The key benchmark indices held positive zone in morning trade, as most as Asian stocks rose. The BSE 30-share Sensex was up 36.73 points or 0.2%, off close to 45 points from the day's high. The S&P CNX Nifty was fell below the psychological 5,500 mark, after crossing that level at the onset of the trading session. The market breadth was strong. Realty stocks rose. Shares of software exporters also rose on encouraging economic data in the US, a prime market for Indian IT services providers. But, index heavyweight Reliance Industries (RIL) extended initial losses.
The market edged higher in early trade, tracking gains in Asian stocks. The market moved in a narrow range in morning trade.
NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, was down 0.68% at 16.04. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.
On macro front, the government will unveil data on some wholesale price indices for the year through 21 August 2010 viz. the food price index, the primary articles index and the fuel price index at about 12:00 IST today. The weekly data is delayed by one day, as Thursday, 2 September 2010, was a government holiday due to the Janmashtami festival.
Most Asian stocks rose on Friday, 3 September 2010, as investors took heart from improving US housing and jobs data amid lingering worries over the pace of the global economic recovery. The key benchmark indices in Hong Kong, Indonesia, South Korea, Taiwan and Japan were up by between 0.06% to 1.38%. But, the key benchmark indices in Singapore and China fell by between 0.17% to 0.46%.
Four of China's five biggest banks reported increases in special-mention loans in the second quarter from the preceding quarter, offering fresh evidence of potentially high credit risk in the local banking system, the China Securities Journal reported on Friday, 3 September 2010, citing its own statistics. Special-mention loans refer to loans that have a potential weakness or pose an unwarranted financial risk that, if not corrected, could weaken the asset and lead to higher risks.
China's banks issued a record CNY9.6 trillion worth of loans last year, triggering concerns about a potential surge in lenders' bad-loans ratios to crippling levels last seen in the first half of this decade.
South Korea's central bank revised down the nation's second-quarter economic growth rate Friday, as construction investment was less than previously thought. The Bank of Korea said real gross domestic product rose 1.4% during the quarter, compared to an initial estimated growth of 1.5% made in July.
Trading in US index futures indicated that the Dow could fall 15 points at the opening bell on Friday, 3 September 2010.
US stocks rose in light volume on Thursday, 2 September 2010, as data showed improvement in housing and job market a day ahead of the critical monthly payrolls figures. The Dow Jones Industrial Average added 50.63 points, or 0.49% to 10,320.10. The Standard & Poor's 500 Index rose 9.81 points, or 0.91% to 1,090.10. The Nasdaq Composite Index gained 23.17 points, or 1.06% to close at 2,200.01.
Data from the National Association of Realtors showed pending home resales rose unexpectedly in July 2010 and a separate report showed new claims for unemployment insurance fell for a second straight week.
The European Central Bank held interest rates at a record low on Thursday, 2 September 2010, and extended its liquidity safety-net in response to a lopsided recovery and worries about vulnerable banks. The ECB also raised growth forecasts for this year and next but ECB President Jean-Claude Trichet said while recent economic data had been stronger than expected, recovery would occur at a moderate pace with uncertainty still prevailing.
The ECB extended its commitment to provide unlimited one-week and one-month funding until at least 18 January 2011. It will also offer unlimited funds at its three-month tenders until at least the end of this year.
Closer home, exports rose for the ninth straight month in July 2010, growing an annual 13.2% to $16.24 billion, government data released on 1 September 2010 showed. Imports for the month rose 34.3% to $29.17 billion, widening the country's trade deficit to $12.93 billion. Exports during the April-July period rose 30.1% to $68.63 billion.
The trade deficit edged back into double digits in April 2010 after averaging $9.1 billion in Q4 March 2010 and has remained elevated since then. Latest data shows the gap stood at $12.93 billion in July 2010, highest since September 2008 and widening further from $10.55 billion in June 2010.
The gross domestic product (GDP) grew 8.8% in Q1 June 2010, data released by the government on Tuesday, 31 August 2010, showed. The manufacturing sector grew 12.4%, mining sector expanded 8.9%, construction sector grew 7.5%, and farm sector expanded at 2.8%. Output in the combined sectors -- trade, hotels, transport and communication, jumped 12.2%.
