High volatility characterized trading as key benchmark indices struck yet another record high. After extending gains in mid-afternoon trade soon after Ukraine's announcement that the country's President Petro Poroshenko had agreed on a permanent cease-fire in the Donbas region with his Russian counterpart Vladimir Putin, key indices came off the day's high shortly thereafter after a Russian official reportedly clarified that the two leaders had not agreed on a truce, but instead had discussed the peace process in eastern Ukraine. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on intraday basis as well as on closing basis. The Sensex rose 120.55 points or 0.45% to settle at 27,139.94. IT stocks led gains after upbeat US economic data. The market breadth indicating the overall health of the market turned negative from positive in late trade. Brent crude oil futures moved higher from a 16-month low hit yesterday, 2 September 2014. A survey showed that growth in India's service sector activity slowed last month. 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.
L&T gained after commissioning the world's largest solar photovoltaic plant in Amritsar, Punjab. ONGC dropped amid intraday volatility after its overseas subsidiary signed MoU with a major oil producing company in Argentina. Shares of paint makers were in demand on expectations of rise in sales of decorative paints during the upcoming festival season. PSU OMCs gained on decline in crude oil prices. Metal stocks advanced after better-than-expected economic data from China.
Key indices had witnessed intraday volatility earlier during the day after a firm opening. An overnight sharp slide in crude oil prices and positive cues from Asian markets had triggered a firm opening on the domestic bourses.
In overseas markets, European stocks surged after Ukraine's announcement that the country's President Petro Poroshenko had agreed on a permanent cease-fire in the Donbas region with his Russian counterpart Vladimir Putin. 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.
The Sensex advanced 120.55 points or 0.45% to settle at 27,139.94, a record closing high. The index jumped 206.46points at the day's high of 27,225.85 in mid-afternoon trade, a lifetime high. The index rose 47.63 points at the day's low of 27,067.02 in intraday trade.
The CNX Nifty garnered 31.55 points or 0.39% to settle at 8,114.60, a record closing high. The index hit a high of 8,141.90 in intraday trade, a lifetime high. The index hit a low of 8,092.25 in intraday trade.
The market breadth indicating the overall health of the market was negative. On BSE, 1,529 shares declined and 1,494 shares rose. A total of 112 shares were unchanged.
The BSE Mid-Cap index advanced 81.10 points or 0.85% to settle at 9,604.87, outperforming the Sensex. The BSE Small-Cap index gained 41.30 points or 0.39% to settle at 10,533.72, underperforming the Sensex.
The S&P BSE IT index (up 2.50%), the S&P BSE Teck index (up 2.21%), the S&P BSE Realty index (up 2.15%), the S&P BSE Metal index (up 1.16%), the S&P BSE Capital Goods index (up 0.80%) and the S&P BSE Auto index (up 0.67%), outperformed the Sensex.
The S&P BSE Consumer Durables index (up 0.44%), the S&P BSE Healthcare index (up 0.30%), the S&P BSE Oil & Gas index (up 0.02%), the S&P BSE Power index (down 0.06%), the S&P BSE Bankex (down 0.12%) and the S&P BSE FMCG index (down 0.59%), underperformed the Sensex.
Among the 30 Sensex shares, 15 declined and remaining shares gained.
State-run GAIL (India) declined 1.93% to Rs 455.30.
ITC was down 1.65% to Rs 348.95. 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.
State-run Coal India rose 3.40% to Rs 376.
Tata Power Company rose 1.07% to Rs 90.05. The company during market hours said that its wholly owned subsidiary Bhira Investments (Bhira) has redeemed $450 million fixed to floating rate subordinated notes on Tuesday, 2 September 2014, as per the notice for early redemption to the Trustee dated 31 July 2014. The redemption has been financed by way of loans raised by Bhira for this specific purpose, Tata Power said in a statement.
