After trimming intraday gains, key benchmark indices retained strength in afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 195.94 points or 0.74% at 26,834.05. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.1%. The BSE Small-Cap index was 1.02%. Both these indices outperformed the Sensex. Data showing recovery in India's economy, with a 5.7% growth in gross domestic product in Q1 June 2014 underpinned sentiment.
PSU OMCs gained after the under-recovery on High Speed Diesel declined to Rs 0.08 per litre in the first fortnight of September 2014, effective 1 September 2014. But, BPCL reversed direction after scaling a record high. Among side counters, Asahi India Glass and Lakshmi Machine Works hit 52-week high.
Data showing improvement in economic growth in Q1 June 2014 triggered a firm opening on the domestic bourses and took indices to record high. The 50-unit CNX Nifty hit record high above the psychological 8,000 level.
A Supreme Court hearing on coal blocks case is scheduled today, 1 September 2014. The apex court on 25 August 2014 deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
European stocks edged lower amid initial volatility after German trade data. Asian stocks rose as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in August 2014. Brent crude prices dropped after registering gains during the previous trading session.
At 13:15 IST, the S&P BSE Sensex was up 195.94 points or 0.74% at 26,834.05. The index jumped 216.44 points at the day's high of 26,854.55 in afternoon trade, a lifetime high for the index. The index rose 94.28 points at the day's low of 26,732.39 in early trade.
The CNX Nifty was up 58.10 points or 0.73% to 8,012.45. The index hit a high of 8,023.30 in intraday trade, a lifetime high for the index. The index hit a low of 7,984 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,755 shares gained and 970 shares fell. A total of 124 shares were unchanged.
The BSE Mid-Cap index was up 102.64 points or 1.1% at 9,401.54. The BSE Small-Cap index was up 104.97 points or 1.02% at 10,369.42. Both these indices outperformed the Sensex.
Among the 30-share Sensex pack, 22 stocks gained and rest of them declined.
Hero MotoCorp (up 3.91%), Maruti Suzuki India (up 3.76%) and L&T (up 2.69%) edged higher from the Sensex pack.
PSU OMCs gained after the under-recovery on High Speed Diesel declined to Rs 0.08 per litre in the first fortnight of September 2014, effective 1 September 2014. HPCL (up 0.47%) and Indian Oil Corporation (up 2.97%) gained.
BPCL fell 0.29% to Rs 692.35, with the stock reversing direction after scaling a record high of Rs 705 in intraday trade.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the second fortnight of August 2014. The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of September 2014, effective from 1 September 2014, will go down to Rs 0.08 per litre, from Rs 1.78 per litre during second fortnight of August 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the first fortnight of September 2014 was Rs 32.67 per litre (Rs 32.98 per litre in second fortnight of August 2014) and Rs 427.82 per cylinder (Rs 447.87 per cylinder in second fortnight of August 2014) respectively. Effective from 1 September 2014, PSU OMCs are incurring combined daily under-recovery of about Rs 195 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 230 crore daily under-recoveries during second fortnight of August 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14.
Meanwhile, petrol prices were reduced by Rs 1.82 per litre (including state levies) at Delhi, with corresponding decrease in other states from 31 August 2014. The price of domestic non-subsidised LPG cylinder was reduced by Rs 19 for a 14.2 kg cylinder and that of LPG commercial cylinder was redduced by Rs 32.50 for a 19 kg cylinder (including VAT) at Delhi with corresponding decrease in other states from 1 September 2014, as international prices declined in August.
Price of diesel sold to bulk consumers (Bulk HSD) was reduced by Rs 1.32 per litre at Delhi (including VAT) with corresponding decrease in other states from 1 September 2014 as prices in international market showed downtrend, IOC said. For retail diesel, an increase of Rs. 0.50 per litre (excluding VAT) is being effected in retail diesel prices, with effect from 31 August 2014, resulting in increase of Rs. 0.57/litre in retail selling price at Delhi (including VAT) with corresponding increase in other states, IOC said.
Asahi India Glass surged 6.17% to Rs 98.15 after hitting a 52-week high of Rs 101 in intraday trade.
Lakshmi Machine Works gained 4.63% to Rs 4,110 after hitting a 52-week high of Rs 4,174 in intraday trade.
Brent crude prices dropped after registering gains during the previous trading session. Brent for October settlement was off 24 cents at $102.95 a barrel. The contract rose 73 cents to settle at $103.19 a barrel on Friday, 29 August 2014.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.42, compared with its close of 60.52 on Thursday, 28 August 2014. Indian financial markets were closed on Friday, 29 August 2014, for a holiday.
