Key benchmark indices extended gains and hit fresh record high in afternoon trade after European market edged higher in early trade there. The barometer index, the S&P BSE Sensex, hit record high above the psychological 27,000 mark. The Sensex was currently up 148.76 points or 0.55% at 27,016.31. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap and Small-Cap indices were up more than 1% each. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session.
On the macro front, the current account deficit (CAD) narrowed on year-on-year basis but rose on sequential basis in Q1 June 2014. Meanwhile, Japan has promised 3.5 trillion yen of public and private investment and financing, including Overseas Development Assistance (ODA) over five years for India's development.
Key indices have remained in green so far during the day after opening a tad higher.
European stocks rose amid speculation that slower growth in euro zone will prompt European Central Bank (ECB) to accelerate stimulus. Asian markets were mixed. Japanse stocks surged as the yen weakened against the dollar before Prime Minister Shinzo Abe announces a new cabinet tomorrow, 3 September 2014.
At 13:15 IST, the S&P BSE Sensex was up 148.76 points or 0.55% at 27,016.31. The index jumped 148.76 points at the day's high of 27,016.31 afternoon trade, a record high for the index. The index rose 18.67 points at the day's low of 26,886.22 in early trade.
The CNX Nifty was up 51.20 points or 0.64% at 8,078.90. The index hit a high of 8,080.40 in afternoon trade, a record high for the index. The index hit a low of 8,036.55 in intraday trade.
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The market breadth indicating the overall health of the market was strong. On BSE, 1,748 shares gained and 1,033 shares fell. A total of 118 shares were unchanged.
The BSE Mid-Cap index was up 108.04 points or 1.14% at 9,552.63. The BSE Small-Cap index was up 127.77 points or 1.23% at 10,525.36. Both these indices outperformed the Sensex.
Among 30-share Sensex pack, 18 stocks rose and remaining declined. Cipla (up 6.33%), Bharti Airtel (up 3.48%), Sun Pharmaceutical Industries (up 2.75%), Hero MotoCorp (up 1.8%), HDFC Bank (up 1.62%), Bajaj Auto (up 1.26%), Bharat Heavy Electricals (up 1.24%), HDFC (up 1.22%), Axis Bank (up 0.76%) and State Bank of India (up 0.5%), edged higher from the Sensex pack.
Sesa Sterlite (down 1.36%), Hindustan Unilever (down 1.28%), Tata Motors (down 0.86%), Tata Steel (down 0.6%), Infosys (down 0.54%), Wipro (down 0.47%) and Hindalco Industries (down 0.4%), edged lower from the Sensex pack.
The sentiment on the bourses was boosted by provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 554.14 crore yesterday, 1 September 2014, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.58, compared with its close of 60.525 during the previous trading session.
Japanese Prime Minister Shinzo Abe yesterday, 1 September 2014, expressed his intention to realize 3.5 trillion yen of public and private investment and financing from Japan, including Overseas Development Assistance (ODA) to India in five years, to finance appropriate public and private projects of mutual interest including in the areas of next generation infrastructure, connectivity, transport systems, Smart Cities, rejuvenation of Ganga and other rivers, manufacturing, clean energy, skill development, water security, food processing and agro industry, agricultural cold chain, and rural development. This was stated in a joint statement issued yesterday, 1 September 2014, after a meeting between Prime Minister Narendra Modi and Abe. Modi is currently on a five-day visit to Japan. The Prime Ministers of the two countries have decided to set a target of doubling Japan's foreign direct investment and the number of Japanese companies in India within five years as an objective to be jointly achieved.
In macroeconomic data, the output of eight core sector industries rose 2.7% in July 2014, showing moderation from a growth of 7.3% in June 2014. However, the cumulative growth has remained steady at 4.1% in April-July 2014 over April-July 2013. The data was announced after market hours on Monday, 1 September 2014.
India's current account deficit (CAD) narrowed sharply to $7.8 billion or 1.7% of GDP in Q1 June 2014, from $21.8 billion or 4.8% of GDP in Q1 June 2013. The lower CAD was primarily on account of a contraction in the trade deficit contributed by a rise in exports and a decline in imports. On sequential basis, the CAD rose from $1.2 billion or 0.2% of GDP in Q4 March 2014.
The preliminary data on India's balance of payments (BoP) also showed that foreign direct investment (FDI) in India rose to $8.2 billion in Q1 June 2014, from $6.5 billion in Q1 June 2013. The data was announced after market hours on Monday, 1 September 2014.
European stocks rose today, 2 September 2014, amid speculation that slower growth in euro zone will prompt European Central Bank (ECB) to accelerate stimulus. Key benchmark indices in UK, France and Germany were up by 0.34% to 0.71%.
ECB President Mario Draghi signaled last month that ECB policy makers are ready to increase stimulus to combat low inflation in the euro area.
Asian stocks were mixed today, 2 September 2014. Key benchmark indices in Singapore, Japan, Indonesia, and China were up 0.38% to 1.37%. Key benchmark indices in Hong Kong, Taiwan and South Korea were off 0.01% to 1.19%.
Trading in US index futures indicated that the Dow could gain 35 points at the opening bell on Tuesday, 2 September 2014. US stock markets were closed on Monday, 1 September 2014 for Labor Day holiday.
According to reports, the Russian officials pressed Ukraine on Monday, 1 September 2014, to declare a cease-fire with separatists, but Ukrainians say they are locked in a war not just against the rebels but also against Russia on behalf of Europe. Ukraine and its Western allies have surmised that Russian forces are significantly aiding pro-Russian separatists.
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