Separately, Tata Power Company said that power supply has been normalized fully in Mumbai. The company said there has been no load shedding in Mumbai since yesterday, 2 September 2014, night. The company issued the statement after power went off in many parts of Mumbai yesterday due to technical fault at one of the power stations of Tata Power.
L&T rose 1.36% to Rs 1,598.15 after the company during market hours said that its construction division has recently commissioned the world's largest solar photovoltaic plant of 7.52 MWp capacity on a single roof at Amritsar in Punjab. The energy generated from this plant is being fed to the local grid through a power purchase agreement (PPA) signed with the state distribution company under the New and Renewable Sources of Energ (NRSE) Policy, L&T said in a statement.
ONGC lost 1.48% at Rs 438. The stock was volatile. The stock hit a high of Rs 450 and low of Rs 435.75. ONGC Videsh and YPF S.A., the major oil producing company of Argentina have entered into a memorandum of understanding (MoU) on 1 September 2014 to cooperate in the hydrocarbon sector. Under the MoU, the two companies will analyse the opportunities for cooperation in upstream sector in Argentina, India and third countries. The MoU also envisages collaboration in the areas of research & development and human resources, ONGC said in a statement.
PSU OMCs gained on decline in crude oil prices. BPCL (up 0.17%), HPCL (up 1.17%), and Indian Oil Corporation (up 1.70%) gained.
Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
IT stocks advanced after positive economic data in US, the biggest outsourcing market for Indian IT firms. Infosys (up 3.41%), Wipro (up 3%), TCS (up 2.45%), Hexaware Technologies (up 2.01%), Tech Mahindra (up 1.37%), HCL Technologies (up 0.86%) and MphasiS (up 0.56%), edged higher.
Metal stocks advanced after better-than-expected economic data from China. Bhushan Steel (up 4.97%), Steel Authority of India (Sail) (up 1.89%), Tata Steel (up 1.26%) and Hindalco Industries (up 0.40%), edged higher. Hindustan Zinc (down 0.39%), Jindal Steel & Power (down 0.92%) and JSW Steel (down 2.44%), edged lower.
NMDC rose 2.46%. NMDC's total iron ore production rose to 12.10 million tonne for five months from April-August 2014, from 10.83 million tonnes during the five months from April-August 2013. Sales rose to 13.57 million tonnes for five months from April-August 2014, from 11.44 million tonne during the five months from April-August 2013. The company announced the data after trading hours on Tuesday, 2 September 2014.
Meanwhile, NMDC kept price of iron ore unchanged for September 2014. NMDC said it has rolled over the August 2014 price of lump ore (Rs 4600 per tonne) and fines (Rs 3160 per tonne) to the month of September 2014.
Separately, NMDC said that the company has subscribed to its full entitlement of shares of the rights offer of Legacy Iron Ore. Accordingly, after the allotment of shares by Legacy, NMDC is holding 115.34 crore shares with a voting power of 78.56% in Legacy.
Sesa Sterlite rose 0.81%. The company after market hours on Tuesday, 2 September 2014, said that its board of directors will meet on Friday, 5 September 2014, inter alia, to consider enabling approval for raising of funds through issue of eecurities including convertible debentures, bonds, warrants, NCDs etc.
Shares of paint makers were in demand on expectations of rise in sales of decorative paints during the upcoming festival season. Berger Paints (up 2.08%), Kansai Nerolac Paints (up 1.54%), Shalimar Paints (up 0.91%), Asian Paints (up 0.29%) and Akzo Nobel India (up 0.22%), 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.
Bank stocks were mixed. IDBI Bank (down 1.53%), Punjab National Bank (down 0.89%), State Bank of India (down 0.81%), ICICI Bank (down 0.73%), Bank of Baroda (down 0.25%) and Union Bank of India (down 0.23%), edged lower.
Canara Bank (up 0.23%), IndusInd Bank (up 0.34%), Bank of India (up 1.06%), Federal Bank (up 1.90%) and Yes Bank (up 2.64%), edged higher.
