Key benchmark indices edged higher after the Reserve Bank of India's (RBI) surprise announcement on Monday evening to improve liquidity conditions in the banking system. But, the market gave away a lion's part of the initial strong gains. The barometer index, the S&P BSE Sensex, settled below the psychological 20,000 mark, having alternately moved above and below that level in intraday trade. The Sensex and the 50-unit CNX Nifty, both, reached their highest closing level in 2-1/2 weeks. The Sensex garnered 88.51 points or 0.44%, off close to 170 points from the day's high and up about 40 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
The Sensex has gained 603.84 points or 3.11% in this month so far (till 8 October 2013). The Sensex has gained 556.90 points or 2.86% in calendar 2013 so far (till 8 October 2013). From a 52-week high of 20,739.69 on 19 September 2013, the Sensex has declined 756.08 points or 3.64%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 2,534.90 points or 14.52%.
Coming back to today's trade, many bank stocks reversed initial gains triggered by the RBI's surprise announcement on Monday evening to cut the rate at which it lends emergency funds to banks by half a percentage point. Index heavyweight and cigarette major ITC edged higher. Tata Power Company rose after its wholly owned subsidiary -- Tata Power Renewable Energy (TPREL) -- signed a share purchase agreement (SPA) for acquisition of 100% shareholding in AES Saurashtra Windfarms (ASW) -- a 100% subsidiary of AES Corporation.
Shares of infrastructure companies and construction firms rose on renewed buying. L&T edged higher after the company said it has won orders worth Rs 1605 crore across various business segments. Shares of textiles firms and readymade garments makers rose.
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 8.4957%, 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 alternately notched gains and suffered losses against the dollar during the day. The partially convertible rupee was hovering at 61.8050, a tad lower than its close of 61.79/80 on Monday, 7 October 2013.
The S&P BSE Sensex advanced 88.51 points or 0.44% to settle at 19,983.61, its highest closing level since 20 September 2013. The index jumped 255.17 points at the day's high of 20,150.27 in morning trade. The index rose 41.62 points at the day's low of 19,936.72 in afternoon trade.
The CNX Nifty rose 22.25 points or 0.38% to 5,928.40, its highest closing level since 20 September 2013. The index hit a high of 5,981.70 and a low of 5,913 in intraday trade.
The BSE Mid-Cap index rose 0.19% and underperformed the Sensex. The BSE Small-Cap index gained 0.53% and outperformed the Sensex.
The BSE Realty index (up 1.57%), BSE Capital Goods index (up 1.32%), BSE FMCG index (up 0.78%), BSE Power index (up 0.76%), BSE Bankex (up 0.67%), and BSE Consumer Durables index (up 0.63%), outperformed the Sensex.
The BSE Metal index (down 0.8%), BSE IT index (down 0.25%), BSE PSU index (down 0.06%), BSE Oil & Gas index (up 0.01%), BSE Auto index (up 0.11%), BSE Teck index (up 0.14%), and BSE HealthCare index (up 0.19%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 1795 crore, lower than Rs 1859 crore on Monday, 7 October 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,276 shares gained and 1,141 shares fell. A total of 147 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained.
Coal India fell 1.18%, with the stock extending Monday's losses triggered by reports that the company's 5% follow-on public offer (FPO) is likely to hit the market by the second week of December. The government, which currently holds a 90% stake in Coal India, intends to sell more than 31.5 crore shares through an offer for sale or OFS through the stock exchanges. Shares will be allotted to Coal India employees at a 5% discount to the lowest cut-off price. A maximum of 10% of the offer will be kept for employees, reports said.
Most auto stocks edged lower in choppy trade. M&M fell 0.3%. Maruti Suzuki India dropped 0.27%.
Tata Motors rose 0.78% to Rs 350.65. The stock came off the day's high of Rs 359.30. Jaguar Land Rover (JLR) UK announced on 4 October 2013 record sales in September with retail figures rising 13% year-to-date over the same period last year. Land Rover had its best ever September month of sales, registering an 11% rise in sales to 10,769 vehicles. The bookends of the brand drove the impressive figures with a record September for the Land Rover Defender, with its sales rising 30% compared to the same period last year and continued strong sales of Land Rover's flagship vehicle -- the all new Range Rover, with its sales rising 24% compared to the same period last year.
Shares of two wheeler makers declined. Bajaj Auto (down 0.52%) and Hero MotoCorp (down 0.85%), dropped.
IT stocks were mixed. Infosys rose 0.43%. Infosys announces its Q2 results on Friday, 11 October 2013.
Wipro gained 0.21%. 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.
