Trade deficit data lifts market, Sensex closes at nearly 2-1/2 week high

4:00 pm The Indian markets closed in the green today with the BSE Sensex rising more than 1 percent, marking its highest close in nearly 2-1/2 weeks as the September trade deficit narrowed sharply, raising hopes for a significant improvement in the country’s current account balance.

Sensex closed up 265 points at 20249 and the Nifty closed up 79 points at 6007.

Lenders led gainers as the data was seen supporting the rupee and thus reducing exchange rate-led inflation pressures and the prospect of additional repo rate hikes, said Reuters.

“Although the market opened in the negative today on the back of weak global cues, the upbeat data on trade deficit lifted market sentiments. Further, comments from the RBI guv that the Indian economy should get better from hereon, also boosted sentiments.he Indian equities have continued to outshine global markets in past few days. However, risks remain in terms of continued stalemate on US budget talks and debt ceiling front. We also remain concerned on crude prices,” said Zarbade, Vice President- Private Client Group Research, Kotak Securities.

More from Investing

MSMEs are breaking the traditional convention. Look who’s funding them Scale-up your startup without an investor! Here’s how

Sun Pharma, DLF, Infosys and HDFC Bank were among the major Sensex gainers.

Nifty crosses 6,000, Sensex surges more than 250 points

3:pm Indian markets are trading at their highest levelwith the Sensex rising more than 250 points and the Nifty touched the 6000 level.

The Sensex is up 251.44 points or 1.26 percent at 20235.05, and the Nifty is up 71.45 points or 1.21 percent at 5999.85.

Stocks that are helping the Sensex include RIL, Infosys and HDFC Bank.JP Associates, Suzlon Energy, Yes Bank and Unitech are among the top traded stocks on the NSE.

The rupee strengthened to drop below it’s opening value of 62 per dollar while bond yields softened on trade deficit data.

India’s exports grew 11.15 percent in September and imports declined 18.1 percent amid a sharp fall in inward shipments of gold and silver, taking the trade deficit to the lowest level in 30 months.

Exports last month climbed to $27.68 billion, while imports stood at $34.4 billion, narrowing the trade gap to $6.76 billion.

“The trade deficit during the month was the lowest since March 2011. The main reason for decline in imports was a dip in imports of gold and oil,” said Commerce Secretary SR Rao.

Sensex surges 100 pts as Sept trade deficit narrows to over 2-year low

12:00 pm Sensex surged more than 100 points with 17 components in green as September trade deficit dipped to $6.76 billion from $17.15 billion a year ago, the lowest in 30 months.

India’s September imports at $34.4 bn, down 18.1% (YoY),are the lowest since March 2011.

“Trade deficit in September lowest since March 2011, when it was $3.8 billion,” said commerce secretaryS.R Rao.

Exports came in at $27.68 billion versus $26.14 billion, up 11.15% (YoY).

But the biggest factor that helped narrow the trade gap was the fall in gold imports.

September gold and silver imports came in at just $0.80 billion against $4.6 billion a year ago.

The commerce ministry attributed the decline in gold imports to effective government measures to curb import of non-essential items.

Even C Ragarajan, chairman of the Prime Minister’s Economic Advisory Council attributed the decline in gold imports to actions taken by the government.

Gems and jewellery exports for September were down 8.31 percent at $3.79 billion, while oil imports were down 5.9 percent at $13.19 billion ( year-on-year).

India, also the world’s biggest buyer of gold, has raised the import duty on gold three times this year, taking it to 10 percent, and in July the government told importers that a fifth of their purchases would have to be turned around for export, leaving only 80 percent for domestic use.

India imported 393.68 tonnes of gold from April to September 25, slightly higher than the average 60 tonnes per month. But government restrictions have led to a sharp slowdown.

At 12:00 pm, the BSE Sensex was up90 points at 20072, while Nifty was up 30 points at 5958.

Rupee crosses 62 again, Sensex in red on US uncertainty

9 October, 9:30 AMIndian markets opened on a weak note this morning after International Monetary Fund(IMF) revised growth forecasts for the year, stating that India will grow only 3.8% in FY14 against 5.6% projected in its July forecast.Even Asian share prices sagged as the US budget deadlock drags on and further chips away at investors’ confidence that a deal would be reached before a mid-October deadline to avoid a debt default

While the BSE Sensex opened 65 points down at 19918, Nifty was down 35.57 at 5893.

Even the Indian rupee opened weak at 62.07 against Tuesday’s close of 61.79.

In his first ever television interview as RBI Governor, Raghuram Rajan was not very keen to go after inflation. Rajan said the weak economic growth has already generated a dis-inflationary process. He added that he is confident that the current account deficit (CAD) is coming under control but a that challenge to the rupee is not over till he puts oil dollar demand back through the market.

Raghuram Rajan also aims to build sophisticated financial infrastructure in three years that will facilitate trillion-dollar core sector investments, leading to sustained economic growth, a report stated.

The currency was stabilising, Rajan said, because of the growing expectation that the government would be able to restrict the current account deficit to less than $70 billion, the target set by the Centre.

Meanwhile, just days after the finance ministry nudges banks to bring down lending rates to spur festive demand, banks oblige; State Bank of India , Punjab National Bank , Oriental Bank of Commerce cut rates between 25 basis points to over a percent.

Globally, Janet Yellen has been officially named as the next chair of the Federal Reserve, succeeding Ben Bernanke. Yellen is seen as a dove on monetary policy and Dow futures shot higher reacting to this news. If approved by the senate, this would make Yellen the first woman to head the central bank in its 100-year history.

MSF rate cut boosts markets but Sensex ends below 20000

3:30 pm RBI’s MSF rate cut boosted markets but the benchmark indices closed off the day’s high.

After edging past the 20,000 mark in morning trade, the BSE Sensex closed up just 57 points at 19952 while the NSE Nifty closed up 11 points at 5917.

The Reserve Bank of India (RBI) reduced the marginal standing facility (MSF) rate - the rate at which it lends emergency short-term funds to banks – by another 50 basis points. The move is a continuation of the stance governor Raghuram Rajan announced on 20 September while unveiling his maiden credit policy review.

RBI had cut the MSF by 75 basis points and raised the LAF repo rate - the rate at which it lends to banks - by 25 bps to send a signal that it was determined to continue its battle against inflation.

