Key benchmark indices extended intraday gain to hit fresh intraday high in mid-morning trade as the battered rupee recovered after the Reserve Bank of India (RBI) on Wednesday, 28 August 2013, said it has started a facility to meet the daily dollar requirement of the country's three state-run refiners, with the latest RBI measure aimed at reducing currency market volatility. Gains in Asian stocks underpinned sentiment. The S&P BSE Sensex was up 196.15 points or 1.09%, off about 25 points from the day's high and up close to 120 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Metal and mining stocks gained. IT stocks rose on a steep slide in rupee this month, with TCS and HCL Technologies hitting record high and Wipro reaching 52-week high. Auto stocks also rose.
The market edged higher in early trade as the rupee recovered after after the Reserve Bank of India's move to provide dollars directly to oil companies. The Sensex regained the psychological 18,000 mark at the start of the day's trade. The market retained positive terrain in morning trade. The market extended intraday gains to hit fresh intraday high in mid-morning trade.
Asian stocks rose on Thursday, 29 August 2013, as a weaker-than-expected report on US durable-goods orders triggered speculation that the Federal Reserve may delay plans to reduce its monetary stimulus to the US economy. Speculation that geopolitical tensions caused by a possible US-led military strike against Syria may also lead the Fed hold off the reduction in stimulus aided gains in Asian stocks.
The battered rupee recovered after the Reserve Bank of India (RBI) on Wednesday, 28 August 2013, said it has started a facility to meet the daily dollar requirement of the country's three state-run refiners, with the latest RBI measure aimed at reducing currency market volatility. The partially convertible rupee was hovering at 67.62 against the dollar, sharply higher than its record close of 68.80/81 on Wednesday, 28 August 2013.
The Reserve Bank of India (RBI) on Wednesday, 28 August 2013, said that on the basis of assessment of current market conditions, RBI has decided to open a forex swap window to meet the entire daily dollar requirements of three public sector oil marketing companies (IOCL, HPCL and BPCL). Under the swap facility, the RBI will undertake sell/buy USD-INR forex swaps for fixed tenor with the oil marketing companies through a designated bank. The swap facility gets operationalized with immediate effect and will remain in place until further notice, the RBI said late on Wednesday, 28 August 2013, after the rupee fell by 3.7% on that day, its steepest one-day decline in years, as investors pull back from emerging markets in response to a likely US-led military intervention in Syria.
Indian stocks are likely to remain volatile today, 29 August 2013, as traders roll over positions in the futures & options (F&O) segment from the near month August 2013 series to September 2013 series. The near month August 2013 derivatives contract expire today, 29 August 2013.
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At 11:20 IST, the S&P BSE Sensex was up 196.15 points or 1.09% to 18,192.30. The index surged 221.07 points at the day's high of 18,217.22 in mid-morning trade, its highest level since 27 August 2013. The index rose 75.07 points at the day's low of 18,071.22 in opening trade.
The CNX Nifty was up 53.05 points or 1% to 5,336.05. The index hit a high of 5,348.85 in intraday trade, its highest level since 27 August 2013. The index hit a low of 5,303 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 941 shares rose and 732 shares fell. A total of 115 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks rose and rest of them fell. HDFC (up 5.76%), L&T (up 3.37%) and HDFC Bank (up 2.85%), edged higher from the Sensex pack.
Metal and mining stocks gained. JSW Steel (up 1.06%), Hindalco Industries (up 2.5%), Tata Steel (up 0.35%), Hindustan Zinc (up 1.78%), Sesa Goa (up 4.51%), NMDC (up 0.73%), and Bhushan Steel (up 0.63%), edged higher.
IT stocks rose on a steep slide in rupee this month. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
TCS rose 1.27% to Rs 1928.35 after hitting a record high of Rs 1944.15 in intraday trade.
HCL Technologies rose 1.35% to Rs 991.05 after hitting a record high of Rs 993.65 in intraday trade.
Wipro rose 0.13% to Rs 472 after hitting a 52-week high of Rs 475 in intraday trade. As part of periodic review, IT major Wipro will enter the National Stock Exchange's 50-share CNX Nifty index with effect from 27 September 2013 while Reliance Infrastructure would exit. Earlier, Wipro was dropped from the CNX Nifty index from 1 April 2013 due to demerger of non-IT business into a separate company Wipro Enterprises.
Shares of Reliance Infrastructure gained 0.48%.
Auto stocks gained. M&M (up 0.3%), Maruti Suzuki India (up 0.49%) and Tata Motors (up 0.49%), edged higher.
Shares of two wheeler makers were mixed. Bajaj Auto rose 0.2%. Hero MotoCorp fell 0.28%.
Crude oil prices dropped after US government data showed crude stockpiles gained the most in four months in the US, the world's largest oil consumer. US crude oil futures for October delivery were off 80 cents or 0.73% at $109.30 a barrel.
Oil futures had surged during the past two trading sessions as the US moved closer to military action against Syrian government targets in retaliation for their alleged use of chemical weapons on civilians. However, late Wednesday, US President Barack Obama said in an interview with PBS Newshour that he had yet to make a decision on his nation's response. At the same time, the UK indicated it would wait until a parliamentary vote, likely early next week, before joining any US effort in Syria, according to reports. At the same time, the chances that a Syria strike could spark a wider conflict appeared to rise, as officials from the Syria regime and its ally Iran suggested they might attack Israel if the US takes military action.
Asian stocks rose on Thursday, 29 August 2013, as a weaker-than-expected report on US durable-goods orders triggered speculation that the Federal Reserve may delay plans to reduce its monetary stimulus to the US economy. Speculation that geopolitical tensions arising from a possible US-led military strike against Syria may also lead the Fed hold off the reduction in stimulus aided gains in Asian stocks. Key benchmark indices in Singapore, Hong Kong, South Korea, Indonesia, Taiwan and Japan rose by 0.4% to 1.42%. China's Shanghai Composite fell 0.23%.
The Philippine economy expanded above 7% for a fourth straight quarter, defying a regional slowdown to cement its role as Southeast Asia's best performer as President Benigno Aquino boosts investment. Gross domestic product rose 7.5% in the three months through June from a year earlier, compared with a 7.7% gain in the previous quarter, the National Statistical Coordination Board said in Manila today.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 29 August 2013. US stocks on Wednesday advanced for the first session this week, with oil producers leading the gains as the price of crude settled at a more-than-two-year high.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next 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.
Brazil's central bank on Wednesday raised its key lending rate by a half percentage point, reinforcing a commitment to curb worrisome inflation despite parallel concerns over the pace of economic growth. In a widely expected move, the central bank's monetary policy committee voted unanimously to raise the Selic interest rate to 9% from the previous 8.5%, the fourth increase since April.
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