Key benchmark indices extended intraday gains and hit fresh intraday high in mid-afternoon trade as world stocks rose after the US Federal Reserve after a monetary policy review on Wednesday, 18 September 2013, decided to maintain stimulus to the US economy through monthly bond purchases of $85 billion. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The barometer index, the BSE Sensex, hit its highest level in more than 32 months. The 50-unit CNX Nifty hit 16-week high. The Sensex was up 677.46 points or 3.39%, up close to 295 points from the day's low and off about 20 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Except the BSE IT index, all the other sectoral indices on BSE were in the green.
Pharma stocks extended their recent gains. Index heavyweight and cigarette major ITC moved higher.
The market surged in early trade after the US Federal Reserve after a monetary policy review on Wednesday, 18 September 2013, unexpectedly refrained from reducing pace of monthly bond buying, saying it needs to see more evidence of improvement in the US economy. The S&P BSE Sensex regained the psychological 20,000 mark. The 50-unit CNX Nifty moved past the psychological 6,000 level. Firmness continued on the bourses in morning trade. The Sensex traded off intraday high in mid-morning trade. The market regained strength in early afternoon trade. Key benchmark indices extended intraday gains and hit fresh intraday high in afternoon trade. The market further extended gains in mid-afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 18 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 580.13 crore on Wednesday, 18 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee surged past 62 against the dollar as the Fed refrained from withdrawing monetary stimulus to the US economy. The partially convertible rupee was hovering at 61.78, sharply higher than its close of 63.38/39 on Wednesday, 18 September 2013.
Bond prices jumped as the Fed refrained from withdrawing monetary stimulus to the US economy. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.1862%, lower than its close of 8.3715% on Wednesday, 18 September 2013. Bond yield and bond prices are inversely related.
At 14:20 IST, the S&P BSE Sensex was up 677.46 points or 3.39% to 20,639.62. The index surged 697.68 points at the day's high of 20,659.84 in mid-afternoon trade, its highest level since 3 January 2011. The index gained 385.14 points at the day's low of 20,347.30 in opening trade.
The CNX Nifty was up 213.30 points or 3.62% to 6,112.75. The index hit a high of 6,123.25 in intraday trade, its highest level since 30 May 2013. The index hit a low of 6,040.15 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,356 shares rose and 963 shares fell. A total of 141 shares were unchanged.
Among the 30-share Sensex pack, 29 stocks rose and only one fell. State Bank of India (up 7.96%), ICICI Bank (up 6.83%), and Tata Steel (up 6.37%), surged.
Index heavyweight and cigarette major ITC rose 3.26%, with the stock gaining for the third straight day. ITC's hospitality unit ITC Hotels on 16 September 2013, said it has tied up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai, under ITC Hotels' 5-star 'WelcomHotel' brand and the group's mid-market to upscale 'Fortune' brand. The tie-up has been firmed up through a Memorandum of Understanding between ITC Hotels and RP Groups Hotels & Resorts. While the two WelcomHotels are already under a management contract and will be flagged off immediately, the three Fortune hotels are a part of the signed MOU and will be launched subsequently, ITC Hotels said in a statement.
As part of its expansion drive, ITC Hotels proposes to add several managed hotels to its brand portfolio, it said. On the anvil are an ITC super-premium luxury hotel in Mahabalipuram, a WelcomHotel in Jodhpur, Patna and Chandigarh and more than 30 hotels under the Fortune brand.
Pharma stocks gained for the third straight day. Cipla rose 0.72%.
Dr Reddy's Laboratories rose 0.14%, with the stock extending recent gains triggered by the company getting USFDA nod for Azacitidine for injection 100 mg/vial, a bioequivalent generic version of VIDAZA (azacitidine for injection). The launch of product in the US market is planned in the near term, the company said during trading hours on Tuesday, 17 September 2013. The VIDAZA brand had US sales of approximately $378.5 million for the twelve months ended July 2013, according to IMS Health data.
Ranbaxy Laboratories gained 2.45% to Rs 342.45, with the stock gaining for the third day in a row. The company on Tuesday, 17 September 2013, said that during late hours on Monday, 16 September 2013, the company received communication from the US Food and Drug Administration (USFDA) that the regulator had imposed an import alert on the company's Mohali facility. The USFDA also advised that the Mohali facility will be subject to certain terms of the Consent Decree signed in January 2012. Ranbaxy said it will review the details and will continue to fully cooperate with the USFDA and take all necessary steps to resolve the concerns at the earliest.
