Key benchmark indices surged on the first trading session of September month boosted by firm global stocks. The barometer index, S&P BSE Sensex and the CNX Nifty, both settled at 2-1/2 week high. Global stock markets gained following data showing that manufacturing activity in China to euro-zone has expanded at a faster pace than estimated in August, boosting investor confidence in the global economic recovery. The Sensex was up 266.41 points or 1.43%, up 207.20 points from the day's low and off 55.93 points from the day's high. The market breadth, indicating the overall health of the market, was strong. All the thirteen sectoral indices on BSE were in the green.
The Sensex gained for the fourth day in a row today, 2 September 2013. The Sensex has risen 918.05 points or 5.11% in four trading sessions from a recent low of 17,968.08 on 27 August 2013. The Sensex lost 725.98 points or 3.75% in August 2013. The Sensex has declined 540.58 points or 2.78% in calendar 2013 so far (till 2 September 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,557.49 points or 7.62%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has risen 1,635.33 points or 9.48%.
Coming back to today's trade, index heavyweight and cigarette maker ITC rose. Metal stocks rose after data showed a China's manufacturing gauge rose to a 16-month high in August. Bank stocks were mixed. IT major TCS scaled record high. HCL Technologies hit record high.
Hero MotoCorp reversed direction after scaling 52-week high. Mahindra & Mahindra (M&M) dropped after the company reported weak August sales. Maruti Suzuki India surged after the company reported strong August sales. Tata Motors and Bajaj Auto shrugged off weak August sales.
Capital goods pivotals rose. L&T gained after its construction business secured new orders worth Rs 1141 crore in August 2013 in various business segments. Shares of public sector oil marketing companies rose after announcing a hike in petrol and diesel prices, effective from midnight of 31 August 2013.
The market surged in early trade. It held firm in morning trade. It continued to hover in positive terrain in mid-morning trade. It extended gains and hit fresh intraday high in early afternoon trade. It hit fresh intraday high in afternoon trade. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit highest level in over two weeks. It hovered near intraday high in mid-afternoon trade. It held firm in late trade.
The S&P BSE Sensex was up 266.41 points or 1.43% to 18,886.13, its highest closing level since 14 August 2013. The index rose 322.34 points at the day's high of 18,942.06 in mid-afternoon trade, its highest level since 16 August 2013. The index gained 59.21 points at the day's low of 18,678.93 in early trade.
The CNX Nifty was up 78.95 points or 1.44% to 5,550.75, its highest closing level since 14 August 2013. The index hit a high of 5,564.90 in intraday trade, its highest level since 16 August 2013. The index hit a low of 5,478.85 in intraday trade.
The total turnover on BSE amounted to Rs 1716 crore, lower than Rs 2952.59 crore on Friday, 30 August 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,397 shares rose and 854 shares fell. A total of 149 shares were unchanged.
The BSE Mid-Cap index rose 1.42% and the BSE Small-Cap index rose 1.01%. Both these indices underperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE Metal index (up 3.16%), the S&P BSE FMCG (up 3.1%), the S&P BSE Realty (up 3%), the S&P BSE Oil & Gas (up 2.55%) and the S&P BSE Consumer Durables (up 1.76%), outperformed the Sensex.
The S&P BSE PSU (up 1.42%), the S&P BSE Capital Goods (up 1.04%), the S&P BSE Power (up 1.01%), the S&P BSE Bankex (up 0.91%), the S&P BSE Healthcare (up 0.81%), the S&P BSE Auto (up 0.36%), the S&P BSE Teck (up 0.34%), the S&P BSE IT (up 0.14%) underperformed the Sensex.
Among the 30-share Sensex pack, 19 stocks rose and rest of them fell.
Index heavyweight and cigarette maker ITC rose 3.3%.
Reliance Industries gained 3.76% to Rs 883.60.
Shares of public sector oil marketing companies rose after a hike in petrol and diesel prices, effective from midnight of 31 August 2013. BPCL (up 2.24%), HPCL (up 1.25%) and Indian Oil Corporation (up 0.55%), edged higher.
Public sector oil marketing companies (PSU OMCs) hiked petrol price by Rs 2.35 per litre on falling rupee and firming international oil prices. The fuel price hike, which was effective from midnight of 31 August 2013, excludes local sales tax or VAT. Petrol price in Delhi has increased by Rs 2.83 to Rs 74.10 per litre. This is the sixth increase in rates since June.
In a parallel move, diesel price was hiked by 50 paise, excluding VAT, in line with the January decision of the government allowing oil companies freedom to raise prices in small doses every month to wipe out mounting losses. Diesel price in Delhi has been hiked by 57 paise to Rs 51.97 per litre.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Meanwhile, a falling rupee adversely impacts PSU OMCs as these companies import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
State-run Coal India rose 2.59%. The company announced during market hours today, 2 September 2013, that the company and its subsidiaries achieved 97% of targeted production at 31.68 million tonne in August 2013.
