Key benchmark indices trimmed intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 260.11 points or 1.29%, off about 55 points from the day's high and up close to 150 points from the day's low. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by a drop in crude oil prices after the US and five other world powers agreed with Iran on Sunday, 24 November 2013, to ease part of an economic stranglehold in exchange for steps aimed at capping Iran's nuclear program and ensuring the country's Islamist government doesn't rush to develop atomic weapons.
Bank stocks rose across the board. Realty stocks were also in demand. Cairn India extended Friday's gains ahead of the company's board meeting tomorrow, 26 November 2013, to consider buyback of shares. Shares of footwear makers rallied.
The market surged in early trade as Asian stocks rose after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. The 50-unit CNX Nifty regained the psychological 6,000 mark. The market extended initial gains and hit fresh intraday high in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month November 2013 series to December 2013 series. The near month November 2013 derivatives contract expire on Thursday, 28 November 2013.
Concerns over India's fiscal deficit and current account deficit eased as crude oil prices dropped after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit because the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation. Iran and six world powers clinched a deal on Sunday, 24 November 2013, curbing the Iranian nuclear programme in exchange for initial sanctions relief, signalling the start of a game-changing rapprochement that could ease the risk of a wider Middle East war. Aimed at ending a long festering standoff, the interim pact between Iran and the United States, France, Germany, Britain, China and Russia won the critical endorsement of Iranian clerical Supreme Leader Ayatollah Ali Khamenei. US President Barack Obama said the deal struck after marathon, tortuous and politically charged negotiations cut off Tehran's possible routes to a nuclear bomb. But Israel, Iran's arch-enemy, denounced the agreement as an "historic mistake".
At 11:20 IST, the S&P BSE Sensex was up 260.11 points or 1.29% to 20,477.50. The index jumped 326.15 points at the day's high of 20,543.54 in morning trade, its highest level since 21 November 2013. The index rose 109.27 points at the day's low of 20,326.66 in early trade.
The CNX Nifty was up 79.75 points or 1.33% to 6,075.20. The index hit a high of 6,095.60 in intraday trade, its highest level since 21 November 2013. The index hit a low of 6,035.95 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,262 shares gained and 702 shares fell. A total of 126 shares were unchanged.
From 30-share Sensex pack, 26 stocks rose and four fell. L&T (up 2.42%), Hero MotoCorp (up 2.41%) and Tata Motors (up 2.24%) edged higher from the Sensex pack.
Cairn India advanced 1.18%, with the stock extending Friday's gains ahead of the company's board meeting tomorrow, 26 November 2013, to consider buyback of shares.
Bank stocks rose across the board. ICICI Bank rose 3.74%, with the stock extending intraday gains. HDFC Bank gained 2.65%.
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 1.71% to 2.71%.
Reserve Bank of India (RBI) last week said it would focus on the monitoring of banks' asset quality and help improve the poor debt recovery process in the country. The focus on asset quality comes as bad debts at Indian banks have nearly doubled since 2009 to 4.2% of total loans at the end of September, while debt restructuring is also at a record high. The RBI said the situation required "priority attention".
RBI has advised banks to put in place mechanisms for early detection of signs of distress and to use early warning signals to avoid non-performing loan. It has also advised banks to strengthen information sharing, making it compulsory to receive and share information on borrowers before loans are approved. The central bank also cited an urgent need to speed up operations at fast-track government courts for lenders that deal with cases involving the recovery of debt called Debt Recovery Tribunals and Asset Reconstruction Companies.
AXIS Bank gained 2.78%, with the stock extending intraday gains. Jindal Steel & Power rose 1.51%, with the stock extending intraday gains. The Bombay Stock Exchange (BSE) announced after market hours on Friday, 22 November 2013, that AXIS Bank will replace Jindal Steel & Power (JSPL) in the 30-share S&P BSE Sensex with effect from 23 December 2013.
Realty stocks were in demand. DLF (up 2.39%), HDIL (up 3.55%, D B Realty (up 2.66%) and Unitech (up 2.1%) gained.
Shares of footwear makers rallied. Relaxo Footwear (up 5.67%), Liberty Shoes (up 5.48%) and Bata (India) (up 1.04%) gained.
Pfizer rose 4.71% and Wyeth jumped 10.37% after the boards of Pfizer and Wyeth on Saturday, 23 November 2013, approved the merger of Wyeth with Pfizer. As per the merger scheme, shareholders of Wyeth will get seven Pfizer shares for every 10 shares held in the company. The appointed date of the merger scheme would be 1 April 2013. Wyeth's board also announced a liberal interim dividend of Rs 145 per equity share. The board of directors of Pfizer also announced a liberal interim dividend of Rs 360 per share. The swap ratio for merger of Wyeth with Pfizer has been recommended after taking into account the payment of the interim dividend and is on a post dividend basis, the two companies said separately.
In the foreign exchange market, the rupee edged higher against the dollar as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped eased after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. India imports majority of its crude oil requirements.. The partially convertible rupee was hovering at 62.59, compared with its close of 62.87/88 on Friday, 22 November 2013.
Bond prices rose as concerns about India's fiscal deficit and current account deficit eased as crude oil prices dropped eased after the US and five other world powers reached an historic agreement with Iran on Sunday, 24 November 2013, that would roll back Iran's nuclear program. Cheaper crude would help shrink India's fiscal deficit because the government's fuel-subsidy bill decreases. India imports majority of its crude oil requirements. Falling oil prices could help contain inflation. The yield on the most traded new 10-year federal paper, 8.83% GS 2023, was hovering at 8.7258%, lower than its close of 8.7828% on Friday, 22 November 2013. Bond yield and bond prices are inversely related.
The Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.
On political front, Mizoram assembly elections under revised schedule take place today, 25 November 2013, and counting of votes will be held on 9 December 2013. The assembly polls in Madhya Pradesh are also being held today, 25 November 2013. Elections in Rajasthan will be held on 1 December 2013. Delhi goes to polls on 4 December 2013. Polls in Chattisgarh are already over. Counting for Delhi, Madhya Pradesh, Chhattisgarh and Rajasthan will be held as per schedule on December 8.
Asian stocks rose on Monday, 25 November 2013, as Iran agreed to limit its nuclear program. Key benchmark indices in Taiwan, Hong Kong, Indonesia, Japan, Singapore and South Korea rose by 0.11% to 1.34%.
China's Shanghai Composite rose 0.17%. China's declared intent to protect an air zone encompassing islands that are disputed with Japan escalated tensions between Asia's largest economies, risking damage to a resurgence in trade. China announced an air defense identification zone in the East China Sea effective Nov. 23 and said its military will take "defensive emergency measures" if aircraft enter the area without reporting flight plans or identifying themselves. Japan lodged a complaint as the US and South Korea expressed concern about China's actions.
Trading in US index futures indicated that the Dow could advance 46 points at the opening bell today, 25 November 2013. US stocks rose on Friday, 22 November 2013, with the S&P 500 index closing above 1,800 for the first time and extending gains into a seventh consecutive week.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy.
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