggregate amount of Rs 10000 crore on 7 October 2013, the RBI said in a press release on Monday, 30 September 2013.
The government's fiscal deficit for the April-August period has reached about three-fourths of its target for the year ending March, data released after trading hours on Monday, 30 September 2013, showed. By the end of August, the gap between the government's revenue and expenses has reached 74.6% of its target for the fiscal year, according to data released on Monday. Expenses during the first five months were about 40% of the aim for the year, while revenue was way short at 23% of the target. The government aims to limit the deficit within 4.8% of gross domestic product, compared with 4.9% last year.
The combined output of the eight core infrastructure sectors rose 3.7% in August 2013, supported by strong growth in coal and cement production and electricity generation, data released by the government after trading hours on Monday, 30 September 2013, showed. It was the highest growth in core sector output in seven months.
Most Asian stocks rose on Tuesday as a report showed confidence among large Japanese manufacturers increased before Prime Minister Shinzo Abe unveils plans for an economic-support package. Key benchmark indices in Japan, Taiwan, Indonesia, and Singapore rose 0.27% to 1.19%. South Korea's Kospi fell 0.22%. China's local markets are shut from today, 1 September 2013 till 7 October 2013 for National Day holidays.
A Chinese factory gauge rose less than economists forecast in September, signaling limits on the nation's rebound from a two-quarter economic slowdown. The Purchasing Managers' Index was at 51.1, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with 51 in August.
The Bank of Japan's quarterly Tankan index for big manufacturers rose to 12 in September, the highest since 2007, from 4 in June.
Trading in US index futures indicated that the Dow could gain 38 points at the opening bell on Tuesday, 1 October 2013. US stocks closed lower on Monday with just hours to go before a midnight deadline to avert a federal government shutdown.
The US government began a partial shutdown on Tuesday for the first time in 17 years after lawmakers could not break a political stalemate that sparked new questions about the ability of a deeply divided Congress to perform its most basic functions. Some US government offices and national parks will be shuttered, but spending for essential functions related to national security and public safety will continue, including pay for US military troops.
There are also fears that the conflict could spill over into the more crucial dispute over raising the federal government's borrowing authority. A failure to raise the $16.7 trillion debt ceiling would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets.
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.
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