TCS fell 0.2% to Rs 2,063.35. The stock reversed direction after hitting record high of Rs 2,098 in intraday trade.
HCL Technologies dropped 0.93% to Rs 1,106.50. The stock had hit record high of Rs 1,129 in intraday trade on Monday, 7 October 2013.
Telecom stocks rose on renewed buying. Bharti Airtel (up 2.77%) and Reliance Communications (up 2.59%) edged higher.
Idea Cellular jumped 5.16% to Rs 182.45 after hitting a record high of Rs 182.90 in intraday trade.
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. HDIL (up 3.46%), Unitech (up 2.76%), Godrej Properties (up 2.83%), and D B Realty (up 8.33%), gained. Sobha Developers shed 1.06%.
DLF gained 0.76% 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.
Many bank stocks reversed initial gains triggered by the RBI's surprise announcement on Monday evening to cut the rate at which it lends emergency funds to banks by half a percentage point. Among private sector bank stocks, HDFC Bank (down 0.47%) and Axis Bank (down 0.73%) declined. Yes Bank (up 3.61%), Kotak Mahindra Bank (up 0.98%) and ICICI Bank (up 1.96%) edged higher.
Among PSU bank stocks, Punjab National Bank (down 0.36%), Bank of India (down 0.96%) and Union Bank of India (down 0.22%) declined. Bank of Baroda rose 0.07%.
State Bank of India lost 1.83% to Rs 1,602.95. The stock was volatile. The scrip hit high of Rs 1,680 and low of Rs 1,601.95. The bank after market hours on Monday, 7 October 2013, announced the appointment of Arundhati Bhattacharya, Managing Director, State Bank of India as the Chairman of the bank for a period of three years from the date of her taking over the charge of the post i.e. 7 October 2013, or until further orders, whichever is earlier. Bhattacharya has become the first woman to lead the country's biggest commercial bank in terms of branch network.
Index heavyweight and cigarette major ITC gained 2.32% to Rs 347.80. The stock hit a high of Rs 348.40 and low of Rs 340.
Shares of infrastructure companies and construction firms rose on renewed buying. GVK Power and Infrastructure, Lanco Infratech, Punj Lloyd, NCC, GMR Infrastructure, Hindustan Construction Company and Pratibha Industries rose 1.34% to 17.7%.
L&T advanced 2.38% 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.
IVRCL jumped 9.92% after the company announced that its water division has bagged orders worth Rs 1423.31 crore. The announcement was made during trading hours today, 8 October 2013.
NTPC rose 1.27% after the company said during market hours that the Unit-VI of 500 megawatts (MW) of Rihand Super Thermal Power Project has been commissioned on 7 October 2013. With this the total installed capacity of Rihand Super Thermal Power Project has become 3,000 MW and the total installed capacity of NTPC group has become 41,684 MW.
Tata Power Company rose 2.87%. The company during market hours today, 8 October 2013, said that its wholly owned subsidiary -- Tata Power Renewable Energy (TPREL) -- has today signed a share purchase agreement (SPA) for acquisition of 100% shareholding in AES Saurashtra Windfarms (ASW) -- a 100% subsidiary of AES Corporation. ASW owns and operates a 39.2 megawatts (MW) wind farm near Dwarka in Jamnagar district of Gujarat. The project which is fully operational since January 2012 has executed a power purchase agreement with Gujarat Urja Vikas Nigam (GUVNL) for sale of the electricity at a tariff of Rs 3.56/kWh for the duration of the project. The project is registered with United Nations Framework Convention on Climate Change (UNFCCC) as a CDM project and is eligible to receive CERs. The project is also registered under the Generation Based Incentive scheme of MNRE.
TPREL was selected as the preferred bidder in a process conducted by AES Corporation for sale of its 100% stake in ASW. The acquisition is subject to certain conditions, which are expected to be addressed in a few months time, Tata Power said in a statement.
With this acquisition, Tata Power's total generation capacity will increase to 8,560 MW and its Wind Operational Generation capacity to 437 MW with wind turbine generators (WTGs) located across five states viz. Maharashtra, Rajasthan, Gujarat, Tamil Nadu and Karnataka, which are the leading states in promoting wind power generation in India.
Speaking on achieving this milestone, Mr. Anil Sardana, Managing Director, Tata Power, said: "Tata Power is committed to generating 20-25% of its total generation capacity from clean energy sources and is proud to have signed this SPA to acquire 39.2 MW operational wind farm. The project is a clean energy project, which will enhance and increase the company's clean energy footprint. This is our second acquisition of an operating wind asset and we are in constant look out for similar opportunities in respect of wind and solar plants. This is yet another step towards the company's commitment to sustainability."
