The key benchmark indices extended gains in afternoon trade as firm Asian stocks and higher US index futures, boosted market sentiment. Index heavyweight Reliance Industries (RIL) led the rally. The stock surged more than 3% today, 23 November 2009, after the company said it has put a bid to acquire bankrupt chemicals maker LyondellBasell Industries. The BSE 30-share Sensex was up 161.45 points or 0.95% up close to 140 points from the day's low and off about 5 points from the day's high.
Metal, FMCG, power, capital goods and auto stocks rose. The market breadth was strong.
Stocks were volatile. The key benchmark indices scaled one-month highs in early trade on higher Asian stocks. The market pared gains in morning trade. The market surged later with the Sensex hit a fresh one-month high in early afternoon trade. The market extended gains later.
Equities may remain volatile this week as traders rollover positions in the derivative segment from November 2009 series to December 2009 series ahead of the expiry of the near month November 2009 contracts on Thursday, 26 November 2009.
The government has not yet chalked out a roadmap to withdraw stimulus in the first half of 2010, the junior finance Minister Namo Narain Meena said on Friday. Early in November, Prime Minister Manmohan Singh had said the government would take appropriate action next year to wind down stimulus.
Mass protests by sugarcane farmers backed by political opposition parties forced the parliament to adjourn for a second day on Friday, 20 November 2009, a major headache for the ruling Congress party. The standoff over price deregulation highlights the difficulty Congress faces to balance the implementation of long-stalled financial reforms with the demands of its large rural base.
The government has set reform of the insurance sector as a priority for the winter parliament session that began on 19 November 2009. The bill, which was stalled in the last parliament, proposes raising the foreign investment limit in insurance companies from 26 % to 49%. The government also wants to open up the pension sector to private and foreign firms and give equal voting rights to foreigners in private-sector banks, which are currently limited to 10% irrespective of their actual holding.
Meanwhile, the government and the Reserve Bank of India (RBI) have reportedly decided to withdraw starting next January 2010 a facility that allowed Indian firms to buy back foreign currency convertible bonds (FCCBs) issued to overseas investors, in yet another move to unwind measures introduced last year at the height of the global credit crisis. Companies that have issued such bonds, which have both debt and equity features, will have to convert them into shares or redeem them at face value, depending on investor preference.
In addition to the decision to discontinue the special facility for buying back FCCBs, the government has also reportedly proposed doing away the relaxation on pricing foreign borrowings, another measure announced last year to help Indian companies raise funds during the credit crunch. This is aimed at containing capital flows, which continue to be strong this year and have crossed the $15-billion mark.
The government is not considering imposing a tax to curb an influx in overseas funds, and indeed wants an increase in inflows, the deputy chairman of the government's planning commission Montek Singh Ahluwalia said on Friday. He said foreign funds were needed for developing infrastructure such as road projects and were unlikely to create asset price bubbles.
Higher capital inflows have resulted in currency appreciation mainly in Asia and Latin America, prompting central banks contemplate a range of measures to hold back the tide.
Meanwhile, Prime Minister Manmohan Singh arrives in Washington on Monday for a state visit set to boost the burgeoning economic relationship between two countries, which had relatively marginal commercial dealings a decade ago.
Some Asian stocks edged higher on Monday for first time in three days, on signs the economic recovery is gathering pace. The key benchmark indices in China, Taiwan, Hong Kong, Singapore rose by between 0.05% to 1.23%. But the key benchmark indices in South Korea and Indonesia fell by between 0.1% to 0.73%. Japanese markets were closed on Monday for a holiday.
China's annual economic growth will reach 10% this quarter and grow even faster in the first quarter of 2010, said Yu Bin, a government researcher with the State Council Development Research Centre in remarks published on Monday.
Trading in US index futures indicated Dow could rise 55 points at the opening bell on Monday, 23 November 2009.
In US on Friday, unease about the economy's prospects drove investors to snap up defensive stocks seen better able to withstand an uncertain economy, limiting the Dow's losses. The Dow slipped 14.28 points, or 0.1%, to 10,318.16. The S&P 500 index was down 3.52 points, or 0.3%, to 1,091.38, while the Nasdaq Composite Index fell 10.78 points, or 0.5%, to 2,146.04.
A group of US business economists boosted their forecast for economic growth over the next year, but said the jobless rate will remain stubbornly high, a survey released on Monday showed. The National Association for Business Economists predicted real growth in gross domestic product for 2010 would be 2.9%, up from its October forecast for 2.6% growth.
At 13:20 IST, the BSE 30-share Sensex was up 161.45 points or 0.95% to 17183.30. The Sensex rose 165.28 points at the day's high of 17187.13 in afternoon trade, its highest since 21 October 2009. The Sensex rose 23.17 points at the day's low of 17045.02 in morning trade.
The S&P CNX Nifty was up 56.95 points or 1.01% to 5103.40. It hit a high of 5106.80, its highest since 21 October 2009.
The market breadth, indicating the overall health of the market was strong. On BSE, 1631 shares advanced as compared with 968 that declined. A total of 80 shares remained unchanged.
From the 30 share Sensex pack, 23 rose and rest fell.
The BSE Mid-Cap index rose 0.93% and the BSE Small-cap index rose 1.17%.
Energy major Reliance Industries (RIL) rose 3.19%. The company said it has put a bid to acquire bankrupt chemicals maker LyondellBasell Industries. RIL said that it had submitted a preliminary non-binding offer to acquire, for cash, a controlling interest in Rotterdam, Netherlands-based LyondellBasell.
RIL also said it is reviewing a number of global opportunities for growth in its core business, including LyondellBasell. The conglomerate said its offer is preliminary and subject to customary conditions, including conduct of due diligence, documentation and receipt of creditor support.
