Further gains in rupee against the dollar aided intraday recovery on the domestic bourses. The barometer index, the S&P BSE Sensex, ended almost unchanged for the day. The 50-unit CNX Nifty attained 7-week closing high. The Sensex settled slightly below the psychological 20,000 level, having alternately moved above and below that mark in intraday trade. The Sensex rose 0.36 points to 19,997.45, up close to 220 points from the day's low and off about 55 points from the day's high. The market breadth, indicating the overall health of the market, was strong. BSE Small-Cap and Mid-Cap indices rose more than 1% each, with both these indices outperforming the Sensex.
Share prices were volatile today, 11 September 2013, after Tuesday's rally. The Sensex had jumped 3.77% on Tuesday, 10 September 2013, after the latest data showed that India's trade deficit, the key driver of the country's large current-account deficit, narrowed to five-month low in August 2013.
The Sensex has garnered 1,762.79 points or 9.66% in five trading days from a recent low of 18,234.66 on 3 September 2013. The Sensex has gained 1377.73 points or 7.39% in September 2013 so far (till 11 September 2013). The Sensex has risen 570.74 points or 2.93% in calendar 2013 so far (till 11 September 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 446.17 points or 2.18%.
Coming back to today's trade, shares of state-run bank stocks surged. PSU OMCs rose as crude oil futures fell on Tuesday, 10 September 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2703.20 crore from the secondary equity markets on Tuesday, 10 September 2013, as per data from the Securities & Exchange Board of India (Sebi).
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 63.37, stronger than its close of 63.84/85 on Tuesday, 10 September 2013. The rupee has staged a strong rebound after hitting record low of 68.85 against the dollar in intraday deals on 28 August 2013 after the new Reserve Bank of India Governor Mr. Raghuram Rajan announced several measures to help the rupee, including making it cheaper for banks to keep dollars received via some foreign-currency bank deposits with the RBI.
The S&P BSE Sensex advanced 0.36 points to settle at 19,997.45, its highest closing level since 24 July 2013. The index rose 55.76 points at the day's high of 20,055.53 in morning trade. The index lost 219.46 points at the day's low of 19,777.63 in afternoon trade.
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The CNX Nifty rose 16.40 points or 0.28% to 5,913.15, its highest closing level since 24 July 2013. The index hit a low of 5,832.70 and a high of 5,924.35 in intraday trade.
The BSE Mid-Cap index rose 1.34% and the BSE Small-Cap index gained 1.11%. Both these indices outperformed the Sensex.
The BSE Metal index (up 3.33%), BSE Realty index (up 2.74%), BSE Bankex (up 1.8%), BSE PSU index (up 1.43%), BSE Capital Goods (up 1.37%), BSE HealthCare index (up 1.14%), BSE Power index (up 0.49%), and BSE Auto index (up 0.08%), outperformed the Sensex.
The BSE FMCG index (down 1.11%), BSE Consumer Durables index (down 0.65%), BSE IT index (down 0.24%), BSE Oil & Gas index (down 0.22%), and BSE Teck index (down 0.18%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 2367 crore, higher than Rs 2267 crore on Tuesday, 10 September 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,419 shares gained and 940 shares fell. A total of 152 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
State-run bank stocks surged. SBI (up 3.65%), Punjab National Bank (up 6.72%), Canara Bank (up 6.73%), Bank of India (up 10.46%) and Bank of Baroda (up 8.18%) gained.
The Reserve Bank of India (RBI) on Tuesday said that banks can raise funds overseas above 50% of their Tier I capital with a minimum maturity of three years and swap these borrowings with the central bank at a concessional rate for one to three years. "The swaps shall be available at a concessional rate of a 100 basis points below the market rate for all fresh borrowing with a minimum tenor of one year and a maximum tenor of three years, irrespective of whether such borrowings are in excess of 50% of their unimpaired Tier I capital or not," the RBI said.
RBI said despite the swaps being for the entire tenor of the borrowing, the rate shall be reset after every one year from the date of the swap at 100 basis points lower than the prevailing market rate, at the time of reset. The RBI added that banks are free to borrow in any foreign currency but the swaps will be available only for conversion of the US dollar equivalent into rupees and will be computed at relevant cross rates on that day.
