It is pre-Diwali fireworks on the street. Key benchmark indices surged on the last trading day of the week on speculation the 16-day partial US government shutdown this month will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled over 35-month high. The Sensex was up 467.38 points or 2.29%, off 49.34 points from the day's high and up 396.11 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 17 October 2013. In the foreign exchange market, the rupee was slightly lower against the dollar amid high intraday volatility after the Reserve Bank of India (RBI) said that its dollar window for oil marketing companies remains open, adding that any tapering would be done in a calibrated manner.
Index heavyweight and cigarette major ITC extended gains in late trade. Another index heavyweight Reliance Industries (RIL) also extended gain in late trade. Engineering and construction giant L&T surged with the company reporting Q2 result after market hours, 18 October 2013. Bank stocks gained across the board. Axis Bank surged, with the stock extending Thursday's gains triggered by the bank's good Q2 results.
Metal and mining stocks gained after the latest data showed that China's GDP growth accelerated in Q3 September 2013. Sesa Sterlite surged after a foreign investment bank initiated coverage of the scrip with a "buy" rating citing upcoming earnings drivers. NMDC extended Thursday's gain triggered by the company reporting increase in iron-ore production and sales for the period April-September 2013. Bharti Airtel rose after the company said it has completed the acquisition of 100% equity shares of Wireless Business Services, which holds BWA Spectrum in the Indian telecom circles of Mumbai, Delhi, Haryana and Kerala.
Key benchmark indices edged higher in early trade on firm Asian stocks. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. The uptrend on the bourses continued as key benchmark indices hit fresh intraday high in mid-morning trade. The Sensex pared gains after hitting fresh intraday high in early afternoon trade. Key benchmark indices extended intraday gains and hit fresh intraday high in mid-afternoon trade. The Sensex hit its highest level in more than 35 months. The 50-unit CNX Nifty hit its highest level in more than 21 weeks. Key benchmark indices trimmed gains after striking fresh intraday high in late trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 17 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 821.50 crore from the secondary equity markets on Thursday, 17 October 2013, as per data from Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex was up 467.38 points or 2.29% to 20,882.89, its highest closing level since 4 November 2010. The index jumped 516.72 points at the day's high of 20,932.23 in late trade, its highest level since 9 November 2010. The index rose 71.27 points at the day's low of 20,486.78 in opening trade.
The CNX Nifty was up 143.50 points or 2.37% to 6,189.35, its highest closing level since 11 November 2010. The index hit a high of 6,201.45 in intraday trade, its highest level since 20 May 2013. The index hit a low of 6,070.90 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,404 shares gained and 1,079 shares fell. A total of 169 shares were unchanged.
The BSE Mid-Cap rose 0.99% and the BSE Small-Cap index rose 0.66%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1965 crore, higher than Rs 1935.47 crore on Thursday, 17 October 2013.
All the 13-sectoral indices on BSE edged higher. The BSE Bankex (up 3.93%), the BSE Metal index (up 3.32%), the BSE Capital Goods index (up 3.03%) and the BSE Realty index (up 2.81%) outperformed the Sensex.
The BSE Oil & Gas index (up 2.07%), the BSE FMCG index (up 1.83%), the BSE Power index (up 1.7%), the BSE PSU index (up 1.47%), the BSE Teck index (up 1.21%), the BSE IT index (up 1.15%), the BSE Auto index (up 1.12%), the BSE HealthCare index (up 1.02%) and the BSE Consumer Durables index (up 0.46%), underperformed the Sensex.
Index heavyweight and cigarette major ITC gained 2.5% to Rs 354, with the stock extending gain in late trade. The stock hit a high of Rs 355.10 and low of Rs 345.15.
Nestle India rose 0.95% to Rs 5,521, with the stock extending recent gains triggered by a foreign brokerage upgrading the stock to 'outperform' from 'sell' and raising its price target to Rs 5,850 from Rs 4,900. The foreign brokerage upgraded its rating on Nestle India shares as it expects the company to see better days ahead. The brokerage said that Nestle India is starting to see improving sales while it remains less dependant on imports than competitors such as Hindustan Unilever. Nestle India's shares have also underperformed consumer good rivals, the brokerage added.
Asian Paints rose 0.29%. The company after market hours on Thursday, 17 October 2013, said that its indirect subsidiary Berger International (BIL), Singapore's net profit fell 4.86% to Rs 4.69 crore on 0.89% growth in total revenue to Rs 143.56 crore in the quarter ended September 2013 over the quarter ended September 2012. BIL, Singapore, has no operations in India.
Marico shed 0.05%. The company after market hours on Thursday, 17 October 2013, said that the Scheme of Arrangement entailing demerger of the Kaya skin clinics business sanctioned by the High Court of Judicature at Bombay has been filed with the Registrar of Companies on 17 October 2013. Accordingly, 17 October 2013 will be considered as the effective date of the Scheme of Arrangement.
