Intraday volatility continued as key benchmark indices regained strength after paring initial gains in morning trade. The barometer index, the S&P BSE Sensex, was up 190.15 points or 0.94%, up 95 points from the day's low and off 96.63 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by upward revision in revenue guidance from IT major Infosys, gains in rupee gains the dollar, firm Asian stocks and provisional data showing that foreign funds remained net buyers of Indian stocks on Thursday, 10 October 2013.
IT major Infosys regained strength after witnessing initial volatility. Many other IT stocks rose after Infosys' upward revision in FY 2014 revenue guidance. TCS and HCL Technologies hit record high. Tech Mahindra hit 52-week high. Banking stocks rose after the Reserve Bank of India (RBI) on Thursday allowed banks to raise funds from global multilateral institutions until November 30 as long as the money raised is for general banking purposes and not for capital enhancement. Ashok Leyland gained on huge early volume after two large block deals were executed on the counter on BSE.
Key benchmark indices pared gains after a firm start triggered by higher Asian shares. Intraday volatility continued as key benchmark indices regained strength after paring initial gains in morning trade.
In the foreign exchange market, the rupee edged higher against the dollar tracking gains in regional currencies and the domestic equity market. The partially convertible rupee was hovering at 61.255, higher than its close of 61.39/40 on Thursday, 10 October 2013.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 10 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 614.27 crore on Thursday, 10 October 2013, as per provisional data from the stock exchanges.
At 10:18 IST, the S&P BSE Sensex was up 190.15 points or 0.94% to 20,463.06. The index jumped 286.78 points at the day's high of 20,559.69 in early trade, its highest level since 20 September 2013. The index rose 95.15 points at the day's low of 20,368.06 in morning trade.
The CNX Nifty was up 49.15 points or 0.82% to 6,070.10. The index hit a high of 6,107.60 in intraday trade, its highest level since 20 September 2013. The index hit a low of 6,046.40 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,126 shares gained and 562 shares fell. A total of 105 shares were unchanged.
The total turnover on BSE amounted to Rs 613 crore by 10:20 IST compared to Rs 152 crore by 09:20 IST.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined.
IT major Infosys regained strength after initial volatility triggered by the IT major raising its revenue growth guidance for the year ending 31 March 2014 (FY 2014) at the time of announcement of Q2 September 2013 results before trading hours. The stock was up 5.08% to Rs 3,283. The stock pared gains after surging as much as 7.55% at the day's high of Rs 3,360 at the onset of the trading session, also its 52-week high. The stock rose as much as 1.07% at the day's low of Rs 3,157.65. On a consolidated basis, Infosys' net profit rose 1.4% to Rs 2407 crore on 15.1% increase in total revenues to Rs 12965 crore in Q2 September 2013 over Q1 June 2013. Infosys has made a provision of Rs 219 crore towards visa related expenses in Q2 September 2013. The results are as per International Financial Reporting Standards (IFRS).
Infosys said it now expects revenue in dollar terms to grow 9% to 10% in the year ending 31 March 2014 (FY 2014). This is an upward revision from its guidance of 6% to 10% which the company had given at the time of announcing Q1 June 2013 results in July this year. Thanks to depreciation of rupee against the dollar, Infosys has also raised its revenue growth guidance in rupee terms for FY 2014. The company now expects 21% to 22% growth in revenue in FY 2014, which is higher than its earlier forecast 13% to 17% growth.
Commenting on the second quarter results, S. D. Shibulal, CEO and Managing Director, Infosys said: "During the quarter we witnessed broad-based volume growth, robust client additions, five large deal wins and increased sales momentum of our big data and cloud offerings. This growth is a result of our focus on execution, which helps our clients achieve their objectives. We will continue with planned investments and initiatives to explore new avenues of growth. We remain watchful of the sustainability of improving global economic fundamentals."
Rajiv Bansal, Chief Financial Officer, Infosys, said: "The global currency market remains volatile with the Indian Rupee depreciating by 11% during the quarter. We have an active hedging program to minimize its impact on our margins. We will continue our focus on optimizing costs and enhancing the efficiency of our operations".