Meanwhile, RIL plans an aggressive exploration campaign, investments in petrochemicals and overseas acquisitions as India's top company by market capitalisation prepares itself for the next phase of growth. The company will work towards attaining global scale for its conventional energy platform petrochemicals, refining and oil and gas exploration and invest in its new businesses such as retailing and alternative energy, chairman Mukesh Ambani said at the company's annual meeting of shareholders on 17 November 2009.
RIL has set 27 November 2009 as the record date for a liberal 1:1 bonus share issue.
FMCG stocks rose on bargain hunting. Hindustan Unilever, ITC, United Spirits, Dabur India, Tata Tea rose by between 0.48% to 2.17%.
India's largest thermal power generator by sales National Thermal Power Corporation (NTPC) rose 0.3%. The company said after market hours on 19 November 2009 that a joint venture agreement has been executed amongst NTPC, Power Finance Corporation, Power Grid Corporation of India and Rural Electrification Corporation for formation of a public limited company to carry out and promote the business of energy efficiency, energy conservation and climate change. In this joint venture company, all the four promoters shall contribute 25% equity each it said.
Among other power stocks, Torrent Power, Reliance Infrastructure, Tata Power Company, CESC rose by between 0.04% to 3.11%.
India's largest engineering and construction firm by sales Larsen & Toubro rose 0.49%. The company on 17 November 2009 said Gilbarco Inc. has bought its petroleum dispensing pump business.
Among other capital goods stocks, Bharat Heavy Electricals, ABB, Punj Lloyd, Siemens, rose by between 0.11% to 1.91%.
Banking shares rose on gains in American depository receipts on Friday 20 November 2009. India's second largest private sector bank by net profit HDFC Bank rose 0.77% as its ADR rose 2.92% on Friday.
India's largest private sector bank by net profit ICICI Bank rose 1.48% as its ADR rose 2.64% on Friday. The bank said on Saturday it raised $750 million (about Rs 3,500 crore) through an overseas bond issue, at an yield of 5.5%. The bank's net profit rose 2.6% to Rs 1040.13 crore on a 12.7% decline in total income to Rs 8480.73 crore in Q2 September 2009 over Q2 September 2008. The result was announced during trading hours on 30 October 2009.
Hopes of consolidation among PSU banks boosted shares of state-run banks for the second straight day. Union Bank, Bank of Baroda and Punjab National Bank, Bank of India rose by between 0.06% to 2.05%.
As per reports, Union Bank, Bank of Baroda and Punjab National Bank are keen on acquiring Corporation Bank whereas Canara Bank and Punjab National have shown interest in acquiring Dena Bank. As per reports, chiefs of Punjab National Bank, Canara Bank, Union Bank of India, Bank of India and Bank of Baroda met Finance Ministry official on Wednesday, 18 November 2009, to discuss the pros and cons of consolidation among banks in India.
But, India's largest bank by net profit State Bank of India (SBI) fell 0.29%. State Bank of India said on 9 November 2009 said it had entered into an agreement with T. Rowe Price to sell a 6.5% holding each in UTI Asset Management Company and UTI Trustee Company. State Bank currently holds 25% in each of the companies and after the sale its holding would be reduced to 18.5%, it said in a statement.
SBI announced on 6 November 2009 it has revised downwards interest rates on deposits by 25-50 basis points for a few maturities effective from 9 November 2009. The bank's consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008. The results were announced on 31 October 2009.
India's largest dedicated home loan lender Housing Development Finance Corporation (HDFC) fell 0.13%. The lender announced on 13 November 2009 it has agreed to acquire approximately 41% in the fully diluted equity share capital of Credila Financial Services from DSP Merrill Lynch Capital.
Prime Minister Manmohan Singh said on 8 November 2009, financial reforms, such as building up a domestic bond market and expanding foreign investment in sectors like insurance, would be pushed forward.
Meanwhile, the Reserve Bank of India Deputy Governor Usha Thorat said on Monday 16 November 2009 the central bank will soon issue guidelines on provisioning for bad loans by banks
Banks and co-operatives have reportedly disbursed farm loans to the tune of Rs 1.38 lakh crore in the first half of 2009-10, meeting over 42% of the target set by the government for the whole financial year.
Metal stocks rose after a gauge of six metals traded on the London Metal Exchange, rose 0.73% on Friday, 20 November 2009. National Aluminum Company, Sterlite Industies, Hindustan Zinc rose by between 0.63% to 4.02%.
Steel Authority of India (Sail) rose 1.1%. The government said on 19 November 2009 it is considering a 20% stake sale in steel major Sail, proceeds of which would partly fund the company's Rs 70000 crore expansion projects.
India's largest steel maker by sales Tata Steel rose 1.52% The company last week said it issued $ 546.9 million in new convertible bonds in exchange for $ 493 million of securities as part of a plan to reduce costs and ease repayment obligations. The company had said earlier this month the new foreign currency convertible bonds will have a yield-to-maturity of 4.5% and will mature in November 2014.
JSW Steel rose 0.74%. Japan's JFE Steel, the world's sixth-largest steelmaker, said on 19 November 2009 it will team up with JSW Steel on automotive steel production in India.
Demand for steel remains strong from auto, rural construction and infrastructure sectors. Also demand for construction grade steel has improved post monsoon season, and has resulted into higher sales.
Vishal Retail jumped 7% on reports the company has received in-principle approval for corporate debt restructuring.
Aurobindo Pharma jumped 6.91% after the company inaugurated its formulations manufacturing facility in special economic zone at Hyderabad on Friday, 20 November 2009.
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