Market retreats after firm start
The key benchmark indices pared initial gains on mostly lower Asian stocks. The BSE Sensex was up 18.20 points or 0.10% to 18,018.23, off 13.62 points from the day's high and up 12.99 points from the day's low. Index heavyweight (RIL) slipped in early trade. Index heavyweight and cigarette maker ITC also declined.
Asian stocks were mostly lower on Thursday ahead of the US Federal Reserve's decision about injecting more stimulus into the world's largest economy.
BSE Sensex was up 18.20 points or 0.10% to 18,018.23. The index gained 31.82 points at the day's high of 18,031.85 at the onset of the trading session. The index rose 5.21 points at the day's low of 18,005.24 in early trade.
The S&P CNX Nifty was up 2.80 points or 0.06% to 5,433.20. The index hit a high of 5,437.90 and a low of 5,427.65 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 724 shares rose and 385 shares fell. A total of 43 shares were unchanged.
The total turnover on BSE amounted to Rs 137 crore by 09:25 IST
Among the 30-share Sensex pack, 17 gained while the rest declined. Hero MotoCorp (up 1.95%), ONGC (up 1.22 %) and L&T (up 0.77%) edged higher from the Sensex pack.
Jindal Steel & Power (down 2.66%), Bharti Airtel (down 2.37%) and Cipla (down 1%) edged lower from the Sensex pack.
Index heavyweight Reliance Industries (RIL) shed 0.38% to Rs 794.35. RIL has bought back 3.9 crore shares for about of Rs 2793.51 crore till 4 September 2012 under its ongoing share buyback program. RIL has set maximum buyback price of Rs 870 per share. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. RIL chairman said at the company's Annual General Meeting in June 2012 that the company's buyback program represents a highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future.
RIL on 27 August 2012 said it has scheduled a planned maintenance turnaround of one of the diesel hydrotreater units of the DTA refinery at its Jamnagar, Gujarat complex for a period of approximately two and half weeks starting 28 August 2012. This opportunity will also be utilised to carry out other maintenance and inspection jobs during the shutdown period, RIL said in a statement. During the period the other diesel hydrotreating unit of the DTA refinery along with other units including crude processing levels are planned at normal levels, RIL said.
Index heavyweight and cigarette maker ITC slipped 0.32% to Rs 268.55. The stock had scaled a record high of Rs 271.50 on 30 August 2012. ITC had reported strong Q1 June 2012 results. ITC's net profit jumped 20.21% to Rs 1602.14 crore on 15.34% growth in net sales to Rs 6652.21 crore in Q1 June 2012 over Q1 June 2011. Despite series of tax hikes, ITC's performance in cigarettes business remains robust and displays pricing power for the company.
ICICI Bank rose 1.09% after the private sector bank cut deposit rates by 50 basis points and the revised rates were effective 11 September 2012. The bank cut rates across maturities ranging from 91 days to less than five years.
Optimism the Indian government will unveil a series of fiscal policy decisions and hopes of further stimulus measures from the world's top central banks triggered recent gains. Reports suggest that the government may permit foreign direct investment (FDI) in multi-brand retail and aviation after Friday's agenda-heavy cabinet meeting.
Foreign institutional investors (FIIs) bought shares worth a net Rs 451.19 crore on Wednesday, 12 September 2012, as per the provisional data from the stock exchange.
Government data released on Wednesday, 12 September 2012, showed the index of industrial production (IIP) grew at 0.1% in July 2012 as against 3.7% in the same month last year. The index, a key measure of industrial output, contracted by 1.8% in June 2012 after growing at 0.1% in April 2012.
August headline inflation figure to be declared tomorrow, 14 September 2012 will be closely watched. Inflation based on the wholesale price index (WPI) is projected rise by 7% in August 2012, as per the median estimate of the poll carried out by Capital Market.
The Reserve Bank of India (RBI) last cut rates by 0.5 percentage point to 8% from 8.5% in April, its first move to reverse a 20-month rate-tightening cycle. It then held rates steady in June and at its last rate-setting meeting on July 31, saying that a cut would exacerbate inflationary pressures. The RBI is scheduled to undertake a mid-quarter review of the monetary policy on 17 September 2012. The RBI is expected to maintain status quo on short term lending rates in its policy review on 17 September 2012, as per the poll carried out by Capital Market.
Advance tax data for the 2nd installment due on 15 September 2012 could provide cues on the likely corporate earnings for Q2 September 2012.
The Reserve Bank of India (RBI) on Tuesday eased the external commercial borrowing (ECB) rules and hiked the maximum limit to $3 billion for one company. RBI also hiked the overseas borrowing cap to 75% of the company's last three-year average forex earnings. The foreign loan cap has also been raised to 75% of last three-year average forex earnings. ECB refers to commercial loans in the form of bank loans, buyers' credit, suppliers' credit, securitised instruments availed of from non-resident lenders with a minimum average maturity of three years. Last month, the Finance Ministry had liberalised the norms for raising funds through ECBs by domestic firms, particularly those in the realty sector. The High Level Committee on ECBs also permitted FIIs to invest up to $5 billion in rupee bonds within the overall corporate bond limit of $45 billion.
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