Power Grid Corporation of India (PGCIL) rose 1.95% 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).
Mangalore Refinery and Petrochemicals rose 1.79% after the firm said that Ratna puja carrying 87,610.817 MT of Arab Extra Light crude completed discharge of its cargo through the company's single point mooring system. The announcement was made during trading hours today, 2 September 2013. Mangalore Refinery and Petrochemicals (MRPL) said that the uploading operation of Ratna puja commenced on 29 August 2013 and completed on 30 August 2013.
It may be recalled that MRPL set up single point mooring (SPM) project along with coastal booster pumping station in their Mangalore port limits for handling upto very large crude carrier (VLCC) at an estimated cost of Rs 1044 crore.
Capital goods pivotals rose. L&T gained 0.49% after the company said during market hours today, 2 September 2013 that its construction business secured new orders worth Rs 1141 crore in August 2013 in various business segments.
Bharat Heavy Electricals (Bhel) gained 1.85%. The company said during market hours today, 2 September 2013 that the Board for Industrial and Financial Reconstruction (BIFR) vide order dated 29 August 2013 sanctioned the Modified Draft Rehabilitation Scheme envisaging merger of Bharat Heavy Plate and Vessels (BHPV) with Bhel.
Reliance Infrastructure rose 2.51% after the company announced completion of a road project in Tamil Nadu. The announcement was made during trading hours today, 2 September 2013.
Reliance Infrastructure (RInfra) announced completion of widening of the entire 136 kilometre (km) Salem-Ulundurpet road in Tamil Nadu through its special purpose vehicle (SPV) - SU Toll Road.
Built at a cost of Rs 1061 crore, the SU corridor connects major tourist destinations, industrial zones in Salem district and the Chennai international airport.
Commenting on this development, Sudhir R Hoshing, CEO (Roads), Reliance Infrastructure, said, "We are happy to complete the widening of the entire stretch of Salem-Ulundurpet road that will provide a hassle-free, safe and smooth driving experience. We expect an increase in traffic of over 4,000 more vehicles per day. The new toll plaza is closer to Salem, which is an industrial centre with numerous steel, textiles, cement and electrical equipment manufacturing units. Such industrial traffic would benefit from faster and convenient passage through the road."
The SU road has already been revenue operational since 28 July 2012 with two toll plazas located at Nathakkarai and Veeracholapuram. A third toll plaza at Mettupattai has now become operational. Toll collection has started at all toll plazas, RInfra said.
RInfra said that the SU corridor project required major realignment work along with widening the entire stretch right from Salem to enable construction of four lanes. With the completion of the project, the average speed of vehicles will now double to approximately 70 km per hour, thereby reducing the traveling time by upto 50% and also saving fuel cost by almost 40%.
Infrastructure company Jaiprakash Associates surged 9.67% to Rs 36.30.
Bank stocks were mixed. ICICI Bank rose 3.13%. HDFC Bank fell 1.12%. Kotak Mahindra Bank lost 4.94% to Rs 626.50, with the stock sliding on profit booking after 2-day 8.75% rally.
State Bank of India (SBI) declined 0.13%. The bank on 29 August 2013, that the interest rate for bulk deposits for the tenors 7 days to 60 days will be 9% per annum and for the tenor 61 days to less than one year will be 8.25% per annum with effect from 31 August 2013.
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 1.64% to 5.26%.
Metal stocks rose after data showed a China's manufacturing gauge rose to a 16-month high in August. China is the world's largest consumer of copper and aluminum. Bhushan Steel (up 0.75%), Jindal Steel & Power (up 2.5%), NMDC (up 2.66%), JSW Steel (up 2.5%), and Tata Steel (up 6.07%) edged higher.
Hindalco Industries rose 3.96% to Rs 109.05 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.
IT major, TCS rose 1.08% to Rs 2,045 after hitting a record high of Rs 2,065.45 in intraday trade today, 2 September 2013.
HCL Technologies gained 0.7% to Rs 1,039 after hitting a record high of Rs 1,049.50 in intraday trade today, 2 September 2013.
Tata Motors rose 0.44%. 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 1.91% 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."
Meanwhile, M&M after market hours today, 2 September 2013 said its domestic tractor sales rose 9% to 12,394 units in August 2013 over August 2012. Export sales dropped 27% to 840 units in August 2013 over August 2012. Total tractor sales rose 7% to 13,234 units in August 2013 over August 2012.
Speaking on the monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, Mahindra & Mahindra Ltd. said, Our domestic growth of 9% in August 2013 and consistent performance over the last five months is heartening. We believe the Kharif sowing having crossed the 1000 lac hectare mark, normal monsoons and prospects of the approaching festive season are clear indicators of stronger growth for the overall agriculture sector in the coming months.
