Key benchmark indices surged as world stocks rose after the US Federal Reserve after a monetary policy review on Wednesday, 18 September 2013, decided to maintain stimulus to the US economy through monthly bond purchases of $85 billion.
Fed’s bond-buying program has been a source of liquidity for most Asian and emerging markets this year. The Fed decided against tapering its $85-billion-a-month in bond purchases for now, with Fed Chairman Ben Bernanke saying that economic data since June did not support a reduction in buys.
The barometer index, the BSE Sensex, moved past the psychological 20,000 mark and the 50-unit CNX Nifty surged past the psychological 6,000 level. The Sensex settled at its highest level in more than 34 months. The Nifty settled at 16-week high. The Sensex jumped 684.48 points or 3.43%, up 299.34 points from the day’s low and off 93.05 points from the day’s high. The market breadth, indicating the overall health of the market, was positive. Except the BSE IT index, all the other sectoral indices on BSE were in the green.
The Sensex gained for the fourth straight day today, 19 September 2013. The Sensex has risen 913.88 points or 4.63% in four trading days from a recent low of 19,732.76 on 13 September 2013. The Sensex has gained 2,026.92 points or 10.89% in September 2013 so far (till 19 September 2013). The Sensex has risen 1,219.93 points or 6.28% in calendar 2013 so far (till 19 September 2013). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has gained 3,197.93 points or 18.33%.
Bank stocks galloped. Pharma stocks extended their recent gains. Index heavyweight and cigarette major ITC moved higher. Realty stocks jumped. FMCG stocks rose as good rains this year could boost rural sales, with biscuits major Britannia Industries hitting record high.
Auto stocks gained on renewed buying. Two-wheeler stocks rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Capital goods pivotals also rose. Telecom stocks gained across the board, with Reliance Communications hitting 52-week high.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 18 September 2013. Foreign institutional investors (FIIs) bought shares worth net Rs 525.30 crore from the secondary equity markets on Wednesday, 18 September 2013, as per data from the Securities & Exchange Board of India (Sebi).
In the foreign exchange market, the rupee surged past 62 against the dollar as the Fed refrained from withdrawing monetary stimulus to the US economy. The partially convertible rupee was hovering at 61.94, sharply higher than its close of 63.38/39 on Wednesday, 18 September 2013.
Bond prices jumped as the Fed refrained from withdrawing monetary stimulus to the US economy. The yield on the benchmark federal paper 7.16% GS 2023 was hovering at 8.1862%, lower than its close of 8.3715% on Wednesday, 18 September 2013. Bond yield and bond prices are inversely related.
The S&P BSE Sensex jumped 684.48 points or 3.43% to 20,646.64, its highest closing level since 10 November 2010. The index surged 777.53 points at the day’s high of 20,739.69 in late trade. The index gained 385.14 points at the day’s low of 20,347.30 in opening trade.
The CNX Nifty jumped 216.10 points or 3.66% to 6,115.55, its highest closing level since 30 May 2013. The index hit a high of 6,142.50 in intraday trade, its highest level since 22 May 2013. The index hit a low of 6,040.15 in intraday trade.
The total turnover on BSE amounted to Rs 4009 crore, sharply higher than Rs 1464.45 crore on Wednesday, 18 September 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,430 shares rose and 997 shares fell. A total of 156 shares were unchanged.
The BSE Mid-Cap index rose 2.21% and the BSE Small-Cap index rose 1.16%. Both these indices underperformed the Sensex.
The BSE Bankex (up 6.78%), BSE Realty index (up 5.34%), BSE Capital Goods (up 4.75%), BSE Metal index (up 3.8%) and BSE PSU index (up 3.58%) outperformed the Sensex.
The BSE FMCG index (up 3.21%), BSE Oil & Gas index (up 3.13%), BSE Auto index (up 2.85%), BSE Power index (up 2.61%), BSE Consumer Durables index (up 1.63%), BSE HealthCare index (up 1.35%), BSE Teck index (up 0.74%) and BSE IT index (down 0.2%) underperformed the Sensex.
