After remaining firm throughout the trading session, key benchmark indices extended gains and hit fresh record high in late trade after news reports filtered in that the Attorney General proposed to the Supreme Court that about 40 of the 218 coal mines it declared illegal should not be taken back from the companies that operate them as they were either producing or were close to producing. The barometer index, the S&P BSE Sensex, was provisionally up 253.76 points or 0.95% at 26,891.87. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.57%. The BSE Small-Cap index was 1.3%. Both these indices outperformed the Sensex. Realty stocks edged higher. Tyre stocks gained on lower rubber prices.
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.
The latest rally on the bourses materialized as hearing began in the Supreme Court on the coal blocks case after the apex court last week termed allocation of all coal blocks made since 1993 illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
European stocks edged lower after the latest data showed euro zone's manufacturing sector slowed more sharply than first estimated in August. Asian stocks rose as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in China in August 2014. Brent crude prices dropped after reports showing slower manufacturing growth in China in August 2014.
As per provisional figures, the S&P BSE Sensex was up 253.76 points or 0.95% at 26,891.87. The index jumped 262.19 points at the day's high of 26,900.30 in late 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 80.65 points or 1.01% to 8,035, as per provisional figure, also a lifetime high for the index. The index hit a low of 7,984 in intraday trade.
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The total turnover on BSE amounted to Rs 2906 crore, lower than Rs 3010.11 crore on Thursday, 28 August 2014. The stock market was closed on Friday, 29 August 2014, on account of holiday.
The market breadth indicating the overall health of the market was strong. On BSE, 1,920 shares gained and 1,015 shares fell. A total of 135 shares were unchanged.
The BSE Mid-Cap index was up 145.69 points or 1.57% at 9,444.59. The BSE Small-Cap index was up 133.14 points or 1.3% at 10,397.59. Both these indices outperformed the Sensex.
Realty stocks edged higher. Housing Development & Infrastructure (HDIL) (up 2.6%), D B Realty (up 4.97%), Unitech (up 9.43%), and DLF (up 1.07%) gained.
Mahindra & Mahindra (M&M) fell 0.11% to Rs 1,405.25. The stock reversed direction after hitting record high of Rs 1,418 in intraday trade. M&M's farm equipment sector's (FES) total sales 6% to 15,006 units in August 2014 over August 2013. Domestic sales rose 1% to 13,733 units in August 2014 over August 2013. Exports jumped 107% to 1,273 units in August 2014 over August 2013. The sales figures were announced during market hours.
M&M separtely said during market hours that its total automobile sales fell 7% to 35,175 units in August 2014 over August 2013. Domestic sales declined 6% to 33,146 units in August 2014 over August 2013. Exports dropped 26% to 2,030 units in August 2014 over August 2013.
M&M after market hours on Thursday, 28 August 2014, said it would make an additional investment at its Chakan plant in Maharashtra. As part of its expansion plans, the company will invest additional Rs 4000 crore over a 7-year period taking the total investment in Chakan to Rs 8000 crore. A total of Rs 4000 crore will be utilized towards infrastructure development, product development and capacity expansion for vehicles to be rolled out from the Chakan plant.
Tyre stocks gained on lower rubber prices. Apollo Tyres (up 8.93%), JK Tyre & Industries (up 5.96%), MRF (up 5.08%) and CEAT (up 2.95%) rose. Lower rubber prices will boost profitability of tyre makers. Rubber is a key raw material in manufacture of tyres
The Sensex gained for the seventh straight trading session today, 1 September 2014.
Brent crude prices dropped after reports showing slower manufacturing growth in China in August 2014. Brent for October settlement was off 18 cents at $103.01 a barrel. The contract rose 73 cents to settle at $103.19 a barrel on Friday, 29 August 2014.
Geopolitical developments remained in focus. European Union leaders on Saturday, 30 August 2014, warned Russia to reverse course in Ukraine within a week or face a new round of sanctions. On the same day, Ukrainian President Petro Poroshenko warned a full-scale war was imminent if Russian troops continued to advance in support of pro-Moscow rebels.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.47, 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 today, 1 September 2014, after the latest data showed euro zone's manufacturing sector slowed more sharply than first estimated in August. Key benchmark indices in UK, France and Germany were down by 0.2% to 0.39%.
Euro-area manufacturing output expanded less than initially estimated in August, adding to signs that the region's economic recovery may need another boost of European Central Bank stimulus. A Purchasing Managers' Index fell to 50.7 last month from 51.8, London-based Markit Economics said today. While the number remains above 50, indicating expansion, it's less than the Aug. 21 preliminary reading of 50.8. In Germany, the currency bloc's largest economy, the index fell to 51.4, down from a preliminary reading of 52.
A UK manufacturing index fell to the lowest in more than a year in August as geopolitical risks combined with weak euro-area demand to curb growth. Markit Economics said its factory gauge dropped to 52.5, the lowest since June 2013, from 54.8 the previous month
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%.
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, Hong Kong, China, Japan and Taiwan were up 0.04% to 0.83%. Key benchmark indices in Singapore and South Korea were off 0.03% to 0.39%.
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 markets remain closed today, 1 September 2014, for Labor Day holiday.
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