Shares of companies owned by foreign promoters extended Tuesday's rally triggered by the Reserve Bank of India (RBI) making it easier for them to raise their stake in their listed Indian subsidiaries. ABB India rose 3.35% to Rs 578.75. The stock was volatile. The scrip hit high of Rs 594.90 and low of Rs 540.10.
Siemens jumped 8.18% to Rs 513.75. The stock was volatile. The stock hit high of Rs 568 and low of Rs 466.
However, there is no scope for the overseas parents of both ABB and Siemens to raise stake in these two firms. This is because their overseas parent holds 75% stake in these firms. As per the minimum public shareholding rule, a minimum 25% public shareholding has to be maintained in private companies which are listed on the bourses.
Bharat Heavy Electricals (Bhel) fell 2.03% to Rs 139.70, with the stock declining on profit booking after recent strong gains. Shares of Bhel had rallied 19.43% in prior four sessions to settle at Rs 142.60 on 10 September 2013, from a recent low of Rs 119.40 on 3 September 2013.
Jaiprakash Associates surged 5.51%. The company during market hours today, 11 September 2013, said that the Jaypee Group is committed to unlock and enhance shareholders' value through various options, including reduction of debt and, if required, by sale of some of the undertakings of the company or any of its subsidiaries. This is a continuous exercise and all out efforts are being made to achieve the said objective, Jaiprakash Associates said. The company issued this clarification in reaction to media reports that Jaiprakash Associates is in talks to sell its Gujarat cement unit to UltraTech Cement.
Shares of UltraTech Cement rose 1.17% to Rs 1,725.
PSU OMCs rose as US crude oil futures fell on Tuesday, 10 September 2013. BPCL (up 4.29%), Indian Oil Corporation (up 2.71%) and HPCL (up 3.9%) edged higher.
US crude oil futures for October 2013 delivery were up 51 cents a barrel at $107.90 a barrel in the electronic trading today, 11 September 2013. The contract had fallen $2.13 a barrel or 1.94% to settle at $107.39 a barrel on the New York Mercantile Exchange on Tuesday, 10 September 2013, its lowest closing level since 4 September 2013.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Meanwhile, gains in rupee against the dollar have also eased concerns about increased costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Auto stocks were mixed. Tata Motors lost 2.49% to Rs 340.50. The stock had jumped 9.89% to settle at Rs 349.20 after striking a record high of Rs 352 in intraday trade on Tuesday, 10 September 2013. The company's unit Jaguar Land Rover (JLR) on Tuesday, 10 September 2013, reported 28% rise in sales to 27,852 vehicles in August 2013 over August 2012.
Maruti Suzuki India gained 0.91%. The company said during market hours on 6 September 2013 that its production jumped 62.63% to 91,261 units in August 2013 over August 2012. The company said on 2 September 2013 that its total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) rose 1.86%. The company after market hours on Tuesday, 10 September 2013, said that it has crossed yet another milestone with over 4 lakh sales of its special utility vehicle (SUV), Scorpio.
Speaking on the milestone, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra, said: "This is a very proud moment for us, as the iconic and trend-setting Scorpio has achieved yet another milestone. This achievement reaffirms the Scorpio's immense popularity and the confidence that consumers have reposed in it over the years. Being one of the most admired and most awarded brands within the Indian automobile industry, the Scorpio has rightfully claimed its spot as the king of Indian roads".
Hero MotoCorp gained 0.98%.
Cipla shed 1.09% to Rs 435.50. The stock had hit a record high of Rs 446.50 in intraday trade on Tuesday, 10 September 2013.
Most IT stocks gained. TCS rose 0.85% to Rs 1,992.25. The company after market hours on Tuesday, 10 September 2013, said it has bagged a five-year multi-million euros deal from Scandinavian Airlines (SAS) to help transform and optimise SAS' IT processes, applications and infrastructure. TCS will implement its proprietary cloud-based solutions to simplify and standardize the SAS IT landscape. The initiative is a part of the SAS "4 Excellence Next Generation" strategy, aimed at improving the competitiveness of the SAS Group. Through this partnership, SAS will also tap into TCS' Aviation and Digital Innovation Labs to develop solutions addressing the needs of the new digital consumer.
