Key benchmark indices retained positive terrain in mid-afternoon trade as European stocks ahead of the outcome of the two-day meeting of the Federal Open Market Committee which concludes today, 18 September 2013. The S&P BSE Sensex was up 54.15 points or 0.27%, off close to 40 points from the day's high and up about 80 points from the day's low. The market breadth, indicating the overall health of the market was negative. Bank stocks gained. Shares of power generation and distribution heavyweights rose.
The market edged higher amid initial volatility. Key benchmark indices pared initial gains and swung alternately between gains and losses near the flat line in morning trade. The market hovered in green in early afternoon trade. The market was range bound in afternoon trade. The Sensex retained positive zone in mid-afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 318.05 crore on Tuesday, 17 September 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was up 54.15 points or 0.27% to 19,858.18. The index rose 96.65 points at the day's high of 19,900.68 in early trade, its highest level since 16 September 2013. The index fell 28.74 points at the day's low of 19,775.29 in morning trade.
The CNX Nifty was up 15 points or 0.26% to 5,865.20. The index hit a high of 5,877.90 in intraday trade, its highest level since 16 September 2013. The index hit a low of 5,840.20 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,142 shares fell and 1,103 shares rose. A total of 140 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks rose and rest of them fell. Dr Reddy's Laboratories (up 1.86%), Maruti Suzuki India (up 1.4%) and Hindustan Unilever (up 1.27%), edged higher.
Bhel dropped 4.5%. The stock was the biggest loser from the Sensex pack.
Shares of power generation and distribution heavyweights rose. NTPC gained 2.92%.
Tata Power Company rose 3.17%, with the stock extending intraday gain.
HPCL rose 1.89% to Rs 199. A block deal of 5.4 lakh shares was executed in the counter on BSE at Rs 197.25 at 13:32 IST.
Bank stocks gained. 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 0.76% to 2.07%.
Among private sector banks, ICICI Bank (up 0.66%), HDFC Bank (up 0.06%), and Axis Bank (up 1.51%), gained.
Private sector bank Yes Bank rose 2.91%, with the stock extending Tuesday's gain. The bank on Tuesday, 17 September 2013, said it has successfully closed equivalent to $255 million by way of dual currency, multi-tenor syndicated loan facility which will be utilized for general corporate purposes and trade finance. The facility has a maturity of 1 and 2 years with majority commitments coming in the 2 year tenure bucket. The loan has been widely distributed with commitments from 11 banks representing 8 countries across US, Europe, Middle East and Australia, Yes Bank said.
The recent RBI guidelines on offering swap facility to banks for the foreign currency borrowings at 100 basis points below the market rate will further make the landed rupee cost of these funds extremely competitive vis-vis rupee funds of equivalent maturity, Yes Bank said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.29, stronger than its close of 63.37/38 on Tuesday, 17 September 2013.
The Reserve Bank of India (RBI) cracked down on offshore foreign exchange trading by Indians through online trading websites, asking banks to report any such remittances to the regulator. In a circular issued late on Tuesday, the Reserve Bank of India (RBI) asked banks to advise customers not to undertake forex trading on foreign websites that offer currency contracts by accepting margins through credit card and online money transfer mechanisms. The RBI also asked banks to close the credit card or online bank account of a customer that is found to be in violation of the rule.
Foreign direct investment inflows into India rose an annual 12.9% to $1.66 billion in July 2013, the government said in statement released late on Tuesday, the highest monthly inflow for three months.
At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.
European stock markets edged higher on Wednesday, 18 September 2013, as investors awaited the latest policy decision from the US Federal Reserve, expected to announce the beginning of tapering of its asset purchases. Key benchmark indices in UK, France and Germany were up 0.13% to 0.23%.
The Bank of England's Monetary Policy Committee earlier in September voted unanimously to keep both interest rates and the asset-purchase program unchanged, according to minutes of the meeting published Wednesday. The interest rate was kept at a record low 0.5%, while the quantitative-easing program stayed at 375 billion pounds ($596.48 billion).
Asian stocks were mixed on Wednesday, 18 September 2013, before the Federal Reserve decides later today whether to slow its $85 billion of monthly asset purchases. Key benchmark indices in China, Japan and Singapore rose by 0.29% to 1.35%. Key benchmark indices in Hong Kong, Taiwan and Indonesia shed by 0.27% to 1.32%. South Korean stock market was closed for a holiday.
Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Wednesday, 18 September 2013. US stocks rose slightly on Tuesday on expectations the Federal Reserve will make a modest cut in its stimulative bond buying and keep interest rates extraordinarily low. A report in the US on Tuesday showed the cost of living rose less than forecast in August, with the consumer-price index increasing 0.1%, the least in three months.
Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States ends today, 18 September 2013. 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.
Investors are also eyeing Fed's forward guidance on policy. The Fed is due to offer its rate expectations for 2016, and it has previously said it wanted to see the US unemployment fall to 6.5% from its current 7.3% before it raises the benchmark fed funds rate target from its present 0-to-0.25% range.
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