Key benchmark indices scaled fresh intraday high in early afternoon trade as the rupee hit two-week high against the dollar on receding geopolitical risks from Syria. Gains in Asian stocks also underpinned sentiment. The S&P BSE Sensex was up 490.01 points or 2.54%, up 315.41 points from the day's low and off 67.08 points from the day's high. The market breadth, indicating the overall health of the market, was strong. All BSE sectoral indices were trading in the green.
Index heavyweight and cigarette maker ITC extended intraday gain. Reliance Industries rose. Tata Motors surged to record high. Bank stocks were in demand on renewed buying.
Key benchmark indices rallied in early trade on firm Asian cues. The stock market had remained closed on Monday, 9 September 2013, on account of Ganesh Chaturthi. Key benchmark indices surged in morning trade as the rupee rose to a two-week high on receding geopolitical risks from Syria. The barometer index, BSE Sensex, hit over six-week high. The CNX Nifty hit six-week high. Key benchmark indices hit fresh intraday high in mid-morning trade. Market hit fresh intraday high in early afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Friday, 6 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 800.71 crore on Friday, 6 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee rose to a two-week high on Tuesday as receding geopolitical risks from Syria and strong exports in August helped lift the currency. The partially convertible rupee was hovering at 64.24, stronger than its close of 65.24/25 on Friday, 6 September 2013. Financial markets were closed on Monday, 9 September 2013, on account of Ganesh Chaturthi. The rupee has seen a steep recovery from an all time low of 68.85 hit on 28 August 2013. Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
At 12:21 IST, the S&P BSE Sensex was up 490.01 points or 2.54% to 19,760.07. The index surged 557.09 points at the day's high of 19,827.15 in early afternoon trade, its highest level since 26 July 2013. The index gained 174.60 points at the day's low of 19,444.66 in early trade.
The CNX Nifty was up 152 points or 2.68% to 5,832.40. The index hit a high of 5,850.85 in intraday trade, its highest level since 30 July 2013. The index hit a low of 5,738.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,401 shares gained and 636 shares fell. A total of 106 shares were unchanged.
The total turnover on BSE amounted to Rs 1213 crore by 12:20 IST compared to Rs 883 crore by 11:20 IST.
Among the 30-share Sensex pack, 28 stocks gained and only two of them declined. HDFC (up 6.22%), L&T (up 6.51%) and Maruti Suzuki India (up 4.09%) edged higher from the Sensex pack.
Tata Motors jumped 7.82% to Rs 342.65 after striking a record high of Rs 344.70 in intraday trade today, 10 September 2013. It was the top gainer from the Sensex pack.
Index heavyweight and cigarette maker ITC surged 3.89% to Rs 328.50.
Reliance Industries rose 0.41% to Rs 871.15.
Bank stocks were in demand on renewed buying. The new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013, said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country and also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy.
Among PSU bank stocks, State Bank of India (up 2.05%), Bank of Baroda (up 1.94%), Canara Bank (up 2.39%), Union Bank of India (up 2.92%), Bank of India (up 5.1%) and Punjab National Bank (up 4.76%) edged higher.
Among private bank stocks, Yes Bank (up 6.03%), Kotak Mahindra Bank (up 2.39%), ICICI Bank (up 1.67%), Federal Bank (up 4.36%), and HDFC Bank (up 2.13%), edged higher.
Axis Bank jumped 6.58%. The bank before market hours today, 10 September 2013 said that the Reserve Bank of India (RBI) has withdrawn restrictions with immediate effect on foreign institutional investors (FIIs) on buying shares of Axis Bank as the overall foreign share holding in Axis Bank fell below the prescribed limit of 49%. Foreign share holding in Axis Bank under the portfolio investment scheme have gone below the prescribed threshold limit stipulated under the extant FDI Policy, the RBI said in a statement. Total foreign holding in Axis Bank was 48.96% as at 30 June 2013, of which 40.70% was held by FIIs.
In an unexpectedly detailed and wide-ranging briefing, new RBI Governor Raghuram Rajan on Wednesday outlined plans to attract more funds from overseas by subsidising hedging costs for banks and making it easier for importers and exporters to hedge currency risk. He made clear his intention to liberalise markets, including pushing for more rupee trade settlement, introducing new financial products such as overnight interest rate swaps and removing curbs on opening new branches by Indian banks. Rajan, in his remarks, outlined the plan to attract more funds from non-resident Indians (NRIs) as part of a broader push to lure inflows. Under the plan, the central bank will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians. India has the world's second-biggest diaspora, according to the Ministry of Overseas India Affairs, and the country has turned to overseas Indians for help in past financial crises. The central bank will also offer forex swap into rupees at a concessional rate below market levels for banks who raise dollar funds through overseas borrowings.
Rajan said banks should gradually be allowed to decrease their mandatory holdings of government securities, which would free up capital for lending. He also said new bank licences should be awarded on an ongoing basis. The central bank is now in the process of awarding the first new bank licences in a decade. Rajan also proposed the issue of inflation-indexed bonds linked to the consumer price index, an indication that the central bank may soon shift its inflation benchmark from the wholesale price index. Rajan also pushed back the date of the RBI's next monetary policy review by two days to 20 September 2013. That will give the central bank more time to consider the outcome of what is expected to be a pivotal two-day meeting of the US Federal Reserve, ending on 18 September 2013.
Pipavav Defence and Offshore Engineering Company hit an upper circuit limit of 5% at Rs 42.65 on bargain hunting after a recent slump in share price. Shares of Pipavav Defence and Offshore Engineering Company slumped 38.17% in the preceding 16 trading sessions to Rs 40.65 on 6 September 2013 from a recent high of Rs 65.75 on 14 August 2013.
Pratibha Industries surged 7.56% after the company said it has secured a water supply contract worth Rs 418.36 crore from PHED in Ajmer, Rajasthan. The contract is scheduled to be completed in 36 months from the date of commencement. The company announced the new order during trading hours today, 10 September 2013.
Jaiprakash Power Ventures spurted 12.86% on reports the company may sell its two mega operating hydro-power projects in Himachal Pradesh to Abu Dhabi Water & Electric Authority.
The Reserve Bank of India said on Thursday, 5 September 2013 that it will release the next Mid-Quarter Review of Monetary Policy 2013-14 at 11 IST on 20 September 2013 instead of 18 September 2013 as indicated in the First Quarter Review of Monetary Policy 2013-14. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon.
Asian stocks hit three-month high on Tuesday ahead of a fresh round of Chinese economic data and signs that Syrian tensions are easing. Key benchmark indices in China, Taiwan, Hong Kong, Indonesia, South Korea, Singapore and Japan rose by 0.2% to 2.21%.
Trading in US index futures indicated that the Dow could gain 30 points at the opening bell on Tuesday, 10 September 2013. US markets ended higher on Monday, helped in part by hopes that the threat of a US military intervention in the Middle East could be abating.
Russia on Monday proposed to work with Damascus to put its chemical weapons under international control, a move that President Barack Obama said could be "potentially positive".
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.
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