Key benchmark indices scored strong gains led by index heavyweights HDFC and Infosys. The barometer index, the S&P BSE Sensex, surged 550.92 points or 1.63% to settle at 34,442.05. The Nifty 50 index gained 188.20 points or 1.85% to settle at 10,386.60. Today's market rally was triggered after the government clarified on tussle with the Reserve Bank of India and said that it respects and nurtures central bank's autonomy. Positive global cues also boosted sentiment. Positive global cues also boosted sentiment.
The Sensex surged 550.92 points or 1.63% to settle at 34,442.05. The index hit high of 34,463.38 and low of 33,587.24 in intraday trade.
The Nifty 50 index gained 188.20 points or 1.85% to settle at 10,386.60. The index hit high of 10,396 and low of 10,105.10 in intraday trade.
Among secondary barometers, the BSE Mid-Cap index rose 1.56%. The BSE Small-Cap index rose 1.38%.
Among the sectoral indices on BSE, the S&P BSE IT index (up 3.53%), the S&P BSE Teck index (up 3.18%), the S&P BSE Consumer Durables index (up 2.32%) outperformed the Sensex. The S&P BSE Metal index (down 1.4%), the S&P BSE Power index (up 0.69%), the S&P BSE Realty index (up 0.83%) underperformed the Sensex.
IndusInd Bank (up 4.47%), Axis Bank (up 3.43%) and Yes Bank (up 3.3%) edged higher from the Sensex pack.
Tata Steel lost 2.25%. The steel major's joint venture with Thyssenkrupp AG to set up a European steel company with equal shares of ownership reportedly face an in-depth European Union probe over concerns that the deal could reduce competition in the supply of various high-end steels.
Tata Steel clarified today, 31 October 2018, that it will continue discussions with the European Commission on proposed joint venture with Thyssenkrupp.
IT stocks rose as the rupee weakened against the dollar. MindTree (up 8.43%), Hexaware Technologies (up 2.94%), MphasiS (up 3.29%), Infosys (up 4.02%), HCL Technologies (up 4.6%), Persistent Systems (up 1.85%), Wipro (up 0.99%), Oracle Financial Services Software (up 3.12%) and TCS (up 2.23%) edged higher.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. The partially convertible rupee was hovering at 73.9450, compared with its close of 73.68 during the previous trading session.
Tech Mahindra surged 8.85% after consolidated profit after tax rose 18.5% to Rs 1064 crore on 4.3% rise in revenue to Rs 8630 crore in Q2 September 2018 over Q1 June 2018. The result was announced after market hours yesterday, 30 October 2018.
Consolidated earnings before interest, taxes, depreciation and amortization (EBITDA) rose 19.3% to Rs 1619 crore in Q2 September 2018 over Q1 June 2018. The board of directors of Tech Mahindra considered and approved the proposal for merger by absorption of Tech Mahindra Growth Factories (TMGFL), a wholly owned subsidiary company with Tech Mahindra. The business of TMGFL was to create certain new business avenues including education and training services for corporate/working professionals & students.
C P Gurnani, Managing Director & Chief Executive Officer, Tech Mahindra said that barring declines in implementation business in healthcare vertical, the company has clocked a good quarter in terms of both revenue growth and EBIDTA margin improvement.
Coal India lost 3.53% to Rs 266.15. The President of India, acting through and represented by the Ministry of Coal, Government of India announced an offer for sale (OFS) up to 18.62 crore (3%) equity shares of Coal India on 31 October 2018 (for non-Retail Investors only) and on 1 November 2018 (for Retail Investors and non-Retail Investors who choose to carry forward their unallotted bids) with an option to additionally sell 37.24 crore (6%) equity shares of the company. The announcement was made after market hours yesterday, 30 October 2018.
The shares will be sold through a separate, designated window of the BSE and the National Stock Exchange of India, collectively representing 9% of the total paid up equity share capital of the company on 30 October 2018. The floor price for the OFS shall be Rs 266 per share.
Dr Reddy's Laboratories fell 2.19%. The company said that the audit of formulations manufacturing facility at Duvvada, Visakhapatnam, by the USFDA, has been completed. The company received Form-483 with eight observations which it is addressing, Dr. Reddy's Laboratories said. The announcement was made after market hours yesterday, 30 October 2018.
Separately, Dr. Reddy's Laboratories announced during trading hours today, 31 October 2018, the launch of Atomoxetine Capsules, USP, a therapeutic equivalent generic version of Strattera (atomoxetine) Capsules in the United States market approved by the US Food and Drug Administration (USFDA). The Strattera brand and generic had US sales of approximately $304 million MAT for the most recent twelve months ending in August 2018 according to IMS Health. Dr. Reddy's Atomoxetine Capsules, USP is available in 10 mg, 18 mg, 25 mg, 40 mg, 60 mg, 80 mg, 100 mg with 30 counts bottle size. Straterra is a registered trademark of Eli Lilly and Company.
