Key benchmark indices held positive terrain in 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 94.29 points or 0.52%, off about 115 points from the day's high and up close to 20 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Gains in Asian stocks underpinned sentiment on the domestic bourses.
PSU OMCs gained after the RBI announced on Wednesday a dollar buying facility for PSU OMCs to meet the entire daily dollar requirements of three public sector oil marketing companies. HDFC rose on bargain hunting after a recent slide. Index heavyweight and cigarette maker ITC rose. Another index heavyweight Reliance Industries (RIL) also advanced. L&T rose after a consortium of the company and Pipavav Defence and Offshore Engineering Company bagged an order worth over $170 million from ONGC.
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.
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 67.655 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 10:20 IST, the S&P BSE Sensex was up 94.29 points or 0.52% to 18,090.44. The index surged 209.34 points at the day's high of 18,205.49 in early 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 28.20 points or 0.53% to 5,313.20. 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 5,305.65 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 803 shares rose and 622 shares fell. A total of 83 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks fell and rest of them rose. Bharti Airtel (up 2.28%), HDFC Bank (up 1.98%) and TCS (up 1.75%), edged higher from the Sensex pack.
PSU OMCs gained after the RBI announced on Wednesday a dollar buying facility for PSU OMCs to meet the entire daily dollar requirements of three public sector oil marketing companies. HPCL (up 1.1%), BPCL (up 0.87%) and Indian Oil Corporation (up 2.08%), edged higher.
HDFC rose 5.24% on bargain hunting after slipping 12.1% in prior two sessions.
Index heavyweight and cigarette maker ITC rose 0.59%, with the stock gaining for the second straight day. The board of ITC at its meeting held on Wednesday, 28 August 2013 approved the demerger of the non-engineering business comprising safety matches business and agri (forestry) business of Wimco (a subsidiary of the company) into the company and the related scheme of arrangement (scheme) between Wimco and the company. The scheme, which is subject to approvals as necessary, will take effect from 1 April 2013. Upon the scheme becoming effective, the shareholders of Wimco will be entitled to 2 (two) ordinary shares of Rs 1 each of ITC for every 77 (seventy seven) equity shares of Rs 1 each of Wimco held by them on record date. ITC made the announcement during trading hours on Wednesday, 28 August 2013.
Reliance Industries (RIL) gained 0.84%.
Shares of Pipavav Defence and Offshore Engineering Company remained locked at 5% lower circuit at Rs 55.10 on BSE after the company during trading hours said a consortium of the company and L&T has bagged an order worth over $170 million from ONGC. Pipavav Defence also said that the order book of the company has now crossed Rs 12000 crore.
Shares of L&T were up 2.59% to Rs 723.
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 1.5%. China's Shanghai Composite fell 0.31%.
Investors are watching the Middle East after the US and the UK yesterday said they are prepared to take military action against Syria without authorization from the United Nations Security Council. Fears of a US-led military strike in Syria have heightened in recent days after allegations that forces loyal to the government of Bashar al-Assad used chemical weapons against rebels.
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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