Firmness continued on the bourses in mid-afternoon trade. The Sensex was up 348.62 points or 1.66%, up about 65 points from the day's low and off close to 140 points from the day's high. Indian stocks edged higher today, 9 December 2013, after a strong performance of Bharatiya Janata Party (BJP) in assembly elections. The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro development leader -- Narendra Modi -- would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade. The market sentiment was also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Gains in Asian and European stocks also boosted sentiment on the domestic bourses. In the foreign exchange market, the rupee edged higher against the dollar.
Asian and European Asian stocks rose on Monday, 9 December 2013, after better-than-forecast growth in US jobs and Chinese exports boosted investor confidence cuts to Federal Reserve stimulus won't derail the global economic recovery.
Cement stocks edged higher. Bharti Airtel rose after the company said it will invest over Rs 4000 crore in Punjab over the next five years to expand services and contribute to the Punjab state government's digital inclusion agenda. The market breadth, indicating the overall health of the market, was negative.
The market surged in early trade after strong performance of Bharatiya Janata Party (BJP) in assembly elections. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high. A bout of volatility was witnessed as key benchmark indices regained strength after trimming initial strong gains in morning trade. Volatility continued on the bourses as key benchmark indices trimmed gains and hit fresh intraday low in mid-morning trade. The market was range bound in early afternoon trade. Firmness continued on the bourses in mid-afternoon trade.
BJP has secured emphatic victory in assembly elections in Madhya Pradesh and Rajasthan, a narrower one in Chhattisgarh and emerged as the single largest party in a hung Delhi assembly, giving the party and its leader Narendra Modi confidence and momentum going into next year's general elections. Aam Aadmi Party, which confounded skeptics to win 28 seats in the 70-member Delhi assembly, denied BJP, which won 31 seats, an outright victory. Congress's debacle has also fortified the perception of Narendra Modi-led BJP being the frontrunner for 2014 Lok Sabha elections. Counting of votes for assembly elections in Rajasthan, Delhi, Madhya Pradesh and Chattisgarh took place on Sunday, 8 December 2013.
The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro development leader, Narendra Modi would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade.
Meanwhile, the counting of elections for the 40-member Mizoram Assembly which is underway today, 9 December 2013, showed that the Congress is heading towards forming a government in the state. The Congress party won in 16 seas and was leading in 7 seats.
The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, 6 December 2013, as per provisional data from the stock exchanges.
At 14:20 IST, the S&P BSE Sensex was up 348.62 points or 1.66% to 21,342.53. The index jumped 487.21 points at the day's high of 21,483.74 in early trade, which is a record high. The index rose 286.11 points at the day's low of 21,282.64 in mid-morning trade.
The CNX Nifty was up 107 points or 1.71% to 6,366.90. The index hit a high of 6,415.25 in intraday trade, which is a record high. The index hit a low of 6,345 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,217 shares dropped and 1,180 shares rose. A total of 173 shares were unchanged.
From the 30-share Sensex pack, 25 stocks rose and only five fell. ICICI Bank (up 4.94%), Sesa Sterlite (up 4.84%) and L&T (up 3.92%) edged higher from the Sensex pack.
Bharti Airtel rose 1.13%. The company today, 9 December 2013, said it will invest over Rs 4000 crore in Punjab over the next five years to expand services and contribute to the Punjab state government's digital inclusion agenda. Airtel and the state government of Punjab have signed an agreement on the sidelines of the Progressive Punjab Investors Summit, under which Airtel will take its high speed 4G LTE services to all towns and villages across Punjab and put the state on the data superhighway, Bharti Airtel said in a statement. Airtel launched Punjab's first 4G LTE services in Chandigarh Tri-City in March 2013, making it one of the first States in India to experience the world-class technology. As part of an agreement with the Punjab state government, Bharti Airtel will lay an additional 10,000 km of optic fiber across Punjab and expand its 4G footprint to cover most of the state's population over the next few years. This will provide a major boost to growth of broadband services in rural areas and enable delivery of services such e-governance, e-education, e-health and much more, the company said. In particular, it will provider fillip to the growth of the digital economy in the state and support businesses as well as the government, it said.
