Firmness continued on the bourses as key benchmark indices hit fresh record high in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 218.01 points or 0.82% at 26,856.12. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.3%. The BSE Small-Cap index was 1.08%. Both these indices outperformed the Sensex. Data showing recovery in India's economy, with a 5.7% growth in gross domestic product (GDP) in Q1 June 2014, boosted investor sentiment. Jindal Steel & Power dropped ahead of the Supreme Court's hearing of coal blocks case today, 1 September 2014. IT stocks gained, with Tech Mahindra hitting record high.
Data showing improvement in economic growth in Q1 June 2014 triggered a firm opening on the domestic bourses and took indices to record high. The 50-unit CNX Nifty hit record high above the psychological 8,000 level.
A Supreme Court hearing on coal blocks case is scheduled today, 1 September 2014. The apex court on 25 August 2014 deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
European stocks edged lower after the latest data showed euro zone's manufacturing sector slowed more sharply than first estimated in August. Asian stocks rose as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in August 2014. Brent crude prices dropped after registering gains during the previous trading session.
At 14:16 IST, the S&P BSE Sensex was up 218.01 points or 0.82% at 26,856.12. The index jumped 222.19 points at the day's high of 26,860.30 in mid-afternoon trade, a lifetime high for the index. The index rose 94.28 points at the day's low of 26,732.39 in early trade.
The CNX Nifty was up 70.65 points or 0.89% to 8,025. The index hit a high of 8,025.55 in intraday trade, a lifetime high for the index. The index hit a low of 7,984 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,815 shares gained and 987 shares fell. A total of 132 shares were unchanged.
The BSE Mid-Cap index was up 120.65 points or 1.3% at 9,419.55. The BSE Small-Cap index was up 110.60 points or 1.08% at 10,375.05. Both these indices outperformed the Sensex.
IT stocks gained. TCS (up 0.75%), Infosys (up 0.17%) and Wipro (up 0.49%) gained.
HCL Technologies gained 0.72%. The company during market hours clarified with respect to media report titled "HCL bags $200 million deal from BOfA - Merrill Lynch", that the media story is speculative and based on rumours. As a policy, the company does not respond to market rumours.
Tech Mahindra rose 0.25% to Rs 2,336.15 after hitting record high of Rs 2,379.65 in intraday trade.
Jindal Steel & Power (JSPL) dropped 2.04% ahead of the Supreme Court's hearing of coal blocks case today, 1 September 2014. The apex court on 25 August 2014 deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
According to media reports, JSPL is the worst affected player as the Supreme Court judgement will delay the process of securing mining rights for its Utkal B1 mine, critical for its Angul steel cum power project. JSPL is operating two mines in Chhattisgarh, having a little over 12 million tonnes a year production capacity now. These are for JSPL's Raigarh steel plant and Tanmar Power plant.
JSPL has also been allocated Utkal B1 mine in Odisha for use in Angul, one mine in Chhattisgarh for Raigarh steel unit and Jitpur mine in Jharkhand for its captive power plant at Godda, reports suggested.
Adhunik Metaliks lost 3.05% as the company reported a consolidated net loss of Rs 10.69 crore in Q4 June 2014, higher than net loss of Rs 9.89 crore in Q4 June 2013. The Q4 result was announced before market hours today, 1 September 2014. Adhunik Metaliks's consolidated total income from operations declined 9.12% to Rs 696.57 crore in Q4 June 2014 over Q4 June 2013. Adhunik Metaliks's consolidated net profit fell 53.66% to Rs 40.40 crore on 15.42% decline in total income from operations to Rs 2555.69 crore in the year ended 30 June 2014 over the year ended 30 June 2013.
Brent crude prices dropped after registering gains during the previous trading session. Brent for October settlement was off 24 cents at $102.95 a barrel. The contract rose 73 cents to settle at $103.19 a barrel on Friday, 29 August 2014.
Geopolitical developments remained in focus. European Union leaders yesterday, 31 August 2014, warned Russia to reverse course in Ukraine within a week or face a new round of sanctions. On Saturday, 30 August 2014, Ukrainian President Petro Poroshenko warned a "full-scale war" was imminent if Russian troops continued to advance in support of pro-Moscow rebels.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.455, compared with its close of 60.52 on Thursday, 28 August 2014. Indian financial markets were closed on Friday, 29 August 2014, for a holiday.