Infosys and its subsidiaries added 68 clients during the quarter. There was a gross addition of 12,168 employees and net addition of 2,964 employees for the quarter by Infosys and its subsidiaries.
Infosys' liquid assets, including cash and cash equivalents, available-for-sale financial assets, and government bonds were Rs 26907 crore as on 30 September 2013, higher than Rs 24078 crore as on 30 June 2013.
Many other IT stocks rose after Infosys' upward revision in FY 2014 revenue guidance. TCS rose 2.27% to Rs 2,128.70. The stock hit record high of Rs 2,132.80 in intraday trade. The company unveils Q2 results on 15 October 2013.
Wipro rose 3.57%. The company last week announced changes in the top deck of the organisation. The company announced the appointment of Senior Vice President Shaji Farooq as the global head of its Banking, Finance Services and Insurance (BFSI) strategic business unit. Shaji, who is currently leading the company's Advanced Technologies Service Line and Go-To-Market transformation initiatives, will take over from Senior Vice President Soumitro Ghosh, who will now head Wipro Infotech, the India and Middle East business.
HCL Technologies gained 3.94% to Rs 1,160.50 after striking a record high of Rs 1,161.30 in intraday trade.
Tech Mahindra gained 2.59% to Rs 1,554.30 after scaling a 52-week high of Rs 1,555.80 in intraday trade. The company during market hours on Thursday, 10 October 2013, announced the launch of its retail digital enterprise solution ShelfMonitor, powered by Google Cloud.
Banking stocks rose after the Reserve Bank of India (RBI) on Thursday allowed banks to raise funds from global multilateral institutions until November 30 as long as the money raised is for general banking purposes and not for capital enhancement. These borrowings from multilateral bodies will also be eligible for the recently opened forex swap facility. The central bank on Thursday also allowed banks to borrow from entities other than their own branches overseas under existing regulators for borrowing overseas.
State Bank of India (up 0.93%), HDFC Bank (up 0.52%) and ICICI Bank (up 1.67%) gained.
Ashok Leyland gained 4.85% to Rs 17.30 on huge early volume of 2.69 crore shares after two large block deals were executed on the counter at 09:25 IST on BSE today, 11 October 2013. A block deal of 1.30 crore shares was struck on the counter at Rs 16.55 per share. Another block deal of 1.30 crore shares was struck on the counter at Rs 16.60 per share.
On the macro front, the government will unveil industrial production data for August 2013 after trading hours today, 11 October 2013. Industrial production growth is seen decelerating to 2.4% in August 2013 from 2.6% in July 2013, as per the median estimate of a poll of economists carried out by Capital Market.
Asian stocks edged higher on Friday, 11 October 2013, amid hopes US lawmakers will lift the debt limit and avoid a default. Key benchmark indices in China, Singapore, Japan, South Korea, Hong Kong, Taiwan and Indonesia rose by 0.44% to 1.51%.
China is scheduled to release a series of economic reports over the weekend including September trade data. China's economy may grow about 7% for the foreseeable future as policy makers rein in house-price gains and local government debt, Deputy Central Bank Governor Yi Gang said on Thursday.
Trading in US index futures indicated that the Dow could advance 12 points at the opening bell on Friday, 11 October 2013. US stocks jumped on Thursday, with the Dow Jones Industrial Average notching its best one-day point gain since December 2011, after House Republican leaders proposed a temporary extension of the nation's debt ceiling.
House Republican leaders and President Barack Obama ended a roughly 90-minute meeting at the White House Thursday night without a deal to re-open the government or raise the US debt limit, but agreed to keep talking. House Speaker John Boehner's office said that Republicans explained their proposal for a six-week extension in the debt limit, and to begin immediate talks on re-opening the government.
Claims for US jobless benefits jumped last week to the highest level in six months, a Labor Department report showed on Thursday.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. 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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