The government bonds rallied today. Benchmark 10-year bond yields dropped as much as 22 basis points at one point, while overnight index swap rates also plunged. The rupee gained slightly.

Analysts, however, told Reuters, that the RBI move to cut short term rates is risky.

Although the reduction in the MSF, a short-term rate that banks use to borrow funds, is meant to be another step towards normalising monetary policy, it also contributes to uncertainty about the timing of future moves from the RBI, they said.

It’s far too premature to believe that the rupee’s travails are completely over," J.P.Morgan analysts said in a note to clients on Tuesday.

“Like other emerging markets, India has been the beneficiary of an improving global environment,” they noted. “But globally things can often turn on a dime.”

Credit rating agency CRISIL in its latest report has warned that India Inc’s credit quality is on a slippery wicket. President Ramraj Pai told CNBC-TV18 that for consecutive four quarters, the number of downgrades has been outpacing upgrades.

Pai attributed demand slowdown and liquidity as they key reasons for the downgrades

“The problem of liquidity accounts for almost 90 percent of the downgrades. Sectors like power, transport and real estate are getting impacted by these two key issues,” he added. Further, he highlighted that some companies have also been upgraded, but the reason to upgrade them are more company-specific than industry specific. During the first half of the fiscal, the agency downgraded as many as 478 companies compared to the 417 upgrades, the Crisil report said.

Meanwhile, Jet Airways ended 4.32 percent lower at Rs 355.35. In response to a public interest litigation by BJP leader Subramanian Swamy, the Supreme Court has sought Centre’s response on the approval given to Jet-Etihad Airways deal. In his plea, Swamy had said that India-UAE bilaterals were tweaked only for the Jet-Etihad deal.

Sensex off day’s high, RBI may hike repo rate as rupee seen stabilising

1:00 pm Indian markets are off the day’s high with the Sensex just up half a percent now at 19990 and the Nifty up 0.45 percent at 5923.

Markets have pared gains on profit booking in metals stocks. Index heavyweights HDFC, Reliance Industries and TCS are also under pressure.

Bankex too shed more than 250 points from its day’s high, which is up 1.1 percent to 11602.

Nifty hadsurged close to 6,000 mark in early trade on the back of rally in rate sensitives after the Reserve Bank of India reduced the rate under the marginal standing facility (MSF) by 50 basis points to 9 percent and introduced lending to banks for seven days and 14 days, instead of the current practice of just a day.

Videocon Industries , which holds spectrum in 7 circles and operates in 4 circles, is looking to divest 26 percent stake in telecom subsidiary, reports CNBC-TV18 quoting sources. It is learnt that the company is in talks with 1 European and 2 US telecom companies for stake sale. The stock gained 4 percent.

Meanwhile,brokerages expect the central bank to hike repo rate to address inflationary concerns.

HSBC is of the view that the RBI is becoming more comfortable about the currency and a bit more concerned about domestic liquidity conditions.

According to Citigroup, the RBI move should be seen as a step towards normalisation of exceptional liquidity conditions, and shouldn’t be construed as any change in policy stance.

“There has been no incremental data release on inflation or growth since the last policy announcement to warrant a change in RBI’s anti-inflation stance, and while the move is likely to ease money market conditions at the margin, the headwinds of global conditions, elevated CPI (9.52%YoY in Aug) and entrenched inflationary expectations will keep further calibration gradual,” the report said.

“The current move clearly signals that RBI is getting comfortable with the BoP/INR situation. We believe confidence on stable currency still provides headroom for further MSF rate cuts thereby reducing the spread (between MSF and repo rate) to the intended 100bps. Additionally, we expect partial-to-full withdrawal of the cap on LAF borrowing, both at system level (announced on July 16th) and individual bank level (announced on July 23rd) - a move that will further ease liquidity. However, as per our economist, this move does not carry any message for the RBI’s stance on the repo rate in the coming policy meeting on October 29, 2013 which will be driven by evolving inflation-growth dynamics. In this regard, we foresee RBI continuing with its hawkish stance and maintain it will raise repo rate by another 25bps in the forthcoming policy,” said Edelweiss in a report.

Markets gain some confidence, Bank Nifty cheers RBI move

12:00 pm Indian markets continued their upmove with banks leading the gains after RBI reduced the marginal standing facility (MSF) rate by 50 bps to ease liquidity pressure. The MSF cut will ease short-term rates and companies are likely to borrow from the commercial paper (CP) market instead of banks.

Going forward, HSBC expectS the RBI will further roll back the currency stabilization measures, but also raise the policy (repo) rate to anchor inflation expectations.

More liquidity measures are also expected.

“The RBI is becoming more comfortable about the currency and a bit more concerned about domestic liquidity conditions.Yesterday’s move was foreshadowed by the RBI at its last monetary policy meeting when it signaled that it intended to continue to roll back the currency stabilization measures in calibrated fashion if currency stability persisted, although it also noted that it would be willing to re-introduce them to the extent currency risks flare back up again,” said HSBC in a note.

And with India heading into the festive season, it means higher liquidity demand and the RBI likely wanted to accommodate that as well.

The BSE Sensex is currently up111 points at 20006, while Nifty is up 28 points at 5934.

Tirthankar Patnaik of Religare Capital Market sees the Bank Nifty outperforming Nifty. In an interview with CNBC-TV18, he said today the SGX is up about 48-50 points, so one would expect the Bank Nifty to be up at least 1.5-2 percent to begin with and probably even higher going forward.

Nilesh Shah of Axis Capital expects the Nifty to hit 6100-6200 as RBI’s decision to further slash marginal standing facility rate (MSF) is a positive for short-term.

“The market has now gained some amount of confidence that RBI will take corrective actions whenever it’s necessary,” he added.

Banks cheered the move as overnight borrowing rate dropped to 9 percent from 9.5 percent. YES Bank and IndusInd Bank gained the most among largecaps, rising 6-7 percent followed by Kotak Mahindra Bank and Axis Bank with 3.5 percent gains. State Bank of India , ICICI Bank , HDFC Bank , Punjab National Bank and Bank of Baroda rallied between 2-3 percent.

RBI has also decidedit will provide additional liquidity through term repos of 7-day and 14-day tenor for a notified amount equivalent to 0.25 percent of net demand and time liabilities (NDTL) of the banking system through variable rate auctions every Friday beginning October 11, 2013. The notified amount and tenor of the term repo auctions will be announced prior to the dates of the auctions.

