The key benchmark indices pared gains in mid-afternoon trade. Higher European stocks and US index futures supported market. Strong response to the initial public offer of Indiabulls Power and sustained buying by foreign funds also boosted sentiment. The BSE 30-share Sensex was up 121.82 points or 0.71%, off close to 30 points from the day's high and up close to 190 points from the day's low. Index heavyweight Reliance Industries pared gains.
Banking and realty stocks also rallied. But, India's largest copper maker by sales Sterlite Industries fell on equity dilution worries after the company said before market hours it had raised $500 million in convertible notes. Oil exploration stocks gained whereas PSU OMCs fell on rally in crude oil prices. The market breadth was positive.
The market recovered soon after an initial slide caused by mostly lower Asian stocks. The market extended gains later. The Sensex hit a fresh intraday high in early afternoon trade. The market continued to march higher in afternoon trade. Market pared gains in mid-afternoon trade.
A special one hour Muhurat trading session will be held tomorrow, 17 October 2009, between 18:15 to 19:15 IST to pay obeisance to Lakshmi the Hindu goddess of wealth and prosperity. Investors make token purchases on the Muhurat trading day to mark the beginning of the new Samvat year as per the Hindu calendar. The market remains closed on Monday, 19 October 2009 on account of Diwali.
Emerging-market equity fund inflows surged in the second week of October 2009 on optimism improving US earnings and China's trade figures signal increased demand for commodities, fund tracker EPFR Global said on Friday, 16 October 2009. Heavy inflows were seen in funds specialized in BRIC countries -- Brazil, Russia, India and China. Asia ex-Japan funds received $823 million in the week ended 14 October 2009.
Inflation based on the wholesale price index (WPI) rose 0.92% in 12 months to 3 October 2009, slightly above previous week's annual rise of 0.7%, data released by the government on Thursday showed. Within the WPI, the food articles index rose 13.34%. The government revised upwards inflation for the year through 8 August 2009 to a much smaller decline of 0.37% from an estimated fall of 1.53%.
C. Rangarajan, chairman of the prime minister's Economic Advisory Council said on Wednesday the Reserve Bank of India is likely to hold interest rates at a near decade-low in its policy review this month and the monetary stance can continue until inflationary pressures rise. Robust industrial growth could offset the impact of a 2 to 2.5% contraction in farm output due to weak monsoon, and help the economy grow between 6 and 6.5% in 2009/10, Rangarajan said.
Faster industrial output growth and rising inflationary pressures have strengthened case for an end to the RBI's accommodative monetary stance next year. Industrial output grew at its fastest pace in 22 months in August at 10.4 %.
The water level in main reservoirs rose 3 percentage points to 63% of capacity in the week to Thursday as unseasonal rain filled the tanks to levels closer to normal, government data showed. Over the last 10 years, water levels in India's 81 main reservoirs have on average been steady at 67% for three consecutive weeks at this time of the year.
Reservoirs are important for hydropower, which accounts for a quarter of India's generation capacity. They also provide water to irrigate winter crops such as wheat and rapeseed.
Stock and sector-specific activity may dominate trade in the coming days based on expectations on Q2 September 2009 results. Auto firms are seen reporting strong Q2 results on strong volume growth and on lower input costs. Lower interest rates and pay hike for government employees has boosted auto sales this year after last year's slowdown in demand. Government employees have started receiving the balance 60% of their wage arrears as per the recommendations of the VIth Pay Commission.
Cement firms, too, are seen reporting good Q2 numbers on the back of volume growth, higher realisation and decline in costs like imported coal. Metal firms are seen reporting fall in net profit due to a sharp fall in metal prices on year-on-year basis.
Fall in volumes in the commercial property segment and lower realisations in both commercial and residential property segments, will pull earnings of realty firms lower.
Banks are seen reporting a sedate growth in core lending amid sluggish credit offtake. On the flip side, PSU banks will benefit from treasury gains amid volatility in prices of government securities during the quarter.
Strong growth in new subscriber additions will aid topline growth of telecom firms. But falling average revenue per user (ARPU) and revenue per minute due to intense competition will cap bottom line growth.
European shares were higher in early trade on Friday, with banks and energy stocks the biggest gainers on renewed growth optimism after strong results from IBM and Google. The key benchmark indices in France, Germany and UK were up by between 0.37% to 0.64%.
Asian share markets were mixed as investors awaited fresh leads from major US corporate earnings. Key benchmark indices in South Korea, Hong Kong and Singapore were down by between 0.11% to 1.12%. Key benchmark indices in Japan, Hong Kong and Taiwan rose by between 0.06% to 0.18%.
China's Shanghai Composite index fell 0.31% on concerns the imminent launch of the Growth Enterprise Market, a Nasdaq-style board, would divert cash from current stocks.
China's banking regulator on Friday said major Chinese banks must make sure their lending does not run out of control and that their capital adequacy ratios do not deteriorate. The instruction was relayed to the lenders by Jiang Dingzhi, a vice-chairman of the China Banking Regulatory Commission (CBRC), at a meeting on Wednesday.
