Key benchmark indices pared gains after striking intraday high in morning trade. Better-than-expected July 2013 factory output data and another data showing deceleration of the rate of retail inflation for August 2013 boosted sentiment. Both these data were released after market hours on Thursday, 12 September 2013. The S&P BSE Sensex was up 62.73 points or 0.32%, off 54.76 points from the day's high and up 142.40 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Capital goods stocks edged higher on renewed buying. ICICI Bank recovered from intraday low. Infosys extended initial decline. Sugar stocks gained after the Minister for Consumer Affairs, Food and Public Distribution K.V. Thomas on Thursday, 12 September 2013, said that the Ministry of Food in principle does not have any objection to permit further export of sugar as it will help faster clearance of cane price arrears and help the country to earn some precious foreign exchange.
A bout of initial volatility was witnessed as the key benchmark indices reversed initial losses. Key benchmark indices pared gains after striking intraday high in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 930.54 crore on Thursday, 12 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee weakened against the dollar. The partially convertible rupee was hovering at 64.06, weaker than its close of 63.50/51 on Thursday, 12 September 2013.
At 10:15 IST, the S&P BSE Sensex was up 62.73 points or 0.32% to 19,844.61. The index gained 117.49 points at the day's high of 19,899.37 in morning trade. The index fell 79.67 points at the day's low of 19,702.21 in early trade.
The CNX Nifty was up 17.65 points or 0.3% to 5,868.35. The index hit a high of 5,884.30 in intraday trade. The index hit a low of 5,822.90 in intraday trade.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 799 shares gained and 371 shares fell. A total of 59 shares were unchanged.
The total turnover on BSE amounted to Rs 498 crore by 10:20 IST compared to Rs 223 crore by 09:30 IST.
ICICI Bank fell 0.94% to Rs 942.10, with the stock recovering from an intraday low of 932.90.
Infosys fell 0.91% to Rs 3,035.55, with the stock extending initial decline after hitting an intraday high of Rs 3,060.10.
Capital goods stocks edged higher on renewed buying. ABB (up 2.21%), Bhel (up 3.15%), BEML (up 0.68%), Bharat Electronics (up 1.38%), Crompton Greaves (up 1.87%), L&T (up 2.27%), Siemens (up 1.57%) and Thermax (up 0.83%) gained.
JSW Steel rose 1.5% after the company unveiled production data for August 2013. JSW Steel's crude steel production fell 2% to 9.85 lakh tonnes in August 2013 over August 2012. Production of flat rolled products rose 12% to 8.24 lakh tonnes in August 2013 over August 2012. Production of long rolled products declined 13% to 1.28 lakh tonnes in August 2013 over August 2012. The figures are after giving effect to the merger of JSW ISPAT Steel with the company.
JSW Steel said it took shutdown of one of its Corex furnaces for relining and capacity enhancement and the same is expected to recommence production during September 2013. The capacity utilization at Vijayanagar works remains at around 80% due to iron ore shortage caused by inordinate delays in opening Category A and B mines even after the Supreme Court order in April 2013 to resume mining operations, JSW Steel said.
Sugar stocks gained after the Minister for Consumer Affairs, Food and Public Distribution K.V. Thomas on Thursday, 12 September 2013, said that the Ministry of Food in principle does not have any objection to permit further export of sugar as it will help faster clearance of cane price arrears and help the country to earn some precious foreign exchange.
Bajaj Hindusthan (up 1.51%), Dhampur Sugar Mills (up 2.27%), Sakthi Sugars (up 2.83%), Balrampur Chini Mills (up 3.33%) and Shree Renuka Sugars (up 4.02%) gained.
K.V. Thomas said that government policies, including, the ones relating to sugar exports, are aimed at balancing the interest of consumers, farmers and the industry. Thomas assured that while reviewing sugar export policy, his ministry will be fair to all stakeholders.
Industrial production rose 2.6% in July 2013 as against a contraction of 1.8% in June 2013, data released by the government after trading hours on Thursday, 12 September 2013, showed. The manufacturing sector registered a growth of 3% and electricity generation rose 5.2%. Mining sector output registered a contraction of 2.3%. As per use-based classification, production of basic goods rose 1.7% in July 2013. Capital goods production jumped 15.6% and production of intermediate goods rose 2.4%. Production of consumer goods declined 0.9%. Within the consumer goods sector, production of consumer non-durables rose 6.8% whereas production of consumer durables witnessed a contraction of 9.3%.
Industrial production for June 2013 was revised upwards to de-growth of 1.8% from de-growth of 2.2% reported earlier. Industrial production growth for April 2013 was revised downward to 1.5% from 1.9% reported earlier. On cumulative basis, industrial production registered a contraction of 0.2% for the period April-July 2013 over the corresponding period of the previous year.
The rate of inflation based on the consumer price index decelerated in August 2013, data released by the government after trading hours on Thursday, 12 September 2013, showed. The rate of inflation based on the combined consumer price index (CPI) for urban and rural India decelerated to 9.52% in August 2013 from 9.64% in July 2013. Inflation for the category 'food and beverages' stood at 11.06% in August 2013, the data showed.
The Reserve Bank of India on Thursday, 12 September 2013, announced the details of its committee constituted to examine the current monetary policy framework and recommend ways to revise and strengthen it to make it more transparent and predictable. RBI Governor Raghuram Rajan, who took over on Sept. 4, had announced the committee would be headed by Deputy Governor Urjit Patel. The panel will review the objectives, structure, operating framework and instruments of monetary policy, particularly the multiple indicator approach and the liquidity management framework, the RBI said. It will also identify regulatory, fiscal and other impediments to monetary policy transmission, and recommend measures to improve transmission. The committee is expected to submit its report within three months, the RBI said.
Asian shares dropped on Friday, 13 September 2013, as investors fretted stronger-than-expected US jobless-claims data on Thursday has increased the odds the Federal Reserve would begin trimming its monetary stimulus at next week's meeting. Key benchmark indices in Taiwan, Hong Kong, China, Japan, South Korea and Singapore fell 0.1% to 1.02%. Indonesia's Jakarta Composite index rose 0.12%.
Trading in US index futures indicated a flat opening of US stocks on Friday, 13 September 2013. US stocks declined on Thursday, 12 September 2013, with the S&P 500 snapping its seven-session winning streak, as investors worried about developments related to Syria and Federal Reserve policy moves.
First-time claims for unemployment benefits declined by 31,000 to 292,000 in the week ending Sept. 7, but processing glitches involving two states clouded the reading, the US Labor Department reported on Thursday, 12 September 2013.
The US and Russia began talks on Thursday on Moscow's plan for Syria to surrender its chemical weapons as Damascus formally applied to join a global poison gas ban, but US Secretary of State John Kerry held fast to the position that the US may still use military force if diplomacy fails. Separately, Syria's President Bashar al-Assad reportedly said that the US needs to give up "its policy of threats" and stop shipping arms to Syrian rebels before his government surrenders its chemical weapons.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next week, considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC holds a two-day policy meeting on Tuesday 17 September and Wednesday 18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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