Key benchmark indices retained positive zone in early afternoon trade as the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The S&P BSE Sensex was up 85.81 points or 0.42%, off close to 40 points from the day's high and up about 160 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Auto stocks rose after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected. Car major Maruti Suzuki India extended initial gain triggered by the company's strong Q2 results. Banking stocks extended intraday gain after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system.
The market slipped into the red after opening higher. A bout of volatility was witnessed as key benchmark indices trimmed losses soon after hitting fresh intraday low in morning trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, hit 1-1/2-week low. Volatility ruled the roost as key benchmark indices reversed intraday losses after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The Sensex trimmed gains after hitting fresh intraday high in mid-morning trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2013 series to November 2013 series. The near month October 2013 derivatives contract expire on Thursday, 31 October 2013.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 28 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 636.78 crore on Monday, 28 October 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 85.81 points or 0.42% to 20,656.09. The index jumped 126.94 points at the day's high of 20,697.22 in mid-morning trade. The index fell 76.62 points at the day's low of 20,493.66 in morning trade, its lowest level since 18 October 2013.
The CNX Nifty was up 25.15 points or 0.41% to 6,126.25. The index hit a high of 6,145.60 in intraday trade. The index hit a low of 6,079.20 in intraday trade, its lowest level since 18 October 2013.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 1,088 shares declined and 957 shares rose. A total of 123 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks rose and rest of them fell. Tata Steel (up 2.16%), Sesa Sterlite (up 1.56%) and Hindalco Industries (up 1.03%), edged higher.
Most banking stocks extended intraday gains after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. State Bank of India (SBI) (up 0.97%), HDFC Bank (up 0.51%) and ICICI Bank (up 2.42%), gained.
The Reserve Bank of India today, 29 October 2013, said it has decided to give banks the option to pay interest on savings deposits and term deposits at intervals shorter than quarterly intervals.
Auto stocks rose after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected. Tata Motors (up 1.06%), Hero MotoCorp (up 1.05%) and Bajaj Auto (up 0.25%), gained. But, M&M declined 0.07%.
Car major Maruti Suzuki India jumped 6.56%, with the stock extending initial gain triggered by the company's strong Q2 result. The company after trading hours on Monday, 28 October 2013, said its net profit jumped 194.7% to Rs 670.20 crore on 26.5% growth in net sales to Rs 10211.80 crore in Q2 September 2013 over Q2 September 2012. The company said that base effect aided strong growth in bottomline in Q2 September 2013 -- the company's performance in Q2 September 2012 was adversely impacted by labour problems at its Manesar plant. Higher localization and cost reduction initiatives by the company also contributed significantly to bottomline growth in Q2 September 2013, Maruti said. The overall impact of foreign exchange was positive during the quarter, Maruti said.
Maruti said that the company's new diesel engine facility at Gurgaon and the third assembly facility at Manesar went on stream during Q2 September 2013. With this, the company's total capacity for vehicle assembly has risen to 1.5 million vehicles per annum.
Oriental Hotels lost 3.7% on reverse turnaround in Q2. The company reported net loss of Rs 6.07 crore in Q2 September 2013 as against net profit of Rs 0.45 crore in Q2 September 2012. The Q2 result was announced after market hours on Monday, 28 October 2013. Oriental Hotels' net sales rose 4.7% to Rs 66.34 crore in Q2 September 2013 over Q2 September 2012.
Nocil lost 2.55% on weak Q2 result. The company's net profit declined 10.3% to Rs 5.16 crore on 12.3% growth in net sales to Rs 142.08 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced after market hours on Monday, 28 October 2013.
In the foreign exchange market, the rupee reversed initial losses against the dollar after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The partially convertible rupee was hovering at 61.46, compared with its close of 61.52/53 on Monday, 28 October 2013.
Bond prices rose after the Reserve Bank of India (RBI) after a monetary policy review raised its main lending rate viz. the repo rate by 25 basis points as expected and decided to infuse liquidity into the banking system. The yield on the federal benchmark paper 7.16% GS 2023 was hovering at 8.6062%, lower than its close of 8.6557% on Monday, 28 October 2013. Bond yield and bond prices are inversely related.
The Reserve Bank of India after a monetary policy review today, 29 October 2013, raised its main lending rate viz. the repo rate by 25 basis poinst to 7.75%. With the more recent upturn of inflation, and with inflation expectations remaining elevated anticipating the pass-through of exchange rate depreciation and ongoing adjustment in administered fuel prices, it is important to break the spiral of rising price pressures in order to curb the erosion of financial saving and strengthen the foundations of growth, the RBI said. It is in this context that the LAF repo rate has been increased by 25 basis points, the RBI said.
Keeping in view the need to infuse liquidity into the banking system to normalise liquidity conditions, the RBI has decided to increase the liquidity provided through term repos of 7-day and 14-day tenor from 0.25% of NDTL of the banking system to 0.5% with immediate effect. RBI has also reduced the marginal standing facility (MSF) rate by 25 basis points from 9% to 8.75% with immediate effect. With the reduction of the MSF rate and the increase in the repo rate in this review, the process of re-aligning the interest rate corridor to normal monetary policy operations is now complete, the RBI said. Going forward, however, the more durable strategy for mitigating mismatches between the supply of, and demand for, funds is for banks to step up efforts to mobilise deposits, the RBI said.
The policy stance and measures in this review are intended to curb mounting inflationary pressures and manage inflation expectations in a situation of weak growth, the RBI said. These will help strengthen the environment for growth by fostering macroeconomic and financial stability. The Reserve Bank of India will closely monitor inflation risk while being mindful of the evolving growth dynamics, the central bank said in a statement.
The pass-through of rupee depreciation into prices of manufactured products is acting, along with elevated food and fuel inflation, to offset possible disinflationary effects of low growth. While food price pressures may ease with the arrival of the kharif harvest and the usual seasonal moderation, overall WPI inflation is expected to remain higher than current levels through most of the remaining part of the year, warranting an appropriate policy response, the RBI said. Retail inflation measured by the consumer price index (CPI) has also risen sharply across food and non-food constituents, including services, keeping inflation expectations high. Notwithstanding the expected edging down of food inflation, retail inflation is likely to remain around or even above 9% in the months ahead, absent policy action, RBI said.
Headwinds to growth from domestic constraints continue to pose downside risks, and vulnerabilities to sudden shifts in the external environment remain, the RBI said. The revival of large stalled projects and the pipeline cleared by the Cabinet Committee on Investment may buoy investment and overall activity towards the close of the year.
Asian stocks edged higher in choppy trade on Tuesday, 29 October 2013, after US economic data backed the case for the Federal Reserve to maintain stimulus to the US economy. Key benchmark indices in Hong Kong, Taiwan, Singapore, and South Korea rose 0.06% to 0.19%. Key benchmark indices in China, Japan and Indonesia shed 0.36% to 1.02%.
The People's Bank of China conducted 13 billion yuan ($2.13 billion) of seven-day reverse-repurchase agreements today, 29 October 2013. That compares with the 102.5 billion yuan drained from the banking system in the last two weeks as existing contracts matured and the monetary authority suspended sales of new agreements as corporate tax payments fell due.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 29 October 2013. US stocks were little changed on Monday as investors found few catalysts to push equities higher. Economic data showed pending home sales slumped 5.6% in September, a rate that was far steeper than expected and the biggest drop in more than three years.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting today, 29 October and tomorrow, 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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