Maruti Suzuki India surged 4.66% after the company said during market hours today, 2 September 2013 that its total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Ashok Leyland rose 3.83%. The company said its total sales declined 24% to 7,139 units in August 2013 over August 2012. The company announced the August sales numbers during trading hours today, 2 September 2013. Ashok Leyland's sales of commercial vehicles excluding small commercial vehicle (SCV) Dost fell 25% to 4,939 units in August 2013 over August 2012. Sales of SCV Dost declined 22% to 2,200 units in August 2013 over August 2012.
Hero MotoCorp shed 0.69% to Rs 2,016, after hitting a 52-week high of Rs 2,088 in intraday trade today, 2 September 2013.
Bajaj Auto rose 0.41%. The company said during market hours today, 2 September 2013 that its total sales fell 9% to 3.12 lakh units in August 2013 over August 2012. Motorcycle sales declined 8% to 2.78 lakh units in August 2013 over August 2012. Commercial vehicles sales declined 17% to 33,605 units in August 2013 over August 2012. Exports rose 10% to 1.44 lakh units in August 2013 over August 2012.
TVS Motor Company rose 1.64% after the company reported a marginal 0.57% increase in total sales to 1.55 lakh units in August 2013 over August 2012. TVS Motor Company said its total two-wheeler sales fell 1.5% to 1.48 lakh units in August 2013 over August 2012.
Domestic two-wheeler sales were down 6.21% at 1.27 lakh units in August 2013 over August 2012. Motorcycles sales, however, grew by 14.23% to 61,313 units. Scooters sales declined by 4.49% to 36,478 units during the period under review. Exports during the month grew by around 53% at 27,425 units in August 2013 over August 2012. Two-wheeler exports increased by 40% to 21,374 units in August 2013 over the same month last year. In the three-wheeler segment, the company said total sales surged by around 81% to 7,063 units in August 2013 over August 2012.
Meanwhile, 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.
Realty stocks gained on renewed buying. DLF (up 5.59%), D B Realty (up 3.21%), Indiabulls Real Estate (up 6.77%), HDIL (up 3.14%), Oberoi Realty (up 1.48%) and Unitech (up 4.83%), rose.
The path-breaking Land Acquisition Bill, which seeks to provide just and fair compensation to farmers while ensuring that no land can be acquired forcibly, was passed by the Lok Sabha with overwhelming majority on Thursday, 29 August 2013. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012 stipulates mandatory consent of at least 70% for acquiring land for Public Private Partnership (PPP) projects and 80% for acquiring land for private companies. The bill, which will replace over a century-old law, proposes compensation that is up to four times the market value in rural areas and two times the market value in urban areas. The bill was passed with 216 votes in favour and 19 against.
Mahindra Lifespace Developers rose 1.21% after the company said its board approved raising upto Rs 400 crore by issuing equity shares to qualified institutional buyers. Mahindra Lifespace Developers said that the proposed qualified institutional placement (QIP) of equity shares is subject to approval of shareholders through a postal ballot process. The result of the postal ballot will be declared to the stock exchanges on 22 October 2013, the company said.
On the 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%.
Indian factory activity shrank for the first time in more than four years last month, adding to the country's deepening economic malaise even as the Reserve Bank of India (RBI) struggles to defend the battered rupee currency, a survey showed. The HSBC Manufacturing PMI, compiled by Markit, sank to 48.5 in August from 50.1 in July, the lowest reading since March 2009.
European stocks rallied on Monday, after mostly upbeat PMI numbers from the region and as data from China signaled an improvement in that country's manufacturing sector. Key benchmark indices in UK, France and Germany were up by 0.45% to 1.71%.
Euro-area factory output expanded at a faster pace than initially estimated in August, driven by a resurgence in Italy and Spain, as the 17-nation currency bloc's recovery began to build momentum. An index based on a survey of purchasing managers in the manufacturing industry increased to a 26-month high of 51.4 from 50.3 in July, London-based Markit Economics said today. That's above an estimate of 51.3 published on August 22. A reading above 50 indicates growth.
A UK factory index increased to its highest level in 2-1/2 years in August as the recovery gathered pace in the third quarter. The pound rose against the dollar. The gauge climbed to 57.2 from a revised 54.8 in July, Markit Economics and the Chartered Institute of Purchasing and Supply said today in London. That's above the 50 level that divides expansion from contraction.
Spanish manufacturing expanded in August for the first time in more than two years, strengthening Prime Minister Mariano Rajoy's prediction that exports will help the economy emerge from recession this year. The Purchasing Managers' Index rose to 51.1 in August from 49.8 in July, as manufacturing grew for the first time since April 2011, London-based Markit Economics said in a statement today on its website. A reading above 50 indicates expansion.
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 0.21% to 2.04%. Key benchmark indices in South Korea and Indonesia fell by 0.08% to 2.44%.
China's Shanghai Composite was flat. 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 stock markets remain closed today, 2 September 2013, for the Labor Day holiday. 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.
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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