Key benchmark indices extended intraday gains and hit fresh intraday high in early afternoon trade as gains in Asian stocks boosted sentiment. The barometer index, the BSE Sensex, was up 112.70 points or 0.58%, up close to 230 points from the day's low and off about 25 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee edged higher against the dollar, with the Indian currency finding support from data showing a lower-than-expected current account deficit in Q1 June 2013. Bond prices rose after the Reserve Bank of India (RBI) on Monday, 30 September 2013, said will infuse Rs 10000 crore into the banking system through open-market operations next week to ease liquidity constraints.
Bank stocks rose on renewed buying. Index heavyweight and cigarette maker ITC reversed intraday losses. Another index heavyweight Reliance Industries also edged higher
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the red after a firm opening triggered by higher Asian stocks. Key benchmark indices regained positive terrain in morning trade. The barometer index, the BSE Sensex, and the 50-unit CNX Nifty, both, reversed direction after hitting 3-1/2-week low. Intraday volatility continued as key benchmark indices recovered after trimming almost entire intraday gains in mid-morning trade. The Sensex extended intraday gains and hit fresh intraday high in early afternoon trade.
At 12:20 IST, the S&P BSE Sensex was up 112.70 points or 0.58% to 19,492.47. The index jumped 138.78 points at the day's high of 19,518.55 in early afternoon trade. The index declined 115.05 points at the day's low of 19,264.72 in morning trade, its lowest level since 6 September 2013.
The CNX Nifty was up 34 points or 0.59% to 5,769.30. The index hit a high of 5,776.75 in intraday trade. The index hit a low of 5,700.95 in intraday trade, its lowest level since 6 September 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,115 shares rose and 823 shares fell. A total of 129 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks rose and rest of them fell. Bhel (up 3.71%), Maruti Suzuki India (up 1.97%) and Dr Reddy's Laboratories (up 1.5%), gained.
Bharat Petroleum Corporation (BPCL) fell 2.3%. The company said during market hours today, 1 October 2013, that Shri S. Varadarajan, Director-Finance has been appointed by the competent Authority as Chairman & Managing Director of the company, effective 1 October 2013 in the place of Shri. R. K. Singh who has laid down office on superannuation on 30 September 2013.
PSU OMCs have reduced petrol price by a sharp Rs 3.05 per litre, the first reduction in rates in over five months and raised diesel prices by 50 paise a litre. The price change by oil companies are excluding local sales tax or VAT and are effective from Tuesday, 1 October 2013. Alongside, oil firms also raised rates of non-subsidised domestic cooking gas (LPG) that households buy after exhausting their quota of 9 subsidised or cheaper cylinder. Price in Delhi was hiked by Rs 71.50 per 14.2-kg cylinder to Rs 1,004.
Bank stocks rose on renewed buying. Among private bank stocks, HDFC Bank (up 1.79%), Yes Bank (up 2.09%), Axis Bank (up 1.96%) and ICICI Bank (up 0.64%), gained.
Kotak Mahindra Bank rose 0.21%. The bank said after market hours on Monday, 30 September 2013, that the bank has decided not to transfer any SLR security from AFS/HFT to HTM as permitted under Reserve Bank of India (RBI) circular though there is sufficient headroom to do so. Reserve Bank of India, vide its circular dated 23 August 2013 had, as a onetime measure, permitted banks to transfer SLR securities from AFS/HFT to HTM category during the current year up to the limit of 24.50% of net demand and time liabilities (NDTL). To mitigate impact of mark to market losses incurred by banks due to abnormal market conditions, the RBI also gave banks the option of valuing these securities for the purpose of such transfer, as at the close of business of 15 July 2013. Such transfers were to be done no later than 30 September 2013.
State Bank of India (SBI) rose 1.35%. The bank last week said that it has repurchased a principal amount of $147 million of $1 billion 3.25% bonds due 2018 (the 2018 Bonds). The 2018 Bonds were issued by SBI on 18 April 2013 and are listed on the Singapore Exchange Securities Trading. The repurchase of the Bond took place between 26 August 2013 and 26 September 2013. The bank is in the process of cancelling the repurchased 2018 Bonds and the aggregate outstanding principal amount of the 2018 Bonds following such cancellation will be $853 million, SBI said in a statement.
Punjab National Bank advanced 0.37%. The bank said after market hours on Monday, 30 September 2013 that the bank has decided to provide interest at uniform rate of 9% on all NRE term deposits of tenure 3 years and above up to 10 years, considering recent relaxations permitted by the Reserve Bank of India (RBI). These changes shall be effective from 1 October 2013.
Bank of Baroda rose 0.59%. The bank has decided to revise the rates of interest payable on term deposits of below Rs 1 crore and Rs 1 crore and above of some maturities with effect from 1 October 2013.
Index heavyweight and cigarette maker ITC rose 0.22% to Rs 341.05, off the day's low of Rs 337.95.
Another index heavyweight Reliance Industries gained 0.29%.
Unichem Laboratories declined 1.22% to Rs 165.30. Two block deals were executed on the counter on BSE. One block deal of 3 lakh shares was struck at Rs 165 per share at 10:57 IST and another of 50,000 shares was executed at Rs 165 per share at 10:57 IST.
