Key benchmark indices retained positive zone in early afternoon trade. Mostly higher Asians stocks supported domestic bourses. The S&P BSE Sensex was up 44.14 points or 0.22%, up close to 70 points from the day's low and off about 50 points from the day's high. The market breadth, indicating the overall health of the market, was positive. IT stocks were mixed. Wipro extended Tuesday's surge. Index heavyweight Reliance Industries (RIL) extended intraday gain. Port operators were in the red.
Investors refrained from building large positions ahead of the outcome of the two-day meeting of the Federal Open Market Committee which concludes today, 18 September 2013, and also ahead of the mid-quarter monetary policy review by the Reserve Bank of India (RBI) later this week.
The market edged higher amid initial volatility. Key benchmark indices pared initial gains and swung alternately between gains and losses near the flat line in morning trade. The market hovered in green in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 318.05 crore on Tuesday, 17 September 2013, as per provisional data from the stock exchanges.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.17, stronger than its close of 63.37/38 on Tuesday, 17 September 2013.
At 12:20 IST, the S&P BSE Sensex was up 44.14 points or 0.22% to 19,848.17. The index rose 96.65 points at the day's high of 19,900.68 in early trade, its highest level since 16 September 2013. The index fell 28.74 points at the day's low of 19,775.29 in morning trade.
The CNX Nifty was up 7 points or 0.12% to 5,857.20. The index hit a high of 5,877.90 in intraday trade, its highest level since 16 September 2013. The index hit a low of 5,840.20 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,053 shares rose and 953 shares fell. A total of 147 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks rose and rest of them fell. Tata Power Company (up 2.45%), Dr Reddy's Laboratories (up 2.03%) and Hindustan Unilever (up 1.91%), edged higher.
Index heavyweight Reliance Industries (RIL) rose 1.1%, with the stock extending intraday gain.
IT stocks were mixed. TCS rose 0.26%. Infosys fell 0.21%.
Wipro rose 1.61%, with the stock extending Tuesday's 5.41% surge. Wipro becomes a part of the 50-unit CNX Nifty with effect from 27 September 2013. The IT major replaces Reliance Infrastructure in Nifty.
HCL Technologies fell 0.27%. HCL Infosystems dropped 0.55%. HCL Technologies and HCL Infosystems on Monday, 16 September 2013, clarified that no proposal to merge HCL Infosystems or its systems integration and services business with HCL Technologies is under consideration. The two companies issued the clarification after media reports suggested that HCL Infosystems is working towards the goal of merging its system integration and services business with HCL Technologies. HCL Tech and HCL Infosystems have been teaming on specific opportunities in India and for this purpose the two companies have been cross selling each other's services over the last 2 years, HCL Tech said after trading hours on Monday, 16 September 2013. HCL Tech said that the company derived about 5% of its revenue from India during FY 2013. It is expected that the revenue from India during FY 2014 would remain at similar level, the company said. The arrangement with HCL Infosystems did not have any impact on the margins in the past and it is not expected to have any impact on the margins going forward, HCL Technologies said. HCL Technologies is a software firm.
HCL Infosystems also said that HCL Infosystems and HCL Technologies have been collaborating together under teaming agreements to address business opportunities in India. These agreements are on arms length basis in the best interest of HCL and its customers and not margin dilutive to HCL Infosystems, the company said.
A bulk of HCL Infosystems' revenues comes from selling computing hardware to government and by acting as a national distributor for mobile phones, computers, laptops and printers.
IDFC rose 0.97% to Rs 93.55 after its unit IDFC Alternatives on Tuesday, 17 September 2013, said it has received commitments for $644 million from investors for an India-focused infrastructure fund. IDFC's contribution to the fund, India Infrastructure Fund II, is $64 million. The balance is from investors in North America, Europe and the UK. IDFC Alternatives manages about $2.8 billion of assets. It invests mainly across three asset classes -- infrastructure, private equity and real estate.
GMR Infrastructure rose 2.02%, with the stock extending Tuesday's gain. The company said during market hours on Tuesday, 17 September 2013, that GMR Highways has signed a definitive agreement with India Infrastructure Fund (IIF) to divest 74% stake in GMR Ulundurpet Expressways (GUEL). The transaction is subject to closing conditions customary to such transactions, the company said. IIF emerged as successful bidder in buying majority stake in GUEL, which attracted strong interest from several major investors from India and abroad. This is a second major divestment in GMR's roads portfolio in less than 6 months, GMR Infrastructure said.
GUEL operates the highway stretch of about 73 km, from Tindivanam to Ulundurpet on National Highway 45 in the state of Tamil Nadu. The project commenced commercial operations in July 2009. GMR Group will receive a consideration of about Rs 222 crore for the sale of 74% equity stake.
Private sector bank Yes Bank rose 1.89%, with the stock extending Tuesday's gain. The bank on Tuesday, 17 September 2013, said it has successfully closed equivalent to $255 million by way of dual currency, multi-tenor syndicated loan facility which will be utilized for general corporate purposes and trade finance. The facility has a maturity of 1 and 2 years with majority commitments coming in the 2 year tenure bucket. The loan has been widely distributed with commitments from 11 banks representing 8 countries across US, Europe, Middle East and Australia, Yes Bank said.
The recent RBI guidelines on offering swap facility to banks for the foreign currency borrowings at 100 basis points below the market rate will further make the landed rupee cost of these funds extremely competitive vis-vis rupee funds of equivalent maturity, Yes Bank said.
Port operators were in the red. Essar Ports and Gujarat Pipavav Port shed by 3.02% to 6.1%. Adani Ports & Special Economic Zone rose 0.83%.
Foreign direct investment inflows into India rose an annual 12.9% to $1.66 billion in July 2013, the government said in statement released late on Tuesday, the highest monthly inflow for three months.
Meanwhile, the Reserve Bank of India (RBI) reportedly cracked down on offshore foreign exchange trading by Indians through online trading websites, asking banks to report any such remittances to the regulator. In a circular issued late on Tuesday, the Reserve Bank of India (RBI) asked banks to advise customers not to undertake forex trading on foreign websites that offer currency contracts by accepting margins through credit card and online money transfer mechanisms. The RBI also asked banks to close the credit card or online bank account of a customer that is found to be in violation of the rule.
At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.
Most Asian stocks rose on Wednesday, 18 September 2013, before the Federal Reserve decides later today whether to slow its $85 billion of monthly asset purchases. Key benchmark indices in China, Hong Kong, Japan and Singapore rose by 0.05% to 1.35%. Key benchmark indices in Taiwan and Indoensia shed by 0.49% to 0.66%. South Korean stock market was closed for a holiday.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 18 September 2013. US stocks rose slightly on Tuesday on expectations the Federal Reserve will make a modest cut in its stimulative bond buying and keep interest rates extraordinarily low. A report in the US on Tuesday showed the cost of living rose less than forecast in August, with the consumer-price index increasing 0.1%, the least in three months.
Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States ends today, 18 September 2013. 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. Investors are also eyeing Fed's forward guidance on policy.
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