The robust growth bolsters the case for further interest rate increases, and analysts anticipate a 25-basis point rate rise at a 16 September 2010 Reserve Bank of India (RBI) policy review.
The consumer price index (CPI) rose 11.25% in July 2010, slower than an annual rise of 13.73% a month ago, data early this week showed.
The yield on the benchmark 10-year 2020 bond was hovering at 7.97%, a tad lower than Thursday's (2 September 2010)'s close of 7.98%. The yield on the second most traded, 8.13% 2022 bond was hovering at 8.05%, slightly higher than Thursday's close of 8.04%.
The HSBC Markit Purchasing Managers' Index, based on surveys of 500 Indian companies, fell to 57.25 in August 2010 from 57.6 in July 2010, but strength in new orders helped the index remain well above the 50 mark that divides growth from contraction. The manufacturing PMI had edged up to 57.6 in July 2010 from 57.3 in June 2010, when it slipped from a multi-year high.
The new orders index was 61.99 in August 2010, down from 62.82 in July 2010. The survey showed that output prices rose at their slowest rate in 10 months in August 2010, while the input price index rose for the second consecutive month.
HSBC is expected to unveil the services sector PMI for August 2010 any time now. The index, which shows business activity in the services sector, had eased to 61.7 in July 2010 from 64 in June 2010.
The key monsoon rains were 16% above normal in the past week, compared with 29% above normal in the previous week, the weather office said on Thursday, 2 September 2010. The weekly reading reflects good showers over most parts of the country, except the eastern region, where the seasonal rains were poor. Cumulative rainfall since 1 June 2010 was 1% below normal, it said.
The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector.
At 10:20 IST, the BSE 30-share Sensex was up 36.73 points or 0.2% to 18,275.04. The index rose 78.01 points at the day's high of 18,316.32 in early trade. The Sensex fell 0.23 points at the day's low of 18,238.08 in early trade.
The S&P CNX Nifty was up 5.30 points or 0.1% to 5,491.45. The Nifty hit a high of 5,510.40 in early trade.
The BSE Mid-Cap index was up 0.85% and the BSE Small-Cap index was up 0.82%. Both these indices outperformed the Sensex.
The market breadth, indicating the health of the market, was strong. On BSE, 1768 shares rose while 730 shares declined. A total of 82 shares remained unchanged.
From the 30-share Sensex pack, 20 stocks rose while the rest of them declined.
Index heavyweight Reliance Industries (RIL) fell 0.87%. RIL said on 1 September 2010 it bought additional 26.7 lakh shares or about 0.68% stake in EIH, raising its stake in the hotel chain to 14.8%. It may be recalled that RIL had early this week bought a 14.12% stake in EIH from EIH promoters in an off-market deal valued at Rs 1,021 crore, or an average price of Rs 184 a share.
Incidentally, ITC, which also is among the leading players in the Indian hospitality industry, holds 5.88 crore shares, representing 14.98% stake in EIH (as on 30 June 2010).
Mahindra & Mahindra, Hero Honda Motors, ONGC, Bharti Airtel and Hindustan Unilever rose by between 0.56% to 1.85%.
Jindal Steel & Power, Jaiprakah Associates, ITC, Tata Steel and Tata Power Company fell by between 0.5% to 0.86%.
Shares of software exporters rose on encouraging economic data in the US, a prime market for Indian IT services providers. India's second largest software services exporter by sales Infosys rose 1.25%. India's largest software services exporter by sales TCS rose 0.65%. But, India's third largest software services exporter Wipro fell 0.2%. Wipro has appointed billionaire founder-chairman Azim Premji's oldest son Rishad Premji as chief strategy officer.
Realty stocks rose on renewed buying. Unitech, Omaxe, HDIL, and Phoenix Mills rose by between 0.32% to 2.53%.
DLF, India's largest real estate company by sales rose 0.27% reversing initial losses. As per media reports, DLF has put on hold its plan to sell its non-core assets including ultra-luxury hotel chain Aman Resorts and wind energy business for the next three quarters.
Supreme Industries fell 1.78%, after the stock turned ex-dividend today, 3 September 2010, for dividend of Rs 13 per share for the year ended June 2010.
Parenteral Drugs India lost 4.47%, on profit taking, after the company's board declared one bonus share for every three shares held.