Markets edge higher after positive Chinese data

Written by fe Bureau | Mumbai | Updated: Jul 1 2014, 17:43pm hrs
BSE SensexInvestors will also look at factory surveys from China, Japan, South Korea and India for signs of growth. (AP)
Benchmark indices edged higher on Tuesday on the back of improvement in China's manufacturing output.

The BSE benchmark, the Sensex was trading 91.34 points or 0.35% higher at 25,505.12 points, while the NSE's Nifty was trading 21.85 points or 0.29% higher at 7,633.20 points, at 11.30 am IST.

China's manufacturing purchasing manager's index (PMI) for June was at a six-month high of 51, from 50.8 in May.

Experts believe reforms by the Modi Government could further drive the markets. "We continue to expect markets to re-rate led by expectations of a surge in reforms and an economic recovery to follow in 12-18 months. Our year-end target values the market at 16.5x, a premium to long term averages of 14.5x. If we look at the 2009 elections too, the markets traded at 16-18x for the rest of the year, BoFA ML analysts said in a recent report.

Among sectoral indices, BSE Metal (2.5%), BSE Auto (2.5%), BSE Realty (1.2%) and BSE Capital Goods (1.2%) were the major gainers on Tuesday. Among individual stocks, Hindalco (6.4%), Maruti (4.3%) and Mahindra & Mahidra (3.6%) were the major gainers on the 30-share Sensex.

Most Asian indices were trading in the red. The Hang Seng (-0.13%), Kospi (-0.31%), Straits Times (-0.52%), Jakarta Composite (-0.12%) and Shanghai Composite (-0.06%) were trading lower.

(Reuters) - Continuing its upward journey for the third straight session, the benchmark BSE Sensex spurted by nearly 104 points in early trade today on sustained fund inflows on hopes of strong economic measures in the upcoming Union Budget.

The 30-share Sensex zoomed by 103.87 points, or 0.41 per cent, to trade at 25,517.65 with metals, realty, PSU and oil and gas sector stocks leading the rise. The gauge had rallied by over 351.11 points in the past two sessions.

On the similar lines, the 50-share NSE Nifty also gained 28.15 points, or 0.37 per cent, to 7,639.50.

Buying activity picked up in oil marketing company stocks following a hike in petrol and diesel prices as the crisis in Iraq spooked international oil and currency markets.

HPCL rose 0.99 per cent to Rs 420.05, BPCL up 0.51 per cent to Rs 602.40 and Indian Oil Corp up by 1.64 per cent to Rs 350.80.

Brokers said sentiments remained bullish following sustained capital inflows by foreign funds and widespread buying by retail investors on optimism over the first Budget of the Narendra Modi-led government.

Stocks of power, capital goods, infrastructure and banking sectors continued to remain buyers' fancy on hopes of strong reforms for these sectors in the forthcoming Budget.

Further, a firming trend in other Asian markets after data showed Chinese manufacturing activity picking up last month buoyed the trading sentiments here, they said.

Among other Asian markets, Japan's Nikkei gained 1.35 per cent in early trade today, while financial markets in Hong Kong are closed for public holiday.

The US Dow Jones Industrial Average ended 0.15 per cent lower in yesterday's trade.

HIGHLIGHTS

* India's BSE index is up 0.44 percent, while the broader NSE index is 0.31 percent higher, after heavy buying by foreign institutional investors in the previous session. A hike in fuel prices also helps.

* ICICI Bank rises 0.9 percent, while Larsen & Toubro is up 0.6 percent.

* Overseas investors bought Indian shares worth $214.42 million on Monday, their biggest single-day buying since June 12, provisional exchange data shows.

* Indian Oil Corp (IOC) Corp raises the retail price of gasoline and diesel from Tuesday as global oil prices firmed and the rupee weakened in the last two weeks due to violence in Iraq.

Preview: BSE Sensex to open stronger; Asian PMIs on watch

(Reuters) BSE Sensex is set to open stronger on Tuesday after heavy buying by foreign institutional investors (FIIs) in the previous session while optimism around fuel price hike is also seen helping.

