Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. The rupee's surge against the dollar and gains in Asian stocks underpinned sentiment as the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in almost a week. The Sensex was up 195.15 points or 1%, off about 20 points from the day's high and up close to 130 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Most Asian shares turned higher on Thursday, 3 October 2013, shaking off a weak start following an encouraging reading on non-manufacturing activity in China.
Sesa Sterlite extended intraday gain. IT stocks gained on renewed buying. Infosys rose after the company signed a four-year contract with Toyota Motor Europe for the provision of its pan-European application support.
The market edged higher in early trade on firm Asian stocks. The market extended initial gains and hit fresh intraday high in morning trade.
In the foreign exchange market, the rupee strengthened against the dollar tracking global dollar weakness. The partially convertible rupee was hovering at 61.96, compared with its close of 62.46/47 on Tuesday, 1 October 2013. Indian financial markets were closed on Wednesday, 2 October 2013, on account of Mahatma Gandhi Jayanti.
At 10:20 IST, the S&P BSE Sensex was up 195.15 points or 1% to 19,712.30. The index jumped 216.43 points at the day's high of 19,733.58 in morning trade, its highest level since 27 September 2013. The index gained 66.82 points at the day's low of 19,583.97 in early trade.
The CNX Nifty was up 61.65 points or 1.07% to 5,841.70. The index hit a high of 5,848.10 in intraday trade, its highest level since 27 September 2013. The index hit a low of 5,802.70 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,192 shares rose and 460 shares fell. A total of 88 shares were unchanged.
Among the 30-share Sensex pack, 26 stocks rose and only four fell. Coal India (up 2.51%), Tata Steel (up 2.45%) and Bhel (up 2.02%), gained.
Sesa Sterlite rose 2.99%, with the stock extending intraday gain.
IT stocks gained on renewed buying. HCL Technologies (up 2.22%), Wipro (up 2.36%) and TCS (up 2.9%) rose.
Infosys rose 0.57% after the company said during market hours that it has signed a four-year contract with Toyota Motor Europe for the provision of its pan-European application support. The four-year engagement will see Infosys deploy a managed service model, covering applications across a variety of Toyota's operational areas in Europe, including core automotive processes (such as supply chain, manufacturing, sales, after sales and customer service) and corporate functions (including human resources and finance). This will enable Toyota's IT employees to focus on business support and project development, in addition to supporting cost optimization, Infosys said in a statement.
Prior to this agreement, Infosys has been a key partner of Toyota Motor Europe for projects and transformation delivery services in various initiatives such as its Pan-European IT landscape transformation and connected car, the company added.
Ashok Leyland gained 0.33%, with the stock reversing initial losses. The company reported a 32% decline in total sales to 7,232 units in September 2013 over September 2012. The company made the announcement after market hours on Tuesday, 1 October 2013.
Ashok Leyland witnessed a 38% decline (excluding its small commercial vehicle DOST) in commercial vehicle sales to 4,715 units in September 2013 over September 2012. Sales of DOST declined by 17% to 2,517 units in September 2013 over September 2012.
Separately, Ashok Leyland announced after market hours on Tuesday, 1 October 2013, that it offloaded its US-based testing and engineering company Defiance Testing & Engineering Services (DTE) to Exova. The company, however, did not disclose value of the transaction. Exova is into testing, calibration and advisory services. Commenting on the sale, V Sumantran, vice chairman, Ashok Leyland, said "It is reflective of Ashok Leyland's dynamic shift in strategic priorities aimed at enhancing the value of its business in the medium term."
Most Asian shares turned higher on Thursday, 3 October 2013, shaking off a weak start following an encouraging reading on non-manufacturing activity in China. Key benchmark indices in Hong Kong, Taiwan and Indonesia rose 0.11% to 1.5%. Key benchmark indices in Japan and Singapore fell 0.12% to 0.16%. Markets in South Korea were closed for the National Foundation Day holiday. Markets in mainland China are closed till 7 October 2013 for National Day holidays.
China's official non-manufacturing Purchasing Managers' Index rose to a six-month high of 55.4 in September from 53.9 in August, adding to a growing roster of evidence that China's economy has turned a corner in recent months.
The Philippines won a rating upgrade from Moody's Investors Service, completing the nation's ascent to investment rank as President Benigno Aquino leads a growth resurgence that's outpacing the rest of Southeast Asia. The rating on the nation's government debt was raised one level to Baa3, Moody's said in a statement today. The outlook on the rating is positive. The upgrade puts the Philippines on par with Turkey and Spain.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Thursday, 3 October 2013. US stocks fell on Wednesday as investors watched for progress on ending an impasse over federal spending that shut down the government a second day. The US government has been in partial shutdown for two days after lawmakers failed to agree on a federal budget.
A meeting between President Barack Obama and congressional leaders ended Wednesday night with no deal to re-open the US government. House Speaker John Boehner told reporters that Obama repeated he wouldn't negotiate about passing a funding bill. With the Senate gaveled out for the day, the stalemate continued and meant the government shutdown would continue for a third day on Thursday.
A report showed companies added fewer workers than projected in September, indicating the job market is struggling to gain momentum. The 166,000 increase in employment followed a revised 159,000 rise in August that was smaller than initially estimated, according to the ADP Research Institute in Roseland, New Jersey.
Meanwhile, the US is creeping up against its debt limit. Treasury Secretary Jack Lew on Tuesday night reiterated that the government will lose the ability to borrow on Oct. 17.
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.
Moody's Investors Service lowered its outlook on Brazil's sovereign rating to stable from positive, citing deteriorating debt and investment ratios and evidence the economy is going through a low-growth period. "Even though there are signs that the Brazilian economy may be starting to recover, Moody's view is that, if and when the upturn materializes, it is unlikely that it will be strong enough to restore a positive trend in Brazil credit metrics," Moody's said in a statement dated 2 October 2013. Moody's affirmed Brazil's Baa2 government bond rating.
In Europe, the European Central Bank kept its benchmark interest rate unchanged at a record low on Wednesday, 2 October 2013, as the euro area recovers from its longest-ever recession. The Governing Council meeting in Paris on 2 October 2013 left the main refinancing rate at 0.5% for a fifth month after cutting it by a quarter point in May. The central bank was "particularly attentive" to any moves in market rates which could threaten economic recovery or push inflation too low, Mario Draghi told a news conference.
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