His comments are the latest sign of unease among regulators about the risks that banks are taking by ramping up lending to support the government's 4 trillion yuan ($585 billion) economic pump-priming package.
Japan's economy has been picking up but lacks the drive of domestic demand, the government said in a monthly report on Friday, giving a bleaker view than the Bank of Japan. The central bank's policy board, this week, deferred a decision on withdrawing support for corporate finance after the government pressed it to consider what the economic cost would be if it retreated from credit markets.
Trading in US index futures indicated Dow could gain 23 points at the opening bell today.
US markets closed with marginal gains after a topsy-turvy session on Thursday on positive economic news and better than estimated earnings from Goldman Sachs and Citigroup. The Dow gained 47.08 points, or 0.5%, to 10,062.94, its highest close since last October. The S&P 500 index added 4.54 points, or 0.4%, to 1,096.56. The Nasdaq Composite Index rose 1.06 points, or 0.1%, to 2,173.29.
IBM numbers came out after market close. The company raised its full-year outlook and reported higher-than-expected quarterly profit. Internet search giant Google handily beat analysts' expectations for both profit and revenue.
In the day's economic news, weekly jobless claims dropped to their lowest level since January 2009 at 514000.
Traders are waiting to see if the Dow Jones Industrial Average can stay above 10000 after GE and Bank of America report results tonight.
Paul Volcker, an economic adviser to President Barack Obama and a former Fed chairman on Thursday said the enormous amounts of liquidity pumped into the US financial system by the Federal Reserve is not inflationary at the moment but will become so at some point. Volcker said it is difficult, but necessary, to start draining the billions of dollars in liquidity even while unemployment rates remained high as the US battles out of recession.
Billionaire investor George Soros said on Thursday the US economy is going to be a drag on world growth. Soros said he also believes there is a something of an asset bubble in China.
Closer home, a section of the market is concerned that a glut in share sales may suck liquidity from the secondary market. As per reports, 30 companies have filed their draft red herring prospectuses in September 2009 with market regulator Securities & Exchange Board of India (Sebi) for raising funds through initial public offering.
The corporate sector has raised large sums of money through equity and equity related instruments in the past six months or so to either to retire high cost debt or to fund expansion. The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary market.
As per one report, companies plan to raise over Rs 50,000 crore through initial public offers (IPOs), follow-up public offers, divestment of stake sale in the second half of the current financial year. Reliance Infratel also announced on 22 September 2009, its intention to raise Rs 5,000 crore from the primary market. A number of companies are also in the fray to raise funds by way of qualified institutional placement (QIP), reports suggest.
Divestment of state-run firms by the government may also increase the supply of paper in the market. As per recent reports, the government is planning to announce a blueprint for selling its stake in state-owned firms in the first week of October 2009. The policy is expected to suggest how the government will eventually bring down its stake in public sector companies to 75% over a period of time.
Prime Minister Manmohan Singh on Thursday said the government is encouraging the listing of public sector enterprises on the stock markets as this will unlock the true value of companies, improve their corporate governance standards and help them raise resources for future expansion. He said the government would try to restructure and revive loss-making PSUs.
At 14:20 IST, the BSE 30-share Sensex was up 121,82 points or 0.71% to 17,317.02. The Sensex rose 152.65 points at the day's high of 17,347.85 in afternoon trade. The barometer index fell 68.65 points at the day's low of 17,126.55 in early trade.
The S&P CNX Nifty was up 30.05 points or 0.59% to 5,138.90. It hit a high of 5,149.65.
The market breadth, indicating the overall health of the market was positive. On BSE, 1549 shares advanced as compared with 1125 that declined. A total of 100 shares remained unchanged.
Among the 30-member Sensex pack, 17 rose while the rest fell.
The BSE Mid-Cap index rose 0.95% and the BSE Small-Cap index rose 0.77%.
India's largest private sector firm by market capitalisation and oil refiner Reliance Industries (RIL) rose 1.7% to Rs 2,208.30. The stock came off the day's high of Rs 2,220. RIL is in advanced talks to acquire refinery and petrochemical units in the US and Europe and could finalise a deal by end-2009, Maurice Bannayan, senior vice president at Reliance Industries said on Wednesday.
Anil Dhirubali Ambani group (ADAG) Chairman Anil Ambani called on Sunday, 11 October 2009, for a renewed effort to end a bitter feud with his brother Mukesh Ambani triggered by the carve-up of up a vast family business stretching from energy to telecommunications and financial services.
Anil Ambani said in a statement he believed all disagreements can be sorted out in a constructive, cordial and conciliatory manner, and called for a generous heart, a willing mind and accommodating spirit to resolve issues.
Their latest dispute is over a deal for Mukesh Ambani's Reliance Industries to sell gas to Anil Ambani's Reliance Natural Resources (RNRL) at below-market rates as agreed in a 2005 family settlement to divide the business following their father's death in 2002. The dispute has landed in the Supreme Court (SC). Anil Ambani said on Sunday the contentious gas dispute is a large national issue and can only be resolved through the SC.
