A close above 5,935 is required for the upmove to regain momentum

The Indian stock market witnessed a highly volatile session on Friday. While Sensex closed in the positive for the third consecutive session, the Nifty closed marginally in the negative, breaking the two days of positive upmove. The market opened in the negative and both the indices hit the day’s low in the morning session itself. From this level the indices edged higher but fell once the services PMI data was released. From there, it rallied again and hit the intraday high in the last hour of the session. But from there, again, it fell steeply resulting in a close almost at the same level as yesterday.

The BSE 30-share Sensex opened lower at 19,870 and moved upto 20,052 from the low of 19,833 and closed at 19,916 (up 14 points or 0.07%). Nifty opened in the negative at 5,891 and moved in the range of 5,885 and 5,950 before closing at 5,907 (down 2 points or 0.04%). The National Stock Exchange (NSE) recorded a lower volume of 59.14 crore shares.

Among the other indices on the NSE, the top five gainers were Realty (1.62%); Auto (0.91%); Metal (0.70%); Smallcap (0.68%) and Nifty Junior (0.41%). The top five losers were PSU Bank (0.56%); Infra (0.46%); Service (0.28%); Finance (0.27%) and Bank Nifty (0.25%).

Of the 50 stocks on the NSE Nifty, 19 ended in the green. The top five gainers were Hindalco (2.47%); Coal India (2.30%); Lupin (2.18%); BPCL (2.00%) and Tata Motors (1.46%). While the losers were Dr Reddy (2.47%); Power Grid (2.00%); Jindal Steel (1.89%); IDFC (1.32%) and LT (1.29%).

Activity at Indian services companies shrank at the fastest pace in more than four years last month, a survey showed today. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, slipped from 47.6 in August to 44.6 in September, its weakest since April 2009. That marked its straight third reading below 50, the threshold between growth and contraction. It showed firms were less optimistic about the future and were cutting staff as new business dries up. Services sector accounts for nearly 60% of India's economy. The PMI's new business index fell to 45 in September from 46.6 in August, the weakest reading since February 2009 and the third month running that demand has declined.

The Planning Commission said it certainly revisits the growth prospects. The target of 8% for the 12th Plan (2012-17) remains valid but it will take longer to get there because (the growth in) first two years have been disappointingly low. The economy is likely to expand by over 5% this fiscal.

US indices closed in the negative. Failure to raise the debt limit has "the potential to be catastrophic," the US Treasury Department warned in a report on Thursday, 3 October 2013, that said credit markets could freeze and the value of the dollar could plummet. Atlanta Fed President Dennis Lockhart said on Thursday that the shortage of "data would tend to make me somewhat more cautious" about reducing the pace of bond purchases. If the shutdown lingers until the next Fed policy-setting meeting on Oct. 29-30, it would be very hard to make a decision, he said.

Jobless claims rose to 308,000 in the week ended Sept. 28, from a revised 307,000, the Labor Department said. US payrolls data won't be released as scheduled today because of the shutdown. The department said that an alternative date for the September payrolls report and jobless rate hasn't been scheduled.

Except for KLSE Composite (up 0.29%) and Taiwan Weighted (up 0.07%) all the other Asian indices ended in the negative. Nikkei 225 was the top loser which fell 0.94%. China remained closed today.

The Bank of Japan kept its monetary policy unchanged on Friday following its meeting, and said in an accompanying statement that the economy is recovering moderately. In terms of the inflation outlook, the central bank noted that consumer prices, excluding fresh food, are in the range of 0.5% to 1%, and that inflation expectations appear to be rising on the whole. The Bank of Japan has set a 2% inflation target, which it aims to reach by 2015.

European indices were trading in the green and the US Futures were trading in the positive.