Among the 30-share Sensex pack, 28 stocks rose and only two fell.
Index heavyweight Reliance Industries 1.92% to Rs 887.15.
PSU OMCs rose as a rally in rupee against the dollar eased concerns of higher cost of crude oil imports. PSU OMCs meet most of their crude oil requirement through imports. HPCL (up 3.63%), Indian Oil Corporation (IOCL) (up 1.76%) and BPCL (up 6.76%), edged higher.
PSU OMCs had hiked petrol prices by Rs 1.63 a litre with effect from 14 September 2013.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas on 16 September 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for second fortnight of September 2013 has increased to Rs 14.50 per litre from Rs 12.12 per litre during the first fortnight of September 2013. PSU OMCs are currently incurring combined daily under-recovery of about Rs 486 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices. PSU OMC’s incurred Rs 25579 crore as under-recoveries in Q1 June 2013 on Diesel, PDS Kerosene and Domestic LPG.
Index heavyweight and cigarette major ITC rose 3.49%, with the stock gaining for the third straight day. ITC’s hospitality unit ITC Hotels on 16 September 2013, said it has tied up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai, under ITC Hotels’ 5-star ‘WelcomHotel’ brand and the group’s mid-market to upscale ‘Fortune’ brand. The tie-up has been firmed up through a Memorandum of Understanding between ITC Hotels and RP Groups Hotels & Resorts. While the two WelcomHotels are already under a management contract and will be flagged off immediately, the three Fortune hotels are a part of the signed MOU and will be launched subsequently, ITC Hotels said in a statement.
As part of its expansion drive, ITC Hotels proposes to add several managed hotels to its brand portfolio, it said. On the anvil are an ITC super-premium luxury hotel in Mahabalipuram, a WelcomHotel in Jodhpur, Patna and Chandigarh and more than 30 hotels under the Fortune brand.
FMCG stocks rose as good rains this year could boost rural sales, with biscuits major Britannia Industries hitting record high. Demand from rural areas is likely to pick up as this year’s abundant monsoon rainfall is expected to help boost farm output and farmers’ income.
Britannia Industries rose 1.4% to Rs 762 after hitting record high of Rs 778 in intraday trade.
Colgate-Palmolive (India) (up 3.28%), Dabur India (up 0.33%), Hindustan Unilever (up 5.15%), Marico (up 0.88%) and Tata Global Beverages (up 2.17%) gained.
Bank stocks galloped ahead of the Reserve Bank of India’s (RBI) mid-quarter policy review tomorrow, 20 September 2013.
State Bank of India jumped 8.32%. The state-run bank after market hours on Wednesday, 18 September 2013, said it has raised the base rate by 10 basis points (bps) to 9.8% per annum (pa) from 9.7% and the benchmark prime lending rate by 10 bps to 14.55% from 14.45% with effect from 19 September 2013. The bank has also raised interest rates for retail term deposits.
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained 8.63% to 11.21%.
Among private sector banks, ICICI Bank (up 6.36%), HDFC Bank (up 5.46%), and Axis Bank (up 5.91%), jumped.
Shares of private sector bank Yes Bank jumped a staggering 22.54%. The bank early this week said it has successfully closed equivalent to $255 million by way of dual currency, multi-tenor syndicated loan facility which will be utilized for general corporate purposes and trade finance. The facility has a maturity of 1 and 2 years with majority commitments coming in the 2 year tenure bucket. The loan has been widely distributed with commitments from 11 banks representing 8 countries across US, Europe, Middle East and Australia, Yes Bank said.
The recent RBI guidelines on offering swap facility to banks for the foreign currency borrowings at 100 basis points below the market rate will further make the landed rupee cost of these funds extremely competitive vis-vis rupee funds of equivalent maturity, Yes Bank said.
IndusInd Bank jumped 5.19% to Rs 434. A block deal of 3 lakh shares was executed in the counter on BSE at Rs 462.35 per share at 9:32 IST.
