Key benchmark indices extended gains to strike fresh intraday high in afternoon trade. The S&P BSE Sensex was up 119.06 points or 0.65%, up 221.25 points from the day's high and off 31.05 points from the day's low. Indian stocks rose today, 23 August 2013, after Finance Minister P. Chidambaram and Reserve Bank of India Governor D. Subbarao on Thursday, 22 August 2013, said in separate news conferences that India doesn't plan to introduce capital controls. The market breadth, indicating the overall health of the market, was positive.
Reliance Industries (RIL) rose after the company announced a new gas condensate discovery off the east coast of India in the Cauvery basin. Another index heavyweight and cigarette major ITC declined. IT stocks edged higher on recent steep slide of the rupee against the dollar. Shares of power equipment major Bharat Heavy Electricals (Bhel) extended intraday gains. Telecom stocks were mostly lower. Realty major DLF extended Thursday's fall.
A bout of volatility was witnessed as key benchmark indices slipped into the red after a higher opening triggered by firm Asian stocks. High volatility was witnessed as key benchmark indices regained positive terrain in morning trade. Intraday volatility continued as the Sensex cut entire intraday gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices were a tad higher in early afternoon trade. Key benchmark indices extended gains to strike fresh intraday high in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was up 119.06 points or 0.65% to 18,432. The index jumped 150.11 points at the day's high of 18,463.05 in afternoon trade, its highest level since 21 August 2013. The index fell 102.19 points at the day's low of 18,210.75 in morning trade.
The CNX Nifty was up 34.25 points or 0.63% to 5,442.70. The index hit a high of 5,452.80 in intraday trade, its highest level since 21 August 2013. The index hit a low of 5,377.80 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,231 shares rose and 859 shares fell. A total of 145 shares were unchanged.
The total turnover on BSE amounted to Rs 1169 crore by 13:20 IST.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. Jindal Steel & Power (up 2.05%), ONGC (up 2.51%) and Tata Motors (up 1.97%), edged higher.
Index heavyweight and cigarette major ITC fell 0.91%.
IT stocks edged higher on recent steep slide of the rupee against the dollar. Wipro (up 1.03%), TCS (up 2.63%) and HCL Technologies (up 2.93%), edged higher. Infosys shed 0.89%.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
The rupee was hovering at 64.5450 against the dollar, a tad higher than Thursday's close of 64.55/56. The rupee had hit record low of 65.56 in intraday trade on Thursday, 22 August 2013.
Reliance Industries (RIL) rose 1.86% after the company and British Petroleum announced a new gas condensate discovery off the east coast of India in the Cauvery basin. The discovery, in the deepwater block CY-DWN-2001/2 (CYD5), is situated 62 kilometers from the coast in the Cauvery Basin and is the second gas discovery in the block. RIL is the operator with 70% equity and BP has a 30% share.
Preliminary evaluation of well data and fluid samples indicated presence of gas condensate in the reservoir interval with a gross column of 143 meters. The well reached its total depth in early August and RIL, as operator, has conducted drill stem test (DST) to evaluate the potential of the discovery. The well which had the initial reservoir pressure of 8000 psi flowed gas at the rate of 35.2 million standard cubic feet per day with condensate at the rate of 413 barrels per day through 52/64" choke during DST. Well flow rates during such tests are limited by the rig and well test equipment configuration, RIL and BP said in a joint statement. The Government of India (GoI) and Directorate General of Hydrocarbons have been notified of the discovery, named D-56.
Private sector banking giant ICICI Bank gained 3.95%, with the stock extending intraday gain. The bank after market hours on Thursday, 22 August 2013, said it has increased base rate by 0.25% to 10% per annum with effect from 23 August 2013. With effect from 1 July 2010, interest rates on new loans and advances, including consumer loans, are determined with reference to base rate. ICICI Bank has also announced an increase of 0.25% in its benchmark prime-lending rate and in its Floating Reference Rate (FRR) for consumer loans (including home loans) with effect from 23 August 2013. These benchmark rates are used for determining interest rates on loans and advances sanctioned upto 30 June 2010. The fixed rate customers will not be impacted by the above revision and their contracted rates will remain unchanged, ICICI Bank said.
Shares of power equipment major Bharat Heavy Electricals (Bhel) extended intraday gains. The stock was up 7.08% at Rs 115.
Telecom stocks were mostly lower. Bharti Airtel declined 2.28% on reports the company is in advanced discussions to sell off its Sri Lankan operations to Abu Dhabi's Etisalat.
