A decline in crude oil prices and positive cues from European stocks helped key benchmark indices in India strike yet another record high, with the barometer index, the S&P BSE Sensex, moving past the psychological 27,000 level. The Sensex was provisionally up 142.91 points or 0.53% at 27,010.46. Cement, telecom and pharma stocks led gains. The market breadth indicating the overall health of the market was positive. Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session.
The latest macroeconomic data showed the current account deficit (CAD) narrowed on year-on-year basis but rose on sequential basis in Q1 June 2014. Meanwhile, Japan has promised 3.5 trillion yen of public and private investment and financing, including Overseas Development Assistance (ODA) over five years for India's development.
Key indices pared gains after extending gains in mid-afternoon trade. Benchmark indices remained in green throughout the trading session after opening a tad higher.
In overseas markets, European stocks rose amid speculation that slower growth and low inflation in euro zone will prompt European Central Bank (ECB) to accelerate stimulus. Stocks in mainland China and Japan surged amid a mixed trend in Asian stocks.
As per provisional figures, the Sensex was up 142.91 points or 0.53% at 27,010.46. The index jumped 215.30 points at the day's high of 27,082.85 in mid-afternoon trade, a lifetime high for the index. The index rose 18.67 points at the day's low of 26,886.22 in early trade.
The CNX Nifty advanced 61.15 points or 0.76% at 8,088.85, as per provisional figures. The index hit a high of 8,101.95 in intraday trade, a lifetime high for the index. The index hit a low of 8,036.55 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,739 shares gained and 1,251 shares fell. A total of 122 shares were unchanged.
The BSE Mid-Cap index rose 75.86 points or 0.8% at 9,520.45. The BSE Small-Cap index gained 98.82 points or 0.95% at 10,496.41. Both these indices outperformed the Sensex.
Among 30-share Sensex pack, 17 stocks advanced and remaining declined.
Cement stocks gained. ACC (up 3.54%), Ambuja Cements (up 3.6%), and UltraTech Cement (up 2.67%) gained.
Grasim Industries rose 3.92%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement.
Maruti Suzuki India lost 0.12%. The company during market hours said it will open customer bookings for the much awaited mid-sized premium sedan Ciaz from tomorrow, 3 September 2014 across its nationwide network. Ciaz will be available in petrol and diesel fuel options. The global launch of Ciaz is planned during the forthcoming festival season, Maruti said.
Coal India fell 0.44%. The company said during market hours that the coal production of the company and its subsidiary companies was 98% of targeted production at 34.54 million tonnes in August 2014. The coal offtake was 99% of targeted offtake at 37.30 million tonnes in August 2014.
The sentiment on the bourses was boosted by provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 554.14 crore yesterday, 1 September 2014, as per provisional data from the stock exchanges.
A decline in crude oil prices added to positive sentiment on the domestic bourses. India imports about 80% of its crude oil requirement. Brent crude prices fell on concerns of slowing oil demand growth due to weak economic recoveries in China and Europe. Brent crude for October delivery was off 75 cents at $102.04 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 lower against the dollar amid intraday volatility. The partially convertible rupee was hovering at 60.62, compared with its close of 60.525 during the previous trading session.
Japanese Prime Minister Shinzo Abe yesterday, 1 September 2014, expressed his intention to realize 3.5 trillion yen of public and private investment and financing from Japan, including Overseas Development Assistance (ODA) to India in five years, to finance appropriate public and private projects of mutual interest including in the areas of next generation infrastructure, connectivity, transport systems, Smart Cities, rejuvenation of Ganga and other rivers, manufacturing, clean energy, skill development, water security, food processing and agro industry, agricultural cold chain, and rural development. This was stated in a joint statement issued yesterday, 1 September 2014, after a meeting between Prime Minister Narendra Modi and Abe. Modi is currently on a five-day visit to Japan. The Prime Ministers of the two countries have decided to set a target of doubling Japan's foreign direct investment and the number of Japanese companies in India within five years as an objective to be jointly achieved.
In macroeconomic data, the output of eight core sector industries rose 2.7% in July 2014, showing moderation from a growth of 7.3% in June 2014. However, the cumulative growth has remained steady at 4.1% in April-July 2014 over April-July 2013. The data was announced after market hours on Monday, 1 September 2014.
India's current account deficit (CAD) narrowed sharply to $7.8 billion or 1.7% of GDP in Q1 June 2014, from $21.8 billion or 4.8% of GDP in Q1 June 2013. The lower CAD was primarily on account of a contraction in the trade deficit contributed by a rise in exports and a decline in imports. On sequential basis, the CAD rose from $1.2 billion or 0.2% of GDP in Q4 March 2014.
The preliminary data on India's balance of payments (BoP) also showed that foreign direct investment (FDI) in India rose to $8.2 billion in Q1 June 2014, from $6.5 billion in Q1 June 2013. The data was announced after market hours on Monday, 1 September 2014.
European stocks rose today, 2 September 2014, amid speculation that slower growth and low inflation in euro zone will prompt European Central Bank (ECB) to accelerate stimulus. Key benchmark indices in UK, France and Germany were up 0.22% to 0.9%.
ECB President Mario Draghi signaled last month that ECB policy makers are ready to increase stimulus to combat low inflation in the euro area.
Asian stocks were mixed today, 2 September 2014. Key benchmark indices in Singapore and Indonesia were up 0.4% to 0.46%. Key benchmark indices in Hong Kong, Taiwan and South Korea were off 0.01% to 1.19%.
Stocks in mainland China rose led by defense and technology companies, amid speculation the government will increase military spending as part of its efforts to bolster economic growth. The Shanghai Composite index jumped 1.37%.
Japanese stocks surged as the yen weakened against the dollar before Prime Minister Shinzo Abe announces a new cabinet tomorrow, 3 September 2014. The Nikkei 225 average jumped 1.24%.
Trading in US index futures indicated that the Dow could gain 33 points at the opening bell on Tuesday, 2 September 2014. US stock markets were closed on Monday, 1 September 2014 for Labor Day holiday.
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