HCL Technologies rose 0.51% to Rs 1065.25 after striking a record high of Rs 1081.20 in intraday trade. HCL Technologies and Anglo American, one of the world's largest mining companies, announced after market hours on Tuesday, 10 September 2013, that they have entered into an engagement whereby HCL will deliver IT services for Anglo American businesses across the globe. As a part of this contract, HCL will transform Anglo American's end user computing and data center landscape to improve operational efficiency, business agility and the user experience. The scope of the service covers end to end infrastructure services, including data centre and hosting services, email services, service desk, local area network and security management, end user computing and on-site IT services, utilizing hybrid on-premise and cloud delivery models.
Infosys fell 0.96% to Rs 3120.55. The stock reversed direction after striking a 52-week high of Rs 3,172.70 in intraday trade.
Wipro rose 0.25%.
Shares of Financial Technologies (India) surged 27.18% to Rs 183.85. The stock surged on volume of 58.93 lakh shares, higher than average daily volume of 11.68 lakh shares in the past one quarter. The stock has witnessed wild gyrations ever since the NSEL had to shut down its operation since 1 August 2013 following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension. Financial Technologies (India) is one of the two promoters of the NSEL.
Index heavyweight and cigarette major ITC lost 1.7% to Rs 329.70. The stock hit high of Rs 336.50 and low of Rs 327.15.
Metal and mining stocks extended Tuesday's gains triggered by stronger-than-expected retail and industrial data in China. China is the World's largest consumer of copper and aluminum. NMDC (up 3.96%), Sesa Goa (up 1.02%), Bhushan Steel (up 0.26%), Jindal Steel & Power (up 1.28%), Tata Steel (up 5.07%), Sail (up 5.95%), Hindalco Industries (up 3.81%) and JSW Steel (up 8.68%), edged higher.
Construction shares gained on renewed buying. IVRCL (up 18.7%), Gammon India (up 10.4%), L&T (up 1.15%), Hindustan Construction Company (up 10.84%), NCC (up 6.85%), Patel Engineering (up 6.02%) and IRB Infrastructure Developers (up 14.22%) edged higher.
Sadbhav Engineering jumped 4.84% after the company said it has been declared the successful bidder for two water projects aggregating Rs 456.92 crore. The announcement was made during trading hours today, 11 September 2013.
Realty stocks extended recent gains. DLF (up 5.28%), HDIL (up 3.63%), D B Realty (up 0.35%), and Unitech (up 1.45%), gained.
Harrisons Malayalam jumped 10.2%. The company after market hours on Tuesday, 10 September 2013, said that the High Court of Kerala vide its order dated 9 September 2013 dismissed the Kerala state government's petition challenging the authenticity of company's title deeds and operations, as not maintainable. By dismissing the Kerala government petition, the company has been absolved of allegations in respect of irregularities and fraud as also of alleged violations under the Foreign Exchange Regulation Act (FERA).
Most European stocks edged higher on Wednesday, 11 September 2013, with investors digesting the latest developments in the Syria conflict. Key benchmark indices in Germany and France rose by 0.1% to 0.61%. UK's FTSE 100 fell 0.02%.
The unemployment rate in the UK fell to 7.7% in the period from May to July, down from a level of 7.8% in the months from February to April, the Office for National Statistics said on Wednesday. The UK unemployment rate has been closely watched by investors recently after Bank of England Governor Mark Carney said the central bank will consider raising interest rates when unemployment drops below 7%.
Asian stock markets were mixed on Wednesday, 11 September 2013. Key benchmark indices in China, Japan and South Korea were up 0.01% to 0.49%. Key benchmark indices in Hong Kong, Indonesia and Singapore were off 0.17% to 0.5%.Taiwan's Taiwan Weighted index was unchanged for the day.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 11 September 2013. US stocks rallied on Tuesday, 10 September 2013, with the S&P 500 continuing its longest stretch of gains since mid-July, after upbeat data from China and amid heightened diplomacy on Syria.
US President Barack Obama called for diplomacy in dealing with chemical weapons in Syria but kept open the possibility of military action against the Assad regime. Obama late Tuesday said he was sending US Secretary of State John Kerry to Geneva to meet Russian Foreign Minister Sergey Lavrov to work out details of a plan to have Syria, led by President Bashar al-Assad, give its chemical weapons stockpile to the international community. Obama had called for potential strikes against Syria in retaliation for Syria's use of chemical weapons against civilians in late August. But with a diplomatic solution on the table, Obama asked Congress to delay a vote on whether to authorize military strikes.
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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