Markit Economics said today, 1 September 2014, that the seasonally adjusted HSBC India Purchasing Managers' Index (PMI)-a figure designed to give an accurate overview of business conditions in the manufacturing sector -dipped slightly from July's 17-month high of 53 to 52.4 in August. Nonetheless, the reading was consistent with a solid improvement in operating conditions. The latest PMI data highlighted a tenth consecutive monthly improvement in operating conditions in August, as solid output growth was supported by strong expansions in total new orders and business from abroad. Purchasing activity continued to rise, although a second consecutive decline in employment was recorded. Meanwhile, input cost pressures eased slightly following the acceleration seen in July.
India's gross domestic product (GDP) grew 5.7% in Q1 June 2014, its fastest pace of growth in two-and-half years. The GDP growth has shown sharp improvement from 4.6% in Q4 March 2014 and 4.7% in Q1 June 2013. The Central Statistical Office (CSO) released quarterly estimates of India's GDP on Friday, 29 August 2014, when Indian financial markets were closed for a holiday. The improvement in the GDP growth was facilitated by rebound in industrial sector growth after two sequential quarters of decline. More importantly, the GDP data showed that domestic investment demand has exhibited strong growth of 7% in Q1 June 2014.
Finance Minister Arun Jaitley said at a press briefing on Saturday, 30 August 2014, that he expects the country's economic growth to accelerate as inflation moderates and government measures aimed at making it easier for companies to do business take effect. Mr. Jaitley also expressed confidence that the government would be able to achieve the 4.1% of GDP fiscal deficit target that the government set in the annual budget presented in July.
The Finance Ministry expects India's economy to grow at 5.7% to 5.9% during the current fiscal year. In a statement issued on 30 August 2014, the Finance Ministry said it expects India to reclaim the high growth rate of 7% within 2-3 years. The Finance Ministry further said that with a view to ensure macroeconomic stability, the current account deficit will be contained within 2% of GDP and fiscal deficit will be contained within 4.1% of GDP during the current fiscal year.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in a newspaper interview published on Sunday, 31 August 2014, that India is better prepared to handle the impact of interest rate increases in the United States as foreign funds are less likely to desert the country due to signs of an upturn in economic growth. Rajan said that his commitment to cool surging prices will also support the rupee when US rates finally do rise.
Prime Minister Narendra Modi is in the midst of his five-day trip to Japan to bolster security and business ties with Japan in the face of an assertive China.
European stocks edged lower amid initial volatility today, 1 September 2014, after German trade data. Key benchmark indices in UK, France and Germany were down by 0.08% to 0.13%.
Data released today, 1 September 2014, showed that Germany's exports 0.9% in the second quarter from the first three months of the year. Imports jumped 1.6%.
Germany's economy contracted in the second quarter after a robust start to the year, the Federal Statistics Office, or Destatis, confirmed today, 1 September 2014. In adjusted terms, Germany's gross domestic product shrank 0.2% in the second quarter after growing 0.7% in the first quarter, Destatis said, confirming its preliminary estimates. The statistics office said that GDP grew 1.2% in the second quarter compared with the same period of last year, also unchanged from the first estimate.
Asian stocks rose today, 1 September 2014, as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in August 2014. Key benchmark indices in Indonesia, China, Japan and Taiwan were up 0.34% to 0.83%. Key benchmark indices in Singapore and South Korea were off 0.03% to 0.49%. Hong Kong's Hang Seng index was almost unchanged for the day.
Growth in China's large factory sector slipped to a three-month low in August as foreign and domestic demand cooled, a private survey showed on Monday, raising concerns that the economy is faltering after a bounce. The final HSBC/Markit Purchasing Managers' Index (PMI) retreated to 50.2 in August, roughly in line with a preliminary reading of 50.3 and only a shade above the 50-point mark that demarcates an expansion in activity from a contraction.
China's official manufacturing PMI for August, reported today, 1 September 2014, was 51.1, compared with July's 51.7.
US stocks climbed on Friday, 29 August 2014, ahead of a three-day weekend. US markets remain closed today, 1 September 2014, for Labor Day holiday.
On the economic front Friday, the Commerce Department reported American household spending fell 0.1% in July, bucking forecast for a 0.1% increase. Personal income rose a less-than-expected 0.2%.
On Saturday, 30 August 2014, Ukrainian President Petro Poroshenko warned a "full-scale war" was imminent if Russian troops continued to advance in support of pro-Moscow rebels, while US and European leaders threatened Moscow with further sanctions.
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