Sensex pares gains after hitting its highest level in almost two weeks

A bout of volatility was witnessed as key benchmark indices trimmed gains in afternoon trade. The barometer index, the S&P BSE Sensex, pared gains after hitting its highest level in almost two weeks. Earlier, the 50-unit CNX Nifty, too, had its highest level in almost two weeks in morning trade. The broad market depicted strength. There were more than two gainers against every loser on BSE. The Sensex was currently up 183.23 points or 0.65% at 28,255.16. The BSE Mid-Cap index was up 1%. The BSE Small-Cap index was up 1.39%. Both these indices outperformed the Sensex. In overseas markets, European market edged higher in early trade there. Asian stocks edged higher after the outcome of a monthly survey showed that China's services sector showed continued strength in July.

Nestle India jumped on media reports that a Food Safety and Standards Authority of India (FSSAI) approved laboratory of Central Food Technological Research Institute (CFTRI) has found Maggi noodles in compliance with food safety standards on a testing of five samples sent by Goa Food and Drug Administration. Pharmaceutical shares were in demand. Most private sector banks edged lower. PSU banks edged higher.

Meanwhile, Taiwanese electronics giant Foxconn said yesterday, 4 August 2015, that the company is considering setting up manufacturing facilities in India.

Meanwhile, the outcome of a monthly survey released today, 5 August 2015, showed that India's services sector activity rose last month, primarily in response to a renewed increase in new business.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 118.70 crore yesterday, 4 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) sold shares worth a net Rs 112.55 crore yesterday, 4 August 2015, as per provisional data released by the stock exchanges

In overseas markets, European stocks edged higher in early trade. Asian stocks edged higher after the outcome of a monthly survey showed that China's services sector showed continued strength in July. US stocks edged lower yesterday, 4 August 2015, after Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ripe for a rise in short-term interest rates.

At 13:18 IST, the S&P BSE Sensex was up 183.23 points or 0.65% at 28,255.16. The index jumped 238.30 points at the day's high of 28,310.23 in afternoon trade, its highest level since 24 July 2015. The index rose 63.75 points at the day's low of 28,135.68 in early trade.

The CNX Nifty was up 56.60 points or 0.66% at 8,573.50. The index hit a high of 8,587.45 in intraday trade, its highest level since 24 July 2015. The index hit a low of 8,545.85 in intraday trade.

The market breadth indicating the overall health of the market was quite strong. There were more than two gainers against every loser on BSE. 1,935 shares gained and 871 shares fell. A total of 92 shares were unchanged.

The BSE Mid-Cap index was up 114.80 points or 1% at 11,572.03. The BSE Small-Cap index was up 166.64 points or 1.39% at 12,187.78. Both these indices outperformed the Sensex.

Nestle India jumped on media reports that a Food Safety and Standards Authority of India (FSSAI) approved laboratory of Central Food Technological Research Institute (CFTRI) has found Maggi noodles in compliance with food safety standards on a testing of five samples sent by Goa Food and Drug Administration. The stock was up 5.91% at Rs 6,729. In a clarification issued to the stock exchanges during trading hours today, 5 August 2015, Nestle India said that the company does not have any further information on this except what is reported in media.

Pharmaceutical shares were in demand. Glenmark Pharmaceuticals (up 3%), Strides Arcolab (up 2.79%), Divi's Laboratories (up 2.10%), Lupin (up 2.08%), Cadila Healthcare (up 1.70%), Aurobindo Pharma (up 1.64%), Piramal Enterprises (up 1.42%), GlaxoSmithKline Pharmaceuticals (up 1.39%), Wockhardt (up 1.19%), Sun Pharmaceutical Industries (up 0.72%), Cipla (up 0.66%) and Dr. Reddy's Laboratories (up 0.09%), edged higher. IPCA Laboratories was down 0.01%

PSU banks edged higher. Indian Bank (up 2.89%), Union Bank of India (up 2.51%), Syndicate Bank (up 2.26%), Corporation Bank (up 1.88%), Central Bank of India (up 1.13%), Vijaya Bank (up 1.09%), Punjab and Sind Bank (up 0.93%), Punjab National Bank (up 0.82%), IDBI Bank (up 0.81%), Bank of India (up 0.72%), Bank of Maharashtra (up 0.52%), United Bank of India (up 0.40%), Andhra Bank (up 0.39%), Allahabad Bank (up 0.37%) and Canara Bank (up 0.10%) edged higher. UCO Bank (down 0.18%), State Bank of India (down 0.23%) and Bank of Baroda (down 0.71%), edged lower.

Shares of private sector banks edged lower. Yes Bank (down 0.9%), City Union Bank (down 0.75%), Kotak Mahindra Bank (down 0.69%), ICICI Bank (down 0.35%) and Axis Bank (down 0.1%), edged lower. HDFC Bank (up 0.29%), IndusInd Bank (up 0.44%) and Federal Bank (up 1.11%) edged lower.

