Key benchmark indices hit fresh intraday high in early afternoon trade. The S&P BSE Sensex was up 154.09 points or 0.79%, up 202.33 points from the day's low and off 0.99 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
IT stocks declined as rupee firmed against dollar. Construction shares were in demand on renewed buying. Larsen and Toubro (L&T) gained after the company said it has won new orders worth of Rs 3057 crore across various business segments in June 2013.
Key benchmark indices moved into positive after a lower start triggered by weak Asian stocks. Key benchmark indices pared gains after hitting three-week high in morning trade. A bout of volatility was witnessed as key benchmark indices recovered after paring intraday gains in morning trade. Key benchmark indices hit fresh intraday high in early afternoon trade.
The market sentiment was boosted by provisional data showing that foreign fund turned net buyers of Indian stocks on Friday, 28 June 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1124.31 crore on Friday, 28 June 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 154.09 points or 0.79% to 19,549.90. The index gained 155.08 points at the day's high of 19,550.89 in early afternoon trade, its highest level since 10 June 2013. The index fell 48.24 points at the day's low of 19,347.57 in early trade.
The CNX Nifty was up 38.05 points or 0.65% to 5,880.25. The index hit a high of 5,882.20 in intraday trade, its highest level since 10 June 2013. The index hit a low of 5,822.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,346 shares gained and 704 shares fell. A total of 126 shares were unchanged.
The total turnover on BSE amounted to Rs 690 crore by 12:20 IST compared to Rs 511 crore by 11:20 IST.
Among the 30-share Sensex pack, 25 stocks gained and rest of them declined.
IT stocks declined as rupee firmed against dollar on some dollar buying by banks and exporters. The rupee strengthened to 59.07 against Friday's close of 59.38. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
Tata Consultancy Services (TCS) (down 1.41%), Infosys (down 1.29%), Tech Mahindra (down 1.05%), Mahindra Satyam (down 1.43%) and HCL Technologies (down 1.17%) declined. Wipro rose 0.34%
Construction shares were in demand on renewed buying. Patel Engineering (up 17.49%), Valecha Engineering (up 3.2%), IVRCL (up 12.96%), NCC (up 10.68%), Gammon India (up 5.42%), Hindustan Construction Company (up 3.41%), edged higher.
Larsen and Toubro (L&T) gained 2.79% after the company said it has won new orders worth of Rs 3057 crore across various business segments in June 2013. The announcement was made during trading hours today.
Tata Communications jumped 11.07%
Godrej Properties rose 1.46%. The company before market hours today, 1 July 2013 said that it has given exit to HDFC PMS by purchasing its 49% stake in the equity share capital of its subsidiary Godrej Estate Developers (GEDPL) by exercising the company's buy out option under the agreement. The exit was as per terms of the agreement with HDFC Asset Management Company (acting in its capacity as portfolio manager of its product called HDFC Asset Management Company Portfolio Management Services Real Estate Portfolio -1 (HDFC PMS) for the project Godrej Eternia at Chandigarh.
Godrej Properties also gave exit to HDFC PMS by purchasing its 49% stake in the equity share capital of its subsidiary Godrej Sea View Properties (GSVPPL) by exercising the company's buy out option under the agreement. The exit was as per terms of the agreement with HDFC Asset Management Company (acting in its capacity as portfolio manager of its product called HDFC Asset Management Company Portfolio Management Services real estate portfolio -1) for the project Godrej Palm Grove at Chennai.
Godrej Properties further infirmed that following the transactions, GEDPL and GSVPPL have become the wholly owned subsidiaries of the company with effect from 28 June 2013 and 1 July 2013, respectively.
Indian factory activity remained weak in June as output contracted for the second month running and order books shrank for the first time in over four years, a survey showed on Monday. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged up to 50.3 in June from 50.1 in May. While export orders came in at a faster pace last month, domestic demand took a hit from the faltering economy. The latest PMI showed inflationary pressures, which eased in the previous few months, have started to pick up again with input and output costs both rising in June.
Asian stocks dropped on Monday, 1 July 2013, as a further slowdown in manufacturing activity in China, South Korea and Taiwan raised concerns about the health of those economies. Key benchmark indices in China, Indonesia, Taiwan, Singapore and South Korea were down 0.08% to 0.5%. The Hong Kong markets were closed to mark the anniversary of the territory's handover from the UK to China.
Two separate surveys in China showed a further loss of momentum in factory activity. An officially sponsored reading of the manufacturing Purchasing Managers' Index for June dropped to 50.1 from 50.8 in May. Another survey by HSBC showed the monthly PMI falling to 48.2 in June from 49.2 in May. A reading below 50 shows a deterioration in activity, while one above signals an improvement.
Meanwhile, separate HSBC surveys in South Korea and Taiwan also indicated weakened conditions for local manufacturers, with both affected by the slowdown in China. In South Korea, the June PMI dropped to 49.4, down from 51.1 in May, while in Taiwan, the June PMI came in at 49.5, up sharply from 47.1 in May but still below the 50-point threshold.
In Japan, the Nikkei 225 index rose 1.28%. The Bank of Japan's quarterly tankan survey showed an improvement in sentiment at both large manufacturers and non-manufacturers, with the former showing positive sentiment for the first time since mid 2011.
Trading in US index futures indicated that the Dow could gain 23 points at the opening bell on Monday, 1 July 2013. US stocks ended mostly weaker on Friday, 28 June 2013, but posted their strongest first half of any year since 1998 after reaching record highs in May supported by the Federal Reserve's massive monetary stimulus.
In recent weeks, investors have been preoccupied with when the Federal Reserve may start pulling back monetary stimulus as the economy improves further. Federal Reserve Gov. Jeremy Stein on Friday suggested that the central bank's first tapering move could come in September, although he only used the month as a hypothetical start date in a speech to the Council on Foreign Relations. Jeffrey Lacker, president of the Richmond Fed, said there's likely to be more market volatility over the outlook for monetary policy in coming months, but these moves shouldn't interfere with a modest economic recovery. John Williams, president of the San Francisco Fed Bank, said it's better to "wait a bit" before tapering asset purchases. Their comments follow relatively soothing Fed speeches on Thursday, 27 June 2013, in which three officials chastised markets for overreacting to the central bank's statement. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
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