In addition, Airtel will invest in its existing 2G mobile operations, Wire-line & DSL Broadband, DTH services, M-Commerce Services offering in the state. It will also expand its Enterprise Services offerings that provide end-to-end technology solutions to Corporates and SMEs.
Mr. Sunil Bharti Mittal, Chairman and Group CEO, Bharti Enterprises said: "Airtel has been at the forefront of Punjab's telecom growth story and we are delighted to be a partner in Government of Punjab's vision to build a digitally inclusive state. Just like the mobile phone connected millions across Punjab, this high speed data connectivity initiative will further empower people with information and services available at the touch of a screen. I am confident that this initiative will make Punjab a model state for rest of the country"."
Airtel launched mobile services in Punjab in 2002 and is the largest mobile operator in the state with over 7.2 million customers. Till date, it has invested over Rs 4800 crore in its operations in the state and its mobile network covers all 162 towns and 12,750 villages, reaching 94% of the population. The company's distribution network across Punjab spans 50,000 retailers and its operations provide direct and indirect employment opportunities to over 65,000 people across the state, Bharti Airtel said in a statement.
Induslnd Bank jumped 5.14%. The bank said during market hours today, 9 December 2013, that it has opened a new branch in Aliganj area of Lucknow. Induslnd Bank now has nine branches in Lucknow district and overall forty nine branches in the state of Uttar Pradesh as on 30 November 2013. The bank also announced its plans to further strengthen its presence and customer reach in Uttar Pradesh.
Cement stocks rose on renewed buying. Ambuja Cement (up 3.89%) and ACC (up 2.89%) gained.
Jaiprakash Associates rose 0.81% after the company said during market hours today, 9 December 2013, said that pursuant to the orders of the High Court of Allahabad dated 31 October 2013, the secured and unsecured creditors of Jaypee Cement Corporation (JCCL) have in their respective meetings held on Saturday, 7 December 2013, approved the scheme of arrangement, without any modification, for the sale of JCCL's Gujarat cement plant to UltraTech Cement. JCCL is a wholly owned subsidiary of Jaiprakash Associates.
Jaiprakash Associates further said that the High Court of Allahabad in its order has dispensed with the holding of the meeting of the shareholders (both equity and preference) of JCCL.
Shares of UltraTech Cement rose 2.82%.
Accel Frontline was locked at 5% circuit filter at Rs 35.50 on BSE after the company said that CAC Corporation, Japan would acquire majority stake in the company. The announcement was made during market hours today, 9 December 2013.
The current promoters of Accel Frontline (AFL) announced that they have today, 9 December 2013 signed definitive agreements with CAC Corporation, Japan (CAC) to induct CAC as a strategic partner in AFL.
Under the terms of the agreements, CAC will acquire a minimum of 51% equity shareholding in AFL through purchase of equity shares from the promoters, subscription of new equity shares of the company and purchase of equity shares from public shareholders by the mandatory open offer for up to 26% of the company's fully-diluted equity capital at a price of Rs 45 per equity share.
AFL will be run as a joint venture between CAC and the current promoters of AFL who will continue to be significant owners of the company. Mr. N.R.Panicker will remain as the Executive Chairman of AFL.
As a part of the growth plans for AFL, CAC will invest in fresh equity in the company to expand its capital base. In addition, both CAC and the current promoters of AFL will provide long-term soft loans to the company to enhance AFL's long-term working capital, both the companies said in a joint press release.
The formation of the joint venture partnership is expected to provide major opportunities to both partners. While CAC will gain an immediate platform in the fast growing Indian IT services market, AFL will be able to access CAC's relationships in Japan to provide IT services with India as service hub. Also, AFL will now be able to keenly bid for providing IT infrastructure services for the major industrial corridors being built in India by leading Japanese companies.
