Firmness continued on the bourses in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 227.16 points or 1.12%, up 132.01 points from the day's low and off 59.62 points from the day's high. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by upward revision in revenue guidance from IT major Infosys, gains in rupee against the dollar, firm Asian stocks and provisional data showing that foreign funds remained net buyers of Indian stocks on Thursday, 10 October 2013. Asian stocks edged higher amid hopes US lawmakers will lift the debt limit and avoid a default.
Banking stocks rose after the Reserve Bank of India (RBI) on Thursday allowed banks to raise funds from global multilateral institutions until 30 November 2013 as long as the money raised is for general banking purposes and not for capital enhancement. Realty stocks gained after the stock market regulator Securities and Exchange Board of India (Sebi) on Thursday issued draft of guidelines on the setting up of real-estate investment trusts, or REITs. IT major Infosys held firm after the company raised its revenue guidance for the year ending 31 March 2014 (FY 2014) at the time of announcing Q2 results before trading hours.
Key benchmark indices pared gains after a firm start triggered by higher Asian shares. Intraday volatility continued as key benchmark indices regained strength after paring initial gains in morning trade. Key benchmark indices held firm in mid-morning trade. Firmness continued on the bourses in early afternoon trade.
In the foreign exchange market, the rupee edged higher against the dollar tracking gains in regional currencies and the domestic equity market. The partially convertible rupee was hovering at 61.22, higher than its close of 61.39/40 on Thursday, 10 October 2013.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 10 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 614.27 crore on Thursday, 10 October 2013, as per provisional data from the stock exchanges.
At 12:15 IST, the S&P BSE Sensex was up 227.16 points or 1.12% to 20,500.07. The index jumped 286.78 points at the day's high of 20,559.69 in early trade, its highest level since 20 September 2013. The index rose 95.15 points at the day's low of 20,368.06 in morning trade.
The CNX Nifty was up 71.20 points or 1.18% to 6,092.15. The index hit a high of 6,107.60 in intraday trade, its highest level since 20 September 2013. The index hit a low of 6,046.40 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,245 shares gained and 898 shares fell. A total of 155 shares were unchanged.
The total turnover on BSE amounted to Rs 1094 crore by 12:20 IST compared to Rs 869 crore by 11:20 IST.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined. L&T (up 2.56%), GAIL (India) (up 1.96%) and ONGC (up 1.61%) edged higher from the Sensex pack.
Banking stocks rose across the board after the Reserve Bank of India (RBI) on Thursday allowed banks to raise funds from global multilateral institutions until 30 November 2013 as long as the money raised is for general banking purposes and not for capital enhancement. These borrowings from multilateral bodies will also be eligible for the recently opened forex swap facility. The central bank on Thursday also allowed banks to borrow from entities other than their own branches overseas under existing regulators for borrowing overseas.
Among private bank stocks, HDFC Bank (up 1.01%), Kotak Mahindra Bank (up 1.25%), Axis Bank (up 0.96%), Yes Bank (up 2.28%), and ICICI Bank (up 4.13%) gained.
Among PSU bank stocks, State Bank of India (SBI) (up 1.67%), Punjab National Bank (up 3.44%), Bank of Baroda (up 4.13%), Bank of India (up 1.21%) and Union Bank of India (up 2.85%) advanced.
IT major Infosys surged after the company raised its revenue growth guidance for the year ending 31 March 2014 (FY 2014) at the time of announcement of Q2 September 2013 results before trading hours. The stock was up 5.07% to Rs 3,283. The stock surged as much as 7.55% at the day's high of Rs 3,360 at the onset of the trading session, also its 52-week high. The stock rose as much as 1.07% at the day's low of Rs 3,157.65 so far during the day. On a consolidated basis, Infosys' net profit rose 1.4% to Rs 2407 crore on 15.1% increase in total revenues to Rs 12965 crore in Q2 September 2013 over Q1 June 2013. Infosys has made a provision of Rs 219 crore towards visa related expenses in Q2 September 2013. The results are as per International Financial Reporting Standards (IFRS).
Infosys said it now expects revenue in dollar terms to grow 9% to 10% in the year ending 31 March 2014 (FY 2014). This is an upward revision from its guidance of 6% to 10% which the company had given at the time of announcing Q1 June 2013 results in July this year. Thanks to depreciation of rupee against the dollar, Infosys has also raised its revenue growth guidance in rupee terms for FY 2014. The company now expects 21% to 22% growth in revenue in FY 2014, which is higher than its earlier forecast 13% to 17% growth.
