Jubilation continues at D-street; Sensex surpasses 21,000 mark

Jubilation continued on Dalal Street for second day in a row, with Indian equity benchmarks ending the session with gain of over half a percent on the penultimate session of F&O expiry. Market traded in the green throughout the session on the back of in-line expectation RBI’s policy review. Positive global-set-up also added to the investors’ sentiments. There was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Though, investors booked some profit off the table towards the end of the session, but markets managed to end at their highest level in nearly three years and both the benchmarks scaled past the psychological levels of 21,000 (Sensex) and 6,250 (Nifty).

Supportive cues from US markets provided early support to local markets and sentiments remained up-beat on optimism that the Federal Reserve after its two-day policy meeting will maintain its asset purchase program. Rally in Asian markets too boosted the traders’ moral with Japanese Nikkei surging over a percent after industrial production in Japan climbed a seasonally adjusted 1.5 percent in September compared to the previous month. Moreover, positive opening of European counterparts too aided the sentiments as investors bet that the US Federal Reserve will keep its quantitative-easing program intact when it ends its policy meeting later in the day.

Back home, sentiments also remained up-beat after the stock exchanges, in consultation with market watchdog Securities and Exchange Board of India (SEBI), decided to ease the norms to retain up to Rs 10,000 in trading accounts of active customers based on representations received from investors and members. Moreover, buying in stocks of public sector oil marketing companies (OMCs) viz. BPCL, HPCL and IOC too aided the sentiments as the Kirit S. Parikh Committee’s report on pricing diesel, domestic LPG, and PDS kerosene recommended an immediate increase in diesel prices by at least Rs 4 a litre and, thereafter, doubling the current pace of increase in diesel prices to Re1 per month.

However, gains on the up-side remained capped after the rupee depreciated against the US dollar in early trades and traded at Rs 61.49 compared to its previous close of Rs 61.32. Some cautiousness also crept in after India Inc raised apprehension saying that hike in key interest rate by the Reserve Bank of India will hit the already weak investment momentum and impact India’s economic growth. Also, there will be some concern in coal and mining stocks as it has been reported that the auction of coal blocks to private firms may get further delayed to March next year as the Coal Ministry has sought from consultancy firm CMPDIL a report on reserves of four more mines.

The NSE’s 50-share broadly followed index Nifty rose by over thirty points to end above its psychological 6,250 level, while Bombay Stock Exchange’s Sensitive Index -- Sensex surged by over one hundred points to end above the psychological 21,000 mark.

Broader markets too traded with traction and ended the session with a gain of around half a percentage point. The market breadth remained in favour of advances, as there were 1,270 shares on the gaining side against 1,161 shares on the losing side, while 178 shares remained unchanged.

Finally, the BSE Sensex surged by 104.96 points or 0.50%, to settle at 21033.97, while the CNX Nifty added 30.80 points or 0.50% to settle at 6,251.70.

The BSE Sensex touched a high and a low of 21086.59 and 20937.12, respectively. The BSE Mid cap index gained 0.25% and Small cap index was up by 0.64%.

The top gainers on the Sensex were Bharti Airtel up 5.23%, Dr Reddys Lab up 3.87%, Hindalco Inds up 2.77%, ICICI Bank up 2.23% and Bajaj Auto up 2.22%, on the flip side Wipro down 2.17%, SSLT down 1.29%, HDFC Bank down 0.95%, SBI down 0.94%, and L&T down 0.82%, were the top loser on the index. 

On the BSE Sectoral front, Healthcare up by 1.19%, FMCG up by 1.12%, Teck up by 0.66%, Power up by 0.51%, and Realty up by 0.47%, were the top gainers, while Auto down by 0.05%, and PSU down by 0.03%, were the only losers on the sectoral front.

Meanwhile, in a bid to develop the country's corporate bond market, market regulator Securities and Exchange Board of India (SEBI) has relaxed the norms for primary issuance of debt securities by companies.

According to the new measures taken by the SEBI, cash flows generating from the debt securities would have to be disclosed in the prospectus or the disclosure document by way of an illustration. The market regulator has also noted that if the coupon payment date of the debt securities falls on a Sunday or a holiday the payment would be made on the next working day. Furthermore, if the maturity date of the debt securities, falls on a Sunday or a holiday, the redemption proceeds would be paid on the previous working day. These debt securities norms would be applicable to debt securities issued from December 1, 2013.

Moreover, SEBI stressed that the allotment in the public issue of debt securities should be made on the basis of date of upload of each application into the electronic book of the stock exchange. However, on the date of over-subscription, the allotments should be made to the applicants on proportionate basis. Regarding frequent debt issuers, market regulators noted that frequent debt issuers who are in compliance with listing norms, are allowed to disclose unaudited financials with limited review report in the offer document instead of audited results. However, these entities will have to comply with to necessary disclosures including risk factors. These norms would be applicable from November 1, 2013.

In order to enable the investors to forward their grievances to the debenture trustees, the market regulator has asked the companies which have listed their debt securities to disclose the name of the debenture trustees with contact details in their annual report and on their websites from December 1.

The CNX Nifty touched a high and low of 6,269.20 and 6,222.60 respectively.

The top gainers on the Nifty were Bharti Airtel up by 5.28%, Dr. Reddy's Laboratories up by 4.18%, BPCL up by 3.13%, Ranbaxy Laboratories up by 2.96% and Hindalco Industries up by 2.63%. On the other hand, Axis Bank down by 2.31%, Wipro down by 2.07%, Bank of Baroda down by 2.06%, Ambuja Cements down by 1.31%, and State Bank of India down by 1.29%, were the top losers.

The European markets were trading in green, France’s CAC 40 was up by 0.55%, Germany’s DAX was up by 0.38%, and United Kingdom’s FTSE 100 was up by 0.49%.

The Asian markets concluded Wednesday’s trade in green ahead of the conclusion of the US Federal Reserve’s policy meeting. The regional earnings season also continued to roll on, with investors eyeing reports from major companies in Japan and China. Indonesia plans to issue yen and dollar sovereign bonds in the first half of 2014 to fund its budget deficit. Indonesia’s budget for 2014 calls for a deficit of Rp 175.4 trillion ($15.8 billion), which is equivalent to 1.69% of gross domestic product. Japanese industrial production grew by 1.5% in September, with manufacturers expecting further gains for the current month, the Ministry of Economy, Trade and Industry reported. The result marked a swing from August’s 0.9% drop, though it missed forecasts for a 1.8% gain. A monthly survey of manufacturers included with the data showed optimism for the current month with average expectations for a 4.7% rise in October industrial output up from the 2.5% forecast increase seen in the previous month’s survey. For November, however, the manufacturers expected output to fall by 1.2%.

In Hong Kong, mortgage loan approvals in September fell 6.7% compared with August, to $13.5 billion, the Monetary Authority reported. Among approved mortgage loans, those financing primary market transactions rose 67.5% to $2.8 billion, while those for secondary market transactions dropped 17.4% to $8.1 billion. Mortgage loans for refinancing also dropped 12.3% to $2.6 billion. A World Bank Group report stated that China is among the world’s top 20 in making progress on improving its business regulations since 2005, making it a leading power in East Asia and the Pacific. Separately, Shanghai and Beijing posted the slowest economic growth in the first three quarters of this year among China’s 25 provincial areas which have released their economic data due to the two cities’ greater efforts on economic restructuring.