Commenting on the development Mr Akihiko Sako, President and CEO of CAC Corporation said "We at CAC Corporation are excited about this Joint Venture with the Promoters of Accel Frontline, which is a leading name in the IT services business in India, with an established presence in overseas markets such as USA, Japan, the UAE and Singapore. CAC Corporation is one of the oldest software development companies in Japan started way back in 1966. As part of our globalization plan, we are looking at India, not only as a market, software, which can help our customers in different parts of the world. So this JV partnership will achieve the twin objectives of serving our Japanese clients operating in India and leveraging Accel's capability for software development services to serve our global customers."
Commenting on the development Mr. N. R. Panicker, Chairman of AFL said "This is an important milestone for Accel Frontline coming two years after the promoters had bought back a controlling stake in the company from British Telecom in August, 2011. We have been looking at various avenues to grow our international business more rapidly. The Joint Venture with CAC Corporation will help us to achieve this goal. CAC Corporation's prominent presence in Japan and their client base in USA, the UK and other countries will give us cross-selling opportunities with our service offerings."
In the foreign exchange market, the rupee edged higher against the dollar after strong performance of Bharatiya Janata Party (BJP) in assembly elections. The partially convertible rupee was hovering at 61.065, compared with its close of 61.41/42 on Friday, 6 December 2013.
On macro front, 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.
European stocks rose on Monday, 9 December 2013, after a report that showed Chinese exports climbed more than expected last month. Key benchmark indices in France, Germany and UK were up 0.26% to 0.53%.
Asian stocks rose on Monday, 9 December 2013, after better-than-forecast growth in US jobs and Chinese exports boosted investor confidence cuts to Federal Reserve stimulus won't derail the global economic recovery. Key benchmark indices in China, Taiwan, Indonesia, South Korea, Japan and Hong Kong rose 0.05% to 2.29%. Singapore's Straits Times fell 0.05%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.
China today reported inflation slowed more than estimated last month, after data yesterday showed export growth helped swell the nation's trade surplus to $33.8 billion, the widest since January 2009. The consumer-price index rose 3 percent from a year earlier, the National Bureau of Statistics said today in Beijing.
China's trade surplus widened last month to the largest in more than four years as exports exceeded estimates. The surplus of $33.8 billion was the biggest since January 2009, data from the General Administration of Customs showed yesterday in Beijing. Outbound shipments rose 12.7% from a year earlier, while import gained 5.3%.
Japan's growth slowed more than an initial estimate in the third quarter while the country posted an unexpected deficit in its broadest trade gauge in October, underscoring headwinds to Prime Minister Shinzo Abe's efforts to cement a recovery. Gross domestic product expanded an annualized 1.1% from the previous quarter when it rose 3.6%, the Cabinet Office said today in Tokyo, lower than a preliminary reading of 1.9%. Japan's current account registered a 128 billion yen ($1.2 billion) shortfall, the first deficit since January, according to the finance ministry.
Trading in US index futures indicated that the Dow could advance 17 points at the opening bell on Monday, 9 December 2013. US stocks surged on Friday, 6 December 2013, after the latest data showed American employers added more jobs than forecast and the jobless rate dropped to the lowest since 2008. The 203,000 increase in payrolls in November followed a revised 200,000 advance in October, Labor Department figures showed. The US jobless rate fell to 7%, showing progress in the labor market that will help provide a spark for the US economy. Another report showed consumer confidence rose more than forecast in December to the highest level in five months, easing concern about household spending heading into the holiday-shopping season. The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the strongest since July, from 75.1 in November.
Investors are keeping a close watch on economic data in the United States as the Federal Reserve monitors the pace of recovery to gauge when it will begin to reduce monetary stimulus for the US economy, which has been aimed at encouraging growth. 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. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.
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