Motherson Sumi Systems gained 2.81% to Rs 247.25 after hitting a record high of Rs 250.90 in intraday trade
Britannia Industries gained 2.02% to Rs 863.60 after hitting a record high of Rs 873.25 in intraday trade.
Godrej Consumer Products (GCPL) lost 4.25%. The company said after market hours on Monday, 7 October 2013, it has entered into an agreement to acquire a 30% stake in Bhabani Blunt Hair Dressing (B:blunt). B:blunt is a premier hair salon company with one of the strongest consumer franchises in this space. Since launching the chain in 2005, Adhuna Bhabani Akhtar and Osh Bhabani have grown the brand across India. B: blunt, today has a pan-India presence with 17 outlets and 4 academies, GCPL said.
Tyre shares were in demand. Goodyear India (up 7.42%), CEAT (up 2.24%), JK Tyre & Industries (up 2.62%) and MRF (up 1.05%) edged higher.
Apollo Tyres rose 1.07%, with the stock extending Monday's gains triggered by growing uncertainty about the company's $2.5 billion deal to buy US-based Cooper Tire & Rubber Company. Cooper Tire & Rubber Company (Cooper) on Friday, 4 October 2013, said that it filed a complaint in a US court asking that subsidiaries of Apollo Tyres be required to expeditiously close the pending merger between the two tyre companies in accordance with the terms of the definitive merger agreement.
Apollo said in a statement late on Sunday that it may have to bear "significant and unanticipated costs" that were "well beyond" those it was obligated to bear under the initial merger agreement. Those costs are related to labour issues both in the United States and in China, where workers at Cooper's joint venture have been on strike for three months in opposition to the deal. "Cooper has acknowledged to Apollo that some price reduction is warranted. The issue now is by how much," Apollo said in a statement late on Sunday. Cooper disputed that. "Cooper has not agreed that a reduction in share price is warranted," it said in a statement.
On 30 September 2013, Cooper's stockholders voted to approve its pending merger with a wholly-owned subsidiary of Apollo Tyres. When finalised, the pending merger will result in a strategic business combination that creates the seventh-largest tire company in the world.
Cooper and Apollo announced the proposed merger on 12 June 2013 following unanimous approval by the boards of directors of both companies.
Shares of textiles firms and readymade garments makers rose. Arvind (up 5.59%), Raymond (up 0.84%), Kewal Kiran Clothing (up 4.68%), Gokaldas Exports (up 3.43%), Century Textiles & Industries (up 1.74%), Garden Silk Mills (up 17.15%) and Aarvee Denims & Exports (up 9.15%) gained.
Bombay Dyeing & Manufacturing Company gained 3.83%, with the stock extending Monday's rally. The stock had jumped 12.46% on Monday, 7 October 2013, after a media report said that three global private equity firms are in talks to jointly acquire up to 24% stake in Bombay Dyeing & Manufacturing Company. Bombay Dyeing & Manufacturing Company during market hours on Monday, 7 October 2013, in clarification to media report said that it has no comments to offer on the newspaper report which is totally baseless, speculative and unsubstantiated.
Titan Industries rose 0.42% to Rs 240 after a bulk deal of 7.50 lakh shares was executed on the counter at Rs 240.50 per share at 09:30 IST on BSE today, 8 October 2013.
European stocks dropped on Tuesday, 8 October 2013, as the US government shutdown moved into Day 8. Key benchmark indices in Germany, France and UK shed by 0.2% to 0.8%.
The Bank of France Tuesday trimmed its growth forecast for the third quarter of this year after business sentiment indicators remained unchanged in September from August. French gross domestic product will rise 0.1% in the third quarter from the second, the Bank of France said, according to its monthly index of business activity. Last month, the central bank had forecast a 0.2% expansion in GDP.
The Bank of France's business sentiment indicator in manufacturing was unchanged in September from August at 97, slightly below the long-term average of 100. The indicator for services was also unchanged at 93.
German exports rose in August amid signs the economic recovery is continuing in the euro area, the country's biggest trading partner. Exports, adjusted for working days and seasonal changes, increased 1% from July, when they decreased a revised 0.8%, the Federal Statistics Office in Wiesbaden said today.
UK factories saw domestic and export demand strengthen in the third quarter and expect to accelerate hiring in the next three months, according to the British Chamber of Commerce (BCC). Measures of manufacturers' export sales and orders rose to the highest since the fourth quarter of 2010, the BCC said in a report published in London today. An index of domestic sales in the quarter increased, while companies' employment expectations advanced to a record.
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, South Korea, Taiwan, Hong Kong, Japan, Singapore and Indonesia rose by 0.3% to 1.32%.
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 US 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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