Intraday volatility continued as key benchmark indices regained strength in mid-afternoon trade. The barometer index, the S&P BSE Sensex, regained the psychological 20,000 mark, having alternately moved above and below that level in intraday trade. The Sensex was up 155.85 points or 0.78%, up 114.23 points from the day's low and off 99.32 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Indian stocks edged higher today, 8 October 2013, after the Reserve Bank of India's (RBI) surprise announcement on Monday evening to improve liquidity conditions in the banking system boosted sentiment.
Index heavyweight and cigarette major ITC extended intraday gains. Among FMCG stocks, Britannia Industries hit record high. Tata Power Company rose after its wholly owned subsidiary -- Tata Power Renewable Energy (TPREL) -- signed a share purchase agreement (SPA) for acquisition of 100% shareholding in AES Saurashtra Windfarms (ASW) -- a 100% subsidiary of AES Corporation. L&T edged higher after the company said it has won orders worth Rs 1605 crore across various business segments.
The Reserve Bank of India's (RBI) surprise decision on Monday evening to improve liquidity conditions in the banking system triggered a firm opening on the bourses. The barometer index, the S&P BSE Sensex, moved past the psychological 20,000 level. A bout of volatility was witnessed as key benchmark indices regained strength after paring initial gains in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in more than two weeks. Key benchmark indices pared gains in mid-morning trade. The Sensex came further off the day's high in early afternoon trade. The market further cut intraday gains and hit fresh intraday low in afternoon trade. The Sensex fell below the psychological 20,000 level. Key benchmark indices regained strength in mid-afternoon trade. The Sensex regained the psychological 20,000 mark.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 7 October 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 494.13 crore on Monday, 7 October 2013, as per provisional data from the stock exchanges.
Bond prices rose after the Reserve Bank of India (RBI) on Monday evening announced measures to improve liquidity conditions in the banking system. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.4744%, lower than its close of 8.6833% on Monday, 7 October 2013. Bond yield and bond prices are inversely related. The RBI announced a reduction in the marginal standing facility (MSF) rate by 50 basis points to 9% with immediate effect. The central bank has also decided to provide additional liquidity through term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25% of net demand and time liabilities (NDTL) of the banking system through variable rate auctions on every Friday beginning from 11 October 2013. The notified amount and tenor of the term repo auctions will be announced prior to the dates of the auctions, the RBI said in a statement. Starting with the Mid-Quarter Review of September 2013, the RBI began a calibrated withdrawal of exceptional measures undertaken since July 2013. This was done with a view to normalising liquidity conditions, the RBI said. RBI said that open market purchase operations of Rs 9974 crore were conducted on Monday, 7 October 2013, to inject liquidity into the banking system.
In the foreign exchange market, the rupee alternately notched gains and suffered losses against the dollar. The partially convertible rupee was hovering at 61.77, a tad higher than its close of 61.79/80 on Monday, 7 October 2013.
At 14:20 IST, the S&P BSE Sensex was up 155.85 points or 0.78% to 20,050.95. The index jumped 255.17 points at the day's high of 20,150.27 in morning trade, its highest level since 23 September 2013. The index rose 41.62 points at the day's low of 19,936.72 in afternoon trade.
The CNX Nifty was up 40 points or 0.68% to 5,946.15. The index hit a high of 5,981.70 in intraday trade, its highest level since 23 September 2013. The index hit a low of 5,913 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,213 shares gained and 1,063 shares fell. A total of 137 shares were unchanged.
The total turnover on BSE amounted to Rs 1349 crore by 14:20 IST
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined. ICICI Bank (up 3.01%), Bharti Airtel (up 2.57%) and Jindal Steel & Power (up 2.41%), edged higher.
Index heavyweight and cigarette major ITC gained 2.15% to Rs 347.20. The stock hit a high of Rs 347.45 and low of Rs 340 so far during the day.
Britannia Industries gained 2.07% to Rs 864 after hitting a record high of Rs 873.25 in intraday trade.
Godrej Consumer Products (GCPL) lost 3.29%. The company said after market hours on Monday, 7 October 2013, it has entered into an agreement to acquire a 30% stake in Bhabani Blunt Hair Dressing (B:blunt). B:blunt is a premier hair salon company with one of the strongest consumer franchises in this space. Since launching the chain in 2005, Adhuna Bhabani Akhtar and Osh Bhabani have grown the brand across India. B: blunt, today has a pan-India presence with 17 outlets and 4 academies, GCPL said.
Tata Power Company rose 2.94%. The company during market hours today, 8 October 2013, said that its wholly owned subsidiary -- Tata Power Renewable Energy (TPREL) -- has today signed a share purchase agreement (SPA) for acquisition of 100% shareholding in AES Saurashtra Windfarms (ASW) -- a 100% subsidiary of AES Corporation. ASW owns and operates a 39.2 megawatts (MW) wind farm near Dwarka in Jamnagar district of Gujarat. The project which is fully operational since January 2012 has executed a power purchase agreement with Gujarat Urja Vikas Nigam (GUVNL) for sale of the electricity at a tariff of Rs 3.56/kWh for the duration of the project. The project is registered with United Nations Framework Convention on Climate Change (UNFCCC) as a CDM project and is eligible to receive CERs. The project is also registered under the Generation Based Incentive scheme of MNRE.
