Volatility ruled the roost as the key benchmark indices pared gains after a solid surge in early trade triggered by firm global stocks. World stocks rose after data showed the US economy was out of recession. Reliance Industries and Oil & Natural Gas Corporation drifted lower after the two companies announced second quarter results after trading hours on Thursday, 29 October 2009. The BSE 30-share Sensex was up 202.80 points or 1.26% to 16,255.52.
The market breadth was strong. Metal shares were in demand on the back of firm metal prices on the London Metal Exchange. ICICI Bank surged ahead of Q2 results.
Asian markets rallied after data on Thursday showed US gross domestic product (GDP) grew at a 3.5% pace in Q3 September 2009. This was the fastest pace in GDP growth for the US economy since the third quarter of 2007. The growth followed four quarters of contraction. Key benchmark indices in Hong Kong, China, Japan, Singapore, South Korea and Taiwan were up by between 0.28% and 3.12%
The Bank of Japan's (BoJ) policy board unanimously left its overnight call rate target at 0.1% Friday, as was widely expected. It also extended its special lending program at that rate through the end of the Japanese fiscal year in March 2010 in order to ensure ample liquidity until then. However, it said it would end outright purchases of corporate bonds and commercial paper in December 2009, when those increasingly less-used steps were already scheduled to expire.
Board member Atsushi Mizuno was the lone the policy board dissenter opposing its decision to end the outright buys and also end the loan program in March 2010. Although the BoJ makes its decisions independently, the government has kept pressure on the bank to do all it can to support the economic recovery.
US stocks soared on Thursday, 29 October 2009 after four days of losses after data showed the world's largest economy grew for the first time in a year as a spate of stimulus measures brought an end to the longest period of contraction since the Great Depression. The Dow Jones industrial average jumped 199.89 points, or 2.1%, to 9,962.58. The broader S&P 500 index rose 23.48 points, or 2.3%, to 1,066.11, while the Nasdaq Composite Index rose 37.94 points, or 1.8%, to 2,097.55.
A separate government report showed that the number of Americans filing new claims for unemployment fell to 530,000 last week from 531,000 the previous week. Economists thought it would drop to 525,000.
Continuing claims, a measure of Americans receiving benefits for a week or more, fell to 5,797,000 from 5,945,000 the week before. Economists thought claims would fall to 5,905,000.
Trading in US index futures indicated Dow could fall 7 points at the opening bell today, 30 October 2009.
Close home, exports declined by 13.8% to $13.6 billion in September 2009 over September 2008, preliminary data showed on 29 October 2009. The fall in exports in September 2009 was lowest in the current financial year, showing gradual signs of recovery in the country's export sector.
Commerce Secretary Rahul Khullar said exports are likely to touch $165-175 billion during 2009-10 if the current trend continues. The country had exported goods worth more than $168 billion during 2008-09.
Inflation based on the wholesale price index (WPI) rose 1.51% in the year through 17 October 2009, higher than previous week's annual rise of 1.21%, data released by the government showed on Thursday. Within the WPI, the food articles index rose 12.85%. The government revised upwards inflation for the year through 22 August 2009 to rise of 0.17% from an estimated fall of 0.21%.
The Reserve Bank of India at its monetary policy review early this week left its key rates unchanged, but raised the wholesale price-based inflation projection for end-March 2010 sharply to 6.5% with an upward bias, from 5% earlier.
The IMF said on Thursday the economies of India, China and Australia were recovering especially rapidly, suggesting it notices growing pressures for authorities there to tighten monetary policy ahead of others in the region. It called the three economies special cases, while adding a tightening of monetary policy seemed unnecessary elsewhere in the region in the near future.
It also advised Asian central banks not to raise interest rates only to calm asset price growth, saying lifting rates ahead of advanced economies could attract carry trade-type capital inflows and aggravate asset price pressures.
Coming back to stocks, the supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.
Unlisted Reliance Infratel announced on 22 September 2009 its intention to raise Rs 5,000 crore from the primary market. Divestment of state-run firms by the government may also increase the supply of paper in the market.
The government recently approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes.
The government has approved a follow-on public offering of 20% of state run Steel Authority of India, the steel minister said on 21 October 2009. The Government of India owns nearly 86% of Sail. Also the government gave its approval for 15% follow on public offer for Rural Electrification Corporation on 29 October 2009.
As per provisional data, foreign funds dumped stocks worth a net Rs 2546.67 crore on 29 October 2009 whereas domestic funds bought equities worth a net Rs 977.06 crore.
At 10:25 IST, the BSE 30-share Sensex was up 202.80 points or 1.26% to 16,255.52.
The S&P CNX Nifty was up 76.25 points or 1.61% to 4826.80
The market remains closed on Monday, 2 November 2009, on account of Guru Nanak Jayanti.
The market breadth, indicating the overall health of the market was strong. On BSE, 1202 shares advanced as compared with 156 that declined. A total of 18 shares remained unchanged.
The total turnover on BSE amounted to Rs 1024 crore by 10:25 IST
Among the 30-member Sensex pack, 26 gained while only 4 of them declined.
Metal stocks advanced after LMEX, a gauge of six metals traded on the London Metal Exchange jumped 3.52% on Thursday, 29 October 2009.
India's largest non ferrous metal producer by sales Sterlite Industries India surged 4.58% to Rs 780.35 after a 4.88% rally in its American depository receipt (ADR) on Thursday, 29 October 2009. It was the top gainer from the Sensex pack.
Tata Steel (up 4.13%), and Hindalco Industries (up 4.06%), were the other gainers from the metal pack.
India's largest firm by market capitalisation and oil refiner Reliance Industries (RIL) slipped 0.44% to Rs 1995.10 after it reported a fourth straight decline in quarterly profits on shrinking refining margins and reduced exports due to a global economic downturn. The company posted a 6.4% fall in net profit at Rs 3,852 crore despite 6% rise in total income to Rs 47,476 crore in Q2 September 2009 over Q2 September 2008. Refining margins more than halved to $6 a barrel from $13.3 a barrel a year earlier. The results were announced after market hours on Thursday, 29 October 2009
The government on 27 October 2009 allocated additional 50 million cubic metres a day (mmscmd) of gas from Reliance Industries-operated east coast block D6. Power plants and refineries will get the bulk of Reliance Industries' gas from the Krishna-Godavari basin beyond the previously allotted 40 million metric standard cubic metres per day (mmscmd).
The empowered group of ministers (eGoM) also made some allotments for Reliance's petrochemical plants and refineries.
India's largest oil exploration firm by sales Oil & Natural Gas Corporation declined 0.93% to Rs 1155. Net profit rose 5.9% to Rs 5,090 crore in Q2 September 2009 over Q2 September 2008 on account of lower subsidy outgo and higher realisation on crude oil sales. The results were announced after market hours on Thursday, 29 October 2009
India's largest telecom company by sales Bharti Airtel was down 1.09%. The company's net profit rose 43.10% to Rs 2296.94 crore on a 7.5% increase in total income to Rs 8927.10 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours today, 30 October 2009
India's largest private sector bank by net profit ICICI Bank advanced 3.18% ahead of its September 2009 results due today, 30 October 2009. Its ADR rose 2.02% on 29 October 2009.
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