A sudden buying frenzy propelled the key benchmark indices to intraday high in late trade. The barometer index, the S&P BSE Sensex, moved past the psychological 21,000 mark in late trade. The Sensex, and the 50-unit CNX Nifty, both, hit their highest level in more than a week. The Sensex was provisionally up 394.52 points or 1.91%, up 357.20 points from the day's low and off 14.85 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Investor sentiment was boosted after news reports said that the stock market regulator Securities and Exchange Board of India (Sebi) has relaxed the rules on trading of thinly-traded stocks. The market sentiment was also boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 19 December 2013.
Index heavyweight Reliance Industries (RIL) surged on reports that the government has allowed the company to charge higher prices for gas from April 2014 after the company offered financial guarantees to the government to settle any claims against it over a shortfall in its gas output. GAIL (India) rose after the company said that the media reports on Thursday, 19 December 2013, indicating that the company had doubled margin on gas sourced from ONGC are factually incorrect and does not reflect the issue in the right perspective.
IT stocks extended Thursday's gain after Accenture Plc on Thursday, 19 December 2013, said at the time of announcing its Q1 November 2013 results that it expects its consulting business to turn the corner this financial year. IT major Infosys hit record high. Tech Mahindra and Wipro hit 52-week high. Tata Consultancy Services (TCS) rose after the company after market hours on Thursday, 19 December 2013, announced the launch of TCS Insurance Telematics Solution, a mobile application that turns consumers' smartphones into mobile telematics devices.
Sebi has reportedly rationalized the periodic call auction mechanism by modifying how it classifies the so-called illiquid stocks. A stock would now be classified as illiquid if its average daily turnover is less than Rs 2 lakh in the previous two quarters and if it is classified as illiquid at all the exchanges where it is traded. Earlier, a stock was classified to be illiquid if its average daily trading volume in a quarter was less than 10,000, the average daily number of trades was less than 50 in a quarter and if it was classified as illiquid by all the exchanges where it traded.
Henceforth, call auctions will not apply to shares where a company is profitable in at least two of the past three years and not more than 20% of promoters' shareholding is pledged in the latest quarter and the book value is three times or more than the face value. The new rules also exclude companies with a market capitalisation of at least Rs 10 crore or which have paid a dividend in at least two of the past three years.
From now, stock exchanges will determine the number of call auction sessions for illiquid stocks. Exchanges will, however, have at least two sessions in a trading day, with one uniform closing session across the exchanges. So far, periodic call auction sessions of one hour each were conducted throughout trading hours, with the first session starting at 9:30 IST.
Key benchmark indices pared gains after a firm opening. Key benchmark indices retained positive zone in morning trade. The Sensex hovered in positive zone in mid-morning trade. Key benchmark indices surged in early afternoon trade. The Sensex extended gains and hit fresh intraday high in afternoon trade. A bout of volatility was witnessed as the key benchmark indices regained strength after paring intraday gains in mid-afternoon trade. The Sensex surged in late trade as European stocks reversed intraday losses.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 19 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 2264.11 crore on Thursday, 19 December 2013, as per provisional data from the stock exchanges.
As per provisional closing, the S&P BSE Sensex was up 394.52 points or 1.91% to 21,103.14. The index jumped 409.37 points at the day's high of 21,117.99 in late trade, its highest level since 11 December 2013. The index rose 37.32 points at the day's low of 20,745.94 in morning trade.
The CNX Nifty was up 110.75 points or 1.8% to 6,277.40. The index hit a high of 6,280.55 in intraday trade, its highest level since 12 December 2013. The index hit a low of 6,170.35 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,523 shares gained and 990 shares fell. A total of 158 shares were unchanged.
The total turnover on BSE amounted to Rs 2198 crore, lower than Rs 3084 crore on Thursday, 19 December 2013.
Among the 30-share Sensex pack, 28 stocks gained and only two of them declined.
Index heavyweight Reliance Industries (RIL) surged in volatile trade on reports that the government has allowed the company to charge higher prices for gas from April after the company offered financial guarantees to the government to settle any claims against it over a shortfall in its gas output. The stock jumped 4.53% at Rs 893.25. The stock hit a high of Rs 896.70 and low of Rs 862.30. "Bank guarantee will be equivalent to the incremental revenue that Reliance will get from the new gas pricing," Oil Secretary Vivek Rae told reporters after a cabinet meeting on Thursday, 19 December 2013.
The government in June this year approved a move to higher, market-related rates for locally-produced gas from April 2014, but the finance ministry later said prices for RIL should be capped because the company's gas production from the offshore D6 block was far below its supply commitment. RIL, which operates the D6 block off India's eastern coast, has reported a sharp decline in gas output since 2010. Falling output had already prompted the government to disallow proportionate cost recovery to Reliance, leading to arbitration proceedings over the issue.
GAIL (India) rose 1.32%. ONGC advanced 4.17%. GAIL (India) during market hours said that the media reports on Thursday, 19 December 2013, indicating that the company had doubled margin on gas sourced from ONGC are factually incorrect and does not reflect the issue in the right perspective. GAIL (India) clarified that it is charging marketing margin on APM and non-APM gas at different rates. The company said that it charges a uniform marketing margin on non-APM gas consumers on a Pan-India basis since the commencement of non-APM supplies and that there is no discrimination amongst the customers.