Housing finance stocks rallied after PNB Housing Finance announced raising Rs 2450 crore through commercial papers. Dewan Housing Finance Corporation (up 8.49%), Indiabulls Housing Finance (up 8.48%), HDFC (up 5.78%), GRUH Finance (up 3.96%), Can Fin Homes (up 3.64%), GIC Housing Finance (up 3.1%) and LIC Housing Finance (up 0.89%) edged higher.
PNB Housing Finance jumped 9.75%. The company announced during trading hours today, 31 October 2018, that it has successfully raised Rs 2450 crore through Commercial Papers (CP). This is in addition to Rs 1,775 crore raised earlier in October totalling to Rs 4,225 crore of CPs raised in October 2018. The CPs were placed with various mutual funds and banks.
Pidilite Industries rose 1.99%. On a consolidated basis, Pidilite Industries' net profit fell 8.6% to Rs 231.18 crore on 14.09% rise in total income to Rs 1785.07 crore in Q2 September 2018 over Q2 September 2017. The announcement was made after market hours yesterday, 30 October 2018.
Garden Reach Shipbuilders & Engineers gained 7.96%. The company has entered into a contract with the Government of India, Ministry of Defence, for construction and delivery of four Nos. Survey Vessels (Large) at an estimated cost of Rs 2435.15 crore, under fixed price basis. The 1st ship is to be delivered within 36 months from the contract signing date i.e. 30 October 2018. The subsequent ships are to be delivered with a gap of 6 months each from the delivery of the previous ship. The project is expected to be completed within 54 months from the date of signing of the contract. The announcement was made after market hours yesterday, 30 October 2018.
Meanwhile, the government reportedly invoked never-before-used powers under the RBI Act allowing it to issue directions to the central bank governor on matters of public interest.
Media reports suggested that Section 7 of the RBI Act empowers the government to consult and give instructions to the governor to act on certain issues that the government considers serious and in public interest. This Section had never been used in independent India till now, reports added.
The Ministry of Finance issued a clarification today, 31 October 2018, which said that the autonomy for the central bank, within the framework of the RBI Act, is an essential and accepted governance requirement. Governments in India have nurtured and respected this. Both the Government and the central bank, in their functioning, have to be guided by public interest and the requirements of the Indian economy. For the purpose, extensive consultations on several issues take place between the government and the RBI from time to time. This is equally true of all other regulators. Government of India has never made public the subject matter of those consultations. Only the final decisions taken are communicated. The Government, through these consultations, places its assessment on issues and suggests possible solutions. The Government will continue to do so, it added.
India's finance minister Arun Jaitley criticised the Reserve Bank of India (RBI) for failing to prevent lending excess in a speech on Tuesday, 30 October 2018. The central bank looked the other way when banks gave loans indiscriminately during 2008 to 2014, Jaitley reportedly said while speaking at an event in New Delhi. According to media reports, tensions between the finance ministry and the RBI have risen since the bank's deputy governor said in a speech on Friday that undermining a central bank's independence could be "potentially catastrophic", in an indication that it is pushing back hard against government pressure to relax its policies and reduce its powers.
Overseas, stocks in Europe rallied on Wednesday as investors took note of a rebound on Wall Street and digested further corporate earnings.
Most stocks in Asia rose on Wednesday. Chinese official manufacturing Purchasing Managers' Index (PMI) was 50.2. The official manufacturing PMI had been 50.8 in September. China's official non-manufacturing purchasing managers index dropped to 53.9 from September's 54.9, the National Bureau of Statistics said on Wednesday. A reading above 50 indicates expansion, while a reading below that signals contraction.
US stocks closed higher Tuesday as President Donald Trump signaled that the US is ready to reach a deal to ease trade tensions with China, giving the market some much-needed relief. Markets were also digesting a raft of quarterly corporate results with several big-name companies set to report earnings this week.
On the US data front, home-price gains are slowing, as the Case-Shiller 10-city composite index showed a 0.6% increase from last month's reading, or a 5.5% annual increase. The 20-city composite index rose a seasonally adjusted 0.1% and was 5.5% higher compared to its level a year ago, the lowest annual increase in nearly two years.
Consumer sentiment hit an 18-year high, according to the Conference Board's consumer confidence index, which rose to 137.9, from 135.3 in September.
The residential vacancy rate fell 0.4% points from a year earlier to 7.1%, according to the Census Bureau report, which also showed that the US homeownership rate was virtually unchanged at 64.4%.
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