Key benchmark indices pared gains after a firm start triggered by higher Asian shares. IT major Infosys saw high initial volatility as the stock pared gains after an initial rally 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. Many other IT stocks rose after Infosys' upward revision in its FY 2014 revenue growth guidance. The S&P BSE Sensex was up 169.71 points or 0.84%, off 117.07 points from the day's high and up 49.47 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Reliance Industries (RIL) rose after the company on Thursday, 10 October 2013 said signed a Joint Study Agreement with the Venezuelan state oil company, Petroleos de Venezuela, SA (Pd VSA), for Ayacucho Block 8 in Orinoco Oil Belt. Tata Motors reversed direction after hitting a record high.
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 9:22 IST, the S&P BSE Sensex was up 169.71 points or 0.84% to 20,442.62. The index jumped 286.78 points at the day's high of 20,559.69 in early trade. The index rose 120.24 points at the day's low of 20,393.15 in early trade.
The CNX Nifty was up 48.75 points or 0.81% to 6,069.70. The index hit a high of 6,107.60 in intraday trade. The index hit a low of 6,056.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 746 shares gained and 310 shares fell. A total of 41 shares were unchanged.
The total turnover on BSE amounted to Rs 152 crore by 09:20 IST.
Among the 30-share Sensex pack, 28 stocks gained and only two of them declined. ICICI Bank (up 1.04%) and L&T (up 0.95%) edged higher from the Sensex pack.
IT major Infosys saw high initial volatility as the stock pared gains after an initial rally 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 1.95% to Rs 3,185. The stock pared gains after surging as much as 7.55% at the day's high of Rs 3,360, also its 52-week high. 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. The results are as per International Financial Reporting Standards (IFRS). Infosys has made a provision of Rs 219 crore towards visa related expenses in Q2 September 2013.
Infosys said it now expects revenue in dollar terms to grow 9% to 10% in the year ending 31 March 2014 (FY 2014). At the time of announcing Q1 June 2013 results in July this year, Infosys had issued guidance of 6% to 10% growth in revenue in dollar terms for FY 2014. Thanks to depreciation of rupee against the dollar, Infosys has 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 its FY 2014 revenue growth guidance. TCS rose 0.99% to Rs 2,102.05. The stock hit record high of Rs 2,119 in intraday trade. The company unveils Q2 results on 15 October 2013.
Wipro rose 1.92%. 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.
Reliance Industries (RIL) rose 0.37% to Rs 862.95. RIL and the Venezuelan state oil company, Petroleos de Venezuela, SA (Pd VSA) have signed a Joint Study Agreement for Ayacucho Block 8 in Orinoco Oil Belt. As per the study agreement, both the parties will jointly evaluate the development plan for Ayacucho 8. RIL and PdVSA have also extended the term of the memorandum of understanding (MoU) signed between the parties last year by one year for continued cooperation. The signing of the Joint Study Agreement for Ayacucho Block 8 and the extension of MoU marks further strengthening of the long standing relationship between RIL and PdVSA as well as between India and Venezuela, RIL said in statement after market hours on Thursday, 10 October 2013.
Tata Motors shed 0.43% to Rs 370.15. The stock reversed direction after hitting record high of Rs 375 in intraday trade. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) on Thursday, 10 October 2013, said its retail sales jumped 17% to 43,181 vehicles in September 2013 over September 2012. Sustained sales growth continues for JLR, with increase in retail sales in all major regions, JLR said in statement. Retail sales of the Land Rover brand rose 13% to 34,719 vehicles in September 2013 over September 2012. Sales of the Jaguar brand jumped 35% to 8,462 vehicles in September 2013 over September 2012.
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 0.49% to 1.31%.
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.
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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