TPREL was selected as the preferred bidder in a process conducted by AES Corporation for sale of its 100% stake in ASW. The acquisition is subject to certain conditions, which are expected to be addressed in a few months time, Tata Power said in a statement.
With this acquisition, Tata Power's total generation capacity will increase to 8,560 MW and its Wind Operational Generation capacity to 437 MW with wind turbine generators (WTGs) located across five states viz. Maharashtra, Rajasthan, Gujarat, Tamil Nadu and Karnataka, which are the leading states in promoting wind power generation in India.
Speaking on achieving this milestone, Mr. Anil Sardana, Managing Director, Tata Power, said: "Tata Power is committed to generating 20-25% of its total generation capacity from clean energy sources and is proud to have signed this SPA to acquire 39.2 MW operational wind farm. The project is a clean energy project, which will enhance and increase the company's clean energy footprint. This is our second acquisition of an operating wind asset and we are in constant look out for similar opportunities in respect of wind and solar plants. This is yet another step towards the company's commitment to sustainability."
L&T advanced 2.88% after the company said it has won new orders worth Rs 1605 crore across various business segments. The buildings & factories division has bagged an order valued at Rs 445 crore from Hospital Services Consultancy Corporation (India) for the construction of a super specialty cum new paid ward including associated services at Safdarjung Hospital, New Delhi.
The metallurgical & material handling division has secured a new EPC order worth 307 crore from a reputed customer for the construction of a sinter plant in eastern India.
The power transmission & distribution division has bagged a major order worth Rs 675 crore from Kudgi Transmission. In the heavy civil infrastructure business, an additional order worth Rs 178 crore has been received, L&T said.
Coal India fell 1% to Rs 297.10, with the stock extending Monday's losses triggered by reports that the company's 5% follow-on public offer (FPO) is likely to hit the market by the second week of December. The government, which currently holds a 90% stake in Coal India, intends to sell more than 31.5 crore shares through an offer for sale or OFS through the stock exchanges. Shares will be allotted to Coal India employees at a 5% discount to the lowest cut-off price. A maximum of 10% of the offer will be kept for employees, reports said.
Indiabulls Power (up 6.59%), Dewan Housing Finance Corporation (up 6.16%), Torrent Power (up 5.99%), Eclerx Services (up 5.16%), Wockhardt (up %), Arvind (up 4.71%), Prestige Estates Projects (up 3.94%) and Videocon Industries (up 3.72%) were among the major gainers from the BSE Mid-Cap index.
European stock markets slipped on Tuesday, 8 October 2013, as the US government shutdown moved into Day 8. Key benchmark indices in Germany, France and UK shed by 0.03% to 0.31%.
The Bank of France Tuesday trimmed its growth forecast for the third quarter of this year after business sentiment indicators remained unchanged in September from August. French gross domestic product will rise 0.1% in the third quarter from the second, the Bank of France said, according to its monthly index of business activity. Last month, the central bank had forecast a 0.2% expansion in GDP.
The Bank of France's business sentiment indicator in manufacturing was unchanged in September from August at 97, slightly below the long-term average of 100. The indicator for services was also unchanged at 93.
German exports rose in August amid signs the economic recovery is continuing in the euro area, the country's biggest trading partner. Exports, adjusted for working days and seasonal changes, increased 1% from July, when they decreased a revised 0.8%, the Federal Statistics Office in Wiesbaden said today.
UK factories saw domestic and export demand strengthen in the third quarter and expect to accelerate hiring in the next three months, according to the British Chamber of Commerce (BCC). Measures of manufacturers' export sales and orders rose to the highest since the fourth quarter of 2010, the BCC said in a report published in London today. An index of domestic sales in the quarter increased, while companies' employment expectations advanced to a record.
Asian markets were mostly higher on Tuesday, 8 October 2013, after the latest data showed China's services industry continued to expand. Key benchmark indices in China, South Korea, Taiwan, Hong Kong, Japan, Singapore and Indonesia rose by 0.3% to 1.24%.
The HSBC China Services Purchasing Managers' Index fell to 52.4 in September from 52.8 in August, HSBC Holdings PLC said on Tuesday. A reading above 50 denotes expansion.
Trading in US index futures indicated that the Dow could slide 4 points at the opening bell on Tuesday, 8 October 2013. US stocks declined on Monday, with the S&P 500 index closing at a four-week low, as a stalemate on Capitol Hill over preventing a government default persisted.
US President Barack Obama reiterated on Monday that he won't negotiate with Republicans over the debt limit. "We're not going to negotiate under the threat of economic catastrophe," Obama said during a visit to the Federal Emergency Management Agency in Washington. Republicans are insisting on changing the 2010 Affordable Care Act, while Obama refuses to engage in discussions about policy conditions tied to opening the government or raising the debt ceiling. Treasury Secretary Jacob J. Lew has warned the US may be unable to pay its bills after Oct. 17.
Federal Reserve Bank of Dallas President Richard Fisher said in a speech that the US cannot afford to default and that debt ceiling talks "will come down to the wire". Fisher, who doesn't hold a policy vote this year, has said he favors a reduction in the central bank's $85 billion monthly bond purchases.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. The lack of data may make it harder for the Federal Reserve to assess the economy's strength as policy makers mull the timing of reductions in bond buying. Government data from payrolls to retail sales will be delayed as long as the shutdown continues. 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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