A bout of volatility was witnessed as key benchmark indices regained strength after paring initial gains in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both hit their highest level in more than two weeks. The Sensex was up 250.76 points or 1.26%, up 111.34 points from the day's high and off 4.41 points from the day's low. The market breadth, indicating the overall health of the market, was strong. Indian stocks surged today, 8 October 2013, after the Reserve Bank of India's (RBI) surprise announcement on Monday evening to improve liquidity conditions in the banking system boosted sentiment. Gains in Asian stocks also aided the upmove on the domestic bourses. The rupee edged higher against the dollar.
Capital goods shares were in demand on renewed buying. Realty stocks gained on renewed buying. Shares of realty major DLF rose after the company said that its subsidiary DLF Home Developers has sold its 33 megawatts (MW) wind turbines situated at Rajasthan for Rs 67.44 crore. L&T edged higher after the company said it has won orders worth Rs 1605 crore across various business segments.
The Reserve Bank of India's (RBI) surprise decision on Monday evening to improve liquidity conditions in the banking system triggered a firm opening on the bourses. The barometer index, the S&P BSE Sensex, moved past the psychological 20,000 level. A bout of volatility was witnessed as key benchmark indices regained strength after paring initial gains in morning trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 7 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 494.13 crore on Monday, 7 October 2013, as per provisional data from the stock exchanges.
Bond prices rose after the Reserve Bank of India (RBI) on Monday evening announced measures to improve liquidity conditions in the banking system. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.4924%, lower than its close of 8.6833% on Monday, 7 October 2013. Bond yield and bond prices are inversely related. The RBI announced a reduction in the marginal standing facility (MSF) rate by 50 basis points to 9% with immediate effect. The central bank has also decided to provide additional liquidity through term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities (NDTL) of the banking system through variable rate auctions on every Friday beginning from 11 October 2013. The notified amount and tenor of the term repo auctions will be announced prior to the dates of the auctions, the RBI said in a statement. Starting with the Mid-Quarter Review of September 2013, the RBI began a calibrated withdrawal of exceptional measures undertaken since July 2013. This was done with a view to normalising liquidity conditions, the RBI said. RBI said that open market purchase operations of Rs 9974 crore were conducted on Monday, 7 October 2013, to inject liquidity into the banking system.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 61.685, compared with its close of 61.79/80 on Monday, 7 October 2013.
At 10:15 IST, the S&P BSE Sensex was up 250.76 points or 1.26% to 20,145.86. The index jumped 255.17 points at the day's high of 20,150.27 in morning trade, its highest level since 23 September 2013. The index rose 139.42 points at the day's low of 20,034.52 in morning trade.
The CNX Nifty was up 68.70 points or 1.16% to 5,974.85. The index hit a high of 5,981.70 in intraday trade, its highest level since 23 September 2013. The index hit a low of 5,948.75 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,098 shares gained and 593 shares fell. A total of 105 shares were unchanged.
The total turnover on BSE amounted to Rs 483 crore by 10:20 IST compared to Rs 136 crore by 09:25 IST.
Among the 30-share Sensex pack, 28 stocks gained and only two of them declined.
Capital goods shares were in demand on renewed buying. ABB (up 0.31%), Bhel (up 0.72%), Crompton Greaves (up 1.39%), Siemens (up 0.39%) gained.
L&T advanced 3.07% after the company said it has won new orders worth Rs 1605 crore across various business segments. The buildings & factories division has bagged an order valued at Rs 445 crore from Hospital Services Consultancy Corporation (India) for the construction of a super specialty cum new paid ward including associated services at Safdarjung Hospital, New Delhi.
The metallurgical & material handling division has secured a new EPC order worth 307 crore from a reputed customer for the construction of a sinter plant in eastern India.
The power transmission & distribution division has bagged a major order worth Rs 675 crore from Kudgi Transmission. In the heavy civil infrastructure business, an additional order worth Rs 178 crore has been received, L&T said.
Realty stocks rose after the Reserve Bank of India's (RBI) surprise announcement on Monday evening to improve liquidity conditions in the banking system boosted sentiment. Purchases of both residential and commercial property are largely driven by finance. Indiabulls Real Estate (up 2.13%), HDIL (up 2.82%), Unitech (up 1.53%), Godrej Properties (up 0.56%), Oberoi Realty (up 1.1%) and Sobha Developers (up 0.73%) gained.
DLF gained 2.97% after the company said that its subsidiary DLF Home Developers has sold its 33 megawatts (MW) wind turbines situated at Rajasthan for Rs 67.44 crore. The transaction is a part of DLF's objective of divesting its non core assets.
Asian markets were mostly higher on Tuesday, 8 October 2013, after the latest data showed China's services industry continued to expand. Key benchmark indices in China, Taiwan, Hong Kong, Japan, Singapore and Indonesia, rose by 0.03% to 1.1%. South Korea's Seoul Composite index fell 0.09%.
The HSBC China Services Purchasing Managers' Index fell to 52.4 in September from 52.8 in August, HSBC Holdings PLC said on Tuesday. A reading above 50 denotes expansion.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 8 October 2013. US stocks declined on Monday, with the S&P 500 index closing at a four-week low, as a stalemate on Capitol Hill over preventing a government default persisted.
US President Barack Obama reiterated on Monday that he won't negotiate with Republicans over the debt limit. "We're not going to negotiate under the threat of economic catastrophe," Obama said during a visit to the Federal Emergency Management Agency in Washington. Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about policy conditions tied to opening the government or raising the debt ceiling. Treasury Secretary Jacob J. Lew has warned the U.S. may be unable to pay its bills after Oct. 17.
Federal Reserve Bank of Dallas President Richard Fisher said in a speech that the US cannot afford to default and that debt ceiling talks "will come down to the wire". Fisher, who doesn't hold a policy vote this year, has said he favors a reduction in the central bank's $85 billion monthly bond purchases.
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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