Sensex regains 20000, banks steal the show on RBI move

10:13 AM The BSE Sensex today regained 20,000 points while Nifty was well above 5,900 with all sectoral indices trading in the green.

Buying activity is seen in banking, realty, capital goods, auto and consumer durables sectors.

ICICI Bank, Tata Motors, L&T, Bharti Airtel, SBI, Tata Power, HDFC Bank, Jindal Steel and Bajaj Auto are up on BSE, whereas Coal India, HUL, TCS and Cipla are showing some weakness.

Banks, however, stole the show.

Yes Bank surged 6.28%, IndusInd Bank increased 5%, Axis Bank is 3.16% up, Kotak Mahindra is 2.81% higher and ICICI Bank is 2.67% up on BSE after the Reserve Bank of India (RBI) on Monday evening announced measures to improve liquidity conditions in the banking system. The RBI announced a reduction in the marginal standing facility (MSF) rate by 50 basis points to 9% with immediate effect.

“As an immediate impact of these measures, short-term interest rates are likely to reduce proportionately and the measures are positive for more wholesale funded banks,” Angel Broking said in a note.

These measures will lower the overnight rate further and help ease liquidity conditions, global brokerage Nomura said.

Keki Mistry of HDFC feels that the RBI’s steps on Monday will bring down the short term rates by 50 bps. However, with the possibility of higher inflation going forward, repo rates may be hiked, he said in an interview with CNBC-TV18.

He expects the MSF to come down further.

With good monsoon and harvest season, headline inflation may come down now. But, the excess liquidity via FCNR deposits in November will push inflation higher and so, the repo rates will be hiked by 0.25 percent, Mistry said.

Sensex edges past 20000, bank shares surge as RBI cuts short-term rates

9:30 amIndian markets surged in morning trade after the Reserve Bank of India further eased liquidity by cutting the marginal standing facility (MSF) rate, a key overnight interest rate, by 50 basis points to nine per cent, with immediate effect.

While BSE Sensex jumped 240 points to edge above 20,000, Nifty too jumped by 75 pointsat 5963.

The BSE bankex surged 3 percent after the RBI cut an overnight interest rate on Monday, further unwinding extraordinary measures taken to defend the rupee.

The move to cut the marginal standing facility (MSF) rate by 50 basis points to 9.0 percent was the latest by new Reserve Bank of India (RBI) Governor Raghuram Rajan to return monetary policy settings towards normal after a harrowing run for the rupee that saw it drop as much as 20 percent on the year as of late August.

This is the second time in less than a month that the central bank has cut the key overnight interest rate, taking advantage from the rupee’s recent surge.

Banking Secretary Rajiv Takru said that the cut in MSF will aid the economy.

Under the MSF facility, all scheduled commercial banks can borrow overnight from the RBI up to 1 per cent of their net demand and time liabilities (NDTL).

Indian rupee opened at 61.73 per dollar on Tuesday as against previous day’s closing value of 61.79 to the dollar. Pramit Brahmbhatt, CEO of Alpari India feels the rupee will be under some more pressure today owing to choppy equities.

“With US budget uncertainties continuing and no major domestic results due till end of the week, rupee will track international developments for further cues,” he added.

Globally, t US markets fell about 1 percent across the board, with the Dow hitting a one-month low, as the risk of a potential us default grows. European markets ended lower. Asian markets were subdued.

End of updates on 7 October

Sensex ends flat, Bombay Dyeing surges on stake sale buzz

3:30 pm Indian markets ended flat, wiping out the day’s losses, ahead of the earning season that will kickstart on Friday when IT major Infosys will announce its Q2 results.

Sensex closed down 0.73 points at 19915 while Nifty ended flat at 5906.15.

Top Sensex losers were Coal India (down 3.1 percent), Bharti (down 2 percent), Maruti (down 1.6 percent, L&T (down 1.5 percent).

Shares of Bombay Dyeing jumped closed nearly 13 percent higher on reports that at least three global private equity firms are likely to acquire up to 24 percent stake jointly in Bombay Dyeing.

Banking license aspirants like Bajaj Finserv , JM Financial and L&T Financial Holdings are up between 3-10 percent in trade as Finance Minister P Chidambaram has said that the Reserve Bank will issue seven licenses shortly.

BSE banking index closed down 1.13 percent, capital goods index was down 0.4 percent while the IT index closed up 1.6 percent.

“Markets have turned positive recently on easing of liquidity concerns and also due to the appreciation of the rupee from its lows. On the domestic front also, we have seen some reform initiatives being taken by the Government in terms of faster project clearances.If the markets have to sustain the current levels and move up, it will need to have more confidence in the medium-to-long term growth rates of Corporate India. Growth rates will move up once there is a more-enabling investment climate and a lower-interest rate regime,” said Dipen Shah, Head- Private Client Group Research, Kotak Securities.

Mutual funds offloaded shares worth Rs 2,800 crore in September after pumping in money in the preceding month. The net inflow of funds in August was Rs 1,607 crore, as per data with market regulator Securities and Exchange Board of India ( Sebi). In comparison, foreign institutional investors made a net inflow of more than Rs 13,000 crore in equities in September, after withdrawing a net amount of over Rs 16,000 crore in the preceding month.

Meanwhile, Brent futures edged below USD 109 a barrel on Monday as oil production resumed in the Gulf of Mexico after a tropical storm, while lingering concerns over the US government shutdown clouded the outlook for demand, reports Reuters.

Sensex recovers more than 200 points from day’s low

3:00 pm Sensex has recovered more than 200 points from its lowest point of the day; the benchmark is down around only 18 points at19898.8and the Nifty flat at 5906.

TVS Motor Company shares rallied 6 percent on a media report that TVS group is planning to merge two TVS Investments subsidiaries with itself in order to strengthen the group’s balance sheet.

Coal India dropped 3 percent on reports that the government will offload its 5% stake in the company by way of follow-on public offer (FPO) in December.

Jubilant Life Sciences gained 0.5 percent as the board has approved consolidating its pharma business, under its Singapore subsidiary. The company will transfer API and dosage form businesses to its Singapore arm through a slump sale for Rs 1,145 crore.

Whether Modi mania translates into votes is key question for market

12:44 pm A Maquarie report, titled “Eye on India, facts fight back,” expects Infosys results to set a positive tone for the market but says the key question f or the market is whether Modi mania translates into votes in the upcoming state elections is the key question in Nov.

