Key benchmark indices trimmed gains after hitting fresh intraday high in afternoon trade triggered by firm opening of European stocks. The S&P BSE Sensex pared gains after hitting over three-week high. The 50-unit CNX Nifty also trimmed gains after hitting three-week high. The Sensex was up 144.82 points or 0.75%, off about 50 points from the day's high and up close to 195 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Realty stocks rallied. M&M fell after company reported a decline in total sales in June 2013. Bank stocks were in demand. Sterlite Industries and Bharti Airtel extended intraday gains.
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. It trimmed gains after hitting fresh intraday high in 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 13:20 IST, the S&P BSE Sensex was up 144.82 points or 0.75% to 19,540.63. The index gained 192.81 points at the day's high of 19,588.62 in afternoon trade, its highest level since 7 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 40.25 points or 0.69% to 5,882.45. The index hit a high of 5,896.80 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, 1,396 shares gained and 669 shares fell. A total of 118 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks gained and rest of them declined. Jindal Steel & Power (up 2.76%), Bhel (up 2.52%) and Reliance Industries (up 2.27%), edged higher. TCS (down 2.13%), Infosys (down 1.33%) and Bajaj Auto (down 0.44%), edged lower.
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Sterlite Industries rose 3.53%, with the stock extending intraday gains.
Bharti Airtel gained 3.16%, with the stock extending intraday gains.
Realty stocks rallied. HDIL (up 12.06%), Unitech (up 7.8%), D B Realty (up 4.93%) and DLF (up 3.98%), edged higher.
M&M fell 0.17% on decline in total sales in June 2013 over June 2012. The company said during market hours today, 1 July 2013 that total sales fell 7.81% to 38,092 units in June 2013 over June 2012. The company's passenger vehicle segment (which includes UVs and Verito) declined 12.93% to 17,232 units in June 2013 over June 2012. The company's domestic sales declined 7.04% to 36,207 units in June 2013 over June 2012. Exports fell 20% to 1,885 units in June 2013 over June 2012.
Bank stocks were in demand. ICICI Bank (up 0.08%) and HDFC Bank (up 0.43%), edged higher.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 2.04% to 4.62%.
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.
European stock markets edged higher on Monday, 1 July 2013, with banks among the gainers. Key benchmark indices in France, Germany and UK rose by 0.28% to 0.57%.
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 Indonesia, Taiwan, Singapore and South Korea were down 0.02% to 0.41%. China's Shanghai Composite rose 0.81%. 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 95 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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