Key benchmark indices saw divergent trend in a volatile session of trade. While the barometer index, the S&P BSE Sensex, registered small losses, the CNX Nifty settled a tad higher. Both these key benchmark indices registered intraday recovery on the back of gains in rupee against the dollar. The Sensex provisionally settled below the psychological 20,000 level, having alaternately moved above and below that mark in intraday trade. The Sensex was provisionally down 38.70 points or 0.19%, up 180.76 points from the day's low and off 97.14 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Shares of state-run bank stocks edged higher. PSU OMCs rose as US crude oil futures fell on Tuesday, 10 September 2013.
Key benchmark indices edged lower in early trade to profit booking after Tuesday's rally. A bout of volatility was witnessed as the key benchmark indices slipped into the red again after reversing initial losses in morning trade. The Sensex alternately moved above and below the psychological 20,000 level in intraday trade. Key benchmark indices extended losses in mid-morning trade. Key benchmark indices cut intraday losses in early afternoon trade. A bout of volatility was witnessed as key benchmark hit fresh intraday low in afternoon trade. Volatility continued as key benchmark indices trimmed intraday losses as the rupee surged against the dollar. The Sensex once again slipped into the red after reversing intraday losses in late trade.
Foreign institutional investors (FIIs) bought shares worth a massive Rs 2563.60 crore on Tuesday, 10 September 2013, as per provisional data from the stock exchanges. The Sensex had jumped 3.77% on Tuesday after the latest data showed that India's trade deficit, the key driver of the country's large current-account deficit, narrowed to five-month low in August 2013.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 63.55, stronger than its close of 63.84/85 on Tuesday, 10 September 2013.
As per provisional closing, the S&P BSE Sensex was down 38.70 points or 0.19% to 19,958.39. The index lost 219.46 points at the day's low of 19,777.63 in afternoon trade. The index rose 55.76 points at the day's high of 20,055.53 in morning trade, its highest level since 25 July 2013.
The CNX Nifty was up 6.90 points or 0.12% to 5,903.65. The index hit a low of 5,832.70 in intraday trade. The index hit a high of 5,924.35 in intraday trade, its highest level since 26 July 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,421 shares gained and 938 shares fell. A total of 152 shares were unchanged.
The total turnover on BSE amounted to Rs 2367 crore, higher than Rs 2267 crore on Tuesday, 10 September 2013.
Among the 30-share Sensex pack, 16 stocks declined and rest of them gained. Tata Steel (up 4.27%), Tata Power Company (up 4.01%) and Sun Pharmaceutical Industries (up 2.62%), edged higher from the Sensex pack.
State-run bank stocks surged. SBI (up 3.65%), Punjab National Bank (up 6.72%), Canara Bank (up 6.73%), Bank of India (up 10.5%) and Bank of Baroda (up 8.18%) gained.
The Reserve Bank of India (RBI) on Tuesday said that banks can raise funds overseas above 50% of their Tier I capital with a minimum maturity of three years and swap these borrowings with the central bank at a concessional rate for one to three years. "The swaps shall be available at a concessional rate of a 100 basis points below the market rate for all fresh borrowing with a minimum tenor of one year and a maximum tenor of three years, irrespective of whether such borrowings are in excess of 50% of their unimpaired Tier I capital or not," the RBI said.
RBI said despite the swaps being for the entire tenor of the borrowing, the rate shall be reset after every one year from the date of the swap at 100 basis points lower than the prevailing market rate, at the time of reset. The RBI added that banks are free to borrow in any foreign currency but the swaps will be available only for conversion of the US dollar equivalent into rupees and will be computed at relevant cross rates on that day.
Shares of companies owned by foreign promoters extended Tuesday's rally triggered by the Reserve Bank of India (RBI) making it easier for them to raise their stake in their listed Indian subsidiaries. ABB India rose 3.35% to Rs 578.75. The stock was volatile. The scrip hit high of Rs 594.90 and low of Rs 540.10.
Siemens jumped 8.18% to Rs 513.75. The stock was volatile. The stock hit high of Rs 568 and low of Rs 466.
However, there is no scope for the overseas parents of both ABB and Siemens to raise stake in these two firms. This because their overseas parent holds 75% stake in these firms. As per the minimum public shareholding rule, a minimum 25% public shareholding has to be maintained in private companies which are listed on the bourses.
