Key benchmark indices continued to trade on a firm note. At 10:18 IST, the barometer index, the S&P BSE Sensex was up 276.16 points or 0.97% at 28,808.27. The Nifty 50 index was currently up 76.55 points or 0.87% at 8,86.20. The Sensex hit its highest level in over 16-1/2 months. The Nifty hit 18-month high. Positive Asian stocks underpinned sentiment. The latest rally on the bourses was triggered by outcome of a monthly survey showing that August saw a solid rebound in the rate of expansion in Indian service sector business activity also boosted sentiment.
Domestic stocks saw a gap-up opening, as trading resumed after a local holiday yesterday, 5 September 2016, on positive Asian stocks. The Sensex jumped 295.46 points or 1.04% at the day's high of 28,827.57 in morning trade, its highest level since 16 April 2015. The barometer index rose 99.16 points or 0.35% at the day's low of 28,631.27 in opening trade. The Nifty rose 84.10 points or 0.95% at the day's high of 8,893.75 in morning trade, its highest level since 5 March 2015. The index rose 38.80 points or 0.44% at the day's low of 8,848.45 in early trade.
In overseas stock markets, Asian shares were trading higher as prospects for a US interest-rate increase this month remained subdued. US markets were closed yesterday, 5 September 2016 for Labour Day holiday. Meanwhile, the Group of 20 major economies (G20) wrapped up their annual summit, held in Hangzhou, China, yesterday, 5 September 2016 with a stronger commitment to coordinate policies to support growth and promote trade liberalization.
Closer home, the broad market depicted strength. There were more than two gainers against every loser on BSE. 1,447 shares rose and 590 shares declined. A total of 113 shares were unchanged. The BSE Mid-Cap index was currently up 1.06%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.69%, underperforming the Sensex.
Auto stocks gained on renewed buying. Tata Motors (up 2.54%), Mahindra & Mahindra (M&M) (up 0.88%), Eicher Motors (up 0.77%), Ashok Leyland (up 1.5%), Bajaj Auto (up 0.61%), Hero MotoCorp (up 1.02%) and TVS Motor Company (up 0.65%) gained.
Maruti Suzuki India (Maruti) gained 2.06% after the company announced that its total production rose 3.25% to 1.27 lakh units in August 2016 over August 2015. The announcement was made yesterday, 5 September 2016. The market was closed on that day on account of Ganesh Chaturthi.
Telecom stocks declined Reliance Industries (RIL) announced the commencement of its wireless telecommunication services.
Bharti Airtel (down 1.63%), Idea Cellular (down 1.13%), MTNL (down 0.92%), Tata Teleservices (Maharashtra) (down 1.14%) and Reliance Communications (down 0.1%) declined.
Shares of Bharti Infratel slipped 0.32%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.
Reliance Industries (RIL) rose 0.82% after the company after market hours on Friday, 2 September 2016, announced that its telecom arm Reliance Jio Infocomm (Jio) has intimated the Department of Telecommunications (DOT), Telecom Regulatory Authority of India (TRAI) and the security agencies regarding the commencement of its wireless telecommunication services in all 22 service areas from 5 September 2016. The company has also filed the tariff plans for wireless services with TRAI. With these steps, the company has fulfilled all the requirements of Unified License for commencement of services, RIL said in a statement. It may be recalled that Jio had earlier announced its tariff plans under the Jio Welcome Offer.
Meanwhile, Urjit Patel assumed charge as the 24th governor of Reserve Bank of India (RBI), succeeding Raghuram Rajan whose three-year controversy-ridden tenure ended on Sunday, 4 September 2016. Patel has assumed charge effective from Sunday after serving as deputy governor since January 2013, RBI said.
On the macro front, the outcome of a monthly survey showed that August saw a solid rebound in the rate of expansion in Indian service sector business activity. Data released yesterday, 5 September 2016 showed that the seasonally adjusted Nikkei India Services Business Activity Index rose to 54.7 in August, up from 51.9 in July, posting its highest level for over three-and-a-half years. The headline index has now signalled expansion in each of the past 14 months. With growth of manufacturing production also ticking higher, the seasonally adjusted Nikkei India Composite PMI Output Index climbed to a 42-month high of 54.6 in August, from 52.4 in July highlighting a stronger improvement in private sector economic activity.
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