Pharma stocks gained for the third straight day. Cipla rose 0.76%.
Dr Reddy’s Laboratories rose 0.94%, with the stock extending recent gains triggered by the company getting USFDA nod for Azacitidine for injection 100 mg/vial, a bioequivalent generic version of VIDAZA (azacitidine for injection). The launch of product in the US market is planned in the near term, the company said during trading hours on Tuesday, 17 September 2013. The VIDAZA brand had US sales of approximately $378.5 million for the twelve months ended July 2013, according to IMS Health data.
Ranbaxy Laboratories gained 3.55% to Rs 346.10, with the stock gaining for the third day in a row. The company on Tuesday, 17 September 2013, said that during late hours on Monday, 16 September 2013, the company received communication from the US Food and Drug Administration (USFDA) that the regulator had imposed an import alert on the company’s Mohali facility. The USFDA also advised that the Mohali facility will be subject to certain terms of the Consent Decree signed in January 2012. Ranbaxy said it will review the details and will continue to fully cooperate with the USFDA and take all necessary steps to resolve the concerns at the earliest.
The USFDA had conducted inspections at Ranbaxy’s Mohali facility in 2012, resulting in certain observations. The company believes that it has made further improvements at its Mohali facility since the last inspection in 2012, and remains committed to adressing all concerns of the USFDA. Ranbaxy is hopeful of an early resolution these concerns, the company said in a statement.
Ranbaxy remains fully committed to upholding the highest standards that patients, prescribers, regulators and all other stakeholders expect from the company. Ranbaxy stays firmly committed to its philosophy of ‘Quality and Patients First,’ it said in a statement.
Shares of Ranbaxy had tumbled 30.27% in a single trading session to settle at Rs 318.85 on Monday, 16 September 2013, after the USFDA issued an import alert against company’s Mohali plant.
Sun Pharmaceutical Industries gained 1.7%. The stock turned ex-dividend today, 19 September 2013, for dividend of Rs 2.50 per share for the year ended 31 March 2013.
Lupin rose 1.52%. The company on 16 September 2013 said it has received final approval for its Zolpidem Tartrate Extended release tablets USP, 6.25 mg and 12.5 mg from the United States Food and Drugs Administration (FDA) to market a generic version of Sanofi Aventis, U.S, LLC’s (Sanofi) Ambien CR Extended release tablets, 6.25 mg and 12.5 mg. Lupin’s wholly owned US subsidiary Lupin Pharmaceuticals Inc. (LPI) shall commence marketing the product shortly, the company said. Lupin’s Zolpidem CR tablets 6.25 mg & 12.5 mg is the AB rated generic equivalent of Sanofi’s Ambien CR Extended? release tablets, 6.25 mg and 12.5 mg and is indicated for the treatment of insomnia characterized by difficulties with sleep onset and/or sleep maintenance. Sanofi’s Ambien CR Extended release tablets had annual US sales of approximately $366 million (IMS MAT Mar 2013).
Cadila Healthcare rose 2.03% to Rs 679.60. A block deal of 2 lakh shares was executed in the counter on BSE at Rs 670 per share at 13:45 IST.
Auto stocks gained on renewed buying. Maruti Suzuki India surged 6.18%. The company after market hours on Wednesday, 18 September 2013, said that a minor fire was reported earlier on Wednesday from one of the heat treatment furnaces at Maruti Suzuki Manesar Powertrain plant. The fire was quickly extinguished, the company said. There was no injury to anyone due to this incident. Also, there was no loss of production. Work in the plant remains normal, Maruti Suzuki said in a statement.
Mahindra & Mahindra (M&M) rose on expectations of increase in tractor sales due to good rains this year. The stock was up 3.43%.
Tata Motors gained 2.72%.
Two-wheeler stocks rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. The festive season starts with the Durga Puja in October. The festival is followed by Dussehra and Diwali. Bajaj Auto rose 1.74%. TVS Motor Company gained 3.47%. Hero MotoCorp gained 1.42%.
