Key benchmark indices were range bound in afternoon trade. The barometer index, the S&P BSE Sensex was up currently up 117.01 points or 0.43% at 27,136.40. The market breadth indicating the overall health of the market was positive. A survey showed that growth in India's service sector activity slowed last month. Provisional data showed that foreign funds remained net buyers of Indian stocks during the previous trading session. The BSE Mid-Cap index and the BSE Small-Cap index, both, outperformed the Sensex.
Shares of paint makers were in demand on expectations of rise in sales of decorative paints during the upcoming festival season.
Earlier, key indices had surged to fresh record high in mid-morning trade after paring initial gains. Before that, an overnight sharp slide in crude oil prices and positive cues from Asian markets had triggered a firm opening on the domestic bourses.
European market opend higher ahead of the European Central Bank's policy meeting. Asian stocks rose after reports showed faster expansion in China's service industries last month and as US manufacturing expanded at the fastest pace in three years last month.
At 13:15 IST, the S&P BSE Sensex was up 117.01 points or 0.43% at 27,136.40. The index jumped 179.41 points at the day's high of 27,198.80 in mid-morning trade, a record high for the index. The index rose 47.63 points at the day's low of 27,067.02 in intraday trade.
The CNX Nifty was up 29.70 points or 0.37% at 8,112.75. The index hit a high of 8,133.10 in intraday trade, a record high for the index. The index hit a low of 8,092.25 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1450 shares gained and 1325 shares fell. A total of 113 shares were unchanged.
The BSE Mid-Cap index was up 67.36 points or 0.71% at 9,591.13. The BSE Small-Cap index was up 55.91 points or 0.53% at 10,548.33. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 17 rose and the remaining shares fell. Bharti Airtel (up 3.34%), TCS (up 2.72%), Wipro (up 2.60%), Infosys (up 2.31%), Tata Motors (up 1.60%), Axis Bank (up 1.15%), Tata Power (up 1.07%), Larsen & Toubro (up 0.97%), Tata Steel (up 0.91%), Reliance Industries (up 0.77%) and Sesa Sterlite (up 0.77%), edged higher from the Sensex pack.
GAIL (India) (down 2.21%), Hero MotoCorp (down 1.2%), ONGC (down 1.09%), Bajaj Auto (down 1.03%), Bharat Heavy Electricals (down 0.77%), ICICI Bank (down 0.75%), NTPC (down 0.68%), State Bank of India (down 0.57%) and Cipla (down 0.47%), edged lower from the Sensex pack.
ITC was down 1.17% to Rs 350.65. The company announced during trading hours today, 3 September 2014, that in terms of the scheme of arrangement between Wimco and the company for demerger of the non-engineering business of Wimco into the company, the company on 29 August 2014 has issued and alloted 87,761 ordinary shares of Re 1 each to the members of Wimco in the ratio of 2 ordinary shares of Rs. 1 each in the company for every 77 equity shares of Re 1 each held in Wimco. Consequently, with effect from 29 August 2014, the issued and subscribed share capital of the company stands increased to Rs 796.74 crore dividend into 796.74 crore ordinary shares of Re 1 each.
Shares of paint makers were in demand on expectations of rise in sales of decorative paints during the upcoming festival season. Kansai Nerolac Paints (up 2.12%), Berger Paints (India) (up 2.10%), Shalimar Paints (up 0.86%), Asian Paints (up 0.52%) and Akzo Nobel India (up 0.08%), edged higher.
The festival season is traditionally the time of the year when most people choose to get their houses re-painted. Diwali marks the beginning of a new year for most Indians, which is accompanied by a new look to homes across the country.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 672.81 crore on Tuesday, 2 September 2014, as per provisional data from the stock exchanges.
A decline in crude oil prices is good news for India as the country imports 80% of its crude oil requirement. Brent crude futures slumped to a 16-month low yesterday, 2 September 2014, on concern slower manufacturing from Europe to China will curb global oil demand. The contract slipped $2.45 a barrel to settle at $100.34 a barrel yesterday, 2 September 2014, the lowest close since 1 May 2013. In today's trading, Brent for October settlement was up 56 cents at $100.90 a barrel. Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation.
A latest survey released by Markit Economics today, 3 September 2014, showed that growth in India's service sector activity slowed in August 2014. Adjusted for seasonal influences, the headline HSBC India Services Business Activity Index posted 50.6 in August, down from 52.2 in July. On the positive side, weaker activity has softened inflation indicators within the survey.
Global credit rating agency Moody's Investors Service reportedly said today, 3 September 2014, that India's fiscal deficit and inflation outlook could prevent any upgrades in the country's sovereign rating. Moody's said that India's finances would remain vulnerable to future cyclical downturns and external shocks. While stronger growth in this large and diverse economy will help to counterbalance these credit challenges, they limit further upward momentum in the sovereign rating, Moody's said. The credit agency rates India at "Baa3", the lowest investment-grade rating, with a "stable" outlook.
European market was positive in early trade today, 3 September 2014, but remained stuck in a tight range ahead of the European Central Bank's policy meeting, with investors split on whether the ECB will unveil immediate stimulus steps to stave off deflation. Key benchmark indices in UK, France and Germany were up by 0.27% to 0.38%.
A monthly meeting of the European Central Bank (ECB) is scheduled tomorrow, 4 September 2014. There are expectations that the European Central Bank (ECB) will announce quantitative easing in the coming months to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.
Asian markets were trading higher today, 3 September 2014 after data underscored that the US economy continues to gather gradual momentum. Key indices in Japan, China, Hong Kong, Taiwan, Singapore, and Indonesia were up 0.32% to 2.16%. In South Korea, the Seoul Composite index was off 0.02%.
The HSBC China services Purchasing Managers' Index rose to a 17-month high of 54.1 in August from 50 in July, HSBC Holdings PLC said today, 3 September 2014, while cautioning that sub-index readings pointed to a mixed picture of economic recovery. The HSBC Composite Output Index posted at 52.8, up from 51.6 in July, and signalled a robust rise in activity levels. Furthermore, it was the strongest expansion of business activity in 17 months.
China's official non-manufacturing activity slightly recovered in August, with the sector's purchasing managers' index (PMI) rebounding to 54.4 in August from 54.2 in July, official data showed today, 3 September 2014.
Trading in US index futures indicated that the Dow could gain 30 points at the opening bell on Wednesday, 3 September 2014. US stocks mostly fell on Tuesday, 2 September 2014, with the S&P 500 holding above 2,000 after rising to another intraday record, as energy companies dropped along with the price of oil and investors fretted whether the European Central Bank would make further monetary policy moves this week.
Among economic data, the Institute for Supply Management said its US manufacturing activity index rose to 59 in August, the strongest since March 2011.
Separately, US construction spending staged a strong rebound in July, rising by the largest amount in more than two years. Construction spending rose 1.8% in July, the biggest one-month gain since May 2012, the Commerce Department reported Tuesday, 2 September 2014. It followed a 0.9% decline in June, the largest setback in a year.
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