Bharat Heavy Electricals (Bhel) fell 2.03% to Rs 139.70, with the stock declining on profit booking after recent strong gains. Shares of Bhel had rallied 19.43% in prior four sessions to settle at Rs 142.60 on 10 September 2013, from a recent low of Rs 119.40 on 3 September 2013.
Jaiprakash Associates surged 5.51%. The company during market hours today, 11 September 2013, said that the Jaypee Group is committed to unlock and enhance shareholders' value through various options, including reduction of debt and, if required, by sale of some of the undertakings of the company or any of its subsidiaries. This is a continuous exercise and all out efforts are being made to achieve the said objective, Jaiprakash Associates. The company issued this clarification in reaction to media reports that Jaiprakash Associates is in talks to sell its Gujarat cement unit to UltraTech Cement.
Shares of UltraTech Cement rose 1.17% to Rs 1,725.
PSU OMCs rose as US crude oil futures fell on Tuesday, 10 September 2013. BPCL (up 4.29%), Indian Oil Corporation (up 2.71%) and HPCL (up 3.9%) edged higher.
US crude oil futures for October 2013 delivery were up 51 cents a barrel at $107.90 a barrel in the electronic trading today, 11 September 2013. The contract had fallen $2.13 a barrel or 1.94% to settle at $107.39 a barrel on the New York Mercantile Exchange on Tuesday, 10 September 2013, its lowest closing level since 4 September 2013.
PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at government 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.
Meanwhile, gains in rupee against the dollar have also eased concerns about increased costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Auto stocks were mixed. Tata Motors lost 2.35% to Rs 341. The stock had jumped 9.89% to settle at Rs 349.20 after striking a record high of Rs 352 in intraday trade on Tuesday, 10 September 2013. The company's unit Jaguar Land Rover (JLR) on Tuesday, 10 September 2013, reported 28% rise in sales to 27,852 vehicles in August 2013 over August 2012.
Maruti Suzuki India gained 0.91%. The company said during market hours on 6 September 2013 that its production jumped 62.63% to 91,261 units in August 2013 over August 2012. The company said on 2 September 2013 that its total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) rose 1.86%. The company after market hours on Tuesday, 10 September 2013, said that it has crossed yet another milestone with over 4 lakh sales of its special utility vehicle (SUV), Scorpio.
Speaking on the milestone, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra, said: "This is a very proud moment for us, as the iconic and trend-setting Scorpio has achieved yet another milestone. This achievement reaffirms the Scorpio's immense popularity and the confidence that consumers have reposed in it over the years. Being one of the most admired and most awarded brands within the Indian automobile industry, the Scorpio has rightfully claimed its spot as the king of Indian roads".
Cipla shed 1.09% to Rs 435.50. The stock had hit a record high of Rs 446.50 in intraday trade on Tuesday, 10 September 2013.
Most European stocks edged lower on Wednesday, 11 September 2013, with investors taking a breather after a solid rally the prior day and digesting the latest developments in the Syria conflict. Key benchmark indices in France and UK shed by 0.09% to 0.11%. Germany's DAX rose 0.38%.
The unemployment rate in the UK fell to 7.7% in the period from May to July, down from a level of 7.8% in the months from February to April, the Office for National Statistics said on Wednesday. The UK unemployment rate has been closely watched by investors recently after Bank of England Governor Mark Carney said the central bank will consider raising interest rates when unemployment drops below 7%.
Asian stock markets were mixed on Wednesday, 11 September 2013. Key benchmark indices in China, Japan and South Korea were up 0.01% to 0.49%. Key benchmark indices in Hong Kong, Indonesia and Singapore were off 0.17% to 0.5%.Taiwan's Taiwan Weighted index was unchanged for the day.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 11 September 2013. US stocks rallied on Tuesday, 10 September 2013, with the S&P 500 continuing its longest stretch of gains since mid-July, after upbeat data from China and amid heightened diplomacy on Syria.
US President Barack Obama called for diplomacy in dealing with chemical weapons in Syria but kept open the possibility of military action against the Assad regime. Obama late Tuesday said he was sending US Secretary of State John Kerry to Geneva to meet Russian Foreign Minister Sergey Lavrov to work out details of a plan to have Syria, led by President Bashar al-Assad, give its chemical weapons stockpile to the international community. Obama had called for potential strikes against Syria in retaliation for Syria's use of chemical weapons against civilians in late August. But with a diplomatic solution on the table, Obama asked Congress to delay a vote on whether to authorize military strikes.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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