High volatility was witnessed as key benchmark indices reversed strong initial gains after the results of a private survey data showed that slowdown in factory activity deepened last month. The S&P BSE Sensex was down 7.16 points or 0.04%, off about 230 points from the day's high and up about 60 points from the day's low. The market breadth, indicating the overall health of the market, turned negative from positive. Shares of Financial Technologies crashed after the National Spot Exchange on Wednesday, 31 July 2013, said it has suspended trading of contracts, other than e-Series contracts till further notice.
Many metal stocks reversed initial gains. Index heavyweight and cigarette maker ITC edged higher. FMCG major Hindustan Unilever (HUL) rose on bargain hunting after the recent steep losses. Maruti Suzuki India edged higher after the car major reported a small increase in sales in July 2013. Among IT stocks, TCS hit record high.
The market surged in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed initial gains in morning trade. High volatility was witnessed as key benchmark indices reversed strong initial gains after the results of a private survey data showed that slowdown in factory activity deepened last month.
At 11:20 IST, the S&P BSE Sensex was down 7.16 points or 0.04% to 19,338.54. The index fell 65.15 points at the day's low of 19,280.55 in mid-morning trade. The index gained 223.50 points at the day's high of 19,569.20 in early trade, its highest level since 30 July 2013.
The CNX Nifty was down 16.15 points or 0.28% to 5,725.85. The index hit a low of 5,710.05 in intraday trade. The index hit a high of 5,808.50 in intraday trade, its highest level since 30 July 2013.
The market breadth, indicating the overall health of the market, turned negative from positive. On BSE, 867 shares fell and 704 shares rose. A total of 103 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and rest of them rose. Bhel (down 3.95%), ONGC (down 3.25%) and State Bank of India (down 2.39%), declined.
IT major TCS rose 0.77% to Rs 1,829.05. The stock hit record high of Rs 1832 in intraday trade today, 1 August 2013. TCS on 29 July 2013, said it has won a three-year contract from the Zambia Revenue Authority (ZRA) for the modernisation of its domestic tax system.
Index heavyweight and cigarette maker ITC rose 1.65%.
FMCG major Hindustan Unilever (HUL) rose 2.92% on bargain hunting after the recent steep losses triggered by the company reporting a muted growth in bottom line in Q1 June 2013. The company's net profit declined 23.43% to Rs 1019.25 crore on 5.88% increase in total income to Rs 6985.79 crore in Q1 June 2013 over Q1 June 2012. The result was announced on 26 July 2013.
Maruti Suzuki India rose 1%. The company announced during market hours today, 1 August 2013, that its total sales rose 1.3% to 83,299 units in July 2013 over July 2012. Domestic sales rose 5.8% to 75,145 units in July 2013 over July 2012. Export sales fell 27.3% to 8,154 units in July 2013 over July 2012.
Many metal stocks reversed initial gains. Hindalco Industries (down 2.38%), Tata Steel (down 2.11%) and Sterlite Industries (down 1.19%), edged lower.
Financial Technologies 54% to Rs 249 after the National Spot Exchange on Wednesday, 31 July 2013, said it has suspended trading of contracts, other than e-Series contracts till further notice. Financial Technologies is one of the two promoters of the National Spot Exchange. The National Spot Exchange said it has also decided to merge the delivery and settlement of all pending contracts and deferred the same for a period of 15 days. Consequently, the positions outstanding in the contracts will be settled by way of delivery and payment after expiry of 15 days. The exchange will announce a revised settlement calendar and contracts due for settlement after this 15 days period, it said.
The National Spot Exchange said that following the directions issued by the Department of Consumer Affairs, Government of India on 12 July 2013, the exchange had given an undertaking to the Government and simultaneously introduced T+10 contracts with Trade for Trade settlements. This was done with a view to ensure orderly participation without creating any negative sentiments in the market, it said. Such structural change has disrupted the market equilibrium as volumes on the exchange have gone down significantly. It created conflicting views in the minds of large number of members that there are certain regulatory issues pertaining to the contracts running on the exchange in view of the government's direction dated 12 July 2013, which has been widely reported in media. This abrupt action has created uncertainty and doubt about continuity of trading on the exchange and hence most of the participants started withdrawing from the market, the National Spot Exchange said. While the exchange has run successfully without any disruption since last five years, such structural change has created market disequilibrium, leading to this scenario, it said.
