Key benchmark indices pared gains after hitting three-week high in morning trade. The S&P BSE Sensex was up 68.69 points or 0.35%, off 31.59 points from the day's high and up 116.93 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Infrastructure sector stocks rose after Prime Minister Dr. Manmohan Singh on Friday, 28 June 2013, held a meeting with the ministries of power, coal, railways, roads, shipping and civil aviation to set up targets for the current fiscal year. Select FMCG and agri-sector stocks gained after the latest data showed a pick-up in sowing of kharif crops.
Key benchmark indices moved into positive after a lower start triggered by weak Asian stocks. Key benchmark indices pared gains after hitting three-week high in morning trade.
The market sentiment was boosted by provisional data showing that foreign fund turnes net buyers of Indian stocks on Friday, 28 June 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1124.31 crore on Friday, 28 June 2013, as per provisional data from the stock exchanges.
At 10:16 IST, the S&P BSE Sensex was up 68.69 points or 0.35% to 19,464.50. The index gained 100.28 points at the day's high of 19,496.09 in morning trade, its highest level since 10 June 2013. The index fell 48.24 points at the day's low of 19,347.57 in early trade.
The CNX Nifty was up 23.30 points or 0.4% to 5,865.50. The index hit a high of 5,870.35 in intraday trade, its highest level since 10 June 2013. The index hit a low of 5,822.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 918 shares gained and 393 shares fell. A total of 55 shares were unchanged.
The total turnover on BSE amounted to Rs 331 crore by 10:20 IST compared to Rs 88 crore by 09:30 IST.
Among the 30-share Sensex pack, 21 stocks gained and rest of them declined.
Hero MotoCorp (HMC) rose 0.72%. The company before market hours today, 1 July 2013, said it has incorporated a wholly owned subsidiary in USA by the name of HMCL (NA), Inc. (HMCL (NA)) inter alia for the purpose of investing in Erik Buell Racing, inc. (EBR). HMCL (NA) has agreed to invest $25 million in EBR for a total stake of 49.2% in the share capital of EBR. The first tranche of $15 million has been invested by HMCL (NA) on 28 June 2013. The second tranche of $10 million is proposed to be invested within the next 9 months.
Infrastructure sector stocks rose after Prime Minister Dr. Manmohan Singh on Friday, 28 June 2013, held a meeting with the ministries of power, coal, railways, roads, shipping and civil aviation to set up targets for the current fiscal year. L&T (up 1.98%), Bhel (up 2.01%), GMR Infrastructure (up 1.99%), Lanco Infratech (up 3.51%) gained.
The Prime Minister highlighted the need to ramp up investment in infrastructure to revive investor sentiment, a statement from the Prime Minister's Office (PMO) said. For this purpose, a target of rolling out public-private partnership (PPP) projects of at least Rs 1 lakh crore in the next six months has been set, the PMO said.
Reliance Infrastructure (RInfra) rose 1.46%. Reliance Infrastructure (RInfra) through its special purpose vehicle (SPV) Delhi Airport Metro Express (DAMEPL) has intimated the take over of the line by Delhi Metro Railway Corporation (DMRC) with effect from 1 July 2013. The announcement was made before market hours today, 1 July 2013.
RInfra said that due to the defects in the civil structure designed and built by DMRC, DAMEPL after deliberations and consultations with all stakeholders was forced to suspend the operations of the project, with effect from 8 July 2012, in paramount interest of safety of commuters and public at large. In view of the fact that DMRC failed to cure the defects within the period prescribed under the concession agreement, and on account of material breach and DMRC Event of Default having arisen as a result thereof, DAMEPL terminated the concession agreement vide its termination notice dated 8 October 2012.
RInfra said it has requested DMRC for payment of termination payment. As per the terms of the concession agreement, for the termination due to DMRC's Event of Default, DMRC is to pay the termination payment equivalent to 130% of the adjusted equity and 100% of the debt-due. The total investment of RInfra towards project capital expenditure is to the tune of Rs 2800 crore, RInfra said.