Index heavyweight Reliance Industries (RIL) rose 2.7% to Rs 903, with the stock extending intraday gain in late trade. The stock hit high of Rs 907.95 and low of Rs 880.75. The company early this week reported 1.5% growth in net profit to Rs 5490 crore on 14.2% growth in turnover to a record Rs 106523 crore in Q2 September 2013 over Q2 September 2012. Net profit rose 2.6% on 17.6% growth in turnover in Q2 September 2013 over Q1 June 2013.
RIL's gross refining margin (GRM) declined to $7.7 per barrel in Q2 September 2013, from $8.4 a barrel in Q1 June 2013 and $9.5 a barrel in Q2 September 2012.
Engineering and construction giant L&T gained 4.03% to Rs 871. The stock hit a high of Rs 879.90 and low of Rs 828. The company after market hours today, 18 October 2013 reported 14.05% fall in net profit to Rs 977.51 crore on 10.59% rise in total income to Rs 14958.93 crore in Q2 September 2013 over Q2 September 2012.
L&T's order book rose 11% to Rs 1.76 lakh crore as at 30 September 2013 over the previous year.
In its outlook, L&T said that the macro-economic enviornment continues to remain weak and uncertain on account of the twin deficits, tight liquidity, persistent inflation and heightened volatility in the financial markets. Investment climate in the economy is yet to show sign of recovery. Deferral of new projects and delayed decision making and execution features the weak performance of the core sector this far.
The recent government measures such as improved allocation of resources to kick-start the stalled projects are, however, a welcome move to improve the investment sentiment, L&T said.
The company said the strategy of business development in select international markets has started yielding results as is evident from the increased share of international business. The company continues to focus on emerging prospects in the Middle East and other select international markets as part of its twin strategy to hedge against domestic slowdown and attain global competitiveness, it said.
Among other capital goods shares, ABB (up 2.52%), Bhel (up 0.44%), BEML (up 1.41%), Bharat Electronics (up 2.95%), Crompton Greaves (up 1.77%), Siemens (up 3.43%) and Thermax (up 0.56%) edged higher.
Bank stocks gained across the board. Among private bank stocks, ICICI Bank (up 4.68%), Kotak Mahindra Bank (up 3.8%), ING Vysya Bank (up 2.12%), Yes Bank (up 3.19%), and IndusInd Bank (up 6.4%) gained.
HDFC Bank gained 3.17%. HDFC Bank's net profit rose 27.07% to Rs 1982.32 crore on 17.65% rise in total income to Rs 11937.69 crore in Q2 September 2013 over Q2 September 2012. The bank's net interest margin (NIM) declining to 4.3% in Q2 September 2013 from 4.4% in Q2 September 2012. The bank announced Q2 result early this week.
Axis Bank jumped 5.83% to Rs 1,158.80 in volatile trade. The stock hit a high of Rs 1,160 and low of Rs 1,091. The bank's net profit rose 21.25% to Rs 1362.31 crore on 13.22% growth in total income to Rs 9375.08 crore in Q2 September 2013 over Q2 September 2012. The private sector bank announced the second quarter results during trading hours on Thursday, 17 October 2013.
Among PSU bank stocks, State Bank of India (up 2.73%), Punjab National Bank (up 2.23%), Bank of Baroda (up 2.78%), Bank of India (up 2.26%) and Union Bank of India (up 2.93%) advanced.
Metal and mining stocks gained after the latest data showed that China's GDP growth accelerated in Q3 September 2013. China is the world's largest consumer of copper and aluminum. Hindalco Industries (up 3.06%), JSW Steel (up 3.03%), Tata Steel (up 6.19%), Sail (up 2.42%), Hindustan Copper (up 1.25%), National Aluminium Company (up 2.99%), Hindustan Zinc (up 2.18%) edged higher.
Sesa Sterlite surged 5.97% to Rs 195.15 after a foreign investment bank initiated coverage of the scrip with a "buy" rating and a target price of Rs 220 per share, citing upcoming earnings drivers. These include its stake purchase in cash-rich subsidiary Hindustan Zinc, dividends from unit Cairn India and the potential removal of a mining ban in the state of Goa. The foreign investment bank expects Sesa Sterlite's operating profit to grow at a compounded annual growth rate of 11% over the 2013-2015 fiscal years, led by strong volume growth in its power, aluminium and iron ore businesses.
NMDC extended Thursday's gain triggered by the company reporting increase in iron-ore production and sales for the period April-September 2013. The stock was up 0.31%. NMDC's iron-ore sales rose 8.09% to 13.75 million tonnes during the period April-September 2013 over the corresponding previous year period. Production rose 5.31% to 12.89 million tonnes during the period April-September 2013 over the corresponding previous year period.
Jindal Steel & Power rose 0.81%. Gujarat NRE Coke rose 0.23%. Gujarat NRE Coke during market hours on Thursday, 17 October 2013, said that shareholders of Australian mining company -- Gujarat NRE Coking Coal (GNCCL) -- have unanimously passed all seven resolutions at the general meeting held on Wednesday, 16 October 2013, which included authority to Jindal Steel & Power (Jindal group) to acquire majority stake in GNCCL. Among other important items that were approved by the shareholders of GNCCL included two separate fresh offtake agreements of coking coal from the mines between GNCCL and the Jindal Group as well as the Gujarat NRE group, Gujarat NRE Coke said in a statement.
