Key benchmark indices edged higher in early trade on speculation the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The S&P BSE Sensex was up 142.68 points or 0.7%, up 71.41 points from the day's low and off 10.15 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 17 October 2013. The rupee edged higher against the dollar.
Index heavyweight Reliance Industries (RIL) edged higher in early trade. Bank stocks were in demand in early trade. Engineering and construction major L&T slipped ahead of its Q2 results today, 18 October 2013. Marico edged higher after the company on Thursday, 17 October 2013, said that the Scheme of Arrangement entailing demerger of the Kaya skin clinics business sanctioned by the High Court of Judicature at Bombay has been filed with the Registrar of Companies on 17 October 2013.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 17 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1,109.93 crore on Thursday, 17 October 2013, as per provisional data from the stock exchanges.
At 9:23 IST, the S&P BSE Sensex was up 142.68 points or 0.7% to 20,558.19. The index jumped 152.83 points at the day's high of 20,568.34 in early trade. The index rose 71.27 points at the day's low of 20,486.78 in opening trade.
The CNX Nifty was up 40.10 points or 0.66% to 6,085.95. The index hit a high of 6,087.70 in intraday trade. The index hit a low of 6,070.90 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 699 shares gained and 233 shares fell. A total of 39 shares were unchanged.
The total turnover on BSE amounted to Rs 89 crore by 09:25 IST.
Among the 30-share Sensex pack, 24 stocks gained and rest of them declined. Bhel (up 1.3%), ONGC (up 1.12%) and Sesa Sterlite (up 1.06%) edged higher from the Sensex pack.
Index heavyweight Reliance Industries (RIL) rose 1.25% to Rs 890.30. The stock hit high of Rs 890.80 and low of Rs 880.75 so far during the day. The company early this week reported 1.5% growth in net profit to Rs 5490 crore on 14.2% growth in turnover to a record Rs 106523 crore in Q2 September 2013 over Q2 September 2012. Net profit rose 2.6% on 17.6% growth in turnover in Q2 September 2013 over Q1 June 2013.
RIL's gross refining margin (GRM) declined to $7.7 per barrel in Q2 September 2013, from $8.4 a barrel in Q1 June 2013 and $9.5 a barrel in Q2 September 2012.
Engineering and construction giant L&T shed 0.22% ahead of its Q2 results today, 18 October 2013.
Bank pivotals were in demand in early trade. ICICI Bank rose 1.5%. State Bank of India rose 0.79%.
HDFC Bank gained 1.06%. HDFC Bank's net profit rose 27.07% to Rs 1982.32 crore on 17.65% rise in total income to Rs 11937.69 crore in Q2 September 2013 over Q2 September 2012. The bank's net interest margin (NIM) declining to 4.3% in Q2 September 2013 from 4.4% in Q2 September 2012. The bank announced Q2 result early this week.
Marico rose 1.57%. The company after market hours on Thursday, 17 October 2013, said that the Scheme of Arrangement entailing demerger of the Kaya skin clinics business sanctioned by the High Court of Judicature at Bombay has been filed with the Registrar of Companies on 17 October 2013. Accordingly, 17 October 2013 will be considered as the effective date of the Scheme of Arrangement.
In the foreign exchange market, the rupee edged higher against the dollar on speculation the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. The partially convertible rupee was hovering at 61.17, compared with its close of 61.23/24 on Thursday, 17 October 2013.
Indian government bond prices rose on speculation the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. The yield on the benchmark 7.16% GS 2023 was hovering at 8.5751%, lower than its close of 8.6021% on Thursday, 17 October 2013. Bond yield and bond prices are inversely related
Asian markets were mostly higher on Friday, 18 October 2013, after the latest data showed that China's economic growth accelerated in Q3 September 2013. Key benchmark indices in Singapore, China, South Korea, Hong Kong and Taiwan rose by 0.13% to 0.68%. Key benchmark indices in Indonesia and Japan fell 0.05% to 0.06%.
The Chinese economy grew at an annual rate of 7.8% in Q3 September 2013, accelerating from the second quarter's 7.5% increase. Another data showed industrial production and retail sales growth in September 2013 easing off their levels from the previous month. Industrial production rose 10.2% in September from a year earlier, while retail sales climbed 13.3%, separate reports showed.
US stocks ended mostly higher on Thursday, lifting the S&P 500 to a record finish, as Wall Street turned from the latest fiscal drama on Capitol Hill to corporate earnings that included better-than-expected results from Verizon Communications Inc.
After risking a US default, US lawmakers this week agreed to fund the government through Jan. 15 and suspend the debt limit through Feb. 7. US President Barack Obama on Thursday, 17 October 2013, said that the stalemate over US fiscal policy that shut the government for 16 days "encouraged our enemies" and slowed economic growth.
Fed Bank of Chicago President Charles Evans said on Thursday, 17 October 2013, that the central bank should postpone tapering after the shutdown stopped the flow of economic reports used to gauge growth. Minneapolis Fed President Narayana Kocherlakota said policy makers should signal they are prepared to do "whatever it takes," including providing more stimulus, to reduce the jobless rate from August's 7.3%. Fed Bank of Kansas City President Esther George, who has voted this year against expanding stimulus, said that the Fed has enough data to assess the economy's strength and should start tapering even amid fiscal "uncertainty." Evans and George both hold voting positions on the central bank's policy committee this year. Kocherlakota votes in 2014.
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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