Key benchmark indices hovered in green after hitting fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 58.84 points or 0.3%, up close to 90 points from the day's low and off about 5 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Among pharma shares, Sun Pharmaceutical Industries scaled record high. Bank stocks were mixed after the Reserve Bank of India on Wednesday, 25 September 2013, said it is closely and continuously monitoring liquidity conditions in the banking system and will take actions as appropriate, including open market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. L&T rose after the company's construction division won new orders worth Rs 2683 crore during September 2013. Wipro rose ahead of its inclusion in 50-unit CNX Nifty index tomorrow, 27 September 2013.
A bout of initial volatility was witnessed as key benchmark indices alternately swung between gains and losses. Volatility continued as key benchmark indices regained positive terrain after slipping into the red after hitting fresh intraday high in morning trade. The Sensex hovered in green after hitting fresh intraday high in mid-morning trade.
The market may remain volatile today, 26 September 2013, as traders roll over positions in the futures & options (F&O) segment from the near month September 2013 series to October 2013 series. The September 2013 F&O contracts expire today, 26 September 2013.
At 11:20 IST, the S&P BSE Sensex was up 58.84 points or 0.3% to 19,915.05. The index rose 64.11 points at the day's high of 19,920.35 in mid-morning trade. The index declined 29.25 points at the day's low of 19,826.99 in early trade.
The CNX Nifty was up 14.60 points or 0.25% to 5,888.45. The index hit a high of 5,894.15 in intraday trade. The index hit a low of 5,864.10 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 960 shares rose and 769 shares dropped. A total of 138 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks rose and rest of them fell. Bhel (up 2.33%), Sesa Goa (up 1.59%) and HDFC (up 2.06%), edged higher.
Sun Pharmaceutical Industries rose 2.8% to Rs 584.50 after hitting record high of Rs 586.60 in intraday trade.
Bank stocks were mixed after the Reserve Bank of India on Wednesday, 25 September 2013, said it is closely and continuously monitoring liquidity conditions in the banking system and will take actions as appropriate, including open market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. Bank stocks had tumbled recently after the RBI in its mid-quarter monetary policy held on 20 September 2013 unexpectedly raised its main lending rate viz. the repo rate by 25 basis points.
Among private bank stocks, HDFC Bank (up 0.37%) and ICICI Bank (up 0.62%), gained.
State Bank of India (SBI) fell 0.79%. Ratings agency Moody's early this week downgraded its outlook on the bank's financial strength rating to 'negative' from 'stable'. Moody's also downgraded SBI's unsecured debt rating on par with the sovereign foreign currency bond rating. SBI's standalone credit profile continues to face negative pressures, and it will have to compete with other public sector lenders for capital injection from the government, Moody's said. SBI's impaired loan ratio of 8.6% at end-June is below the 11.5% average for Indian public sector banks rated by Moody's.
SBI on 18 September 2013 said it has raised the base rate by 10 basis points (bps) to 9.8% per annum (pa) from 9.7% and the benchmark prime lending rate by 10 bps to 14.55% from 14.45% with effect from 19 September 2013. The bank also raised interest rates for retail term deposits.
Among other PSU bank stocks, Punjab National Bank, Union Bank of India, and Bank of Baroda declined 0.26% to 0.85%. Bank of India and Canara Bank rose 0.04% to 0.49%.
L&T rose 1.06%, with the stock extending intraday gain after the company said during market hours today, 26 September 2013, that its construction division has won new orders worth Rs 2683 crore during September 2013 across various business segments in the domestic and international markets.
Wipro rose ahead of its inclusion in 50-unit CNX Nifty index tomorrow, 27 September 2013. The stock was up 1.64%. The IT major replaces Reliance Infrastructure in Nifty.
Gillette India jumped 10.44% to Rs 2251.60 after Securities and Exchange Board of India (Sebi) said that shareholding of Poddar Heritage Group would be considered part of public holding subject to fulfillment of certain conditions. Currently the Poddar group holds 12.86% stake in Gillette India and is a co-promoter with Procter & Gamble (P&G) group, which holds 75.9% stake in the company.
