Key benchmark indices surged after the rupee recovered in choppy trade after Prime Minister Dr. Manmohan Singh said in parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country as he sought to allay investor concerns that have lately hurt financial markets, especially the rupee which has declined sharply against the dollar this month. Intraday volatility on the bourses was quite high as the Sensex alternately swung between positive and negative zone. The barometer index, the S&P BSE Sensex, was provisionally up 229.99 points or 1.25%, up close to 360 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. The Sensex gained for the third straight day today, 30 August 2013.
Realty stocks were mixed. Jindal Steel & Power tumbled over 9% after the company's board approved buyback proposal. Shares of two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales, with Hero MotoCorp hitting 52-week high. Index heavyweight and cigarette marker ITC edged higher in choppy trade. Another index heavyweight Reliance Industries also gained in choppy trade. Cairn India fell along with crude oil prices.
A bout of volatility was witnessed in early trade as key benchmark indices trimmed losses after slipping into the red after a positive opening. The market regained positive terrain and hit fresh intraday high in morning trade. The Sensex extended gains and hit fresh intraday high in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade as Asian stocks reversed intraday gains. Volatility ruled the roost as key benchmark indices regained positive zone after slipping into the red for a brief period in afternoon trade. Immense volatility was witnessed as key benchmark indices slipped into the red and hit fresh intraday low in mid-afternoon trade as weakness in European stocks hurt sentiment. The market regained positive zone in late trade.
In the foreign currency market, the rupee recovered amid high intraday volatility after Prime Minister Dr. Manmohan Singh said in parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country as he sought to allay investor concerns that have lately hurt financial markets, especially the rupee which has declined sharply against the dollar this month. The partially convertible rupee was hovering at 66.33, higher than its close of 66.55/56 on Thursday, 29 August 2013.
The rupee had risen sharply on Thursday, 29 August 2013, after the Reserve Bank of India (RBI) on Wednesday, 28 August 2013, said it will sell dollars to oil companies to defend the local currency.
As per provisional figures, the S&P BSE Sensex was up 229.99 points or 1.25% to 18,631.03. The index jumped 278.22 points at the day's high of 18,679.26 in late trade, its highest level since 26 August 2013. The index fell 128.28 points at the day's low of 18,272.76 in mid-afternoon trade.
The CNX Nifty was up 70.15 points or 1.3% to 5,479.20, as per provisional figures. The index hit a high of 5,493.30 in intraday trade, its highest level since 26 August 2013. The index hit a low of 5,360.20 in intraday trade.
The total turnover on BSE amounted to Rs 2917 crore, higher than Rs 2190.39 crore on Thursday, 29 August 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,156 shares rose and 1,075 shares fell. A total of 177 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. TCS (up 4.31%), HDFC (up 3.86%) and HDFC Bank (up 3.33%), edged higher from the Sensex pack.
Shares of two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Bajaj Auto jumped 5.27%.
Hero MotoCorp rose 1.78% to Rs 2,008, with the stock paring gains after hitting a 52-week high of Rs 2,059 in intraday trade today, 30 August 2013.
Cairn India lost 0.97% as US crude oil futures fell for a second straight day after UK lawmakers rejected a motion for military action against Syria, easing concern that unrest will disrupt Middle East oil supplies. US crude oil futures for October 2013 delivery were down 87 cents a barrel at $107.93 a barrel in the electronic trading today, 30 August 2013. The contract had fallen $1.30 a barrel or 1.18% to settle at $108.80 a barrel on the New York Mercantile Exchange on Thursday, 29 August 2013. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Index heavyweight and cigarette marker ITC rose 1.08% to Rs 309.15. The stock was volatile. The scrip hit high of Rs 310.45 and low of Rs 300.05.
Another index heavyweight Reliance Industries rose 0.09% to Rs 846. The scrip hit high of Rs 858.35 and low of Rs 828.25.
Jindal Steel & Power (JSPL) tumbled 9.04% to Rs 221.45 after the company's board approved share buyback proposal through open market purchases. The company said it has set aside Rs 1000 crore for share buyback. The ceiling price for the share buyback through the open market purchases has been set Rs 261 per share.
The maximum buyback price of Rs 261 per share is at a premium of 17.85% to the stock's ruling market price.
Pharma major Cipla jumped 5.24%.
Realty stocks were mixed. HDIL (down 1.35%), DLF (down 1.26%), Sobha Developers (down 2.09%), D B Realty (down 1.37%), declined. Unitech (up 3.11%), Indiabulls Real Estate (up 1.89%), Peninsula Land (up 1.79%) and Anant Raj (up 4.5%) rose.
The path-breaking Land Acquisition Bill, which seeks to provide just and fair compensation to farmers while ensuring that no land can be acquired forcibly, was passed by the Lok Sabha with overwhelming majority on Thursday, 29 August 2013. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012 stipulates mandatory consent of at least 70% for acquiring land for Public Private Partnership (PPP) projects and 80% for acquiring land for private companies. The bill, which will replace over a century-old law, proposes compensation that is up to four times the market value in rural areas and two times the market value in urban areas. The bill was passed with 216 votes in favour and 19 against.