The USFDA had conducted inspections at Ranbaxy's Mohali facility in 2012, resulting in certain observations. The company believes that it has made further improvements at its Mohali facility since the last inspection in 2012, and remains committed to adressing all concerns of the USFDA. Ranbaxy is hopeful of an early resolution these concerns, the company said in a statement.
Ranbaxy remains fully committed to upholding the highest standards that patients, prescribers, regulators and all other stakeholders expect from the company. Ranbaxy stays firmly committed to its philosophy of 'Quality and Patients First,' it said in a statement.
Shares of Ranbaxy had tumbled 30.27% in a single trading session to settle at Rs 318.85 on Monday, 16 September 2013, after the USFDA issued an import alert against company's Mohali plant.
Sun Pharmaceutical Industries gained 2.68%. The stock turned ex-dividend today, 19 September 2013, for dividend of Rs 2.50 per share for the year ended 31 March 2013.
Lupin rose 0.94%. The company on 16 September 2013 said it has received final approval for its Zolpidem Tartrate Extended release tablets USP, 6.25 mg and 12.5 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Sanofi Aventis, U.S, LLC's (Sanofi) Ambien CR Extended release tablets, 6.25 mg and 12.5 mg. Lupin's wholly owned US subsidiary Lupin Pharmaceuticals Inc. (LPI) shall commence marketing the product shortly, the company said. Lupin's Zolpidem CR tablets 6.25 mg & 12.5 mg is the AB rated generic equivalent of Sanofi's Ambien CR Extended? release tablets, 6.25 mg and 12.5 mg and is indicated for the treatment of insomnia characterized by difficulties with sleep onset and/or sleep maintenance. Sanofi's Ambien CR Extended release tablets had annual US sales of approximately $366 million (IMS MAT Mar 2013).
Cadila Healthcare rose 1.14% to Rs 673.70. A block deal of 2 lakh shares was executed in the counter on BSE at Rs 670 per share at 13:45 IST.
Adani Enterprises surged 5.54% to Rs 142.95. A block deal of 42.6 lakh shares was executed in the counter on BSE at Rs 140.75 per share at 12:38 IST
Investors' focus will now shift to the outcome of the Reserve Bank of India's mid-quarter policy review tomorrow, 20 September 2013. At its mid-quarter monetary policy review tomorrow, 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. The RBI will release Mid-Quarter Review of Monetary Policy 2013-14 at 11:00 IST tomorrow, 20 September 2013. This will be followed by Governor Raghuram Rajan addressing the media in the afternoon on that day.
European stocks surged on Thursday, 19 September 2013, after the US Federal Reserve decided not to taper its asset purchases as many analysts had expected. Key benchmark indices in UK, France and Germany were up 1.15% to 1.34%.
Asian stocks jumped on Thursday, 19 September 2013, after the Federal Reserve unexpectedly refrained from reducing US economic stimulus on Wednesday, 18 September 2013. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore rose by 1.67% to 4.86%. The stock markets in Mainland China, Taiwan and South Korea were closed for a holiday.
Japan's exports rose the most since 2010 in August, boosting Prime Minister Shinzo Abe's growth drive. Japanese exports rose 14.7% on year in August, the Ministry of Finance said Thursday.
Trading in US index futures indicated that the Dow could gain 37 points at the opening bell on Thursday, 19 September 2013. US stocks climbed to record highs on Wednesday and the benchmark 10-year Treasury yield fell sharply after the Federal Reserve abstained from reducing its bond buys. The Federal Open Market Committee after two-day policy meet on Wednesday said it wants more evidence of an economic recovery before paring its $85 billion-a-month bond buying program. Fed Chairman Ben S. Bernanke said there is no fixed schedule for tapering and it could still start this year should data confirm the central bank's basic outlook.
In fresh quarterly projections, the Fed cut its forecast for 2013 economic growth to a 2% to 2.3% range from a June estimate of 2.3% to 2.6%. The downgrade for next year was even sharper. It cited strains in the economy from tight fiscal policy and higher mortgage rates as it explained why it decided to maintain asset purchases at the current pace. The tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market, it said in a statement. Nevertheless, the Fed said the economy was still making progress despite tax hikes and budget cuts in Washington. Taking into account the extent of federal fiscal retrenchment, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy, it said.
Meanwhile, the US Commerce Department reported that housing starts rose 0.9% to a smaller-than-expected 891,000 annual pace in August.
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