A bout of volatility was witnessed as key benchmark indices slipped into the red after opening higher triggered by firm Asian stocks. The barometer index, the S&P BSE Sensex fell below the psychological 19,000 mark after reclaiming that mark at the onset of the trading session. The Sensex was down 35.92 points or 0.19%, off about 155 points from the day's high and up close to 15 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Index heavyweights, ITC and Reliance Industries, both, declined. Mahindra & Mahindra (M&M) extended Monday's losses triggered by the company reporting weak sales in August.
At 9:30 IST, the S&P BSE Sensex was down 35.92 points or 0.19% to 18,850.21. The index rose 121.18 points at the day's high of 19,007.31 in opening trade. The index fell 48.19 points at the day's low of 18,837.94 in early trade.
The CNX Nifty was down 13 points or 0.23% to 5,537.75. The index hit a high of 5,580.95 in intraday trade. The index hit a low of 5,532.85 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 536 shares rose and 258 shares fell. A total of 33 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks rose and rest of them fell. Hero MotoCorp (down 2.41%), HDFC (down 1.82%) and GAIL (India) (down 0.99%), edged lower from the Sensex pack.
Index heavyweight and cigarette maker ITC fell 0.44%.
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Another index heavyweight, Reliance Industries also dropped 0.99%.
State Bank of India (SBI) rose 0.79%. The bank said after market hours on Monday, 2 September 2013 that it has acquired 23% shares of Bank State Bank of India, Indonesia (BSBII) in a recent deal with P. T. Ravindo Jaya. As per the present shareholding, State Bank of India holds 99% in BSBII and P. T. Ravindo Jaya holds 1%.
Mahindra & Mahindra (M&M) dropped 0.05%, with the stock extending Monday's losses triggered by the company reporting weak sales in August. The company's total auto sales declined 17% to 37,897 units in August 2013 over August 2012. The company announced the auto sales on Sunday, 1 September 2013. M&M's sales of Passenger Vehicles segment (which includes the UVs and Verito) declined 28% to 15,821 units in August 2013 over August 2012. The company's domestic sales declined 18% to 35,159 units in August 2013 over August 2012. The sale of four-wheeler commercial segment which includes passenger and load vehicles fell 4% to 13,718 units while that of three-wheelers declined 14% to 5,149 units in August 2013 over August 2012. Exports declined 9% to 2,738 units in August 2013 over August 2012.
Farm Equipment Sector (FES), a part of the Mahindra Group, announced its domestic tractor sales rose 9% to 13543 units in August 2013 over August 2012. The company's overall sales have also grown by 7% standing at 14158 units during August 2013 over August 2012. Exports for the month of August 2013 stood at 615 units.
Speaking on the monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, Mahindra & Mahindra said, "Our domestic growth of 9% in August 2013 and consistent performance over the last five months is heartening. We believe the Kharif sowing having crossed the 1000 lac hectare mark, normal monsoons and prospects of the approaching festive season are clear indicators of stronger growth for the overall agricultural sector in the coming months".
The combined index of eight core industries rose 3.1% in July 2013 over July 2012. The eight core industries have a combined weight of 37.90% in the Index of Industrial Production (IIP).
The Rajya Sabha on Monday approved a $20 billion scheme to distribute subsidised wheat and rice to 80 crore people, backing an anti-malnutrition drive that investors fear will mean missing the fiscal deficit target. The Food Security Bill is seen as a vote winner by the ruling Congress party as it prepares for elections due by May next year. But investors reacted negatively to the plan when the lower house approved it last weak, on worries the government will struggle to contain the cost of subsidies. The scheme has now been passed by both houses. Before becoming law it must be signed by the president, a formality.
Asian stocks climbed on Tuesday on evidence of a pickup in global manufacturing. Key benchmark indices in China, Hong Kong, South Korea, Singapore, Japan, Indonesia, and Taiwan rose by 0.05% to 2.71%.
China's official purchasing managers' index (PMI) for the non-manufacturing sector dipped slightly to 53.9 in August from July's 54.1, the National Bureau of Statistics (NBS) said on Tuesday. A reading above 50 indicates activity in the sector is accelerating, while one below 50 indicates it is slowing. The services sector index followed the bureau's manufacturing PMI on Sunday, which showed China's factory activity expanded at the fastest pace in more than a year in August with a jump in new orders.
US stock markets remained closed on Monday, 2 September 2013, for the Labor Day holiday.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
President Barack Obama on Saturday said he has decided military action is appropriate, but he would still seek congressional authorization on the use of US military force against Syria. Congressional leaders have agreed to debate and vote on the possible action when lawmakers return from recess on September 9. And, while lawmakers aren't due back in Washington until next week, the Senate Foreign Relations Committee said it would hold hearings on Syria today and tomorrow.
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