Idea Cellular (down 2.69%) and Reliance Communications (down 4.91%) declined. Tata Teleservices (Maharashtra) (up 2.11%) and MTNL (up 0.18%) gained.
Realty major DLF lost 3.98%, with the stock extending Thursday's fall.
Finance Minister P. Chidambaram and Reserve Bank of India Governor D. Subbarao on Thursday, 22 August 2013, said in separate news conferences that India doesn't plan to introduce capital controls. Chidambaram said the restrictions imposed by the Reserve Bank of India recently on money that Indian individuals and companies can send overseas would be revisited once the currency market stabilizes. In separate news conferences in New Delhi, both Chidambaram and Subbarao attributed the rupee's recent sharp decline to global trends.
Chidambaram said that revival and encouragement of growth will continue to be the focus of the government. Chidambaram said that stronger growth will, in course of time, alleviate many of the challenges that India faces today. He said that there is no cause for the panic that seems to have gripped the currency markets and that is feeding into other markets.
Chidambaram believes that the rupee is undervalued and has overshot what is generally believed to be a reasonable and appropriate level. Capital inflows will, in due course, correct the position. India's debt indicators are within prudent limits. India does not have excessive public debt (Central and State Governments taken together). The overall public debt to GDP ratio has declined from 73.2% in 2006-07 to 66% in 2012-13. The economy's external debt is only 21.2% of GDP. India's reserves are $277 billion.
India's inflation could accelerate in the current fiscal year due to the rupee's sharp depreciation, the Reserve Bank of India (RBI) said in a report on Thursday. The pass-through of the depreciation of the rupee exchange rate by about 11% in the four months of 2013-14 is incomplete and will put upward pressure as it continues to feed through to domestic prices, the RBI said in its annual report for 2012-13. Risks on the inflation front are still significant, the RBI said. The rupee's weakness could also increase subsidy payouts for fuel and fertiliser in 2013/14, the central bank said. However, the report said normal monsoon rains in India have taken a major risk off the horizon" but said a close vigil was necessary after food prices showed an upsurge during April to July. If high food inflation persists into the second half of 2013-14, the risks of generalised inflation could become large, it said. India's current account gap, which widened to a record high of 4.8% of GDP in the fiscal year to March 2013, is likely to ease in the current fiscal year but may continue to be much above the sustainable level, the report said. Global risks coupled with domestic structural impediments have dampened prospects of a recovery in 2013-14, and posed immediate challenges for compressing the current account deficit, it said. The central bank's report added that utmost attention is needed to contain risks to financial stability arising from deteriorating asset quality of banks.
European stocks edged lower on Friday, 23 August 2013, with investors awaiting the latest take on consumer confidence in the euro zone, due in the afternoon. Key benchmark indices in UK, France and Germany were down by 0.24% to 0.6%.
Germany's economy sharply rebounded in the second quarter from a weak start to the year, gaining steam from a pickup in investment and robust consumption, official data showed Friday. Gross domestic product swelled 0.7%, corresponding to an annualized rate of 2.9%, the national statistics office said. The figures confirm official estimates issued last week. That makes Germany the fastest growing of the world's largest industrialized economies in the second quarter.
Most Asian stocks rose on Friday, 23 August 2013, after reports from Europe to the US boosted confidence in global economic recovery. Key benchmark indices in Singapore, Japan, Taiwan and South Korea were up by 0.05% to 2.21%. Key benchmark indices in Hong Kong, China and Indonesia fell by 0.14% to 0.47%.
Trading in US index futures indicated that the Dow could fall 22 points at the opening bell on Friday, 23 August 2013. US stocks edged higher on Thursday after a monthly average of jobless claims fell to a more than five-year low in the US, and as manufacturing Purchasing Managers' Index readings from China and Germany indicated expansion.
Investors are keeping a close watch on the Federal Reserve's three-day annual monetary conference in Jackson Hole, Wyo which begins today, 23 August 2013, on whether Fed officials give any indication of the timing of the potential tapering of the Fed's bond purchases. Fed Chairman Ben Bernanke is not attending this year's Fed's annual monetary conference. The Fed currently buys $85 billion worth of securities a month to help support the US economy, but it has signaled its intent to soon slow the pace of those purchases as the economy recovery gains pace.
Bernanke's term expires in January, and US President Barack Obama is considering candidates to succeed him, including Fed Vice Chairman Janet Yellen and former Treasury Secretary Lawrence Summers.
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