Key benchmark indices further pared intraday gains and hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 228.59 points or 1.16%, off about 125 points from the day's high and up close to 40 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks surged today, 16 September 2013, after the main opposition party, the Bharatiya Janata Party (BJP), late on Friday, 13 September 2013, named Gujarat chief minister Narendra Modi as the party's prime ministerial candidate for the general elections in 2014. Gains in Asian stocks also supported the domestic bourses. The rupee surged past 63 against the dollar.
Two-wheeler stocks rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Mahindra & Mahindra (M&M) rose for the second straight day on expectations of increase in tractor sales due to good rains this year. Other auto stocks also rose. Bank stocks gained across the board. Sun Pharmaceutical Industries scaled record high after the company said its unit has received US Food and Drug Administration's (USFDA) final approval for the generic version of Prevacid. Cipla also hit record high. Bhel reversed intraday gain.
The market surged in early trade after the main opposition party, the Bharatiya Janata Party (BJP), late on Friday, 13 September 2013, named Gujarat chief minister Narendra Modi as the party's prime ministerial candidate for the general elections in 2014. The market trimmed initial gains and hit fresh intraday low in morning trade. The Sensex further pared intraday gain to hit fresh intraday low in mid-morning trade.
In the foreign exchange market, the rupee surged against the dollar. The partially convertible rupee was hovering at 62.70, sharply higher than its close of 63.49/50 on Friday, 13 September 2013.
In a major development on political front, Gujarat chief minister Narendra Modi was crowned as the candidate for prime minister's post by India's main opposition -- Bharatiya Janata Party (BJP) -- late on Friday, 13 September 2013. BJP said that Modi's pro-business stance can revive India's stumbling economy. Parliamentary polls are due by next May. "At this time, when corruption and rising prices have become a big problem for the country, I hope the people will support our call for development and good governance," Mr. Modi said at a news conference in New Delhi on Friday, 13 September 2013.
The stock market cheered Modi's appointment as BJP's prime ministerial candidate given Modi's pro-business record as chief minister of Gujarat.
At 11:20 IST, the S&P BSE Sensex was up 228.59 points or 1.16% to 19,961.35. The index surged 353.67 points at the day's high of 20,086.43 in early trade, its highest level since 25 July 2013. The index rose 190.56 points at the day's low of 19,923.32 in mid-morning trade.
The CNX Nifty was up 62.30 points or 1.06% to 5,912.90. The index hit a high of 5,957.25 in intraday trade, its highest level since 25 July 2013. The index hit a low of 5,903.50 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,121 shares gained and 754 shares fell. A total of 92 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks gained and seven declined. L&T (up 2.29%), Hindustan Unilever (up 2.37%) and ONGC (up 2.92%), gained.
Two-wheeler stocks rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. The festive season starts with the Durga Puja in October. The festival is followed by Dussehra and Diwali. Bajaj Auto (up 1%), Hero MotoCorp (up 2.73%) and TVS Motor Company (up 3.32%), gained.
Meanwhile, PSU OMCs hiked petrol prices by Rs 1.63 a litre with effect from Saturday, 14 September 2013.
Mahindra & Mahindra (M&M) rose for the second straight day on expectations of increase in tractor sales due to good rains this year. The stock was up 2.55%.
Among other auto stocks, Tata Motors (up 1.57%) and Maruti Suzuki India (up 2.98%), gained.
Bank stocks gained across the board. Among private sector banks, ICICI Bank (up 4.41%), Yes Bank (up 5.83%), Federal Bank (up 3.08%), Kotak Mahindra Bank (up 1.91%) and Axis Bank (up 3.88%), gained.
HDFC Bank rose 2.03%. The bank on Saturday, 14 September 2013, said that it has completed the acquisition of additional 42.75 lakh equity shares of its subsidiary HDFC Securities (HSL) from an existing shareholder. With this acquisition the total shareholding of HDFC Bank in HSL has increased from 62.06% to 89.88% of the paid-up capital of HSL.
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 by 1.5% to 3.7%.
Cipla rose 0.32% to Rs 442 after hitting record high of Rs 450 in intraday trade today, 16 September 2013.
Sun Pharmaceutical Industries rose 0.81% to Rs 567.70 after hitting record high of Rs 583 in intraday trade today, 16 September 2013. The company said on Saturday, 14 September 2013, that the US FDA has granted its subsidiary final approval for its Abbreviated New Drug Applications (ANDA) for generic version of Prevacid, Lansoprazole Delayed-Release Capsules USP, 15 mg and 30 mg. Lansoprazole Delayed-Release Capsules USP, 15 mg and 30 mg are therapeutic equivalents of Takeda's Prevacid Delayed-Released Capsules. These Capsules have annual sales of approximately $430 million in the US. Lansoprazole Delayed-Release Capsules USP are indicated for short-term treatment (for 4 weeks) for healing and symptom relief of active duodenal ulcer.
Bhel fell 0.77%, with the stock reversing intraday gain.
On the macro front, the government unveils data of inflation based on the wholesale price index (WPI) for August 2013 today, 16 September 2013. WPI inflation is seen accelerating to 5.9% in August 2013 from 5.79% in July 2013, as per the median estimates of a poll of economists carried out by Capital Market. WPI inflation had accelerated to 5.79% in July 2013, from 4.86% in June 2013.
The Securities and Exchange Board of India (Sebi) said on Friday, 13 September 2013, that FIIs/QFIs shall hereafter be permitted to invest in government debt without purchasing debt limits till the overall investment reaches 90%. Once this 90% limit is reached, auction mechanism shall be initiated for allocation of the remaining limits, as currently in place for FII investments in corporate debt. Presently FIIs/QFIs have to purchase the debt limits through the auction mechanism.
Asian stocks rose on Monday, 16 September 2013, after Lawrence Summers withdrew from consideration to be the next Federal Reserve chairman, paving the way for Janet Yellen, who some investors say may favor a slower reduction in US stimulus. Key benchmark indices in China, Taiwan, Hong Kong, Singapore, South Korea and Indonesia rose by 0.1% to 1.67%. Japanese stock markets were closed for a holiday.
Trading in US index futures indicated that the Dow could jump 165 points at the opening bell on Monday, 16 September 2013. US stocks on Friday scored modest gains despite a mediocre retail sales report and a disappointing read on consumer sentiment. US retail sales, a closely watched benchmark of economic health, rose just 0.2% in August. The consumer sentiment reading in September issued by Thomson Reuters and the University of Michigan was 76.8, down from the 82.1 reading in August.
Summers withdrew his nomination to lead the Fed, before a two-day policy meeting starting tomorrow, 17 September 2013. Summers, 58, was one of three names that US President Barack Obama had mentioned as possible replacements for Bernanke, whose term as Fed chairman ends on 31 January 2014. Janet Yellen, 67, the current Fed vice chairman, was also on Obama's candidate list along with Donald Kohn, 70, a former Fed vice chairman, the president said earlier.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this week, considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC holds a two-day policy meeting on Tuesday 17 September and Wednesday 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.
The US and Russia announced a deal on Saturday, 14 September 2013, for Syria to destroy its chemical-weapons stockpile by the middle of 2014. The agreement halted preparation for a possible US attack on Syrian government targets in retaliation for the apparent use of chemical agents on civilians last month. Meanwhile, the United Nations said Sunday that Secretary-General Ban Ki-moon had received a report from weapons inspectors on their probe into the use of chemical weapons in Syria, with the report to be published on the UN's website later on Monday morning, according to media reports.
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