Airline shares sizzle on hopes of FDI
The key benchmark indices were firm in morning trade after an initial upsurge to nearly 7-month highs on strong global cues. A steep hike of Rs 5 per liter on heavily subsidised diesel by the Cabinet Committee on Political Affairs (CCPA) on Thursday to bring down the burgeoning fiscal deficit and sustained buying by foreign funds bolstered sentiment. The BSE Sensex was up 368.48 points or 2.04%, up 104.89 points from the day's low and off 66.69 points from the day's high. The market breadth was strong.
Index heavyweight (RIL) extended early gains. Index heavyweight and cigarette maker ITC scaled a record high. Airline stocks gained on reports the cabinet will today, 14 September 2012 consider a proposal to allow foreign airlines to buy stakes in local carriers. Shares of organised retailers rose after Thursday's fall.
Asian markets gained after the US central bank on Thursday initiated another aggressive stimulus program to stimulate growth in the world's largest economy.
August headline inflation figure to be declared today, 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.
At 10:25 IST, the BSE Sensex was up 368.48 points or 2.04% to 18,389.64. The index surged 435.17 points at the day's high of 18,456.33 at the onset of the trading session, its highest level since 22 February 2012. The index rose 263.59 points at the day's low of 18,284.75 in early trade.
The S&P CNX Nifty was up 115.15 points or 2.12% to 5,550.50. The index hit an intraday high of 5,564.05, its highest level since 22 February 2012. The Nifty hit an intraday low of 5,526.95 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,596 shares rose and 653 shares fell. A total of 76 shares were unchanged.
The total turnover on BSE amounted to Rs 827 crore by 10:25 IST compared with Rs 409 crore by 09:25 IST
All the 30 members from the Sensex pack gained. Hindalco Industries (up 5.26%), ICICI Bank (up 4.67%) and Tata Motors (up 4.17%) edged higher from the Sensex pack.
Index heavyweight and cigarette maker ITC rose 0.05% to Rs 270 after scaling a record high of Rs 272.50 in intraday trade today, 14 September 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.
Index heavyweight Reliance Industries (RIL) gained 2.39% to Rs 817.80, extending early gains. 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.
Airline stocks gained on reports the cabinet will today, 14 September 2012 consider a proposal to allow foreign airlines to buy stakes in local carriers. Jet Airways India (up 4.26%), SpiceJet (up 7.11%) and Kingfisher Airlines (up 9.28%), gained. Under current rules, foreign airlines are barred from buying stakes in domestic carriers, although foreign investors are allowed to hold a cumulative 49%.
Shares of organised retailers rose after Thursday's fall triggered after trade minister said that the Cabinet said won't consider any proposal to allow foreign direct investment (FDI) in multi-brand retail at its meeting today, 14 September 2012.
Pantaloon Retail India (up 3.49%), Trent (up 0.96%) and Shoppers Stop (up 1.67%) gained.
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