The uptrend on the bourses continued as key benchmark indices hit fresh intraday high in mid-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 335.23 points or 1.64%, up 263.96 points from the day's low and off 0.25 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 edged higher against the dollar.
Index heavyweight Reliance Industries (RIL) extended intraday gain. Bank stocks gained across the board. Axis Bank rose in volatile trade, with the stock extending Thursday's gain triggered by the bank's good Q2 results. Aviation stocks rose after crude oil prices eased and rupee strengthened against the dollar.
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 uptrend on the bourses continued as key benchmark indices hit fresh intraday high in mid-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 11:20 IST, the S&P BSE Sensex was up 335.23 points or 1.64% to 20,750.74. The index jumped 335.48 points at the day's high of 20,750.99 in mid-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 102.15 points or 1.69% to 6,148. The index hit a high of 6,152.30 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, 1,220 shares gained and 740 shares fell. A total of 132 shares were unchanged.
The total turnover on BSE amounted to Rs 636 crore by 11:20 IST compared to Rs 389 crore by 10:20 IST.
Index heavyweight Reliance Industries (RIL) rose 1.89% to Rs 895.90, with the stock extending intraday gains. The stock hit high of Rs 896.80 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.
Bank stocks gained across the board. Among private bank stocks, ICICI Bank (up 2.85%), Kotak Mahindra Bank (up 1.91%), ING Vysya Bank (up 1.46%), Yes Bank (up 2.44%), and IndusInd Bank (up 4.47%) gained.
HDFC Bank gained 2.27%. HDFC Bank's net profit rose 27.07% to Rs 1982.32 crore on 17.65% rise in total income to Rs 11937.69 crore in Q2 September 2013 over Q2 September 2012. The bank's net interest margin (NIM) declining to 4.3% in Q2 September 2013 from 4.4% in Q2 September 2012. The bank announced Q2 result early this week.
Axis Bank rose 2% to Rs 1,116.85 in volatile trade. The stock hit a high of Rs 1,119 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.
Among PSU bank stocks, State Bank of India (up 2.67%), Punjab National Bank (up 2.12%), Bank of Baroda (up 2.44%), Bank of India (up 2.08%) and Union Bank of India (up 2.31%) advanced.
Aviation stocks rose after crude oil prices eased and rupee strengthened against the dollar. SpiceJet (up 6.05%), Kingfisher Airlines (up 2.96%) and Jet Airways (India) (up 1.04%) edged higher.
US crude oil futures for November delivery were up 14 cents to $100.81 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.
Aviation turbine fuel (ATF) or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.
A strong rupee augurs well of the aviation sector as almost a third of operational expenses of aviation firms are denominated in dollars. Among the payments made in dollars, include rentals of leased aircraft, maintenance, spare parts and salary paid out to foreign crew. The rupee had hit its record closing low of 68.80 on 28 August 2013.
In the foreign exchange market, the rupee edged higher against the dollar tracking a continued sell-off in the greenback across all major currencies on worries of the economic impact on the US economy from the weeks-long US government shutdown. The partially convertible rupee was hovering at 61.0275, 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, Hong Kong, Singapore and Taiwan rose by 0.34% to 0.8%. Key benchmark indices in Indonesia and Japan fell 0.13% to 0.18%.
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 34 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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