“Overall, the market seems set to continue its upward journey. Buy on the dips,” say Macquarie analysts Rakesh Arora and Arjun Bhattacharya.

According to the brokerage, export oriented sectors dominate the limelight right now due to the rupee depreciation, which has come as a blessing in disguise as companies look to export surplus production to beat low domestic demand.

“IT sector is a standout, followed by Autos (Tata Motors), Media, Pharma and Consumer. Cement sector is expected to be the worst performer. Buy HCL Tech, Ranbaxy, Tata Steel and Reliance on results. Sell Ambuja Cement, Ultratech and SBI,” they say.

Sensex down 200 points; ‘Rising US yields can kill Indian markets’

11:37 am After surging over 100 points in early morning trade, the Sensex is down 201 points at 19714 while Nifty is down 60 points at 5846 amid caution ahead of the July-September earnings season for blue chips, which starts on Friday when Infosys announces its results.

If US bond yields were to rise above 3, it will kill markets like Indonesia, India, Brazil, South Africa, and Turkey - anybody who is capital hungry, said Viktor Shvets of Macquarie.

He said the performance of the Indian market has nothing to do with Indian fundamentals but more to do with US bond yields.

“If bond yields were to fall lower, around 2.2-2.3 percent, carry trade may restart and funds flow may come back.” he said.

Even World Bank has lowered its 2013 and 2014 economic growth forecasts for China and most of developing East Asia

Meanwhile, RBI deputy Khan said dollar window for oil companies will be open until or before Nov 30.

Sensex rangebound, rupee opens weak too

9:15 AM Indian markets opened lower this morning as the global cues are off to a weak start.

Infosys results and IIP numbers are on tap at the end of this trading week.

BSE Sensex opened down 60 points at 19857, while the Nifty is down 16 points at 5891.

However, Sensex extended losses to over 100 points, hurt by losses in ICICI, ITC, RIL, HDFC Bank.

“Initial opening shows we should have a bearish bias today. The current Nifty levels are good enough to go short,” said market analyst Sudarshan Sukhani in an interview with CNBC-TV18.

According to Aditya Narain, MD and India Strategist at Citi, this is the time to take advantage of the market as delay of QE tapering has given some relief to the markets and not the time to get complacent.

The rupee too opened weaker at 61.49 against Friday’s close of 61.43.

Meanwhile, India is preparing a plan to allow greater overseas participation in the domestic currency futures market to protect the rupee. The plan could draw from the recommendation of the high-powered expert committee on making Mumbai an international financial centre regarding the creation of a bond-currency-derivatives chain, says a report in the Economic Times.

Nifty may open lower; US debt ceiling impasse biggest worry

8:45 am, 7 October Indian markets are expected to open lower this morningfollowing muted trend in other Asian markets.

The dollar, oil prices and US stock futures eased on Monday as politicians in Washington showed no signs of making progress to resolve the US budget standoff, while safe-haven gold inched higher.

What is worse now is that the upcoming debt ceiling impasse could plunge the US into a recession.

The US inched towards its first-ever default on the government’s debt as a House vote on a straightforward bill to boost the borrowing authority without concessions from President Barack Obama was ruled out.

Overseas investors pulled out about Rs 3,400 crore (USD 544 million) from the Indian debt market in the past week amid concerns about the US government

shutdown.

The broader market benchmark Sensex, which tracks 30 bluechips, has gained about 2 per cent this year so far.

Domestically, cautious trading is likely to prevail in equities ahead of the September quarter earnings from Infosys on October 11.

Weakening economic growth could have weighed on corporate earnings.

The industrial production data for August is scheduled tocome on Friday.Besides, data on inflation based on wholesale price index(WPI) and consumer price index (CPI) for September, to bedeclared on October 14, would also be key triggers for themarkets.

The Reserve Bank of India will announce its second quartermonetary policy review on October 29

End of updates on 4 October

3. 30 pm: Markets end flat, Shobha Dev gains 9%

The Indian markets closed flat todayafter a HSBC survey showed activity at domestic services companies shrank at the fastest pace in more than four years last month.

The BSE Sensex closed at 19924.32, up 0.11 percent while the Nifty closed at at 5908, up 0.01 percent.

Sobha Developers was the biggest gainer in the BSE Sensex closing up 9 percent. The real estate developer sold 1 million square feet of new spaces that are valued at Rs 632 crore. Average price realisation is at Rs 6304 per square feet.

Tata Motors ended 1. 19 percent up despite the disaster sales numbers in September. Total sales fell 33 percent at 50427 versus 75773 units YoY.

Despite a great morning start after the cabinet nod on Etihad deal, Jet Airways ended 0.54 percent down. Jet stocks fell after the Supreme Court today agreed to hear a PIL of BJP leader Subramanian Swamy seeking quashing of the Centre’s approval to Jet -Etihad Airways deal. A bench comprising Chief Justice P Sathasivam and Ranjan Gogoi said that it would hear the petition on October 8.

4 October, 9:30 amIndian markets opened flat this morning on sluggish global cues.

Key US share indices ended lower on Thursday after the US federal government continued to remain shutdown for the third straight as the differences between the Democrats and Republicans continued over the healthcare funding bill.Shares in Europe ended mixed on Thursday on rising worries as law makers in the US failed to reach a consensus over the healthcare bill. The CAC-40 and DAx down 0.4-0.7% each while the FTSE-100 ended up 0.2% at 6,449. Asian markets were also subdued.

At 9:30 am, the BSE Sensex was up 100 points at 20002, while Nifty was up30 points at 5940.

“See Nifty heading to 6300-6400 before it starts correcting, " said Sanju Varma, CEO & MD ,Violet Arch Cap,in an interview with CNBC-TV18.”

Jet Airways surged 5 percent after the Cabinet Committee of Economic Affairs (CCEA) gave a green signal to the Jet-Etihad deal , according to which the Abu Dhabi based airline will be able to buy 24 percent stake in the Indian airline.

The Indian rupeefell by 12 paise in early trade to 61.85 per dollar as against previous day’s closing of 61.73 per dollar.

Jayesh Mehta of Bank of America Merrill Lynch expects the current stabilisation in rupee to continue. For the time being, trajectory for the rupee is to appreciate further, he said. According to him, RBI shoring up the reserves via oil marketing companies could further provide upside and key support level at 61.50/USD is difficult to breach. “The range for the day is seen between 61.75-62.25/USD.”