The exchange will ensure that the process of settlement takes place in orderly manner and all participants get their rightful dues in accordance with Rules and Bylaws of the Exchange keeping in view the interest of the participants, it said.
Vivimed Labs was locked at 5% upper circuit at Rs 106.10 on BSE after the company said it has signed an agreement to acquire Actavis Pharma Manufacturing's solid oral dosage facility in Tamil Nadu. The announcement was made during trading hours today 1 August 2013. Vivimed Labs said that Actavis Pharma Manufacturing's (APMPL) solid oral dosage (SOD) facility is being acquired from its parent Actavis Holding Asia B. V. (Actavis), an affiliate of Actavis Inc., a leading global generic and specialty pharmaceutical company.
The gross acquisition consideration is Rs 122 crore and is being funded through an optimal combination of internal accruals and debt. The structuring is made attractive by the available cash balance and the appropriate working capital support being provided by the Actavis Group towards execution of the contract manufacturing agreement, Vivimed said. As part of the transaction, Actavis and Vivimed are also entering into a contract manufacturing agreement for Vivimed to manufacture a set of products for Actavis Group over a defined period
A slowdown in factory activity deepened in July as order books shrank by the most in over four years, suggesting a broad stagnation in the manufacturing sector, a survey showed on Thursday, 1 August 2013. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged down to 50.1 in July from 50.3 in May. The index, which gauges business activity in Indian factories but not its utilities, has been running close to the 50 mark that separates growth from contraction since May, but has held above it for over four years.
Asian stocks rose on Thursday, 1 August 2013, after the Federal Reserve maintained its bond-buying program at current levels. Key benchmark indices in Hong Kong, China Japan, Singapore, and South Korea rose by 0.36% to 2.04%. Key benchmark indices in Taiwan and Indonesia fell by 0.02% to 0.45%.
A privately compiled gauge of China's manufacturing activity sank to an 11-month low, the index's publishers HSBC and Markit said Thursday. The HSBC manufacturing Purchasing Managers' Index fell to 47.7, down from June's final reading 48.2. The result contrasted with an official version of the manufacturing PMI, which unexpectedly rose to 50.3 from June's 50.1. Any reading above 50 indicates activity is expanding, and the July data marked the third straight month the HSBC registered contraction, and also the third month the two PMIs differed on whether factory activity was rising. HSBC's PMI covers a smaller number of firms and focuses on smaller manufacturers, while the official PMI includes more of the large state-run firms. HSBC's survey also showed new orders falling at their fastest rate in almost a year, though pace of the contraction for new export orders slowed.
Chinese leaders pledged at a Politburo meeting this week to maintain steady second-half growth while pressing on with economic reforms.
Trading in US index futures indicated that the Dow could gain 71 points at the opening bell on Thursday, 1 August 2013. US stocks ended mixed on Wednesday after a busy day of news that included a policy statement from the Federal Reserve and a mixed report on US economic growth. Second-quarter US gross domestic product grew 1.7%, above the 1.1% pace expected. However, the report also included a steep downgrade in first-quarter GDP growth, which is now estimated at 1.1% instead of 1.8%.
The Federal Open Market Committee, which has floated the prospect of reductions to its stimulus program should economic risks abate, said yesterday after a two-day long meet that while growth should pick up, persistently low inflation may hamper the recovery. Policy makers, however, expect inflation to move back toward its 2% objective over the next 18 months. The Fed said that that the world's largest economy was expanding at a "modest" pace. It had called the pace "moderate" in June.
The statement came as data showed US gross domestic product expanded more than economists estimated last quarter. The Fed offered no clues as to when it plans to slow the pace of monetary stimulus. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
The influential US non-farm payroll data for July 2013 is due tomorrow, 2 August 2013.
The European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions later in the global day today, 1 August 2013.
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