Select FMCG and agri-sector stocks gained after the latest data showed a pick-up in sowing of kharif crops. The Centre on Friday, 28 June 2013, said that as per reports received from state governments, the total sown area in the country stands at 250.99 lakh hectare (lh) as on 28 June 2013, compared with 135.87 lh at this time last year.
Britannia Industries (up 1.41%), Dabur India (up 1.86%), Godrej Consumer Products (up 1.43%), Nestle India (up 0.68%) and Tata Global Beverages (up 2.57%) gained.
Index heavyweight and cigarette major ITC was unchanged at Rs 324.40.
Hindustan Unilever was also trading flat at Rs 585. Anglo-Dutch consumer goods major Unilever's open offer to raise its stake in Indian unit, which opened on 21 June 2013, closes on 4 July 2013. Unilever will buyback shares from minority shareholders at Rs 600 per share to hike its stake in Hindustan Unilever from 52.48% to up to 75%.
United Spirits jumped 5.05% to Rs 2,281 after Morgan Stanley Asia (Singapore) Pte bought 10.80 lakh shares, or 0.74% stake of the company at Rs 2,118.23 per share via a block deal on NSE on Friday, 28 June 2013. As on 31 March 2013, Morgan Stanley Asia (Singapore) Pte held 40.84 lakh shares, or 3.12% stake in United Spirits.
Among agri-sector stocks, Advanta India (up 1.77%), Jain Irrigation Systems (up 2.01%) and Monsanto India (up 1.62%) edged higher.
Markit Economics will today, 1 July 2013, unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for June 2013. HSBC's India manufacturing PMI, eased to 50.1 in May 2013 from 51 in April 2013 led by a fall in output and a slowdown in new orders.
Asian stocks dropped on Monday, 1 July 2013, as a further slowdown in manufacturing activity in China, South Korea and Taiwan raised concerns about the health of those economies. Key benchmark indices in China, Indonesia, Taiwan, Singapore, Japan and South Korea were down 0.02% to 0.75%. The Hong Kong markets were closed to mark the anniversary of the territory's handover from the UK to China.
Two separate surveys in China showed a further loss of momentum in factory activity. An officially sponsored reading of the manufacturing Purchasing Managers' Index for June dropped to 50.1 from 50.8 in May. Another survey by HSBC showed the monthly PMI falling to 48.2 in June from 49.2 in May. A reading below 50 shows a deterioration in activity, while one above signals an improvement.
Meanwhile, separate HSBC surveys in South Korea and Taiwan also indicated weakened conditions for local manufacturers, with both affected by the slowdown in China. In South Korea, the June PMI dropped to 49.4, down from 51.1 in May, while in Taiwan, the June PMI came in at 49.5, up sharply from 47.1 in May but still below the 50-point threshold.
In Japan, the Bank of Japan's quarterly tankan survey showed an improvement in sentiment at both large manufacturers and non-manufacturers, with the former showing positive sentiment for the first time since mid 2011.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Monday, 1 July 2013. US stocks ended mostly weaker on Friday, 28 June 2013, but posted their strongest first half of any year since 1998 after reaching record highs in May supported by the Federal Reserve's massive monetary stimulus.
In recent weeks, investors have been preoccupied with when the Federal Reserve may start pulling back monetary stimulus as the economy improves further. Federal Reserve Gov. Jeremy Stein on Friday suggested that the central bank's first tapering move could come in September, although he only used the month as a hypothetical start date in a speech to the Council on Foreign Relations. Jeffrey Lacker, president of the Richmond Fed, said there's likely to be more market volatility over the outlook for monetary policy in coming months, but these moves shouldn't interfere with a modest economic recovery. John Williams, president of the San Francisco Fed Bank, said it's better to "wait a bit" before tapering asset purchases. Their comments follow relatively soothing Fed speeches on Thursday, 27 June 2013, in which three officials chastised markets for overreacting to the central bank's statement. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
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