Sensex gains 400 points even as US shutdown enters 3rd day

4:00 PM Indian markets rallied todayon persistent buying, mainly in metal, banking, IT, auto, capital goods and oil & gas sectors, on the back of higher Asian cues coupled with appreciation of rupee value against the dollar.

In the foreign exchange market, the rupee was hovering at 61.70 per dollar as against the last close of 62.46.

The Sensex ended 385 points higher at 19902 and the Nifty closed up 129 points at 5909.

Ironically, the markets have gained ever since the US government partially shut down its non-essential services on 1 October.Mos experts believe the shutdown will force US Federal Reserve to hold back on its tapering, as the shutdown would increase uncertainty for the US economy.

If tapering is delayed, emerging markets like India stand to gain,as global investors are likely to increase their allocation to Indian markets.

Moreover, thedebt ceiling is the bigger problem. In case of thedebt ceiling, the Government is mandated to spend money but does not have the legal authority to borrow the same. By October 17, the Government would have reached the limit at which it can borrow money to pay its bills.

And as long as the issue is not resolved, it could mean that the Fed could go slow on the withdrawal of theQE programme which will have a bearing on the flow of funds especially to the emerging markets including India.

Richard Titherington of JPMorgan believes when and how much the Fed decides to taper is very important as markets have been nervous before. He expects a market correction as and when tapering finally occurs.

In an interview to CNBC-TV18, Titherington says the timeframe and the quantum of the tapering will play key roles in deciding the faith of the market.

Nifty soars 100 points but this is just a relief rally, not a bull market

Indian markets continued to trade higher with the Sensex up 290 points at 19804.52 and Nifty up 100 points at 5880. However, expoerts are still not bullish on the Indian market.

“This is not a bull market, just a relief right. It’s time to take your money out of Nifty and step out, said market analyst Sudarshan Sukhani, in an interview with CNBC-TV18.

Jim Walker MD, Asianomics too is not bullish on India. He feels it is difficult to advise clients to buy the Indian market now given that the economic growth story is stuttering and equities are likely to remain bipolar going ahead.

“Foreign investors have a cautious stance on the Indian market. We expects a sell-off and would be a buyer in Sensex at 16,000 levels,” he added.

Sanjay Dutt of Quantum Securities sees the global uncertainty extending to Indian market as well, but said that downsides are limited. In an interview to CNBC-TV18 , Dutt said that the Nifty is unlikely to break 5,700. Like most market experts, he is also of the view that the debt ceiling issue is more important than the US shutdown.

Brokerage Anand Rathi believes the Indian equity market movement is more related to the currency performance and policy moves than the policy logjam in Washington.

US shutdown is good, Sensex rallies on hopes of delayed tapering

11:21 am The partial shutdown of the US government may slowdown the world’s largest economy, but markets in India clearly don’t give a damn.

The S&P BSE Sensex rallied over 300 points in mid-morning trade today, led by gains in IT, metals, autos and capital good stocks even though analysts said markets may remain volatile ahead of debt ceiling negotiations and FOMC meet due later in the month of October.

Indian sharesalso tracked higher regional peers, which are seen finding comfort in expectations that major central banks might have to stay super-loose for longer.

At 11:25 am, the Sensex was up 258 points at 19778, while Nifty was up 90 points at 5870. Even the rupee strengthened to 61.80 against the USD.

“If the fiscal issue drags on, the Fed is likely to be less willing to reduce stimulus in the economy. The dollar will suffer if that is the case,” James Kwok, London-based head of currency management at Amundi was quoted as saying by Bloomberg.

‘Given India’s growth outlook, Sensex is definitely not a buy’

10:12 am Given the fragile state of the US economy, experts believe that either the US Fed taper could be delayed or the quantum reduced significantly from the earlier envisaged $20 billion.

Federal Reserve could put of tapering of quantitative easing into the early part of next year, said Jim Walker of Asianomics, this morning.

He believes the markets are currently bullish on easy monetary policies and does not expect global markets to come off sharply in the next three months.

On India, however, Walker is rather a cautious than bullish as Inda’s economic growth story is stuttering.

“Given the growth outlook, it is difficult to advise a buy on Indian markets.. I would buy Sensex only at 16,000 levels,” he said in an interview with CNBC-TV18.

Sensex in green, rupee strong as $ weakens post US shutdown

3 October. 9:30 am Indian equity markets were cheerful this morning as thefirst US government shutdown in 17 years is stoking speculation that the longer it lasts, the more likely the Federal Reserve will delay reducing its stimulus programme. But raising the debt ceiling limit in the USis far more important than the shutdown since it could lead to an unprecedented default by the United States, an outcome the market assumes is unthinkable.

While BSE Sensex opened139 points higher at 19664, Nifty was up 44 points at 5828.

All BSE indices are in the green, the winners being metals, capital goods and IT indices.All stocks in the BSE banking index are also trading in the green

Overnight, US stocks ended lower as the government enters the second day of a partial U.S. government shutdown. Adding to investor concerns a report showed that private employers added fewer-than-expected jobs in September.

The Indian rupee opened stronger this morning, up 30 paise at 62.15 per dollar versus 62.45 on Tuesday.

According to Ashutosh Raina, HDFC Bank, the partial shutdown in the US has led to dollar losing against all other major as well as emerging market currencies.

“Back home, the trade deficit numbers for June quarter have been more or less on expected lines, which has lent some strength to the rupee. Expect the currency to trade in the range of 62-63/USD today,” he added.

Domestically, the Cabinet has dumped its controversial ordinance and the Bill aimed at shielding convicted politicians, while Finance Minister P Chidambaram said it is fair to say that growth will pick up in the second half and, anything higher than 5% and closer to 5.5% should be considered very satisfactory.

Meanwhile,auto sales for September has shown mixed trend for the Indian automotive industry. Auto makers such as Tata Motors, Mahindra & Mahindra, Hyundai Motor and General Motors sales slumped in September, while Maruti Suzuki and the Indian units of Toyota Motor and Ford Motor clocked higher sales.

Sensex unaffected by US shutdown, closes 130 points higher

3:45 pmIndian markets closed in the green, largely remaining unaffected by the partial shut down of US government services.