NSE Nifty index futures traded on the Singapore Exchange rise 0.3 percent, while the MSCI-Asia Pacific excluding Japan index falls 0.1 percent.

Asian shares were off to a cautious start near a three-year high while the U.S. dollar was listless as investors took new bets that U.S. monetary policy will stay loose for some time.

Overseas investors bought Indian shares worth $214.42 million on Monday, provisional exchange data shows.

Indian Oil Corp will raise the retail price of gasoline by about 2.8 percent and that of diesel by about 1 percent from Tuesday as global oil prices has firmed and the rupee weakened in the last two weeks due to violence in Iraq.

India's fiscal deficit in the first two months of the 2014/15 financial year touched 2,408.37 billion rupees ($40.05 bln), or 45.6 percent of the full-year target, government data showed on Monday.

Investors will also look at factory surveys from China, Japan, South Korea and India for signs of growth in activity and orders, particularly export orders which have been a weak spot.

India Morning Call-Global Markets

EQUITIES

NEW YORK - The S&P 500 and the Nasdaq Composite indexes wrapped up a sixth straight quarter of gains on Monday, a streak not seen in more than 14 years.

The three major U.S. stock indexes, however, closed little changed for the day, following a set of mixed economic data.

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LONDON - Britain's top equity index slipped lower on Monday, with budget airline easyJet the worst-performing stock as it felt the effect of a broker downgrade.

The blue-chip FTSE 100 index ended down by 0.2 percent, or 13.83 points, at 6,743.94 points - down more than 2 percent from its 2014 peak of 6,894.88 in May, which marked its highest level since December 1999.

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TOKYO - Japan's Nikkei share average rose on Tuesday as upbeat China factory reports offset some weak spots in the Bank of Japan tankan survey.

Big Japanese manufacturers' business sentiment worsened in the three months to June but is poised to improve in the following quarter, the central bank survey showed.

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HONG KONG - Hong Kong financial markets are closed on Tuesday for a public holiday and will resume trading on Wednesday.

The holiday marks the Hong Kong Special Administrative Region Establishment Day.

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FOREIGN EXCHANGE

SYDNEY - The dollar languished at seven-week lows against a basket of major currencies on Tuesday, having extended a month-long decline after a recent batch of mixed data cast doubts on the strength of the U.S. economic recovery.

San Francisco Fed President John Williams said the U.S. central bank will probably need to keep interest rates near zero for at least another year, even as he expressed optimism the economy is on the recovery path.

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TREASURIES

NEW YORK - U.S. Treasuries prices rose modestly on Monday on month-end buying and reluctance to sell ahead of quarter-end and U.S. jobs data on Thursday, putting bond prices on track for gains in the first half of the year.

Analysts said traders avoided bets against bonds after rising prices over the quarter took many by surprise.

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COMMODITIES

GOLD

SINGAPORE - Gold was trading near its highest in 2-1/2 months on Tuesday, as a softer dollar and escalating violence in Iraq increased the metal's appeal.

Spot gold slipped slightly to $1,325.66 an ounce by 0020 GMT. It gained nearly 1 percent in the previous session, after hitting a peak of $1,329.10 - the metal's highest since mid April.

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BASE METALS

SYDNEY - London copper hit its loftiest in nearly four months on Tuesday and zinc approached its highest in almost three years, both propped up by shrinking supply and expansion in China's vast factory sector.

Three-month copper on the London Metal Exchange edged up by 0.1 percent to $7,024 a tonne by 0115 GMT after closing little changed in the previous session. It earlier hit its highest since March 7 at $7,028 a tonne.

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OIL

NEW YORK - Brent futures held above $112 a barrel on Tuesday as investor attention shifted back to demand after China's factory growth rose to a six-month high, adding to signs the economy of the world's second-biggest oil consumer is regaining strength.

Oil markets have for weeks been rattled by supply concerns due to the Ukraine crisis and as a takeover of large areas of Iraq by Sunni militants stoked fears of disruption in exports from OPEC's second-biggest producer amid unsteady shipments from Libya and others. As those fears recede somewhat, investors are looking for fresh clues to gauge the direction of the market.