Markit Economics said today, 1 September 2014, that the seasonally adjusted HSBC India Purchasing Managers' Index (PMI)-a figure designed to give an accurate overview of business conditions in the manufacturing sector -dipped slightly from July's 17-month high of 53 to 52.4 in August. Nonetheless, the reading was consistent with a solid improvement in operating conditions. The latest PMI data highlighted a tenth consecutive monthly improvement in operating conditions in August, as solid output growth was supported by strong expansions in total new orders and business from abroad. Purchasing activity continued to rise, although a second consecutive decline in employment was recorded. Meanwhile, input cost pressures eased slightly following the acceleration seen in July.
India's gross domestic product (GDP) grew 5.7% in Q1 June 2014, its fastest pace of growth in two-and-half years. The GDP growth has shown sharp improvement from 4.6% in Q4 March 2014 and 4.7% in Q1 June 2013. The Central Statistical Office (CSO) released quarterly estimates of India's GDP on Friday, 29 August 2014, when Indian financial markets were closed for a holiday. The improvement in the GDP growth was facilitated by rebound in industrial sector growth after two sequential quarters of decline. More importantly, the GDP data showed that domestic investment demand has exhibited strong growth of 7% in Q1 June 2014.
Finance Minister Arun Jaitley said at a press briefing on Saturday, 30 August 2014, that he expects the country's economic growth to accelerate as inflation moderates and government measures aimed at making it easier for companies to do business take effect. Mr. Jaitley also expressed confidence that the government would be able to achieve the 4.1% of GDP fiscal deficit target that the government set in the annual budget presented in July.
The Finance Ministry expects India's economy to grow at 5.7% to 5.9% during the current fiscal year. In a statement issued on 30 August 2014, the Finance Ministry said it expects India to reclaim the high growth rate of 7% within 2-3 years. The Finance Ministry further said that with a view to ensure macroeconomic stability, the current account deficit will be contained within 2% of GDP and fiscal deficit will be contained within 4.1% of GDP during the current fiscal year.
Reserve Bank of India (RBI) Governor Raghuram Rajan said in a newspaper interview published on Sunday, 31 August 2014, that India is better prepared to handle the impact of interest rate increases in the United States as foreign funds are less likely to desert the country due to signs of an upturn in economic growth. Rajan said that his commitment to cool surging prices will also support the rupee when US rates finally do rise.
Prime Minister Narendra Modi is in the midst of his five-day trip to Japan to bolster security and business ties with Japan in the face of an assertive China.
European stocks edged lower today, 1 September 2014, after the latest data showed euro zone's manufacturing sector slowed more sharply than first estimated in August. Key benchmark indices in UK, France and Germany were down by 0.05% to 0.21%.
Euro-area manufacturing output expanded less than initially estimated in August, adding to signs that the region's economic recovery may need another boost of European Central Bank stimulus. A Purchasing Managers' Index fell to 50.7 last month from 51.8, London-based Markit Economics said today. While the number remains above 50, indicating expansion, it's less than the Aug. 21 preliminary reading of 50.8. In Germany, the currency bloc's largest economy, the index fell to 51.4, down from a preliminary reading of 52.
Data released today, 1 September 2014, showed that Germany's exports 0.9% in the second quarter from the first three months of the year. Imports jumped 1.6%.
Asian stocks rose today, 1 September 2014, as investors weighed whether Chinese policy makers will add stimulus after reports showing slower manufacturing growth in August 2014. Key benchmark indices in Indonesia, China, Japan and Taiwan were up 0.04% to 0.83%. Key benchmark indices in Singapore and South Korea were off 0.03% to 0.43%. Hong Kong's Hang Seng index was almost unchanged for the day.
Growth in China's large factory sector slipped to a three-month low in August as foreign and domestic demand cooled, a private survey showed on Monday, raising concerns that the economy is faltering after a bounce. The final HSBC/Markit Purchasing Managers' Index (PMI) retreated to 50.2 in August, roughly in line with a preliminary reading of 50.3 and only a shade above the 50-point mark that demarcates an expansion in activity from a contraction.
China's official manufacturing PMI for August, reported today, 1 September 2014, was 51.1, compared with July's 51.7.
US markets remain closed today, 1 September 2014, for Labor Day holiday.
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