BSE Sensex closed up 137 points at 19517 while Nifty rose 45 points to shut shop at 5780.

BSE banking index closed up 3 percent, realty index gained 2.7 percent, capital goods index rose 1.6 percent while auto index gained 1 percent.

Top Sensex movers were HDFC Bank, HDFC, ICICI Bank and ITC.

Forget shutdown, big trigger for Sensex is US debt ceiling debate

2:30 pmA temporary US shut down may not impact the economy much but a US government default, which will happen unless Congress raises the debt ceiling soon, can cause a financial catastrophe.

The shutdown if temporary, will not cause much disruption to the US economy, but if it is prolonged, it will have a direct impact on growth. According to Puneet Chaddha, CEO, HSBC AMC, prolonged shutdown of the US will have ramifications on global risk and flows to the emerging markets.

In an interview with Business Standard, he says the market outlook is cautious optimism along with a lot of volatility.

Bruce Kasman, Chief Economist and Managing Director of Global Research, JPMorgan feels the global equities already responded to the shutdown and are trading cautiously.

“The issue here is not the shutdown per se, but how the shutdown prepares for debt ceiling debate coming up. Markets have become cautious, but they are not really going to respond negatively to get close to the debt ceiling debate. If we feel that is actually potentially going to go bad then we have a much more significant negative to hit in the equity market,” Kasman told CNBC-TV18.

Economic affairs secretary Arvind Mayaram on Tuesday said that as of now, a shutdown of the US government is not likely to have a major impact on the Indian economy. However, the Indian rupee could come under pressure as there might be hesitation in the US to give new orders in investment and exports. And if there is volatility in global markets, it will also affect Indian stocks.

While many market players expect the government shutdown, which in the past has lasted from one day to nearly a month, to ultimately be resolved, they are more fearful about implications for debt ceiling negotiations due later this month. Any likelihood of that the U.S. government is going have problems servicing its massive debt is likely to hit equity market hard though it would raise expectations the Federal Reserve will keep its monetary stimulus in place for longer.

America’s financial department will not be able to borrow more money to meet its debt obligations if there is no decision on raising the debt ceiling. There are high chances it defaults on payments, something which Obama says will have ‘profound destabilising effect’.

Sensex shrugs off US shutdown but market may be overvalued

1:00 pm The Indian markets have completelyshruggedoff the impact of US government partially shutting down its services. After dipping in the morning, most the shutdown announced, markets soon rebounded are are currently trading at the day’s high.

The Sensex is up 104 points at 19483 and the Nifty is up 31 points at 5767

However, Morgan Stanley cautioned that the ferocity of market movement implies it is overvalued and may have to adjust slightly lower given the benign global cues.

Ridham Desai, MD, Morgan Stanley believes the market will drift lower in October as overvalued equities, tepid growth, high inflation and misallocated capital remain a cause for concern.

On the other hand, US government shutdown should not affect the Indian market more than the concerns over the debt ceiling in mid-October. The market will remain data dependent unless Federal Reserve’s next move, he said in an interview with CNBC-TV18.

“The global macro is quite benign, in fact even the US shutdown is largely anticipated by the market so I do not expect a major reaction though you should see some drift down in US bond yields which is not negative for India. So, India should not react that badly to the looming shutdown in the US than the debt ceiling in mid-October, when there will be subsequent labour data points,” he said.

History shows stock markets don’t give a damn about US shutdown

12:07 Indian markets continue to trade in the green and history suggests markets don’t give a damn about the US government shutting down.

Wall Street has weathered similar incidents in the past. During a shutdown from Dec. 15, 1995, to Jan. 6, 1996, the S&P 500 added 0.1 percent. During the Nov. 13 to Nov. 19, 1995 shutdown, the benchmark index rose 1.3 percent, according to data by Jason Goepfert, president of SentimenTrader.com.

According to a Reuters report, Bank of America-Merrill Lynch examined 17 government shutdowns since 1976 (all but three of which took place before 1987 under Presidents Ford, Carter and Reagan). In the month prior to a government shutdown, the market gained 0.1 percent; it dipped 0.8 percent during a shutdown, and then bounced, gaining about 1.1 percent in the month following a shutdown.

BofA-Merrill strategists see any significant decline as a buying opportunity. But they said they view “the risk of a 10 percent correction brought about by political brinkmanship to be a low probability event.” ( Read more here)

Moreover,effects of a shutdown would not be immediately felt by most.

Essential government programs such as air traffic control, Social Security, Medicare and mail delivery would all continue, but national parks and museums would be closed, and agency operations would slow down or stop.

US shutdown a big yawn, Indian markets move on

11:20 am Indian markets seem to have completely ignored thepolitical stand-off between the Democrats and the Republicans that puts the US in danger of busting through its debt ceiling**.**

However, Indian markets are moving on and are trading at the high point of the day.

While BSE Sensex is up 86 points at 19467, the Nifty is up 24 points at 5759.

" US shutdown is a big yawn, just a political football in Washington. History shows that market actually went up rather than down,” said Societe Generale in an interview with CNBC-TV18.

The US shutdown is expected to reduce America’s quarterly GDP growth by around 0.15 percentage points for every week it lasts, costing the US economy billions of dollars and denting consumer confidence.

Most analysts have said that historical performance of the S&P 500 stock index during previous shutdowns suggests that equity prices might actually benefit from a brief suspension of federal government activities.

Take a look at the TIME explanation of the US shutdown:

“the federal government runs on money like a car runs on gas. Lawmakers couldn’t agree on where to go or which route to take, so they ended up driving in circles and reading Dr. Seuss books to each other until they ran out of fuel. Some parts of the car will still operate without gas, but many won’t.

_If the government shuts down, the most important things will still get done. Soldiers and other members of the military who help protect America will still keep us safe. The Post Office will still deliver letters. Air traffic controllers will still help planes land safely at airports. And your old or disabled relatives who get things called “Social Security checks” will still have money for bin_go.” Read more here

Sensex recoups losses, 80% Federal workers will work despite US shutdown

10:43 am Indian markets recouped some of their losses supported largely by financials, auto, technology and capital goods stocks.

The Sensex rose 54.58 points to 19,434.35 and the Nifty gained 15.65 points to 5,750.95.

TVS Motor Company , country’s third largest two-wheeler maker, gained nearly 7 percent after total sales in September increased 27 percent to 1.97 lakh units M-o-M.