Commenting on the second quarter results, S. D. Shibulal, CEO and Managing Director, Infosys said: "During the quarter we witnessed broad-based volume growth, robust client additions, five large deal wins and increased sales momentum of our big data and cloud offerings. This growth is a result of our focus on execution, which helps our clients achieve their objectives. We will continue with planned investments and initiatives to explore new avenues of growth. We remain watchful of the sustainability of improving global economic fundamentals."
Rajiv Bansal, Chief Financial Officer, Infosys, said: "The global currency market remains volatile with the Indian Rupee depreciating by 11% during the quarter. We have an active hedging program to minimize its impact on our margins. We will continue our focus on optimizing costs and enhancing the efficiency of our operations".
Infosys and its subsidiaries added 68 clients during the quarter. There was a gross addition of 12,168 employees and net addition of 2,964 employees for the quarter by Infosys and its subsidiaries.
Infosys' liquid assets, including cash and cash equivalents, available-for-sale financial assets, and government bonds were Rs 26907 crore as on 30 September 2013, higher than Rs 24078 crore as on 30 June 2013.
Realty stocks gained after the stock market regulator Securities and Exchange Board of India (Sebi) on Thursday issued draft of guidelines on the setting up of real-estate investment trusts, or REITs. This move is likely to increase the depth of India's real estate market, in terms of both exit and financing options for developers and avenues for investors.
HDIL (up 2.48%), Unitech (up 8.94%), Oberoi Realty (up 1.07%) and Indiabulls Real Estate (up 2.61%) gained.
According to the draft guidelines on REITs, companies with more than Rs 1000 crore of assets can list as REITs. They must make an initial public offering of at least Rs 250 crore and a quarter of their stake must be with public holders, says the draft. The requirement of minimum assets is proposed to ensure that only established firms form REITs, the regulator said. Also, according to the draft, each investor must buy units of at aleast Rs 2 lakh. Under the proposals, 90% of a REIT's assets should be in completed, revenue-generating properties and 90% of its net income distributed to investors.
DLF advanced 4.25%. The company early this week said its two subsidiaries viz. DLF Home Developers and DLF Projects have divested 60% stake in Star Alubuild (Star Alubuild), a subsidiary, at an enterprise value of Rs 79.80 crore. Star Alubuild specializes in designing, engineering, fabrication and installation of curtain walls for commercial buildings, retail malls and doors & windows for projects throughout India. Accordingly, Star Alubuild has ceased to be subsidiary of the company, DLF said. The transaction is a part of DLF's objective of divesting its non core assets.
GMDC fell 1.02% to Rs 101.40 on profit booking after the stock rose 15.24% in the preceding six trading sessions to Rs 102.45 on 10 October 2013, from a recent low of Rs 88.90 on 1 October 2013.
On the macro front, the government will unveil industrial production data for August 2013 after trading hours today, 11 October 2013. Industrial production growth is seen decelerating to 2.4% in August 2013 from 2.6% in July 2013, as per the median estimate of a poll of economists carried out by Capital Market.
Asian stocks edged higher on Friday, 11 October 2013, amid hopes US lawmakers will lift the debt limit and avoid a default. Key benchmark indices in China, Singapore, Japan, South Korea, Hong Kong, Taiwan and Indonesia rose by 0.06% to 1.48%.
China is scheduled to release a series of economic reports over the weekend including September trade data. China's economy may grow about 7% for the foreseeable future as policy makers rein in house-price gains and local government debt, Deputy Central Bank Governor Yi Gang said on Thursday.
Trading in US index futures indicated that the Dow could advance 20 points at the opening bell on Friday, 11 October 2013. US stocks jumped on Thursday, with the Dow Jones Industrial Average notching its best one-day point gain since December 2011, after House Republican leaders proposed a temporary extension of the nation's debt ceiling.
House Republican leaders and President Barack Obama ended a roughly 90-minute meeting at the White House Thursday night without a deal to re-open the government or raise the US debt limit, but agreed to keep talking. House Speaker John Boehner's office said that Republicans explained their proposal for a six-week extension in the debt limit, and to begin immediate talks on re-opening the government.
Claims for US jobless benefits jumped last week to the highest level in six months, a Labor Department report showed on Thursday.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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