Volatility continued as key benchmark indices regained positive terrain after swinging alternately between positive and negative zone in morning trade. Gains in Asian stocks aided intraday recovery on the domestic bourses. The barometer index, the S&P BSE Sensex, regained the psychological 19,000 mark, having alternately moved above and below that level in intraday trade. The Sensex was up 58.91 points or 0.31%, up about 110 points from the day's low and off close to 65 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Bank stocks edged lower on profit booking after Thursday's sharp rally triggered by a number of favourable announcements for the banking and financial sector made by the new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013.
The market reversed initial gains triggered by higher Asian stocks. Volatility continued as key benchmark indices regained positive terrain after swinging alternately between positive and negative zone in morning trade..
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 5 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1101.41 crore on Thursday, 5 September 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 58.91 points or 0.31% to 19,038.57. The index jumped 126.10 points at the day's high of 19,105.96 in early trade. The index fell 50.38 points at the day's low of 18,929.38 in morning trade.
The CNX Nifty was up 2.45 points or 0.04% to 5,595.40. The index hit a high of 5,624.20 in intraday trade. The index hit a low of 5,566.15 in intraday trade.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 964 shares rose and 612 shares fell. A total of 86 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. Wipro (up 2.36%), Cipla (up 2.05%) and L&T (up 1.94%), rose.
Bank stocks edged lower on profit booking after Thursday's sharp rally triggered by a number of favourable announcements for the banking and financial sector made by the new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013. Among the key announcements, the new RBI governor said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country. He also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy.
Among PSU bank stocks, State Bank of India (down 2.28%), Bank of Baroda (down 1.23%), Canara Bank (down 1.76%), Union Bank of India (down 2.21%), Bank of India (down 0.07%) and Punjab National Bank (down 1.47%) edged lower.
Among private bank stocks, Yes Bank (down 1.34%), Kotak Mahindra Bank (down 0.74%), Federal Bank (down 2.1%), and HDFC Bank (down 3.29%), edged lower.
ICICI Bank rose 3.1%, with the stock extending Thursday's 9.2% gain.
Fortis Healthcare rose 1.88% after the company announced the successful completion of the preferential allotment of 37.37 lakh equity shares to Standard Chartered Private Equity Mauritius III. The announcement was made after market on Thursday, 5 September 2013.
In the last phase of this current fund raising program, Fortis Healthcare on Thursday, 5 September 2013, completed the preferential allotment of 37.37 lakh equity shares at Rs 99.09 per share to Standard Chartered Private Equity Mauritius III (SCPE). SCPE/entities acting in concert with SCPE, had previously invested in the institutional placement program (IPP) of the company and have also recently intimated to the stock exchanges that they are the key investor in the public issue of FCCBs that the company listed on the Singapore Stock Exchange (SGX) in July 2013. With this the cumulative investment by SCPE in the company is estimated to be approximately Rs 250 crore, Fortis said in a statement.
Fortis has cumulatively raised Rs 1040 crore, this year, through equity and equity linked instruments, gaining from the confidence of globally recognised strategic and financial investors in its future plans, amidst tight liquidity conditions. The International Finance Corporation (IFC), a key strategic investor with a long term horizon and commitment to healthcare has so far invested approximately Rs 570 crore in the company through the institutional placement program (IPP) in May 2013, the preferential allotment of equity shares and subscription to the company's FCCB issuance-both made during June 2013, Fortis said in a statement.
Mr. Vishal Bali, Group CEO, Fortis Healthcare, said: "We are pleased to have on board long term strategic investors like IFC and SCPE who believe strongly in the long term growth potential of the company. The healthcare sector in India is poised for significant growth, and Fortis Healthcare is ready to capitalise on emergent opportunities by continuing to provide world-class healthcare to patients in India. The current series of fund raising measures have been successfully completed and make the company stronger, creating room for further debt reduction and expansion."
Fortis, during the year, has also brought in a sharper focus on geographies and verticals which present relatively stronger growth opportunities. Re-enforcing this position, it has also divested its businesses in Australia and Vietnam and continues to evaluate its current portfolio of international assets to ensure the right strategic fit, the company said.
Fortis said it continues to strengthen its balance sheet, with a net debt to equity at 0.7x as on 30 June, 2013 substantially lower as compared to a net debt to equity of 1.6x as on 30 September 2012. This is expected to show a further improvement with a target to reach a net debt to equity of no more than 0.5x in the near future, Fortis said in a statement.
Balmer Lawrie & Company fell 4.71% after the stock turned ex-dividend today, 6 September 2013, for dividend of Rs 17.60 per share for the year ended 31 March 2013.
In the foreign exchange market, the rupee was unchanged for the day at 66.01, compared with Thursday's close of 66.01/02.
The Reserve Bank of India said on Thursday that it will release the next Mid-Quarter Review of Monetary Policy 2013-14 at 11 IST on 20 September 2013 instead of 18 September 2013 as indicated in the First Quarter Review of Monetary Policy 2013-14. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon.
Most Asian stocks gained on Friday, 6 September 2013, extending a six-day advance as investors await the monthly American jobs report later in the global day. Key benchmark indices in China, Taiwan, Hong Kong, South Korea, and Singapore rose by 0.01% to 0.4%. Key benchmark indices in Indonesia and Japan shed by 0.41% to 0.96%.
Leaders of the world's biggest economies at a Group of 20 summit in Russia grappled with threats to the global economy as the effects of the Syrian conflict added to the fallout from a potential stimulus exit. The BRICS countries pledged yesterday in St. Petersburg to create a $100 billion pool of currency reserves to guard against shocks even as Russia said US President Barack Obama sought to ease concern about an abrupt pullback. Chinese and Italian officials warned that military intervention in Syria would risk harming the global economy. China will contribute $41 billion to a pool of BRICS reserves, with Russia, India and Brazil each adding $18 billion and South Africa providing $5 billion, according to a statement issued yesterday. The BRICS countries, which also agreed to seed a new development bank with $50 billion of capital, are seeking a shield against unintended negative spillovers from unconventional monetary policies in developed economies, according to the statement.
Trading in US index futures indicated that the Dow could fall 20 points at the opening bell on Friday, 6 September 2013. US stocks on Thursday climbed for a third consecutive session, with the Dow Jones Industrial Average posting its longest winning run since the middle of July, as investors looked to the government's monthly jobs report. Claims for US unemployment benefits declined by 9,000 to 323,000 in the week ended August 31, less than the estimates. Another report showed companies boosted employment by 176,000 workers in August, according to the ADP Research Institute.
The influential US nonfarm payroll report for August 2013 is due for release today, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
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.
In Europe, European Central Bank indicated recent improvements in the euro zone's economy haven't been strong enough for a pullback from the bank's easy monetary policies. While the ECB's Governing Council left its benchmark lending rate unchanged at 0.5% at its meeting Thursday, ECB President Mario Draghi said policy makers had discussed lowering the rate. He also said inflation expectations are contained, which will give the central bank room to hold off on raising rates for some time.
The Bank of England also on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($585 billion). The minutes from the September 4 meeting will be published on September 18. The central bank has said it aims to keep rates low at least until the UK unemployment rate drops below 7%, which it doesn't expect will happen until 2016.
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