Maruti Suzuki India was up 0.69% at Rs 4,468.65. The stock hit a high of Rs 4,478 in intraday so far, which is a record high for the stock. The company during trading hours today, 5 August 2015, announced the launch of its first premium cross-over, S-CROSS in New Delhi. It is offered in two diesel engine options: DDiS 200 and DDiS 320. The combination of massive torque, power and superior ride and handling is bound to delight customers, Maruti said in a statement. By offering power and performance, and the comfort and refinement of a sedan, S-CROSS creates the new category of "premium cross-over" in India, the car major said. The introductory prices for a total of seven variants range from Rs 8.34 lakh to Rs 13.74 lakh ex-showroom Delhi.

Meanwhile, Maruti Suzuki India after market hours yesterday, 4 August 2015, announced that its total production rose 19.46% to 1.33 lakh units in July 2015 over July 2014.

Meanwhile, Taiwanese electronics giant Foxconn said yesterday, 4 August 2015, that the company is considering setting up manufacturing facilities in India. Foxconn Chairman Terry Gou reportedly said at a news conference in New Delhi yesterday, 4 August 2015, that Foxconn intends to set up manufacturing facilities for producing televisions, routers, switches, storage equipment and batteries among other devices in India. Foxconn is the world's largest contract electronics manufacturer by revenue.

Meanwhile, the outcome of a monthly survey released today, 5 August 2015, showed that India's services sector activity rose last month, primarily in response to a renewed increase in new business. The seasonally adjusted Nikkei Services Business Activity Index rose back above the 50 no-change mark in July, posting 50.8 from 47.7 in June. Although growing for the first time in three months, the expansion in new business was slight. The upturn in incoming new work led Indian service providers to take on additional workers in July. Although slight, the rate of job creation was the quickest in two years. While contrasting with continued marginal job shedding in the manufacturing sector, the rise in services employment was enough to result in higher staffing levels overall. Rates charged by service providers to their users rose for the 8th month in a row in July. Nonetheless, the latest increase was only marginal. Anecdotal evidence suggests that strong competitive pressures had weighed on service providers' pricing power. Confidence among Indian services firms deteriorated in July. Although companies remained optimistic on average, the level of positive sentiment dipped to a survey low.

Meanwhile, the Reserve Bank of India (RBI) Governor Dr. Raghuram G. Rajan indicated in his written monetary policy statement yesterday, 4 August 2015, that monetary policy could be eased further if there is greater monetary policy transmission by way of cut in base rate by commercial banks. The RBI kept its benchmark lending rate viz. the repo rate unchanged at 7.25% after a monetary policy yesterday, 4 August 2015, while retaining the accommodative stance of monetary policy.

Meanwhile, India's weather office, the India Meteorological Department (IMD) said in a daily report issued yesterday, 4 August 2015, that the Southwest Monsoon was active over Madhya Pradesh, Vidarbha and Chhattisgarh during past 24 hours until 8:30 IST. For the country as a whole, cumulative rainfall during this year's monsoon season was 7% below the Long Period Average (LPA) until 4 August 2015. Region wise, the rainfall was 21% below the LPA in South Peninsula, 8% below the LPA in East & Northeast India, 6% below the LPA in Central India and 6% above the LPA in Northwest India until 4 August 2015.

The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.

In overseas markets, European stocks edged higher in early trade today, 5 August 2015. Key benchmark indices in UK, France and Germany were up by 0.32% to 0.89%.

Meanwhile, both Greece and its lenders reportedly said yesterday, 4 August 2015, that they were optimistic they could broker a deal within days on a multi-billion euro bailout. A bailout worth up to 86 billion euros ($94.5 billion) must be settled by 20 August 2015 -- or a second bridge loan agreed -- if Greece is to pay off debt of 3.5 billion euros to the European Central Bank (ECB) that matures on that day, reports suggested.

Asian stocks edged higher today, 5 August 2015, after the outcome of a monthly survey showed that China's services sector showed continued strength in July. Key benchmark indices in Taiwan, South Korea, Hong Kong, Singapore, Japan and Indonesia were up 0.09% to 0.99%.

In mainland China, the China's Shanghai Composite was down 1.65%. The tepid performance of the mainland market follows Chinese authorities' moves to clamp down on short selling early this week.

Activity in China's services sector expanded at its fastest pace in 11 months in July, thanks to stronger new business, a private survey showed today, 5 August 2015. The services Purchasing Managers' Index (PMI) compiled by Caixin/Markit rose to 53.8 in July from June's 51.8. The July level is the highest since August 2014 and marks a 12th straight month of expansion. A reading above 50 points indicates growth on a monthly basis, while one below that points to a contraction. A government measure of services and construction, known as the official nonmanufacturing PMI, was also strong in July, rising to 53.9 from 53.8 in June, according to government data released on 1 August 2015.

US stocks edged lower yesterday, 4 August 2015, after Federal Reserve Bank of Atlanta President Dennis Lockhart said the economy is ripe for a rise in short-term interest rates.

The influential monthly US nonfarm payroll report for July 2015 is due on Friday, 7 August 2015. The report will be scrutinized for clues to the strength of the labor-market recovery. The ADP employment report, considered a precursor to the nonfarm data, is due later in the global day today, 5 August 2015. Investors have been parsing economic data, from inflation to wages, for clues about when the Fed might raise rates.

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