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Markets extended gains in the late-morning session this Tuesday after the Reserve Bank of India (RBI) chief Duvvuri Subbarao said on Tuesday that "perhaps" there was a need to reduce the reserves that banks have to set aside via the cash reserve or the statutory liquidity ratios.
The cash reserve ratio, or the amount of cash lenders must deposit with the Reserve Bank of India, stands at a record low of 4%. Meanwhile, the statutory liquidity ratio, which includes securities such as government bonds, stands at 23%.
The rupee gained a little and traded at 61.30 against the dollar in early trade against the previous close of 61.27 at the Interbank Foreign Exchange market.
At 11:30AM, 30-share Sensex rose 187 points to trade at 19,134 and the 50-share Nifty gained 55 points at 5,668 levels.
Globally, Asian shares traded firm as Chinese stocks surged to a 3-1/2 week high as investors took heart from last week's encouraging data from the world's second-biggest economy, helping offset a slightly disappointing second quarter Japanese GDP report.
Japan’s Nikkei rose 2.3% to 13,838, Singapore’s Straits Times added 0.4 % to 3,244, China’s Shanghai Composite index was down 0.1% at 2,099 while Hong Kong’s Hang Seng rose 1% to 22,508 today.
Domestically, among the key sectoral indices, realty, IT, power, healthcare and auto sectors gained while consumer durables, metal and PSU sectors declined on the BSE.
The gainers included counters such as Mahindra & Mahindra gained 3.5%, Bajaj Auto rose 2%, Wipro gained 2.9%, NTPC and BHEL added 2.3% each on the BSE.
The laggards were Hindalco Industries declined 4%, Coal India dropped 2%, ONGC fell 1.3%, ICICI Bank and SBI fell 1% each on the BSE.
The key notable movers included counters such as Tech Mahindra is trading higher by 4.3% to Rs 1,320 after reporting 36% quarter-on-quarter (qoq) jump in its consolidated adjusted net profit at Rs 686 crore for the quarter ended June 30, 2013 (Q1) on back of higher non-operating income from forex gains. The company’s revenues for the quarter grew by 6.8% at Rs 4,103 crore on qoq basis.
The DLF stock is up about 4.5% after the company reported results, which were above expectations, and on analyst upgrades.
Analysts at Motilal Oswal upgraded their FY14/15 EPS by 7-11% to factor better operating profits from non-core business (hotel) and potential cost savings after divestment of insurance business by 2HFY14, which currently contributes to an annual loss of Rs 130 crore.
The broader markets traded firm with mid-caps and small-caps gaining 0.6 per cent on the BSE.
The market breadth was positive. Out of 1,928 stocks traded, 1,110 stocks advanced while 698 stocks declined on the BSE.