Capital goods pivotals rose. L&T (up 6.28%) and Bhel (up 2.65%), gained.
Suzlon Energy rose 3.21% after the company said it divested 75% stake in its China-based subsidiary to Poly LongMa Energy for $28 million. The company made the announcement after market hours on Wednesday, 18 September 2013.
Suzlon Energy said it entered into an agreement with China’s Poly LongMa Energy (Dalian), a conglomerate focused on conventional and green energy investments, to divest 75% stake in its China-based manufacturing subsidiary Suzlon Energy Tianjin (SETL) for $28 million. Suzlon in a statement said the first tranche of the payment has already been completed.
Suzlon Group will continue to own 25% share in the company and participate in its operations as joint venture (JV) partner. Thereafter, Poly LongMa Energy (Dalian) will lead marketing and sales operations in China, with Suzlon acting as technology partner with its existing China portfolio including the S66-1.25 megawatts (MW), S82- 1.5 MW and S88-2.1 MW turbines, and manage manufacturing and quality for the venture.
Speaking on the development, Mr. Tulsi Tanti, Chairman, Suzlon Group said, “This is an important step forward for our future business in China. With this joint venture, we monetize an asset we have built up from 2006, and through our partner, Poly LongMa Energy (Dalian), maintain our strong presence in the world’s largest market, which remains strategically important for us. With the combined strength of both groups, the new joint venture will be very well positioned in China, and offer the potential to explore exports as well.”
“While this deal has taken time and changes to fructify, we believe this achieves the best possible balance for the Group and our stakeholders, including our customers, vendors, lenders and employees,” Mr. Tanti added.
Steel shares rallied. JSW Steel (up 9.14%), Tata Steel (up 7.03%), Sail (up 3.67%), Jindal Steel & Power (up 3.03%) edged higher.
Among other metal stocks, Hindalco Industries (up 3.23%), Sesa Goa (up 3.97%) and Hindustan Zinc (up 2.98%), gained
NMDC rose 0.37%. The stock turned ex-dividend today, 19 September 2013, for final dividend of Rs 4 per share for the year ended 31 March 2013.
NMDC after market hours on Wednesday, 18 September 2013 said that the conveyor belt no.31 of Bailadila Iron Ore Mine, Bacheli Complex, Chhattisgarh was attacked by some miscreants in the early hours of 18 September 2013. Around 150 metres of the conveyor belt has been burnt, NMDC said. The belt restoration work has already been taken up and it is expected that within three days the belt would be repaired. The scheduled dispatches of iron ore are continuing and this incident will not affect the production/dispatches, the company said in a statement.
Telecom stocks gained across the board. Idea Cellular (up 2.43%), MTNL (up 0.14%) Tata Teleservices (Maharashtra) (up 1.13%) gained.
Bharti Airtel rose 4.94% to Rs 354. A block deal of 10 lakh shares was executed in the counter on BSE at Rs 355.20 per share at 10:06 IST
Reliance Communications galloped 12.22% to Rs 160.75 on high volume of 72.23 lakh shares. The stock hit 52-week high of Rs 163.80 in intraday trade.
Bharti Infratel rose 3.18% to Rs 164.05. A block deal of 7.96 lakh shares was executed in the counter on BSE at Rs 165 per share at 10:40 IST.
Realty stocks jumped. HDIL (up 4.69%), Indiabulls Real Estate (up 9.25%), Unitech (up 7.29%), D B Realty (up 5.68%) and DLF (up 6.54%), jumped.
Adani Enterprises surged 9.97% to Rs 148.95. A block deal of 42.6 lakh shares was executed in the counter on BSE at Rs 140.75 per share at 12:38 IST
Ashoka Buildcon rose 2.17% after the company said that a special purpose vehicle viz. GVR-Ashoka Chennai ORR, incorporated by the company and GVR Infra Projects with 50% stake each, has executed a concession agreement with the Highways and Minor Ports Department of the Tamil Nadu state government for a road development project in Chennai. The project will be executed on design, build, finance, operate and transfer annuity basis.
