Key benchmark indices spurted and hit fresh intraday high in mid-morning trade as many Asian stocks reversed intraday losses and as rupee staged a sharp rebound against the dollar. The barometer index, the S&P BSE Sensex was up 342.70 points or 1.88%, up close to 390 points from the day's low and off about 30 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Metal and mining stocks edged higher as a private survey showed growth in China's services sector hit a five-month high in August. Among IT stocks, HCL Technologies scaled record high. Index heavyweight Reliance Industries jumped on bargain hunting after tumbling 6.07% on Tuesday.
A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red after opening higher. The market extended initial gains and hit fresh intraday high in morning trade. The Sensex spurted and hit fresh intraday high in mid-morning trade.
At 11:20 IST, the S&P BSE Sensex was up 342.70 points or 1.88% to 18,577.36. The index jumped 372.57 points at the day's high of 18,607.23 in mid-morning trade. The index fell 46.23 points at the day's low of 18,188.43 in early trade.
The CNX Nifty was up 107.15 points or 2.01% to 5,449.60. The index hit a high of 5,459.70 in intraday trade. The index hit a low of 5,318.90 in intraday trade, its lowest level since 29 August 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,157 shares rose and 602 shares fell. A total of 120 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks rose and rest of them fell. Tata Motors (up 4.56%), Bhel (up 3.73%) and Hero MotoCorp (up 3.88%), gained.
Index heavyweight Reliance Industries jumped 3.99% on bargain hunting after tumbling 6.07% on Tuesday.
Metal and mining stocks edged higher as a private survey showed growth in China's services sector hit a five-month high in August. China is the world's largest consumer of copper and aluminum. Hindalco Industries (up 3.64%), Jindal Steel & Power (up 2.65%), Hindustan Zinc (up 2.69%), NMDC (up 3.48%), Sail (up 1.95%), JSW Steel (up 2.85%), Tata Steel (up 2.06%) and Sesa Goa (up 0.03%), edged higher.
HCL Technologies rose 2.34% to Rs 1046.80 after hitting a record high of Rs 1050.50 in intraday trade today, 4 September 2013.
In the foreign exchange market, the rupee strengthened after earlier falling below 68 level as equities rose. The partially convertible rupee was hovering at 67.05, stronger than its close of 67.63/64 on Tuesday, 3 September 2013. The rupee had tumbled earlier in the day on renewed concerns of US military intervention in Syria.
Indian services activity shrank in August at its quickest pace since the depths of the global financial crisis as new business dried up, a survey showed, the latest evidence that Asia's third-largest economy is rapidly losing steam even as policymakers battle a full-blown currency crisis. The HSBC Services Purchasing Managers' Index (PMI) compiled by Markit, slipped to 47.6 in August, the weakest since April 2009, from 47.9 in July. A number below 50 denotes contraction.
Asian stocks reversed intraday losses on Wednesday, 4 September 2013, as growth in China's services sector hit a five-month high in August underpinned by new orders and business optimism. Key benchmark indices in China, Hong Kong, Japan, and South Korea rose by 0.11% to 0.26%. Key benchmark indices in Indonesia, Singapore and Taiwan shed by 0.02% to 1.98%.
Growth in China's services sector hit a five-month high in August underpinned by new orders and business optimism, a private survey showed on Wednesday, adding to views that the world's second-largest economy had avoided a sharp slowdown. The Markit/HSBC Services Purchasing Managers' Index (PMI) climbed to 52.8 in August after seasonal adjustments, up from July's 51.3 and the highest since March. The reading was well above the 50 level that demarcates an acceleration in activity from a slowdown, although a sub-index for employment shrank.
Australia's economy expanded more than economists forecast last quarter as non-dwelling construction surged, providing a stronger growth momentum for the winner of this week's election. Second-quarter gross domestic product advanced 0.6% from the previous three months, when it rose a revised 0.5%, a Bureau of Statistics report released in Sydney today showed.
Trading in US index futures indicated that the Dow could gain 20 points at the opening bell on Wednesday, 4 September 2013. US stocks rose on Tuesday as better-than-forecast economic data overshadowed concern over possible military action against Syria. The Institute for Supply Management's manufacturing index increased to 55.7 in August, the strongest since June 2011, from 55.4 a month earlier. Readings above 50 indicate growth. Another report showed construction spending in the US increased in July to the highest level in four years, propelled by gains in residential real estate.
US House of Representatives Speaker John Boehner backed President Barack Obama's call for action against Syria, while Republican and Democratic leaders of the Senate's foreign relations panel agreed on a proposal backing a military strike. Obama urged Congress to take a prompt vote authorizing military action against Syria. He announced on August 31 that he'd seek support from Congress, after previously saying he had authority to order a military mission.
In addition, the Senate reached an agreement on a resolution authorizing military strikes against Syria. The resolution gives Obama 60 days to strike Syria, and is expected to be put to a vote on Wednesday, 4 September 2013.
The influential US nonfarm payroll report for August 2013 is due for release on Friday, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Meanwhile, a summit of leaders from the Group of 20 major economies begins in St. Petersburg on Thursday, 5 September 2013.
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