Key benchmark indices surged in early trade after the main opposition party, the Bharatiya Janata Party (BJP), late on Friday, 13 September 2013, named Gujarat chief minister Narendra Modi as the party's prime ministerial candidate for the general elections in 2014. Gains in Asian stocks underpinned sentiment as the barometer index, the S&P BSE Sensex, moved past the psychological 20,000 level. The rupee surged past 63 against the dollar. The Sensex was up 304.28 points or 1.54%, up close to 65 points from the day's low and off about 50 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Bank stocks gained. Sun Pharmaceutical Industries rose after the company said its unit has received US Food and Drug Administration's (USFDA) final approval for the generic version of Prevacid.
In the foreign exchange market, the rupee surged against the dollar. The partially convertible rupee was hovering at 62.76, stronger than its close of 63.49/50 on Friday, 13 September 2013.
In a major development on political front, Gujarat chief minister Narendra Modi was crowned as the candidate for prime minister's post by India's main opposition -- Bharatiya Janata Party (BJP) -- late on Friday, 13 September 2013. BJP said that Modi's pro-business stance can revive India's stumbling economy. Parliamentary polls are due by next May. "At this time, when corruption and rising prices have become a big problem for the country, I hope the people will support our call for development and good governance," Mr. Modi said at a news conference in New Delhi on Friday, 13 September 2013.
The stock market cheered Modi's appointment as BJP's prime ministerial candidate given Modi's pro-business record as chief minister of Gujarat.
At 9:30 IST, the S&P BSE Sensex was up 304.28 points or 1.54% to 20,037.04. The index surged 353.67 points at the day's high of 20,086.43 in early trade, its highest level since 25 July 2013. The index rose 239.21 points at the day's low of 19,971.97 in opening trade.
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The CNX Nifty was up 88.80 points or 1.52% to 5,939.40. The index hit a high of 5,957.25 in intraday trade, its highest level since 25 July 2013. The index hit a low of 5,919.85 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 852 shares gained and 280 shares fell. A total of 31 shares were unchanged.
Among the 30-share Sensex pack, 29 stocks gained and only one declined. L&T (up 2.73%), ONGC (up 2.72%) and Jindal Steel & Power (up 2.39%), gained.
Power Grid Corporation of India (PGCIL) rose 2.71%. The company after market hours on Friday, 13 September 2013, said that the Ministry of Power vide an order dated 13 September 2013 conveyed that it has sought the approval of Cabinet Committee on Economic Affairs (CCEA) for the follow on public offer (FPO) of PGCIL of 78.70 crore equity shares of Rs 10 each consisting 17% of existing paid up capital as per Sebi guidelines, which comprises of fresh issue of 60.18 crore equity shares (13% of existing paid up capital) and disinvestment of 18.51 crore equity shares (4% of existing paid up capital) by the Government of India (GoI).
The Ministry of Power also conveyed that PGCIL may proceed further with regard to appointment of Merchant Bankers and other key intermediaries involved in a public issue.
As on 30 June 2013, the GoI held 69.42% stake in PGCIL.
Bank stocks gained. ICICI Bank rose 3.13% and State Bank of India (SBI) gained 1.51%.
HDFC Bank rose 1.72%. The bank on Saturday, 14 September 2013, said that it has completed the acquisition of additional 42.75 lakh equity shares of its subsidiary HDFC Securities (HSL) from an existing shareholder. With this acquisition the total shareholding of HDFC Bank in HSL has increased from 62.06% to 89.88% of the paid-up capital of HSL.
Sun Pharmaceutical Industries rose 2.13% after the company said on Saturday, 14 September 2013, that the US FDA has granted its subsidiary final approval for its Abbreviated New Drug Applications (ANDA) for generic version of Prevacid, Lansoprazole Delayed-Release Capsules USP, 15 mg and 30 mg. Lansoprazole Delayed-Release Capsules USP, 15 mg and 30 mg are therapeutic equivalents of Takeda's Prevacid Delayed-Released Capsules. These Capsules have annual sales of approximately $430 million in the US. Lansoprazole Delayed-Release Capsules USP are indicated for short-term treatment (for 4 weeks) for healing and symptom relief of active duodenal ulcer.
Strides Arcolab lost 5.27% to Rs 852.80 after the company said the sterile manufacturing facility 2 (SFF) at Bangalore of Agila Specialties, a wholly owned subsidiary of the company, has received a warning letter from the United States Food and Drug Administration (USFDA). The USFDA inspected SFF in the month of June 2013 and the inspection resulted in issuance of Form FDA 483 with observations. The company responded to the 483 observations by implementing corrective actions. Strides Arcolab said that the company is committed to work collaboratively and expeditiously with the USFDA to resolve concerns cited in the warning letter in the shortest possible time.
Further, the oncology facility at Bangalore of Agila Specialties was also inspected recently by the USFDA and this facility has cleared the inspection with "Zero 483 status", Strides Arcolab said.
Strides Arcolab said that the company has 8 USFDA approved sterile manufacturing facilities.
On the macro front, the government unveils data of inflation based on the wholesale price index (WPI) for August 2013 today, 16 September 2013. WPI inflation is seen accelerating to 5.9% in August 2013 from 5.79% in July 2013, as per the median estimates of a poll of economists carried out by Capital Market. WPI inflation had accelerated to 5.79% in July 2013, from 4.86% in June 2013.
The Securities and Exchange Board of India (Sebi) said on Friday, 13 September 2013, that FIIs/QFIs shall hereafter be permitted to invest in government debt without purchasing debt limits till the overall investment reaches 90%. Once this 90% limit is reached, auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt. Presently FIIs/QFIs have to purchase the debt limits through the auction mechanism.
Asian stocks rose on Monday, 16 September 2013, after Lawrence Summers withdrew from consideration to be the next Federal Reserve chairman, paving the way for Janet Yellen, who some investors say may favor a slower reduction in US stimulus. Key benchmark indices in Taiwan, Hong Kong, Singapore, South Korea and Indonesia rose by 0.56% to 1.82%. China's Shanghai Composite fell 0.24%. Japanese stock markets were closed for a holiday.
US stocks on Friday scored modest gains despite a mediocre retail sales report and a disappointing read on consumer sentiment. US retail sales, a closely watched benchmark of economic health, rose just 0.2% in August. The consumer sentiment reading in September issued by Thomson Reuters and the University of Michigan was 76.8, down from the 82.1 reading in August.
Summers withdrew his nomination to lead the Fed, before a two-day policy meeting starting tomorrow, 17 September 2013. Summers, 58, was one of three names that US President Barack Obama had mentioned as possible replacements for Bernanke, whose term as Fed chairman ends on 31 January 2014. Janet Yellen, 67, the current Fed vice chairman, was also on Obama's candidate list along with Donald Kohn, 70, a former Fed vice chairman, the president said earlier.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this week, considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC holds a two-day policy meeting on Tuesday 17 September and Wednesday 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.
The US is seeking support from its allies to confiscate Syria's chemical arsenal after forging an agreement with Russia over the weekend. US Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov agreed on a framework for finding, securing and destroying Syrian President Bashar al-Assad's stock of poison gas. The deal calls for early signs of progress, giving Assad one week to submit an inventory of his toxic weapons, and calls for initial inspections in Syria by November.
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