Key benchmark indices surged in early trade tracking strength in most Asian stocks after a gauge of China's manufacturing rose to a 16-month high, boosting investor confidence in the global economic recovery. China is the World's second largest economy after the US. The barometer index, the S&P BSE Sensex, was up 191.27 points or 1.03%, off about 15 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. Except the BSE Auto index all the other sectoral indices on BSE were in the green.
Tata Motors declined on poor August sales. Mahindra & Mahindra (M&M) dropped after the company reported weak August sales. Power Grid Corporation of India (PGCIL) rose after the company acquired Vizag Transmission (VIZAG TL).
At 9:30 IST, the S&P BSE Sensex was up 191.27 points or 1.03% to 18,810.99. The index rose 205.63 points at the day's high of 18,825.35 in early trade. The index gained 59.21 points at the day's low of 18,678.93 in early trade.
The CNX Nifty was up 48.75 points or 0.69% to 5,520.55. The index hit a high of 5,526.65 in intraday trade. The index hit a low of 5,478.85 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 634 shares rose and 217 shares fell. A total of 36 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks rose and rest of them fell. HDFC (up 3.26%), Hindustan Unilever (up 2.53%) and ICICI Bank (up 2.16%), edged higher from the Sensex pack.
Power Grid Corporation of India (PGCIL) rose 1.75% after the company after market hours on Friday, 30 August 2013 said that pursuant to its selection as the successful bidder under Tariff based competitive bidding, the company has acquired Vizag Transmission (VIZAG TL), the special purpose vehicle (SPV) to establish the transmission system for system strengthening in Southern Region for import of power from Eastern Region on build, own operate and maintain (BOOM) basis on 30 August 2013 from REC Transmission Projects Company (the Bid Process Cordinator).
Hindalco Industries rose 0.43% to Rs 105.35 after the company after market hours on Friday, 30 August 2013 said that 2.88 crore warrants issued to promoter group company have transferred to other promoter group companies.
Earlier, Hindalco had on 22 March 2012 allotted 15 crore warrants on preferential basis to promoter group companies. The warrant holder is entitled to apply for and be allotted one equity share at Rs 144.35 per share.
Post transfer of 2.88 crore warrants, the final position of 15 crore warrants stood at ICH Holdings with 12.10 crore warrants, Turquoise Investments and Finance with 2.50 crore warrants, TGS Investment and Trade with 39 lakh warrants and Umang Commercial Company has 1 lakh warrants.
Tata Motors declined 1.42% on poor August sales. The company's total sales (including exports) of Tata commercial and passenger vehicles fell 30.93% to 49,611 units in August 2013 over August 2012. Total domestic sales fell 33.71% to 44,717 units in August 2013 over in August 2012. The company's sales from exports jumped 11.91% to 4,894 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) dropped 0.77% after reporting weak August sales. The company's total auto sales declined 17% to 37,897 units in August 2013 over August 2012. The company announced the auto sales on Sunday, 1 September 2013. M&M's sales of Passenger Vehicles segment (which includes the UVs and Verito) declined 28% to 15,821 units in August 2013 over August 2012. The company's domestic sales declined 18% to 35,159 units in August 2013 over August 2012. The sale of four-wheeler commercial segment which includes passenger and load vehicles fell 4% to 13,718 units while that of three-wheelers declined 14% to 5,149 units in August 2013 over August 2012. Exports declined 9% to 2,738 units in August 2013 over August 2012.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra said, 'The auto industry which is currently going through one of its most challenging phases, is in desperate need of some short-term fiscal stimulus. The weakening rupee, resulting in increased inflation, is impacting cost of operations. Immediate action by the government is needed so as not to lose out on the upcoming festive season wherein sales could look up and bring some cheer for the auto industry and add additional revenue to the government."
PSU OMCs hiked petrol price by a steep Rs 2.35 per litre, and diesel by 50 paise per litre effective Sunday, 1 September 2013.
On macro front, India's economy grew at the slowest quarterly rate since the global financial crisis in the three months through June, lower than expected and hurt by a contraction in mining and manufacturing, government data showed on Friday, 30 August 2013. The GDP grew 4.4% in Q1 and was the slowest growth since the Jan-March quarter of 2009. Manufacturing fell an annual 1.2% during the quarter while mining fell by 2.8^, the data showed. while farm output rose 2.7%.
Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for August 2013 today, 2 September 2013.
Most Asian stocks rose on Monday after a gauge of China's manufacturing rose to a 16-month high, boosting investor confidence in the global economic recovery. Key benchmark indices in Hong Kong, Japan, Taiwan and Singapore rose by 0.07% to 1.85%. Key benchmark indices in China, South Korea, and Indonesia fell by 0.08% to 0.51%.
China's economy is strengthening after a two-quarter slowdown, with a manufacturing gauge rising to a 16-month high in August as new orders jumped and overseas demand rebounded. The Purchasing Managers' Index was at 51.0, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing. A separate manufacturing PMI released by HSBC Holdings Plc and Markit Economics rose to 50.1 last month from 47.7 in July, the biggest gain in three years and the first reading above 50 since Apr
South Korea's exports expanded at a faster pace in August than the previous month in a sign of economic recovery, the Ministry of Trade, Industry and Energy said Sunday, beating market expectations.
US stocks fell in a thinly traded session on Friday, 30 August 2013 as the S&P 500 index recorded its steepest decline since May 2012 and investors avoided making large bets before a long weekend with the situation about Syria still uncertain. US stock markets remain closed today, 2 September 2013, for the Labor Day holiday.
President Barack Obama has decided to seek congressional authority to attack Syria for alleged chemical weapons prompting criticism that he's undermined US credibility.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 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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