The stock market remains closed tomorrow, 2 October 2013, on account of Mahatma Gandhi Jayanti.
India received 6% higher rainfall than normal in the 2013 monsoon season ended on September 30, the Indian Meteorological Department (IMD) said on Tuesday, strengthening prospects of a bumper farm output that could boost farmers' earnings. Monsoon rains are vital for 55% of the country's farmlands that lack irrigation facilities, and can make the difference between India being an exporter or importer of staples such as rice and sugar.
Factory activity in India shrank for a second month in September, albeit not as sharply as in August, on a dearth of new orders which pushed firms to cut staff, a survey showed on Tuesday. The HSBC Manufacturing PMI, compiled by Markit, rose to 49.6 in September from 48.5 in August, but remaining below the watershed 50 mark that separates growth from contraction. The new orders sub-index rose to 49.6 last month from 47.5 in August.
In the foreign exchange market, the rupee edged higher against the dollar, with the Indian currency finding support from data showing a lower-than-expected current account deficit in Q1 June 2013. The partially convertible rupee was hovering at 62.26, compared with its close of 62.60/61 on Monday, 30 September 2013.
India's current account deficit (CAD) widened to $21.8 billion or 4.9% of GDP in Q1 June 2013 from $16.9 billion or 4% of GDP in Q1 June 2012, data released by the Reserve Bank of India (RBI) after trading hours on Monday, 30 September 2013, showed. The CAD was $18.1 billion in Q4 March 2013. The RBI said that the year-on-year rise in CAD in Q1 June 2013 was due to a rise in imports and some decline in merchandise exports. Merchandise trade deficit (balance of payments basis) widened to $50.5 billion in Q1 June 2013 from $43.8 billion in Q1 June 2012. The trade deficit, coupled with a slow recovery in net invisibles (income and services), led to widening of CAD on year-on-year basis in Q1 June 2013, the RBI said. On balance of payments (BoP) basis, there was a slight drawdown in foreign exchange reserves of $0.3 billion in Q1 June 2013 as against an accretion of $0.5 billion in Q1 June 2012.
Bond prices rose after the Reserve Bank of India (RBI) on Monday, 30 September 2013, said will infuse Rs 10000 crore into the banking system through open-market operations next week to ease liquidity constraints. The yield on the federal benchmark paper 7.16% GS 2023 was hovering at 8.6907%, lower than its close of 8.7658% on Monday, 30 September 2013. Bond yield and bond prices are inversely related.
Based on the current assessment of prevailing and evolving market conditions, the RBI will purchase government securities for an aggregate amount of Rs 10000 crore on 7 October 2013, the RBI said in a press release on Monday, 30 September 2013.
The government's fiscal deficit for the April-August period has reached about three-fourths of its target for the year ending March, data released after trading hours on Monday, 30 September 2013, showed. By the end of August, the gap between the government's revenue and expenses has reached 74.6% of its target for the fiscal year, according to data released on Monday. Expenses during the first five months were about 40% of the aim for the year, while revenue was way short at 23% of the target. The government aims to limit the deficit within 4.8% of gross domestic product, compared with 4.9% last year.
The combined output of the eight core infrastructure sectors rose 3.7% in August 2013, supported by strong growth in coal and cement production and electricity generation, data released by the government after trading hours on Monday, 30 September 2013, showed. It was the highest growth in core sector output in seven months.
Asian stocks rose on Tuesday, 1 October 2013, as a report showed confidence among large Japanese manufacturers increased before Prime Minister Shinzo Abe unveils plans for an economic-support package. Key benchmark indices in Japan, South Korea, Taiwan, Indonesia, and Singapore rose 0.1% to 1.4%. China's local markets are shut from today, 1 September 2013 till 7 October 2013 for National Day holidays.
A Chinese factory gauge rose less than economists forecast in September, signaling limits on the nation's rebound from a two-quarter economic slowdown. The Purchasing Managers' Index was at 51.1, the National Bureau of Statistics and China Federation of Logistics and Purchasing said today in Beijing. That compares with 51 in August.
The Bank of Japan's quarterly Tankan index for big manufacturers rose to 12 in September, the highest since 2007, from 4 in June.
The Reserve Bank of Australia kept official interest rates at a record low 2.5% for the second month in a row on Tuesday, saying that the impact of its earlier cuts were still filtering through the economy.
Trading in US index futures indicated that the Dow could gain 23 points at the opening bell on Tuesday, 1 October 2013. US stocks closed lower on Monday with just hours to go before a midnight deadline to avert a federal government shutdown.
The US government began a partial shutdown on Tuesday for the first time in 17 years after lawmakers could not break a political stalemate that sparked new questions about the ability of a deeply divided Congress to perform its most basic functions. Some US government offices and national parks will be shuttered, but spending for essential functions related to national security and public safety will continue, including pay for US military troops.
There are also fears that the conflict could spill over into the more crucial dispute over raising the federal government's borrowing authority. A failure to raise the $16.7 trillion debt ceiling would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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