Bharti Airtel rose 2.06%. The company during market hours today, 18 October 2013, said that it has completed the acquisition of 100% equity shares of Wireless Business Services, which holds Broadband Wireless Access (BWA) spectrum in the Indian telecom circles of Mumbai, Delhi, Haryana and Kerala. With this, Wireless Business Services has become a wholly owned subsidiary of Bharti.
PSU OMCs rose after the Reserve Bank of India said that its dollar window for oil marketing companies remains open, adding that any tapering would be done in a calibrated manner. HPCL (up 2.99%) and Indian Oil Corporation (up 0.58%) edged higher. The RBI had opened a special window to provide dollars directly to oil companies since late August in a bid to shore up a battered rupee.
BPCL jumped 4.76%. The company during market hours today, 18 October 2013, said that Petrobras has completed formation test in Farfan area in Sergipe-Alagoas Basin, Brazil.
SpiceJet rose 2.91%. SpiceJet during market hours today, 18 October 2013, said it is misconceived to say that the company is in talks with Qatar Airways for possible stake sale. The company was reacting to media reports that Qatar Airways is eying SpiceJet stake. "We wish to reiterate that few investors have evinced interest in the company post Government of India allowing FDI in civil aviation sector to foreign airlines. It will be improper and pre-mature to comment on the possibilities of any fresh equity issuance to such interested parties or confirm/deny names of any specific entity. It is misconceived to say that the company is in talks with Qatar Airways for possible stake sale," SpiceJet said.
Realty stocks were in demand. DLF (up 2.84%), Indiabulls Real Estate (up 4.1%), HDIL (up 5.07%), Unitech (up 1.97%), Godrej Properties (up 0.37%), Oberoi Realty (up 1.89%) gained.
In the foreign exchange market, the rupee edged lower against the dollar amid high intraday volatility after the Reserve Bank of India (RBI) said that its dollar window for oil marketing companies remains open, adding that any tapering would be done in a calibrated manner. The partially convertible rupee was hovering at 61.25, compared with its close of 61.23/24 on Thursday, 17 October 2013. The rupee had earlier fallen to as low as 61.71 after news channel reported that the central bank is considering closing the dollar swap window offered to oil companies. The RBI had opened a special window to provide dollars directly to oil companies since late August in a bid to shore up a battered rupee.
Indian government bond prices rose on speculation the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. The yield on the benchmark 7.16% GS 2023 was hovering at 8.5569%, lower than its close of 8.6021% on Thursday, 17 October 2013. Bond yield and bond prices are inversely related
European stocks edged higher on Friday, 18 October 2013, as data showed China's economic growth accelerated for the first time in three quarters. Key benchmark indices in UK, France and Germany were up by 0.15% to 0.42%.
Asian markets were mostly higher on Friday, 18 October 2013, after the latest data showed that China's economic growth accelerated in Q3 September 2013. Key benchmark indices in China, Indonesia, South Korea, Hong Kong, Singapore and Taiwan rose by 0.2% to 1.06%. Japan's Nikkei 225 index fell 0.17%.
The Chinese economy grew at an annual rate of 7.8% in Q3 September 2013, accelerating from the second quarter's 7.5% increase. The Chinese government is aiming for economic expansion of at least 7.5% this year.
Another data showed industrial production and retail sales growth in September 2013 easing off their levels from the previous month. Industrial production rose 10.2% in September 2013 from a year earlier, compared with 10.4% growth in August 2013. Retail sales climbed 13.3% in September 2013, compared with 13.4% increase in August 2013.
Trading in US index futures indicated that the Dow could advance 14 points at the opening bell on Friday, 18 October 2013. US stocks ended mostly higher on Thursday, lifting the S&P 500 to a record finish, as Wall Street turned from the latest fiscal drama on Capitol Hill to corporate earnings that included better-than-expected results from Verizon Communications Inc.
After risking a US default, US lawmakers this week agreed to fund the government through Jan. 15 and suspend the debt limit through Feb. 7. US President Barack Obama on Thursday, 17 October 2013, said that the stalemate over US fiscal policy that shut the government for 16 days "encouraged our enemies" and slowed economic growth.
Fed Bank of Chicago President Charles Evans said on Thursday, 17 October 2013, that the central bank should postpone tapering after the shutdown stopped the flow of economic reports used to gauge growth. Minneapolis Fed President Narayana Kocherlakota said policy makers should signal they are prepared to do "whatever it takes," including providing more stimulus, to reduce the jobless rate from August's 7.3%. Fed Bank of Kansas City President Esther George, who has voted this year against expanding stimulus, said that the Fed has enough data to assess the economy's strength and should start tapering even amid fiscal "uncertainty." Evans and George both hold voting positions on the central bank's policy committee this year. Kocherlakota votes in 2014.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. 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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