Key benchmark indices extended initial gains and hit fresh intraday high in morning trade on speculation the 16-day partial US government shutdown will curb economic growth in the world's biggest economy and lead the Federal Reserve to maintain monetary stimulus to the US economy into 2014. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The S&P BSE Sensex was up 255.02 points or 1.25%, up 183.75 points from the day's low and off 2.91 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 17 October 2013. In the foreign exchange market, the rupee strengthened past 61 against the dollar.
Index heavyweight Reliance Industries (RIL) extended initial gain. PSU OMCs rose as strength in rupee eased concerns of high cost of crude oil imports. Engineering and construction giant L&T reversed initial losses in volatile trade. Axis Bank rose in volatile trade, with the stock extending Thursday's gain triggered by the bank's good Q2 results.
Key benchmark indices edged higher in early trade on firm Asian stocks. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 17 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1,109.93 crore on Thursday, 17 October 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 255.02 points or 1.25% to 20,670.53. The index jumped 257.93 points at the day's high of 20,673.44 in morning trade, its highest level since 15 October 2013. The index rose 71.27 points at the day's low of 20,486.78 in opening trade.
The CNX Nifty was up 78.15 points or 1.29% to 6,124. The index hit a high of 6,127.20 in intraday trade, its highest level since 15 October 2013. The index hit a low of 6,070.90 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,131 shares gained and 547 shares fell. A total of 106 shares were unchanged.
The total turnover on BSE amounted to Rs 389 crore by 10:20 IST compared to Rs 89 crore by 09:25 IST.
Among the 30-share Sensex pack, 28 stocks gained and only two of them declined.
Index heavyweight Reliance Industries (RIL) rose 1.56% to Rs 893.25, with the stock extending initial gain. The stock hit high of Rs 895 and low of Rs 880.75 so far during the day. The company early this week reported 1.5% growth in net profit to Rs 5490 crore on 14.2% growth in turnover to a record Rs 106523 crore in Q2 September 2013 over Q2 September 2012. Net profit rose 2.6% on 17.6% growth in turnover in Q2 September 2013 over Q1 June 2013.
RIL's gross refining margin (GRM) declined to $7.7 per barrel in Q2 September 2013, from $8.4 a barrel in Q1 June 2013 and $9.5 a barrel in Q2 September 2012.
PSU OMCs rose as strength in rupee eased concerns of high cost of crude oil imports. BPCL (up 1.61%), HPCL (up 1.35%) and Indian Oil Corporation (up 0.86%) edged higher. PSU OMCs import about 70-75% of their crude oil needs.
US crude oil futures for November delivery were up 21 cents to $100.88 a barrel. The contract fell $1.62, or 1.6% to settle at $100.67 on Thursday, 17 October 2013, the lowest close since 2 July 2013.
Public sector oil marketing companies (PSU OMCs) suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Engineering and construction giant L&T rose 1.28% to Rs 848, with the stock reversing initial fall. The stock was volatile. The stock hit a high of Rs 848.80 and low of Rs 828. The company unveils its Q2 results today, 18 October 2013.
Asian Paints fell 1.9%. The company after market hours on Thursday, 17 October 2013, said that its indirect subsidiary Berger International (BIL), Singapore's net profit fell 4.86% to Rs 4.69 crore on 0.89% growth in total revenue to Rs 143.56 crore in the quarter ended September 2013 over the quarter ended September 2012. BIL, Singapore, has no operations in India
Axis Bank rose 1.52% to Rs 1,112 in volatile trade. The stock hit a high of Rs 1,113 and low of Rs 1,091 so far during the day. The bank's net profit rose 21.25% to Rs 1362.31 crore on 13.22% growth in total income to Rs 9375.08 crore in Q2 September 2013 over Q2 September 2012. The private sector bank announced the second quarter results during trading hours on Thursday, 17 October 2013.
In the foreign exchange market, the rupee strengthened past 61 against the dollar. The rupee rose tracking a continued sell-off in the greenback across all major currencies on worries of the economic impact from the weeks-long US government shutdown. The partially convertible rupee was hovering at 60.99, compared with its close of 61.23/24 on Thursday, 17 October 2013.
Asian markets were mostly higher on Friday, 18 October 2013, after the latest data showed that China's economic growth accelerated in Q3 September 2013. Key benchmark indices in China, South Korea, Indonesia, Japan, Hong Kong rose by 0.22% to 0.89%. Key benchmark indices in Singapore and Taiwan fell 0.34% to 1.77%.
The Chinese economy grew at an annual rate of 7.8% in Q3 September 2013, accelerating from the second quarter's 7.5% increase. The Chinese government is aiming for economic expansion of at least 7.5% this year.
Another data showed industrial production and retail sales growth in September 2013 easing off their levels from the previous month. Industrial production rose 10.2% in September 2013 from a year earlier, compared with 10.4% growth in August 2013. Retail sales climbed 13.3% in September 2013, compared with 13.4% increase in August 2013.
Trading in US index futures indicated that the Dow could advance 40 points at the opening bell on Friday, 18 October 2013. US stocks ended mostly higher on Thursday, lifting the S&P 500 to a record finish, as Wall Street turned from the latest fiscal drama on Capitol Hill to corporate earnings that included better-than-expected results from Verizon Communications Inc.
After risking a US default, US lawmakers this week agreed to fund the government through Jan. 15 and suspend the debt limit through Feb. 7. US President Barack Obama on Thursday, 17 October 2013, said that the stalemate over US fiscal policy that shut the government for 16 days "encouraged our enemies" and slowed economic growth.
Fed Bank of Chicago President Charles Evans said on Thursday, 17 October 2013, that the central bank should postpone tapering after the shutdown stopped the flow of economic reports used to gauge growth. Minneapolis Fed President Narayana Kocherlakota said policy makers should signal they are prepared to do "whatever it takes," including providing more stimulus, to reduce the jobless rate from August's 7.3%. Fed Bank of Kansas City President Esther George, who has voted this year against expanding stimulus, said that the Fed has enough data to assess the economy's strength and should start tapering even amid fiscal "uncertainty." Evans and George both hold voting positions on the central bank's policy committee this year. Kocherlakota votes in 2014.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. 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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