Axis Bank rose 1.17% at Rs 413.60. The stock hit a record high of Rs 414.80 in the intraday trade.
HDFC Bank fell 0.22% at Rs 856.65. The stock reversed direction after hitting record high of Rs 863.80 in the intraday trade.
Telecom major Bharti Airtel rose 2.87% at Rs 403.15. The stock hit a 52-week high of Rs 408.25 in the intraday trade.
Aviation stocks advanced on decline in crude oil price. SpiceJet (up 3.97%) and Jet Airways (India) (up 0.31%), gained. The aviation turbine fuel (ATF) or jet fuel constitutes about 40% of the airlines' operating cost. Jet fuel prices are linked to international crude oil prices.
Punj Lloyd rose 2.64% to Rs 40.75 after the company during market hours said that its board of directors at a meeting held today, 3 September 2014, approved issue of non convertible debentures including bonds within the overall borrowing limits of the company.
Carborundum Universal jumped 3.22% to Rs 195.55 after HDFC Mutual Fund bought 0.53% stake in the company on Tuesday, 2 September 2014. HDFC Mutual Fund under its HDFC Midcap Opportunities Fund bought 10 lakh shares or 0.53% stake in Carborundum Universal at Rs 188 per share in a bulk deal on NSE on Tuesday, 2 September 2014, from Amansa Holdings.
Shriram Transport Finance Company clocked a highest turnover of Rs 75.12 crore on BSE. Cigniti Technologies (Rs 48.87 crore), Housing Development and Infrastructure (Rs 46.29 crore), State Bank of India (Rs 41.92 crore) and TCS (Rs 41.40 crore), were the other turnover toppers on BSE in that order.
Avance Technologies reported highest volumes of 72.63 lakh shares on BSE. Unitech (57.96 lakh shares), Cals Refineries (49.95 lakh shares), Housing Development and Infrastructure (47.99 lakh shares) and Rasoya Proteins (47.14 lakh shares), were the other volume toppers on BSE in that order.
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. Brent for October settlement 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, the contract was up 97 cents at $101.31 a barrel. Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation.
In the foreign exchange market, the rupee edged higher against the dollar as equity benchmark indices hit yet another record high and as Brent crude oil prices hit 16-month low yesterday, 2 September 2014. The partially convertible rupee was hovering at 60.48, compared with its close of 60.68/69 during the previous trading session.
The Sensex gained for the nine straight trading session today, 3 September 2014. The barometer index has risen 825.65 points or 3.14% in nine trading sessions from a recent low of 26,314.29 on 20 August 2014. The Sensex has gained 501.83 points or 1.88% in this month so far (till 3 September 2014). The Sensex has gained 5,969.26 points or 28.20% in calendar year 2014 so far (till 3 September 2014). From a 52-week low of 18,188.43 on 4 September 2013, the Sensex has risen 8,951.51 points or 49.22%.
A 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 stocks climbed today, 3 September 2014, after Ukraine said it had reached a deal with Russia for a cease-fire in eastern Ukraine, though both sides later pulled back on the claim. Key benchmark indices in UK, France and Germany were up by 0.75% to 1.24%.
Early in the morning, Ukraine said that the country's President Petro Poroshenko and his Russian counterpart Vladimir Putin had struck an agreement for a permanent truce in the Donbas region, where the Russian separatist-held city of Donetsk is located. A Russian official later reportedly clarified that Putin had not agreed on a cease-fire, because Russia isn't a party to the fighting, but the Russian President did discuss how to resolve the conflict in eastern Ukraine.
Later, Poroshenko's office reportedly modified its statement on the talks with Putin, to replace the conversation resulted in an agreement on constant cease-fire with the conversation resulted in an agreement on cease-fire regime.
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 edged 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 2.46%. 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 73 points at the opening bell on Wednesday, 3 September 2014. The Institute for Supply Management yesterday, 2 September 2014, 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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