Key benchmark indices pared gains after hitting fresh intraday high in early afternoon 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 barometer index, the S&P BSE Sensex pared gains after hitting its highest level in more than 35 months. The S&P BSE Sensex was up 308.68 points or 1.51%, off 40.94 points from the day's high and up 237.41 points from the day's low. The market breadth, indicating the overall health of the market, was positive. 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 reversed gains against the dollar.
Index heavyweight and cigarette major ITC edged higher. Metal and mining stocks gained after the latest data showed that China's economic growth accelerated in Q3 September 2013. Sesa Sterlite surged after a foreign investment bank initiated coverage of the scrip with a "buy" rating citing upcoming earnings drivers. NMDC extended Thursday's gain triggered by the company reporting rise in its total iron-ore production and sales during the period April-September 2013 over the corresponding previous year period. Many small and mid-cap counters were in demand on renewed buying.
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. Market pared gains after hitting fresh intraday high in early afternoon trade. The barometer index, the S&P BSE Sensex pared gains after hitting its highest level in more than 35 months.
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 12:15 IST, the S&P BSE Sensex was up 308.68 points or 1.51% to 20,724.19. The index jumped 349.62 points at the day's high of 20,765.13 in early afternoon trade, its highest level since 11 November 2010. The index rose 71.27 points at the day's low of 20,486.78 in opening trade.
The CNX Nifty was up 96.10 points or 1.59% to 6,141.95. The index hit a high of 6,152.90 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 positive. On BSE, 1,178 shares gained and 849 shares fell. A total of 146 shares were unchanged.
The total turnover on BSE amounted to Rs 863 crore by 12:20 IST compared to Rs 636 crore by 11:20 IST.
Index heavyweight and cigarette major ITC rose 1.06% to Rs 349. The stock hit a high of Rs 349.75 and low of Rs 345.15 so far during the day.
Metal and mining stocks gained after the latest data showed that China's economic growth accelerated in Q3 September 2013. China is the world's largest consumer of copper and aluminum.
JSW Steel (up 2.49%), Tata Steel (up 4.26%), Sail (up 1.73%), Hindustan Copper (up 1.09%), National Aluminium Company (up 1.2%), Hindustan Zinc (up 1.95%) edged higher.
Sesa Sterlite surged 3.99% to Rs 191.45 after a foreign investment bank initiated coverage of the scrip with a "buy" rating and a target price of Rs 220 per share, citing upcoming earnings drivers. These include its stake purchase in cash-rich subsidiary Hindustan Zinc, dividends from unit Cairn India and the potential removal of a mining ban in the state of Goa. The foreign investment bank expects Sesa Sterlite's operating profit to grow at a compounded annual growth rate of 11% over the 2013-2015 fiscal years, led by strong volume growth in its power, aluminium and iron ore businesses.
NMDC rose 0.92%, with the stock extending Thursday's gain triggered by the company reporting 8.09% rise in its total iron-ore sales to 13.75 million tonnes during the period April-September 2013 over the corresponding previous year period. Production rose 5.31% to 12.89 million tonnes during the period April-September 2013 over the corresponding previous year period.
Jindal Steel & Power rose 1.66%. Gujarat NRE Coke rose 1.13%. Gujarat NRE Coke during market hours on Thursday, 17 October 2013, said that shareholders of Australian mining company -- Gujarat NRE Coking Coal (GNCCL) -- have unanimously passed all seven resolutions at the general meeting held on Wednesday, 16 October 2013, which included authority to Jindal Steel & Power (Jindal group) to acquire majority stake in GNCCL. Among other important items that were approved by the shareholders of GNCCL included two separate fresh offtake agreements of coking coal from the mines between GNCCL and the Jindal Group as well as the Gujarat NRE group, Gujarat NRE Coke said in a statement.
Hindalco Industries rose 0.36%. Recent media reports said that details of the 14th FIR in the coal blocks allocation scam which names former coal secretary PC Parakh and Aditya Birla Group Chairman Kumar Mangalam Birla reveals that Parakh changed the decision of the screening panel committee that was held in 2005 after a personal meeting with Birla. Parakh allegedly abused his position to show undue favours to the Birla-owned Hindalco. The FIR states that Hindalco got a better deal at the cost of PSU Neyveli Lignite Corporation, reports said. The CBI FIR also says a screening committee in 2005, chaired by Parakh, had earlier rejected Hindalco's bid and allocated the coal block to Neyveli Lignite Corporation, reports said. The FIR goes on to allege there was a criminal conspiracy between Parakh, Birla and others to show undue favour to Hindalco
Hindalco on Tuesday, 15 October 2013, said that the company has followed every process required for allocation of coal completely as stipulated by the government. In a separate statement Hindalco's Managing Director D. Bhattacharya had said: "On the unfounded allegations, reported by the media, on the CBI FIR against Hindalco and Chairman Mr. Kumar Mangalam Birla, the reality of the matter is very different from what has been projected. In fact, the application for the Talabira II mine was made in 1996 by Indal, the Indian subsidiary of Alcan, the Canadian aluminium major. Indal was acquired by Hindalco in the year 2000, after which Hindalco pursued the matter further. The actual allocation of the mine was done in November 2005, which is nine years after the first application was made. In the interim, Hindalco made several representations to the Government as any corporation would normally make in such circumstances, and only through formal channels. To imply that our Chairman, Mr. Kumar Mangalam Birla, managed to overturn the decision of the Screening Committee, is preposterous. The truth of the matter is that the Talabira II and III mines together have been finally allotted jointly to Mahanadi Coal Fields and Neyveli Lignite, both public sector undertakings, with Hindalco having only a 15% stake in the joint venture. The project for which this mine was allocated is ready to commission later this month, whereas the clearances to permit mining have not been received so far. Consequently, no mining has been carried out. This will mean delayed returns from our project, which has been set up on a capex of over Rs 11000 crore. We hope this puts in perspective the struggle Hindalco has had to undergo for securing the coal and the irrecoverable economic loss that Hindalco has had to suffer. In the light of these facts, the allegations made are paradoxical".
Many small and mid-cap counters were in demand on renewed buying. Jain Irrigation Systems (up 6.33%), Prestige Estates Projects (up 4.25%), MCX (up 4.12%), Gujarat State Petronet (up 3.06%) and CRISIL (up 2.98%) were among the top gainers from the BSE's 'A' group.
Dewan Housing Finance Corporation (up 12.22%), Just Dial (up 9.51%), Redington India (up 7.62%), Whirlpool of India (up 5.05%) and TVS Motor Company (up 4.51%) were the top gainers from the BSE's Mid-Cap index.
Esab India (up 14.9%), Heritage Foods (up 7.92%), GTL Infrastructure (up 7.88%), VIP Industries (up 7.15%) and Sasken Communication Technologies (up 5.01%) were the top gainers from the BSE's Small-Cap index.
In the foreign exchange market, the rupee reversed gains against the dollar. The partially convertible rupee was hovering at 61.25, 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 0.3% to 0.99%. Key benchmark indices in Indonesia and Japan fell 0.13% to 0.17%.
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 36 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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