Financial Technologies (India) slumped 19.19%.
Shares of commodities futures exchange Multi Commodity Exchange of India (MCX) jumped by maximum permissible 5% upper limit at Rs 372.95. MCX clarified during market hours today, 30 August 2013, that IBMA is not a Member of MCX and that IBMA has traded on exchange in the capacity of a client. As per the company's records, IBMA volume as a percentage of total exchange turnover was 0.09% in FY2012-13 and 0.17% in FY2013-14. As on date the exchange does not have any open position or pay-in/pay-out obligations with respect to IBMA, MCX said.
MCX and the National Spot Exchange (NSEL) are group companies of Financial Technologies India (FTIL). The NSEL had to shut down its operation early this month following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension.
The Forward Markets Commission (FMC), which regulates the commodity futures market in India, has raised the initial margin on gold futures to 5% from 4% for domestic traders effective Monday, 2 September 2013. The FMC move comes after gold prices rose 18% to reach a record high earlier this week. The FMC also imposed an additional 5% margin on gold, silver and crude oil futures contracts from Monday, 2 September 2013.
Prime Minister Dr. Manmohan Singh today, 30 August 2013, said in parliament that said that the rupee's tumble is a "matter of concern", but is part of a needed adjustment due to India's large current account deficit and will have a positive impact on export competitiveness in coming months. He said India's current account deficit was "unsustainably large" and to remedy this there needed to be a reduction in demand for gold and oil imports. He added that although the rupee fall was a matter of concern the government will not meet the rupee decline with capital control measures.
Earlier this month, the Reserve Bank of India tightened rules for overseas investments by Indian companies and individuals in an effort to stem capital outflows and prop up the rupee. The steps raised worries that authorities could impose more restrictions on capital flows, potentially making it difficult for foreign investors to pull out their money.
Dr. Singh also sought to calm concerns over the country's swelling current-account deficit and promised steps to help contain the deficit at $70 billion this fiscal year through March 2014. The deficit was about $88 billion in the last fiscal year.
The Prime Minister urged people to control the consumption of gold and oil. "We need to reduce our appetite for gold and economise the use of petroleum products and take steps to increase our exports," Singh said.
The Prime Minister said that the government won't go back on reforms in the current economic situation. "There is no question of reversing economic reforms. The cabinet decisions to give go-ahead to projects will show results in the second quarter," he said. Dr. Singh urged the Opposition to help in passing of certain bills for economic growth. "Many bills are stalled due to lack of political consensus. I urge political parties to come together and get them through for the economic growth," Singh said.
The Prime Minister said that India is not facing a repeat of the 1991 balance of payments crisis and fears that economic growth will slip to as low as 3% are unfounded. Noting that the rupee's sharp decline over the last three months was partly due to an expected tapering of the US Federal Reserve's liquidity measures, he said rich countries should pay more attention to the impact of their policy steps on developing countries' economies.
The Central Statistics Office (CSO) will unveil data on gross domestic product (GDP) for Q1 June 2013 at 17:30 IST today, 30 August 2013. The GDP growth is seen moderating further to 4.7% in Q1 June 2013, from 4.78% in Q4 March 2013, as per the median estimate of a poll of economists carried out by Capital Market. The GDP grew 5% in the year ended 31 March 2013, the weakest in a decade, as falling domestic and overseas demand, crumbling domestic infrastructure facilities, bureaucratic delays in approvals for industrial projects and high borrowing costs choked investments in the economy.
European stocks declined on Friday, 30 August 2013, as investors digested the latest developments in the Syria conflict. Key benchmark indices in UK, France and Germany were off 0.41% to 0.59%.
Economic confidence in the euro area soared to a two-year high in August as the 17-nation currency bloc's recovery gathered pace after it exited a record-long recession. An index of executive and consumer sentiment rose for a fourth month to 95.2 from 92.5 in July, the European Commission in Brussels said today.
Euro-area unemployment held at a record in July, underscoring the challenges that face the 17-nation currency bloc as it tries to shake off the legacy of a debt crisis now in its fourth year. The jobless rate in the euro zone remained at 12.1%, the European Union's statistics office in Luxembourg said today.
Euro-area inflation slowed more than economists forecast in August, led by a decline in energy prices, even as the 17-nation currency bloc's economic recovery began to gain momentum. Consumer prices rose 1.3% after a 1.6% gain in July, the European Union's statistics office in Luxembourg said in a preliminary estimate today.
Most Asian stocks rose on Friday, 30 August 2013, following overnight gains in US stocks triggered by data showing that the US economy expanded more rapidly than previously thought in the second quarter. Key benchmark indices in China, Hong Kong, South Korea, Indonesia, and Taiwan rose by 0.06% to 2.23%. Key benchmark indices in Singapore and Japan fell by 0.11% to 0.3%.
Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.
Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Friday, 30 August 2013. US stocks rose on Thursday, 29 August 2013, as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said
US markets remain closed on Monday, 2 September 2013, for the Labor Day holiday.
The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. A further vote was set for early next week, specifically on whether the UK should get directly involved.
The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next 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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