The customers in Mumbai region, alleging higher marketing margin being charged by GAIL, are new to supply of non-APM gas since November 2013, GAIL said. In fact, RCF, Thal in Mumbai region is taking non-APM gas supplies since February 2012 and is being charged marketing margin at the same rate as all other non-APM customers, GAIL (India) said in a statement. Further, producers may not be charging marketing margin as their risks and returns associated with exploration and production are included in the Gas Producer Price, the company said.
Shares of PSU OMCs gained. HPCL (up 4.66%), BPCL (up 2.4%) and Indian Oil Corporation (up 1.55%), edged higher.
IT stocks extended Thursday's gain after Accenture Plc on Thursday, 19 December 2013, said at the time of announcing its Q1 November 2013 results that it expects its consulting business to turn the corner this financial year as orders rise.
IT major Infosys rose 1.21% to Rs 3,557.10. The stock hit record high of Rs 3,569.90 in intraday trade. Infosys announced after market hours on Thursday, 19 December 2013, that Mr. Subrahmanyam (Subu) Goparaju, Member of the Executive Council has conveyed his intention to resign from the services of the company.
Tata Consultancy Services (TCS) rose 2.26%. TCS after market hours on Thursday, 19 December 2013, announced the launch of TCS Insurance Telematics Solution, a mobile application that turns consumers' smartphones into mobile telematics devices. Facilitating usage-based insurance (UBI) practices that more closely align consumer driving patterns and habits with auto insurance premiums, the TCS Insurance Telematics Solution minimizes the need for a separate, potentially expensive, telematics device provided by the insurer, TCS said in a statement.
TCS Insurance Telematics Solution is the latest in a series of product innovations from the company's Insurance Innovation Lab -- a state-of-the-art environment for customers to test new ideas and trial new solutions, TCS said.
Wipro gained 3.98% to Rs 551. The stock hit 52-week high of Rs 552 in intraday trade.
HCL Technologies shed 0.08% to Rs 1,233. The stock had hit record high of Rs 1,257 in intraday trade on Thursday, 19 December 2013.
Tech Mahindra gained 2.92% to Rs 1,844. The stock hit 52-week high of Rs 1,871.95 in intraday trade.
Oracle Financial Services Software (up 0.09%), Polaris Financial Technology (up 3.04%), Hexaware Technologies (up 4.47%) gained.
Accenture's consulting business has been hit in the past few quarters as companies cut down on discretionary spending. Revenue from the business has declined in five of the last six quarters.
Consulting bookings rose to $4.3 billion in the first quarter from $4.2 billion a year earlier. Revenue from the consulting business fell 1% to $3.94 billion in the quarter ended November 30. Outsourcing accounted for 51% of total bookings in the quarter, up from 44% a year earlier.
European stocks edged higher in volatile trade on Friday, 20 December 2013, as the US Federal Reserve's decision to taper its bond buying continued to spur optimism about the US economy. Key benchmark indices in UK, Germany and France were up 0.28% to 0.55%.
The European Union lost its top credit rating from Standard & Poor's, which said the group's cohesion has weakened and its financial profile has deteriorated. S&P cut its long-term rating on the EU to AA+ from AAA and maintained its short-term rating at A-1+. The outlook is stable, the agency said in a statement today. "The downgrade reflects our view of the overall weaker creditworthiness of the EU's 28 member states," S&P said. The reduction follows ratings cuts in recent years on EU members including France, Italy and Spain, as a sovereign-debt crisis roiled the region. "We believe the financial profile of the EU has deteriorated and that cohesion among EU members has lessened," S&P said. "EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states," it said.
French business confidence unexpectedly rose in December from November, bouncing back to its long-term average, official statistics bureau Insee said Friday. Business confidence in the manufacturing sector rose to 100 in Insee's monthly survey in December. Encouraging business confidence data follow Insee's forecast, however, that French economic growth will slow in the first half of next year after a rebound in the last quarter of 2013.
In Germany, data from Nuremberg-based GfK SE showed a gauge of consumer confidence in Europe's largest economy will climb to 7.6 in January from 7.4 this month, the highest reading since August 2007.
UK consumer confidence unexpectedly fell for a third month in November. A consumer sentiment index by GfK NOP dropped 1 point from October to minus 13, the London-based research group said.
Asian stocks were mostly higher on Friday, 20 December 2013 as the US Federal Reserve's decision to taper its bond buying continued to spur optimism about the US economy. Key benchmark indices in Japan, Taiwan, Singapore and South Korea rose 0.01% to 0.79%. In Indonesia, the Jakarta Composite was off 0.86%.
Chinese stocks fell amid concern funding costs for the nation's lenders will remain high even after the central bank injected cash into the financial system. Key benchmark indices in Hong Kong and China were off 0.33% to 2.02%. The Chinese central bank said at the close of market trading yesterday, 19 December 2013, that it added funding to selected lenders using short-term liquidity operations.
The Bank of Japan kept its asset-purchase levels and overall monetary policy unchanged after a monetary policy review. The central bank's statement also retained previous language on the economic outlook, saying the nation's economy "has been recovering moderately," while "inflation expectations appear to be rising on the whole."
Trading in US index futures indicated that the Dow could advance 34 points at the opening bell on Friday, 20 December 2013. US stocks on Thursday recovered most earlier losses as investors shrugged off disappointing housing, manufacturing and employment reports, sending the Dow Jones Industrial Average to a record closing.
The Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The Fed has said it will keep buying bonds until the outlook for the labor market has "improved substantially". Federal Reserve Chairman Ben S. Bernanke said after the Fed's monetary policy review on 18 December 2013 that the program was on its way to meeting that test, as the jobless rate fell to a five-year low of 7 percent in November.
The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
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