Sebi said that Poddar group shall have no special rights in Gillette India through any formal or informal arrangements other than that of normal public shareholder. Sebi added that entities belonging to Poddar group shall not hold any key management personnel position in Gillette India and other group company of Procter & Gamble (P&G) through any formal or informal arrangement.
Sebi said that if entities belonging to Poddar group promoters want to be classified as promoters of Gillette India again in future, they shall be required to make open offer and no exemption shall be given in this regard. The market regulator said that there shall be no acquisition of shares of Gillette India by Poddar group for a period of one year from the date of reclassification of Poddar group as public shareholder.
Sebi also said that it will not insist P&G to make open offer for the shareholders of Gillette India, in view of the facts of the case and the intent behind the transaction i.e. to comply with the minimum shareholding requirement.
In 2012, Gillette India had proposed a three-stage plan to lower the promoter holding to 75%. However, Sebi had turned down Gillette India's plan on the grounds that the shares were not being sold directly to the public. As per the norms stipulated by the market regulator Sebi, privately promoted companies are expected to boost public shareholding to atleast 25%.
Diamond Power Infrastructure lost 2.47% as the stock turned ex-dividend today, 26 September 2013, for dividend of Re 1 per share for the year ended 31 March 2013.
Bond prices rose after the Reserve Bank of India on Wednesday, 25 September 2013, said that it is closely and continuously monitoring liquidity conditions in the banking system and will take actions as appropriate, including open market operations, to ensure that adequate liquidity is available to support the flow of credit to productive sectors of the economy. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.7194%, lower than its close of 8.7862% on Wednesday, 25 September 2013. Bond prices and bond yields are inversely related.
The RBI said that liquidity conditions in the banking system have been tightening due to uncertainties around the government borrowing programme for the second half of 2013-14 as well as the prospective effects of banks' half-yearly account closure, the seasonal pick-up in credit demand, festival-related demand for currency and sluggish deposit growth. The RBI last week began a calibrated unwinding of the exceptional measures undertaken since July so as to restore normalcy to financial flows. Currently, the RBI is injecting about Rs 1.5 lakh crore into the system on a daily basis through the liquidity adjustment facility (LAF), the export credit refinance facility (ECR) and the marginal standing facility (MSF) taken together, the RBI said.
In the foreign exchange market, the rupee edged higher against the dollar after the RBI eased norms for providing swaps to banks that are borrowing funds overseas. The partially convertible rupee was hovering at 62.21, compared with its close of 62.44/45 on Wednesday, 25 September 2013.
The Reserve Bank of India on Wednesday relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee. The RBI, however, said the relaxation is only applicable while the swap window remains open until November 30. After that, banks' overseas borrowings above 50% of their Tier I capital will have to be of minimum maturity of three years, it said. The RBI set up the swap window for banks earlier this month saying they can borrow overseas up to 100% of their Tier 1 capital level, although any loan over 50% of that level must be for at least three years. Under the plan, the central bank will offer to exchange foreign currency for rupees at a rate below market rates for banks who raise these funds through overseas borrowings.
Asian stocks were mixed on Thursday. Key benchmark indices in China, Hong Kong and Taiwan were off 0.29% to 1.52%. Key benchmark indices in Indonesia, Japan, and South Korea rose 0.37% to 0.88%.
Trading in US index futures indicated that the Dow could gain 23 points at the opening bell on Thursday, 26 September 2013. US stocks dropped on Wednesday, with the S&P 500 index recording its longest decline since December, as a possible government shutdown overrode better-than-forecast economic reports. The Senate voted 100-0 on Wednesday to pass a stopgap spending measure, with Democrats planning to get rid of language from the House version that would remove funding of the 2010 Affordable Care Act. Without an accord to hasten Senate consideration of the bill, a vote on its passage could come as late as Sunday, giving the House one day to move before spending authority lapses. Separately, Treasury Secretary Jacob Lew told legislators that he'll run out of options to avoid hitting or surpassing the debt limit by Oct. 17 or sooner.
A report from the Commerce Department showed that new-home sales rose last month after an unexpected drop in July. Another data showed that orders for US durable goods unexpectedly bounced back last month on the back of demand for autos.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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