Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade as gains in European and Asian stocks boosted sentiment. The barometer index, the BSE Sensex, was up 139.37 points or 0.72%, off about 0 points from the day's high and up close to 255 points from the day's low. The market breadth, indicating the overall health of the market, was positive. 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.
Realty stocks edged higher on renewed buying. Most IT stocks declined as the rupee edged higher against the dollar.
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. The barometer index, the BSE Sensex, and the 50-unit CNX Nifty, both, reversed direction after hitting 3-1/2-week low. Intraday volatility continued as key benchmark indices recovered after trimming almost entire intraday gains in mid-morning trade. The Sensex extended intraday gains and hit fresh intraday high in early afternoon trade. Key benchmark indices traded off the day's high in afternoon trade. The Sensex extended gains and hit fresh intraday high in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was up 139.37 points or 0.72% to 19,519.14. The index jumped 150.22 points at the day's high of 19,529.99 in mid-afternoon 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 34.15 points or 0.6% to 5,769.45. The index hit a high of 5,777.60 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, 1,234 shares rose and 944 shares fell. A total of 151 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and rest of them fell. Bhel (up 3.39%), ICICI Bank (up 2.8%), and HDFC Bank (up 2.57%), edged higher from the Sensex pack.
Most IT stocks declined as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. HCL Technologies (down 1.27%), Infosys (down 0.08%) and Wipro (down 0.43%), declined. But, TCS rose 0.88%.
Mahindra & Mahindra (M&M) rose 0.51% after the company announced during trading hours today that its total auto sales rose 14% to 43,289 units in September 2013 over August 2013. M&M's total sales declined 10% to 43,289 units in September 2013 over September 2012. The sales of passenger vehicle segment (which includes utility vehicles and Verito) declined 21% to 18,916 units in September 2013 over September 2012. The company's domestic sales fell 10% to 40,574 units in September 2013 over September 2012. Exports declined 12% to 2,715 units in September 2013 over September 2012.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra said: "While there has been a growth over August 2013, it is not to the extent that makes us comfortable especially as we approach the festive season. Factors such as increase in input and raw material costs and the depreciating rupee have not helped. To compensate to some extent we have taken a price increase effective today. The auto industry is definitely in need of a trigger in terms of a stimulus to boost consumer sentiments leading to a turnaround in the sector as well as a revival of the economy in general".
Mahindra & Mahindra (M&M) today, 1 October 2013, also announced its tractor sales data for the month just gone by. The company's total tractor sales jumped 33% to 26,637 units in September 2013 over September 2012. The company's domestic tractor sales jumped 37% to 25,922 units in September 2013 over September 2012.
Speaking on the monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, M&M said: "On the back of a good monsoon, we are delighted with a 37% growth in tractor sales despite traditionally low buying period in September. We see a healthy growth continuing over the next few months".
Realty stocks edged higher on renewed buying. DLF (up 5.57%), Sobha Developers (up 1.69%), HDIL (up 1.94%), D B Realty (up 0.09%) and Unitech (up 0.64%), gained.
The stock market remains closed tomorrow, 2 October 2013, on account of Mahatma Gandhi Jayanti.
India received 6% higher rainfall than normal in the 2013 monsoon season ended on September 30, the Indian Meteorological Department (IMD) said on Tuesday, strengthening prospects of a bumper farm output that could boost farmers' earnings. Monsoon rains are vital for 55% of the country's farmlands that lack irrigation facilities, and can make the difference between India being an exporter or importer of staples such as rice and sugar.
Factory activity in India shrank for a second month in September, albeit not as sharply as in August, on a dearth of new orders which pushed firms to cut staff, a survey showed on Tuesday. The HSBC Manufacturing PMI, compiled by Markit, rose to 49.6 in September from 48.5 in August, but remaining below the watershed 50 mark that separates growth from contraction. The new orders sub-index rose to 49.6 last month from 47.5 in August.
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 62.30, 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 8.7331%, 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.
European stocks were mostly higher on Tuesday, 1 October 2013, as investors assessed the impact of a partial shutdown of the US government. Key benchmark indices in France and Germany were up 0.61% to 0.75%. However, UK's FTSE 100 was down 0.14%.
Asian stocks rose on Tuesday, 1 October 2013, as a report showed confidence among large Japanese manufacturers increased. Key benchmark indices in Japan, South Korea, Taiwan, Indonesia, and Singapore rose 0.10% to 1.14%. 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.
The Reserve Bank of Australia kept official interest rates at a record low 2.5% for the second month in a row on Tuesday, saying that the impact of its earlier cuts were still filtering through the economy.
Trading in US index futures indicated that the Dow could gain 58 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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