Two-wheeler sales jumped 27.7 percent M-o-M to 1.89 lakh units in September while export sales rose marginally to 27,577 units from 27,425 units M-o-M.

Maruti Suzuki Sept domestic sales are up 1.8 percent, the stock is up 3 percent.

Despite partial shutdown of US government, about 80 percent of federal workers will continue working. According to reports, the 3.3 million employees who will have to work include those whose pay is not subject to annual appropriation such as the US postal service etc.

The shutdown will continue until Congress resolves its differences, which could be days or months. But the conflict could spill over into the more crucial dispute over raising the federal government’s borrowing authority.

A failure to raise the $16.7 trillion debt ceiling would force the country to default on its obligations, dealing a potentially painful blow to the economy and sending shockwaves around global markets, Reuters reported.

Dollar stays****steady even as US govt shutdown begins

10:14 amThe dollar held steady on Tuesday even though much of the US.government was due to start shutting down after Congress failed to find a compromise on a bill to fund government operations.

Competing spending measures flew back and forth between Republican-controlled House of Representatives and Democratic-led Senate late into Monday night in Washington but Congress deadlocked over Republican efforts to use the temporary spending bill as a way to delay implementation of President Barack Obama’s health care programme.

It comes a few weeks ahead of the next political battle to raise the federal government’s debt ceiling. Failure to do the latter by mid-October could result in a historic US debt default that would threaten the U.S. economy and send ripples around the globe.

The dollar was down 0.1 percent against a basket of currencies. It was steady at 98.15 yen, having climbed off a one-month low of 97.50 on Monday as Japan’s Prime Minister Shinzo Abe was expected to announce his economic growth and tax strategy later on Tuesday. ( Reuters)

10:am Furious Obama takes to Twitter, says Congress failure ob Budget forced govt shutdown

Congress has missed the deadline for averting the first partial government shutdown in 17 years. As the clock struck midnight Monday, House Republicans were demanding that the Senate negotiate their demand for a one-year delay in making millions of people buy health insurance under President Barack Obama’s 2010 health care law. Minutes before midnight, the White House ordered a shutdown.

Critical functions like air traffic control and military operations will continue. Social Security benefits will be paid. National parks and most federal offices will close.

The shutdown is happening on the backdrop of a fragile economic recovery in the US. So people are likely to cut back on their spending and tourism will be affected as museums and parks will remain shut. According to President Barack Obama, the partial shutdown of the US government will definitely impact the economy and its citizens.

“Congress failure on Budget forces govt shutdown,, US troops will remain on normal duty status during the shutdown,” tweeted US president Barack Obama.

“After more than a decade, the government is moving away from war footing.. we will continue to work with Congress to reopen the government,” he added.

9:30 am Indian markets opened largely range bound this morning, tracking global cues.

The Indian markets today opened in the green but pared its gains after the US government officially shut down its services for the first time since 1996after Congress failed to find a compromise on a government spending bill before a midnight (0400 GMT Tuesday) deadline.

“We urge Congress to act quickly to pass a continuing resolution to provide a short-term bridge that ensures sufficient time to pass a budget for the remainder of the fiscal year, and to restore the operation of critical public services and programs that will be impacted by a lapse in appropriations,” said Sylvia Burwell, director of the White House Office of Management and Budget, in a statement.

While the BSE Sensex opened 0.37 percent higher at19452, Nifty opened 0.20 percent higher at 5746. However, both the Sensex and Nifty gave up the early morning gains asWhite House has directed government offices to prepare for shutdown by midnight.

At 9:30 am, the Sensex was down 82 points at 19294.

Foreign institutional investors sold Indian shares worth Rs 519 crore on Monday on concerns over political dysfunction in US

The good news is that the India’s external economy didn’t do as badly as one would have expected in the June quarter.

India’s current account deficit (CAD) in Q1 of 2013-14 was US$ 21.8 billion (4.9 per cent of GDP),compared with expectations of $22 billion.

Meanwhile, petrol price was reduced by Rs 3.05 per litre, the first reduction in rates in over five months, while diesel prices were raised by 50 paise a litre. The petrol price in Delhi will be cut by Rs 3.66 to Rs 72.40 per litre, while in Mumbai it will cost Rs 79.49 per litre as against Rs 83.63 currently.

Among the sectoral indices, the BSE Banking Index was up 0.3 percent, followed by the S&P BSE Auto Index which gained 0.08 per cent and the S&P BSE Healthcare Index rose 0.06 percent. The BSE FMCG index was trading BSE Metal index down 1.08 per cent, followed by the BSE FMCG index slipped 0.85 percent, the BSE oil & Gas index plunged 0.5 per cent and the BSE Power index was trading 0.4 per cent lower.

Rupee flat at 62.50, jittery investors await US govt shutdown

9:00 am 1 October, 2013 Indian rupee today opened flat at 62.50 against the US dollar on hopes that India’s current account deficit will narrow in coming quarters. However, investors were jittery over imminent shutdown of partial US government services.

Sensex stock-index futures gained after the nation’s current-account deficit widened less than forecast in the second quarter but gave up most of its gains on fears of a partial US government shutdown.

India’s current-account deficit widened to $21.8 billion in the three months through June, compared with expectations of $22 billion.

The government has tightened curbs on gold imports to pare the deficit from a record $87.8 billion in the fiscal year ended March to support a battered rupee.

Tirthankar Patnaik, Religare said, “We expect overall CAD for the fiscal at a much lower USD 55 billion or 3.2 percent of GDP, thanks to a narrowing trade deficit. Concerns on the capital account have also faded after the RBI’s recent steps. However, with lower growth and the Fed’s ’taper’ still remaining key risks for India, we maintain our 58-62/USD band for the rupee for now.”

US Congress, still in partisan deadlock on Monday over Republican efforts to halt President Barack Obama’s healthcare reforms, was on the verge of shutting down most of the US government starting on Tuesday morning.

The stock markets are already reacting negatively. US stocks closed lower on Monday ahead of a deadline to avert the shutdown.

A government shutdown would have wide-ranging implications for most assets. If a deal were reached quickly, markets might recover, but a prolonged shutdown could harm the economy and consumer confidence, said a Reuters report.

