Volatility continued as key benchmark indices regained positive terrain after slipping into the red after hitting fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, was up 26.42 points or 0.13%, up close to 55 points from the day's low and off about 35 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Auto stocks edged higher. Car maker Maruti Suzuki India rose on reports that the company will raise vehicle prices by up to Rs 10000 in the first week of October. Two-wheeler stocks were mostly higher on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Kingfisher Airlines extended recent sharp surge triggered by the company's Chairman Vijay Mallya's comment that the company is in talks with a foreign investor for a potential stake sale.
A bout of initial volatility was witnessed as key benchmark indices alternately swung between gains and losses. Volatility continued as key benchmark indices regained positive terrain after slipping into the red after hitting fresh intraday high in morning trade.
The market may remain volatile today, 26 September 2013, as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire today, 26 September 2013.
At 10:20 IST, the S&P BSE Sensex was up 26.42 points or 0.13% to 19,882.66. The index rose 60.39 points at the day's high of 19,916.63 in early trade. The index declined 29.25 points at the day's low of 19,826.99 in early trade.
The CNX Nifty was up 8.55 points or 0.15% to 5,882.40. The index hit a high of 5,892.85 in intraday trade. The index hit a low of 5,864.10 in intraday trade.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 879 shares rose and 585 shares dropped. A total of 104 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and rest of them fell. Bhel (up 2.69%), Sun Pharmaceutical Industries (up 1.55%) and HDFC (up 1.56%), edged higher.
Auto stocks gained. M&M rose 0.71%.
Tata Motors gained 0.29%, with the stock extending Wednesday's 1.9% gain. The company's British luxury car unit Jaguar Land Rover (JLR) on Tuesday, 24 September 2013, unveiled details of its future plans for advanced research and development in the UK which will now be focused on a new cutting-edge technology, innovation and education centre in Warwick. The National Automotive Innovation Campus (NAIC) is designed to create a large-scale collaborative research environment, JLR said in a statement. JLR is the lead partner in the project investing 50 million pounds, along with Tata Motors European Technical Centre (TMETC), WMG (Warwick Manufacturing Group) and the UK Government's Higher Education Funding Council England (HEFCE).
Car maker Maruti Suzuki India rose 0.88% on reports that the company will raise vehicle prices by up to Rs 10000 in the first week of October to offset higher input costs, caused mainly by a sharp fall in the local currency's value. A weak rupee adds to inflation by swelling the cost of imported parts for companies such as Maruti as well as for their auto-parts suppliers. Fuel retailers have also increased the prices of diesel, the fuel used by trucks to transport vehicles.
Two-wheeler stocks were mostly higher on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. The festive season starts with the Durga Puja in October. The festival is followed by Dussehra and Diwali. Bajaj Auto gained 0.88%. TVS Motor Company was up 3.62%. But, Hero MotoCorp dropped 0.54%.
Kingfisher Airlines was locked at 10% upper circuit at Rs 6.21 on BSE, with the stock extending recent sharp surge triggered by the company's Chairman Vijay Mallya's comment on Tuesday, 24 September 2013, that the company is in talks with a foreign investor for a potential stake sale. Kingfisher Airlines has been grounded for almost a year for want of cash.
Gillette India (up 11.6%), Financial Technologies (India) (up 5.93%), Vakrangee Softwares (up 2.65%) and Prism Cement (up 2.28%), were among the biggest gainers from the BSE Mid-Cap index.
Bond prices rose after the Reserve Bank of India on Wednesday, 25 September 2013, said that it is closely and continuously monitoring liquidity conditions in the banking system and will take actions as appropriate, including open market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.7228%, lower than its close of 8.7862% on Wednesday, 25 September 2013. Bond prices and bond yields are inversely related.
The RBI said that liquidity conditions in the banking system have been tightening due to uncertainties around the government borrowing programme for the second half of 2013-14 as well as the prospective effects of banks' half-yearly account closure, the seasonal pick-up in credit demand, festival-related demand for currency and sluggish deposit growth. The RBI last week began a calibrated unwinding of the exceptional measures undertaken since July so as to restore normalcy to financial flows. Currently, the RBI is injecting about Rs 1.5 lakh crore into the system on a daily basis through the liquidity adjustment facility (LAF), the export credit refinance facility (ECR) and the marginal standing facility (MSF) taken together, the RBI said.
In the foreign exchange market, the rupee edged higher against the dollar after the RBI eased norms for providing swaps to banks that are borrowing funds overseas. The partially convertible rupee was hovering at 62.31, compared with its close of 62.44/45 on Wednesday, 25 September 2013.
The Reserve Bank of India late on Wednesday relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee.
Asian stocks were mixed on Thursday. Key benchmark indices in China, Hong Kong and Taiwan were off 0.88% to 1.47%. Key benchmark indices in Indonesia, Japan, and South Korea rose 0.3% to 1.17%.
Trading in US index futures indicated that the Dow could gain 21 points at the opening bell on Thursday, 26 September 2013. US stocks dropped on Wednesday, with the S&P 500 index recording its longest decline since December, as a possible government shutdown overrode better-than-forecast economic reports. The Senate voted 100-0 on Wednesday to pass a stopgap spending measure, with Democrats planning to get rid of language from the House version that would remove funding of the 2010 Affordable Care Act. Without an accord to hasten Senate consideration of the bill, a vote on its passage could come as late as Sunday, giving the House one day to move before spending authority lapses. Separately, Treasury Secretary Jacob Lew told legislators that he'll run out of options to avoid hitting or surpassing the debt limit by Oct. 17 or sooner.
A report from the Commerce Department showed that new-home sales rose last month after an unexpected drop in July. Another data showed that orders for US durable goods unexpectedly bounced back last month on the back of demand for autos.
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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