Key benchmark indices extended initial gains and hit fresh record high in morning trade, with market sentiment boosted by data showing that the gross domestic product (GDP) grew 5.7% in Q1 June 2014, its fastest pace in two-and-half years. The barometer index, the S&P BSE Sensex, was currently up 210.57 points or 0.79% at 26,848.68. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Mid-Cap and Small-Cap indices were up more than 1% each. Both these indices outperformed the Sensex.
Key indices had opened on a firm note and hit record high after the release of the GDP data on Friday, 29 August 2014, when the stock market was closed for a holiday. The 50-unit CNX Nifty hit record high above the psychological 8,000 level.
A Supreme Court hearing on coal blocks case is scheduled today, 1 September 2014. The apex court on 25 August 2014 deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
Asian stocks rose as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in August 2014. Brent crude was almost unchanged for the day after registering gains during the previous trading session.
At 10:24 IST, the S&P BSE Sensex was up 210.57 points or 0.79% at 26,848.68. The index jumped 211.25 points at the day's high of 26,849.36 in morning 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 61.60 points or 0.77% to 8,015.95. The index hit a high of 8,018.65 in intraday trade, a lifetime high for the index. The index hit a low of 7,984 in intraday trade.
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The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 1488 shares gained and 608 shares fell. A total of 74 shares were unchanged.
The BSE Mid-Cap index was up 101.20 points or 1.09% at 9,400.10. The BSE Small-Cap index was up 109.93 points or 1.07% at 10,374.38. Both these indices outperformed the Sensex.
Hero MotoCorp (up 2.66%), Tata Power (up 2.53%) and Hindalco Industries (up 2.53%) edged higher from the Sensex pack.
Realty stocks edged higher. Housing Development & Infrastructure (HDIL) (up 1.55%), Indiabulls Real Estate (up 4.14%), Unitech (up 1.23%), DLF (up 0.23%) and Sobha (up 0.93%) gained.
HCL Technologies gained 1.21%. The company during market hours clarified with respect to media report titled "HCL bags $200 million deal from BOfA - Merrill Lynch", that the media story is speculative and based on rumours. As a policy, the company does not respond to market rumours.
Brent crude was almost unchanged for the day after registering gains during the previous trading session. Brent for October settlement was up 3 cents at $103.22 a barrel. The contract rose 73 cents to settle at $103.19 a barrel on Friday, 29 August 2014.
In the foreign exchange market, the rupee was unchanged against the dollar. The partially convertible rupee was hovering at 60.52, 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.
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 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 will 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.
The HSBC Manufacturing PMI for August 2014 is due today 1 September 2014. The Manufacturing PMI had increased to 53 in July 2014, from 51.50 in June 2014.
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.
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 0.17% to 0.76%. Key benchmark indices in Singapore and South Korea were off 0.09% to 0.42%.
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 stocks climbed on Friday, 29 August 2014, ahead of a three-day weekend. US markets remain closed today, 1 September 2014, for Labor Day holiday.
On the economic front Friday, the Commerce Department reported American household spending fell 0.1% in July, bucking forecast for a 0.1% increase. Personal income rose a less-than-expected 0.2%.
On Saturday, 30 August 2014, Ukrainian President Petro Poroshenko warned a "full-scale war" was imminent if Russian troops continued to advance in support of pro-Moscow rebels, while US and European leaders threatened Moscow with further sanctions.
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