European markets closed lower with the Italian index leading the fall, after a series of Cabinet resignations that could trigger fresh elections. The Italian markets did recover from sessions lows on reports that Berlusconi’s centre-right party could rebel if he continues to threaten to bring down the government. Stocks were also sent lower as a possible US Government shutdown becomes ever likely.

The benchmark BSE index slumped 1.76 percent, or 347.50 points, to end at 19,379.77. The broader NSE index fell 1.68 percent, or 97.90 points, to end at 5,735.30 on Monday.

Both indexes gained in September.Nifty rose 4.8 percent for the month, helped by foreign buying of more than $2 billion in Indian shares in September, the first net monthly inflows since May, regulatory data showed.

Sensex closes 400 points down on US, Italian political risks

3:30 pm Indian markets closed in the red today with the BSE Sensex down 400 points at19326, while Nifty shut shop at 5721, down111 pointsas political tension in Italy rattled investors already fearful of a looming US government shutdown.

Investors are concerned Italy will be forced into new elections just seven months after the last inconclusive vote, following Silvio Berlusconi’s move to pull his ministers out of the ruling coalition on the weekend.

Aside from Italy, investor are focused on events in Washington where a deadline to avert a federal government shutdown is approaching, threatening to damage a fragile economic recovery.US law makers hardened their positions over the weekend making passage of a stop-gap spending bill for the new fiscal year by midnight on Monday, less likely.

Domestically, the RBI will release India’s current account deficit today, which probably widened to as high as 5.4 percent in the June quarter, but a dramatic slowdown in gold imports and a rebound in merchandise exports are expected to narrow the gap in coming quarters

Biggest Sensex losers were ITC down 3 percent, ICICI Bank down 4.6 percent, HDFC down 3 percent.

BSE banking index closed down 3 percent, capital goods index too lost 3 percent while metals index was down 2.7 percent.

According to analysts, markets are likely to remain volatile and may trade with a negative bias in October, ahead of earnings for the quarter ending September 30, deadlock on US debt ceiling and two-day FOMC meet due on October 29-30, 2013.

Sensex going down but gold’s on its way up on safe-haven buying

12:40 amMarkets are trading lower but gold is edging higher as a possible US government shutdown prompted safe-haven buying, and the metal was on track to record its best quarter in a year despite a cloudy outlook for US stimulus.

Markets are feeling the heat as the three government crises (budget and debt ceiling in the US, governmental collapse in Italy) is hitting home and global stocks too. Over the weekend, the US Congress failed to agree on a budget, and the Italian government lurched towards collapse, as Berlusconi’s party said it was withdrawing from the coalition.

Gold has gained nearly 9 percent in July-September, boosted by a big short-covering rally, geopolitical tensions in the Middle East and some weak US economic data.

“Gold has behaved like a safe-haven currency of late. The market is pricing in a possible government shutdown,” Barnabas Gan, an analyst at OCBC Bank in Singapore, was quoted as saying by Reuters.

At 12:47 am. the BSE Sensex was down285 points at 19747 while Nifty was down 87 points at 5750. Rupee was up 0.32 percent at Rs 30,824.

Fear of US shutdown spooks market, Sensex falls nearly 250 points

11:40 am Indian markets were deep in red today, with the Sensex down around 250 points on concerns of a possible shutdown of the US government at midnight if the Republicans and the Democrats fail to reach a common ground on debt ceiling issue.

In a government shutdown, spending for essential functions related to national security or public safety would continue along with benefit programs such as Medicare health insurance and Social Security retirement benefits for seniors.

But civilian federal employees - from people who process forms and handle regulatory matters to workers at national parks and museums - would be furloughed.

Apart from potential market swings, companies hoping to raise money in an initial public offering could face delays.

Businesses will still be able to file certain documents to the Securities and Exchange Commission, but the agency said on Friday that processing and approving applications will be discontinued during a shutdown.

“Capital-raising will have a huge hiccup if the SEC shuts down as it has said,” said Eric Jensen, a partner with law firm Cooley LLP in Palo Alto, California.( Reuters)

In fact, the BSE Sensex extended intraday losses and was hovering below 19,500 ahead of the current account deficit (CAD) data to be releaseb by the RBI later today.

According to exports, the current account gap has widened in the June quarter due to a surge in gold imports and slowing exports.

At 11:50 am, the BSE Sensex was down238 points at 19488, while Nifty was down 72 points at 5760.

Banking stocks fell on worries about higher non-performing loans and the possibility of RBI raising rates one more time with its new found focus on inflation.

Market analyst Sandeep J Shah sees no reason for the Nifty to head higher from the current level.

He is not totally bearish on market but cautions that the Nifty could re-visit the 5200-5400 depending on how soon repo rate hikes are announced and QE tapering, if it happens this year.

Speaking to CNBC-TV18, he said that there may not be an impact of the much-talked about US debt ceiling issue on Indian market.

10:amVolatility to rule: Sensex down 180 points; rupee nears 63

Indian stock market opened down today, in line with the global markets which declined due to concerns that the US may be heading for a shutdown of its services as impasse over raising the debt ceiling continued.

The dollar weakened as the deadline to increase the debt ceiling of the US approached, giving rise to risk aversion across the global markets.

The Sensex was down 0.95 percent at 19,539 and the Nifty 0.98 percent 5,775.80. The rupee also opened weaker at 62.91 against the dollar.

Dipen Sheth of HDFC Securities told CNBC TV18 the Indian markets will continue to be volatile and that there is no point in making any short term projections.

[caption id=“attachment_1127165” align=“alignleft” width=“380”]  Reuters[/caption]

“Nothing has changed as far as India structural weakness is concerned,” he said. He said the cooling off in the West Asia is elusive as the region has always given negative surprises.

He expects more downgrades after this earnings season.

Interest rate sensitive shares like auto and banks were down, with BSE auto index declining 1.13 percent, Bankex 2.2 percent and the Realty 1 percent.

The interest sensitives are likely to continue their downward journey as hopes that the central bank will cut rates in the near future has receded.

Meanwhile, IT shares gained due to the fall in the rupee, which boots their export earnings.

Stocks in news

SpiceJet shares were down about 3.7 percent after its auditors raised doubts about the company’s viability as its net worth has eroded completely.

ING Vysya shares were up about 4 percent after the Economic Times reported ING is looking exit the bank and that Kotak Mahindra Bank may be interested in buying the stake.

Financial Technologies was down about 6 percent as the NSEL crisis continued to be an overhang on the stock.