Key benchmark indices surged as world stocks rose after Federal Reserve Chairman Ben S. Bernanke on Wednesday, 10 July 2013, said that a highly accommodative monetary policy is needed for the US economy for the foreseeable future. The S&P BSE Sensex was provisionally up 375.35 points or 1.95%, off 55 points from the day's high and up close to 200 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Except BSE Consumer Durables index, all the other sectoral indices on BSE were in the green.
Mining and metal stocks rose after global commodity prices rallied overnight. Bank stocks rose across the board. IT major Infosys rose ahead of its Q1 June 2013 results tomorrow, 12 July 2013.
The market surged in early trade on firm Asian stocks. The market extended initial gains to hit fresh intraday high in morning trade. The market extended gains to hit fresh intraday high in mid-morning trade. The Sensex hit over 5-week high. The Sensex further extended gains to hit fresh intraday high in early afternoon trade. Key benchmark indices pared gains in afternoon trade as profit booking emerged at higher levels. The market held firm in mid-afternoon trade.
Bernanke said a speech on Wednesday, 10 July 2013, that "highly accommodative" monetary policy will be needed for the "foreseeable future." Meanwhile, minutes of the Fed's June meeting showed that while "several members judged that a reduction in asset purchases would likely soon be warranted," many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program.
The signal that the Fed will likely maintain an accommodative policy stance sent Asian stocks surging as Fed's bond-buying program and quantitative easing by other central banks worldwide has flooded global markets with liquidity and helped support an array of assets, including equities in recent years. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Federal Reserve Chairman Ben Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
As per provisional figures, the S&P BSE Sensex was up 375.35 points or 1.95% to 19,669.47. The index jumped 429.39 points at the day's high of 19,723.51 in afternoon trade, its highest level since 4 June 2013. The index gained 174.34 points at the day's low of 19,468.46 in opening trade.
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The CNX Nifty was up 116.25 points or 2% to 5,932.95, as per provisional figures. The index hit a high of 5,948.85 in intraday trade, its highest level since 7 June 2013. The index hit a low of 5,887.95 in intraday trade.
The total turnover on BSE amounted to Rs 1426 crore, lower than Rs 1619.83 crore on Wednesday, 10 July 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,365 shares rose and 966 shares fell. A total of 148 shares were unchanged.
From the 30-share Sensex pack, 26 stocks rose and only 4 of them fell. Bharti Airtel (up 3.62%), Hero MotoCorp (up 3.41%) and Coal India (up 3.15%), edged higher.
IT major Infosys rose 1.38% ahead of its Q1 June 2013 results tomorrow, 12 July 2013. The company's Q1 results will reflect the impact of salary hike, rupee depreciation and cross-currency movements. Investors will closely watch the management commentary on demand environment. At the time of announcement of Q4 March 2013 results in April this year, Infosys had forecast 6% to 10% growth in revenue in both rupee terms and dollar terms for the year ending 31 March 2014 (FY 2014). Infosys has suspended the practice of giving EPS guidance or outlook on margins citing uncertainty in various factors.
Infosys on Tuesday, 9 July 2013, said head of global sales Basab Pradhan has left the company. The company gave no reason for Pradhan's departure.
Bank stocks rose across the board. ICICI Bank (up 1.9%), HDFC Bank (up 2.57%) and Axis Bank (up 2.25%), edged higher.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 1.27% to 2.7%.
IndusInd Bank rose 3.29% on strong Q1 results. The bank's net profit rose 41.72% to Rs 334.84 crore on 22.14% rise in total income to Rs 2382.81 crore in Q1 June 2013 over Q1 June 2012. The bank announced Q1 results during market hours on Wednesday, 10 July 2013.
HDFC edged higher after two block deals were executed in the counter on BSE. The stock was up 2.84% at Rs 852.85. A block deal of 1 lakh shares was executed at Rs 844.15 at 9:30 IST. Another block deal of 1.01 lakh shares was struck at Rs 848 at 11:05 IST.
Shares of car major Maruti Suzuki India fell 2.65% to Rs 1503.30. The company on 8 July 2013 said its production fell 25.36% to 61,668 vehicles in June 2013 over June 2012. Earlier, the company had reported 12.6% fall in total sales to 84,455 units in June 2013 over June 2012. The company's domestic sales fell 7.8% to 77,002 units in June 2013 over June 2012. Exports declined 43% to 7,453 units in June 2013 over June 2012. The company announced the monthly sales data on 1 July 2013.
Mining and metal stocks rose after global commodity prices rallied overnight. Sail (up 0.84%), JSW Steel (up 1.38%), Jindal Steel & Power (up 1.51%), Hindustan Zinc (up 1.92%), Hindalco Industries (up 4.48%), Sterlite Industries (up 5.14%) and Sesa Goa (up 5.93%), edged higher.
Tata Steel rose 1.74%. Tata Steel said on Wednesday, 10 July 2013, its hot metal production rose 20% to 2.22 million tonnes in first quarter ended June 2013-14 (Q1 FY 2014) over Q1 FY 2013. The crude steel production rose 22% to 2.46 million tonnes in Q1 FY 2014 over Q1 FY 2013. Saleable Steel production was higher by 23% to 2.14 million tonnes in Q1 FY 2014 over Q1 FY 2013 and sales increased by 26% to 2.01 million tonnes in Q1 FY 2014 over Q1 FY 2013.
State Trading Corporation of India (STC) declined 5.08%. The Cabinet Committee on Economic Affairs has approved the disinvestment of 1.02% stake of State Trading Corporation (STC) to make the company compliant with the public shareholding norms under the Securities Contract (Regulation) Rules (SCRR). Under these rules every listed public sector company has to maintain a public shareholding of atleast 10% of the total paid up equity capital. The Government of India (GoI) currently owns 91.02% stake in STC.
European stocks mirrored gains in Asian market after US Federal Reserve Chairman Ben S. Bernanke said on Wednesday, 10 July 2013, that the world's biggest economy will continue to need stimulus. Key benchmark indices in UK, France and Germany were up by 0.74% to 1.03%.
Asian stocks rose on Thursday, 11 July 2013, after Bernanke's comment. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan rose by 0.39 % to 3.23%.
The Bank of Japan (BOJ) refrained from adding to unprecedented monetary stimulus and raised its assessment of the economy, referring to a recovery for the first time since before a record 2011 earthquake. Governor Haruhiko Kuroda's board stuck with an April pledge to expand the monetary base by 60 to 70 trillion yen ($709 billion) per year, a statement released in Tokyo today showed. The bank maintained its April forecast that prices, excluding the effect of a planned sales tax increase, will rise 1.9% in the year starting April 2015. It trimmed some other forecasts for inflation and economic growth. The BOJ now sees inflation of 0.6% in the current fiscal year and 1.3% in the following 12 months. The central bank is chasing a target of 2 percent inflation, focusing on a gauge that excludes fresh food.
South Korea's central bank on Thursday left its policy interest rate unchanged at 2.5% amid low inflation, uncertainty over the Federal Reserve's bond purchases and China's economic slowdown.
Trading in US index futures indicated that the Dow could surge 129 points at the opening bell on Thursday, 11 July 2013. US stocks ended little changed on Wednesday as investors analyzed minutes from the Fed's last meeting for signs on when the central bank might slow the pace of stimulus efforts.
Meanwhile, Brazil's central bank late Wednesday, 10 July 2013, raised the country's benchmark interest rate to 8.5% from 8%, marking the third consecutive rate increase of a half-percentage point each.
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