Reliance Industries (RIL) said it welcomes Anil Ambani's call to make a renewed effort to resolve, reconcile and reciprocate and said it hopes that it is a positive change in the negative, calumnious and malafide campaign launched by ADAG against RIL.
RIL, last week, announced liberal 1:1 bonus issue. Both the bonus and the dividend are applicable to shareholders of the erstwhile Reliance Petroleum, which has been merged with RIL. Meanwhile, a sharp year on year fall in refining margins will weight on Q2 September 2009 results of RIL.
Oil exploration stocks rose as crude oil rose above $78 a barrel today capping its biggest weekly gain in two months, on an unexpected decline in US gasoline stockpiles and refinery utilization. Rise in crude oil prices would result in higher realizations from crude sales for oil exploration firms.
Cairn India rose 3.91%. Cairn India, a unit of Cairn Energy, won 2 offshore blocks in the auction. Cairn India, has secured loans worth $1.6 billion to fund its project in the western state of Rajasthan, potentially helping it accelerate development of its oilfields in the region. India's second biggest state-run oil exploration firm by revenue Oil India rose 0.54%. Oil India won 5 offshore blocks in the auction.
But, India's biggest state-run oil exploration firm by revenue Oil & Natural Gas Corporation (ONGC) fell 0.78%. ONGC has bagged over a third of the 70 blocks offered under the government's eighth New Exploration Licensing Policy (NELP 8), amid luke-warm response towards the bidding round. ONGC bid for 25 blocks and was awarded 11 offshore and two onshore concessions.
Nearly half of 70 blocks offered under NELP 8 found no bidder, with 76 bids submitted for 36 exploration blocks, D.N. Narasimha Raju, joint secretary in the oil ministry said on Monday.
PSU OMCs fell as higher crude oil prices will increase under-recoveries on domestic sale of petrol, diesel, kerosene and LPG at controlled prices. HPCL, BPCL and Indian Oil Corporation (IOC) fell by between 0.32% to 2.48%.
Crude oil for November delivery climbed as much as 59 cents, or 0.8% to $78.17 barrel in Asian electronic trading on Friday.
Bank stocks rose on better than expected result by US banks Goldman Sachs and Citigroup on Thursday. India's largest bank by net profit and branch network State Bank of India rose 4.7%. Among other PSU banks, Bank of India, Punjab National Bank, Union Bank of India, Punjab National Bank and Bank of Baroda, rose by between 1.41% to 4.85%.
India's largest private sector bank by net profit ICICI Bank rose 3.32%. Its ADR was flat on Thursday. The bank last week reduced auto loan rates by 50 basis points.
But, India's second largest private sector bank by net profit HDFC Bank fell 0.13% even as its ADR rose 2.86 % on Thursday. The bank's net profit rose 30.2% to Rs 687.46 crore in Q2 September 2009 over Q2 September 2008. The results, which hit the market during trading hours on Wednesday, were more or less in line with market expectations.
The central bank will reportedly hike the ceiling on the portion of government securities that banks can park in held-to-maturity (HTM) category. Banks do not have to make any mark-to-market provisions on securities held this basket if prices of securities fall. Provisions have to be made out of profit and therefore, impact a bank's bottom line. Yields on ten-year government bonds have risen sharply this year. Bond prices and bond yields are inversely related.
Indian banks can put bonds equal to 25% of the value of deposits in their HTM accounts. The market expectations is for an increase in the ceiling by up to 2 percentage points, possibly at a quarterly monetary policy review on 27 October 2009.
India's largest dedicated housing finance firm HDFC rose 2.12%. HDFC, after market hours on Monday said net profit rose 24.27% to Rs 663.94 crore in Q2 September 2009 over Q2 September 2008. The results beat market expectations.
Realty stocks rose on recent reports that demand for residential projects in major cities is picking up on lower home loan rates, property price cuts by developers and a recovery in the job market. Realty market had slumped last year amid a global credit crunch and buyers fearing job losses. DLF, Indiabulls Real Estate, Akruti City, Unitech rose by between 1.57% to 4.67%.
India's largest copper maker by sales Sterlite Industries fell 5.77% on equity dilution worries after company said before market hours it had raised $500 million in convertible senior notes and plans to use the proceeds primarily for expansion of its copper business. The notes are convertible into American depositary shares at $23.33 per share.
India's largest engineering and construction firm by sales Larsen & Toubro rose 0.44%. The company on Wednesday announced bagging orders worth Rs 966 crore.
Sical Logistics rose 4% after the company formed a joint venture firm with Japan's Mitsui OSK Lines for automotives management yard at Ennore Port, Chennai.
EIH extended gains for the second consecutive day and rose as much as 77.45% after reports said that the Oberoi family plans to sell a little over 17 % to /Analjit Singh for up to Rs 1250 crore.
Apcotex Industries was locked at 5% at Rs 79.20 after the board approved buyback of shares at a price not exceeding Rs 90 per share, which is 13.64% premium to the ruling market price.
Powered by Capital Market - Live News