Hind Rectifiers rose 1.99% after the company said it received two orders worth Rs 26.56 crore from the Indian Railways. The company made the announcement after market hours on Wednesday, 18 September 2013. Hind Rectifiers said the orders are a milestone for the company as each of them mark the placing of complete order by Indian Railways on a single vendor, the company said.
Prism Cement gained 3.29% after the company said its wholly-owned foreign subsidiary Lifestyle Investments (LIPL) has sold its entire stake in Norcros Plc, a company listed on the London Stock Exchange, for a net consideration of GBP 26.55 million. Post the sale LIPL does not hold any shares of Norcros Plc. LIPL’s capital gain on this transaction would be about GBP 12.8 million, Prism Cement said.
Investors’ focus will now shift to the outcome of the Reserve Bank of India’s mid-quarter policy review tomorrow, 20 September 2013. At its mid-quarter monetary policy review tomorrow, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures. The RBI will release Mid-Quarter Review of Monetary Policy 2013-14 at 11:00 IST tomorrow, 20 September 2013. This will be followed by Governor Raghuram Rajan addressing the media in the afternoon on that day.
European stocks surged on Thursday, 19 September 2013, after the US Federal Reserve decided not to taper its asset purchases as many analysts had expected. Key benchmark indices in UK, France and Germany were up 1.04% to 1.44%.
Asian stocks jumped on Thursday, 19 September 2013, after the Federal Reserve unexpectedly refrained from reducing US economic stimulus on Wednesday, 18 September 2013. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore rose by 1.67% to 4.65%. The stock markets in Mainland China, Taiwan and South Korea were closed for a holiday.
Japan’s exports rose the most since 2010 in August, boosting Prime Minister Shinzo Abe’s growth drive. Japanese exports rose 14.7% on year in August, the Ministry of Finance said Thursday.
Trading in US index futures indicated that the Dow could gain 58 points at the opening bell on Thursday, 19 September 2013. US stocks climbed to record highs on Wednesday and the benchmark 10-year Treasury yield fell sharply after the Federal Reserve abstained from reducing its bond buys. The Federal Open Market Committee after two-day policy meet on Wednesday said it wants more evidence of an economic recovery before paring its $85 billion-a-month bond buying program. Fed Chairman Ben S. Bernanke said there is no fixed schedule for tapering and it could still start this year should data confirm the central bank’s basic outlook.
In fresh quarterly projections, the Fed cut its forecast for 2013 economic growth to a 2% to 2.3% range from a June estimate of 2.3% to 2.6%. The downgrade for next year was even sharper. It cited strains in the economy from tight fiscal policy and higher mortgage rates as it explained why it decided to maintain asset purchases at the current pace. The tightening of financial conditions observed in recent months, if sustained, could slow the pace of improvement in the economy and labor market, it said in a statement. Nevertheless, the Fed said the economy was still making progress despite tax hikes and budget cuts in Washington. Taking into account the extent of federal fiscal retrenchment, the committee sees the improvement in economic activity and labor market conditions since it began its asset purchase program a year ago as consistent with growing underlying strength in the broader economy, it said.
Meanwhile, the US Commerce Department reported that housing starts rose 0.9% to a smaller-than-expected 891,000 annual pace in August.
The World Trade Organisation (WTO) lowered growth projections for world trade in 2013 for the second time but has said the conditions for improved trade are already falling into place. WTO has forecast growth in world trade in 2013 at 2.5% against 3.3% projected in April and 4.3% earlier in the year. WTO has also lowered growth projection for 2014 to 4.5% from 5% predicted in April. Trade was only up 1.2% in the first half of 2013, and to realise 2.5% growth in 2013 would require a 3.8% growth in the second half of 2013, which is feasible, says WTO.
The revised trade forecasts are accompanied by a slight downward revision in the GDP estimates compared to the April release (from 2.1% to 2% in 2013, and from 2.7% to 2.6% in 2014).(business-standard)
