With European stocks surging on reports of Ukraine and Russia agreeing on a cease-fire in eastern Ukraine, key benchmark indices in India extended their gains and struck fresh record high in mid-afternoon trade. The barometer index, the S&P BSE Sensex was up currently up 181.15 points or 0.67% at 27,200. The market breadth indicating the overall health of the market was positive. The market sentiment was boosted by provisional data showing that foreign funds remained net buyers of Indian stocks during the previous trading session. Meanwhile, a survey showed that growth in India's service sector activity slowed last month. Global credit rating agency Moody's Investors Service reportedly said today, 3 September 2014, that India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating. Bank stocks were mixed. Aviation stocks gained on decline in crude oil prices.
Key indices had witnessed intraday volatility earlier during the day after a firm opening. An overnight sharp slide in crude oil prices and positive cues from Asian markets had triggered a firm opening on the domestic bourses.
In overseas markets, European stocks rose as Ukraine and Russia agreed on a ceasefire in eastern Ukraine. Asian stocks rose after reports showed faster expansion in China's service industries last month and as US manufacturing expanded at the fastest pace in three years last month. Brent crude oil futures moved higher from a 16-month low hit yesterday, 2 September 2014.
At 14:13 IST, the S&P BSE Sensex was up 181.15 points or 0.67% at 27,200. The index jumped 197.61 points at the day's high of 27,217 in mid-afternoon trade, a record high for the index. The index rose 47.63 points at the day's low of 27,067.02 in intraday trade.
The CNX Nifty was up 51.35 points or 0.64% at 8,134.40. The index hit a high of 8,139.30 in intraday trade, a record high for the index. The index hit a low of 8,092.25 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,496 shares gained and 1,403 shares fell. A total of 110 shares were unchanged.
The BSE Mid-Cap index was up 86.12 points or 0.9% at 9,609.89, outperforming the Sensex. The BSE Small-Cap index was up 67.40 points or 0.64% at 10,559.82, underperforming the Sensex.
Among the 30 Sensex shares, 18 rose and the remaining shares fell.
Bank stocks were mixed. Federal Bank (up 2.83%), Yes Bank (up 2.13%), Bank of India (up 1.49%), Canara Bank (up 0.67%), IndusInd Bank (up 0.51%), and Bank of Baroda (up 0.25%) gained. Kotak Mahindra Bank (down 0.27%), Punjab National Bank (down 0.28%), State Bank of India (down 0.44%), ICICI Bank (down 0.37%) declined.
Axis Bank rose 1.38% at Rs 414.45. The stock hit a record high of Rs 414.80 in the intraday trade.
HDFC Bank rose 0.4% at Rs 861.95. The stock hit a record high of Rs 863.80 in the intraday trade.
Bharti Airtel rose 3.7% at Rs 406.40. The stock hit a 52-week high of Rs 408.25 in the intraday trade.
Sun Pharmaceutical Industries rose 0.58% at Rs 868. The stock hit a record high of Rs 877.40 in the intraday trade.
Aviation stocks advanced on decline in crude oil price. SpiceJet (up 4.66%) and Jet Airways (India) (up 0.91%) gained. The aviation turbine fuel (ATF) or jet fuel constitutes about 40% of the airlines' operating cost. Jet fuel prices are linked to international crude oil prices.
Punj Lloyd was locked at 5% upper circuit at Rs 41.65 after the company during market hours said that its board of directors at a meeting held today, 3 September 2014, approved issue of non convertible debentures including bonds within the overall borrowing limits of the company.
Carborundum Universal jumped 7.36% after HDFC Mutual Fund bought 0.53% stake in the company on Tuesday, 2 September 2014. HDFC Mutual Fund under its HDFC Midcap Opportunities Fund bought 10 lakh shares or 0.53% stake in Carborundum Universal at Rs 188 per share in a bulk deal on NSE on Tuesday, 2 September 2014, from Amansa Holdings.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on Tuesday, 2 September 2014, as per provisional data from the stock exchanges.
A decline in crude oil prices is good news for India as the country imports 80% of its crude oil requirement. Brent crude futures slumped to a 16-month low yesterday, 2 September 2014, on concern slower manufacturing from Europe to China will curb global oil demand. The contract slipped $2.45 a barrel to settle at $100.34 a barrel yesterday, 2 September 2014, the lowest close since 1 May 2013. In today's trading, Brent for October settlement was up 43 cents at $100.77 a barrel. Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation.
In the foreign exchange market, the rupee edged higher against the dollar as equity benchmark indices hit yet another record high and as Brent crude oil prices hit 16-month low yesterday, 2 September 2014. The partially convertible rupee was hovering at 60.46, compared with its close of 60.68/69 during the previous trading session.
A survey released by Markit Economics today, 3 September 2014, showed that growth in India's service sector activity slowed in August 2014. Adjusted for seasonal influences, the headline HSBC India Services Business Activity Index posted 50.6 in August, down from 52.2 in July. On the positive side, weaker activity has softened inflation indicators within the survey.
Global credit rating agency Moody's Investors Service reportedly said today, 3 September 2014, that India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating. Moody's said that India's finances would remain vulnerable to future cyclical downturns and external shocks. While stronger growth in this large and diverse economy will help to counterbalance these credit challenges, they limit further upward momentum in the sovereign rating, Moody's said. The credit agency rates India at "Baa3", the lowest investment-grade rating, with a "stable" outlook.
European stocks surged today, 3 September 2014, as geopolitical worries receded after Ukraine and Russia agreed on a ceasefire in eastern Ukraine. Key benchmark indices in UK, France and Germany were up by 0.85% to 1.74%.
As per reports, Russia and Ukraine have agreed on a permanent cease-fire in eastern Ukraine. The truce came after telephone talks between Ukraine's President Petro Poroshenko and Russia's President Vladimir Putin. In recent days, Kiev's forces have seen dramatic reversals in heavy fighting in the region, which involved an incursion of more than 1,000 Russian troops, according to NATO.
A monthly meeting of the European Central Bank (ECB) is scheduled tomorrow, 4 September 2014. There are expectations that the European Central Bank (ECB) will announce quantitative easing in the coming months to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.
Asian markets edged higher today, 3 September 2014 after data underscored that the US economy continues to gather gradual momentum. Key indices in Japan, China, Hong Kong, Taiwan, Singapore, and Indonesia were up 0.32% to 2.46%. In South Korea, the Seoul Composite index was off 0.02%.
The HSBC China services Purchasing Managers' Index rose to a 17-month high of 54.1 in August from 50 in July, HSBC Holdings PLC said today, 3 September 2014, while cautioning that sub-index readings pointed to a mixed picture of economic recovery. The HSBC Composite Output Index posted at 52.8, up from 51.6 in July, and signalled a robust rise in activity levels. Furthermore, it was the strongest expansion of business activity in 17 months.
China's official non-manufacturing activity slightly recovered in August, with the sector's purchasing managers' index (PMI) rebounding to 54.4 in August from 54.2 in July, official data showed today, 3 September 2014.
Trading in US index futures indicated that the Dow could gain 86 points at the opening bell on Wednesday, 3 September 2014. The Institute for Supply Management yesterday, 2 Setepmber 2014, said its US manufacturing activity index rose to 59 in August, the strongest since March 2011. Separately, US construction spending staged a strong rebound in July, rising by the largest amount in more than two years. Construction spending rose 1.8% in July, the biggest one-month gain since May 2012, the Commerce Department reported Tuesday, 2 September 2014. It followed a 0.9% decline in June, the largest setback in a year.
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