Diwali is here: Sensex ends at all-time closing high of 21033

3:29 PM Indian markets continued their romance with RBI governor Raghuram Rajan with both the Sensex and Nifty closing at record highsas the general bullish sentiment fuelled by the central bank’s actions yesterday extended today aided by the global cues.

Today’s rally was aided by a rally in global stockson hopes that the US Federal Reserve will stay on course with its $85 billion monthly asset purchase programme at its two-day meeting ending today.

Exchange data showed a net purchase of Rs 1103 crore on Tuesday, bringing the total to nearly Rs 15000 crore during the period.

While the BSE Sensex closedup 104 points or 0.44 percent higher at 21033, the NSE Nifty closed 30 points higher at 6251. Bharti Airtel was the biggest Sensex gainer, up 6.2 percent after it announced its second quarter earnings. Other stocks leading the rally include ICICI Bank, Hindalco, Bhel and Dr Reddy’s Laboratories.

The Sensex has closed above the 21,000 mark for the first time since November 2010. In fact it is just 184 points away from its intra-day high of21206.77.

Even though the BSE Sensex hit the 21,000 mark on many occasions in the past, it last closed above the mark only on 5 November, 2010

“All dips and corrections will be used to buy because mid-caps and small-caps are going to fly now, " said technical analyst Sudarshan Sukhani in an interview with CNBC-TV18.

Angel Broking noted that the new high has been achieved without retail participation.

“With their ( retail) participation, we would have been much much higher. The new high for the Sensex in the next 2-3 years can be 30,000” said Rajan Shah of Angel Broking.

Asian share markets took heart from record highs in US stocks on Wednesday as investors wagered the Federal Reserve would rock no boats at its policy meeting and leave stimulus in place for the next few months at least.

Domestically, the RBI’s liquidity loosening steps taken yesterday had instilled confidence among investors about the economy.

More than the repo rate hike, investors were relieved that the marginal standing facility rate was cut giving the banking system access to cheaper funds.

Sensex stays above 21,000, Bharti top gainer on Q2 results

2:45 pmIndian stock markets gained in afternoon trade thanks to positive global cues.

Global stalks rallied today and foreign investors continued to pump money into the Indian equity markets on hopes that the US Federal Reserve will stay on course with its $85 billion monthly asset purchase programme at its two-day meeting ending today.

While the BSE Sensex was up93 points at 21022, Nifty was up 26 points at 6247.

Market expert Sandip Sabharwal believes the market will move up another 6-8 percent by the year end.

“December has been very good for the market. December average returns are 4-5 percent. I think mostly Fed is not going to taper and that will lead to upgrades going forward,” he told CNBC-TV18.

bharti Airtel shares surged 6 percent after reporting strong revenues and improvement in Africa business during Second quarter.

ICICI Bank rallied 2.5 percent, in addition to previous day’s 6 percent rally.

Lupin gained nearly 2 percent post September quarter earnings. Lupin matched treet expectations with the second quarter consolidated net profit increasing 39.8 percent on yearly basis to Rs 406 crore, driven by other income, despite higher tax rates.

Nifty near three-year high, Sensex crosses 21,000 again

11:14 am Nifty at near three-year high, Sensex crosses 21,000 again

The Nifty gained 0.23 percent after earlier hitting its highest intraday level since November 2010, while the BSE Sensex has crossed 21,000 again.

At 11:14 am, Nifty was up0.32 percent at 62410, while Sensex was up 0.35 percent at 21010.

Realty stocks led the rally with the BSE realty index up 1.25 percent.

Bharti Airtel is up 3.8 percent after its September-quarter operating margins came at 32 percent, meeting some analysts’ estimates.

Tata Communications gained 10 percent after it posts a consolidated net profit in the September-quarter from a net loss a year earlier.

Dr.Reddy’s Laboratories gained 2.5 percent a day ahead of its July-September earnings.

According to Nilesh Shah of Envision Capital investors should stock to defensives and shun PSU banks, cement stocls. Shah is bullish on IT, pharma and select automobile stocks. He likes FMCG names too, but in an interview with CNBC-TV18 he advised investors to steer clear of large caps like HUL and ITC as he feels valuations are too expensive

Bharti Airtel is up 4.65 percent post its Q2 results

9:35Bharti Airtelis up 4 percent after the telecom operator posted its Q2 results. The company has done better on the revenues front but missed the profit forecast due to massive forex loss.Bharti Airtel net profit for the second quarter came in at Rs 512 crore against expectations of Rs 772 Cr due to a forex loss of Rs 342 cr during the quarter. The second quarter sales are up 5 percent at Rs 21324 crore against Rs 20264 crore (QoQ).The telecom major’s Africa net $ revenue is up 5.6% (QoQ); Minutes of usage at 437 vs 417 (YoY) while net debt has been reduced to $9.7 Billion.

Ranbaxy shares are down 4 percent after it posted a loss for a second straight quarter on Tuesday, hurt by foreign exchange charges and a one-time write-off related to one of its plants under an import ban by the U.S. health regulator.Net loss in July-September was Rs 450 crore ($73 million) from a profit of Rs 750 crore a year earlier, it said. Ranbaxy is 63.5 percent owned by Japan’s Daiichi Sankyo Co .

DLF is up 1.37 percent as the realty major is expected to announce its Q2 results today.

Sensex touches 21,000; heading towards new high on Rajan magic

9:30 am The Indian indices are looking at flirting with their all-time highs today after RBI governor Raghuram Rajan managed to live up to his reputation once again.

While the BSE Sensex opened about a quarter of a percent higher at20970, Nifty opened0.21 percent higher at 6233. Within minutes of opening,Sensex surged past the 21,000 mark led by gains in Bajaj Auto, Hero MotoCorp and Dr. Reddy’sbut pulled back slightly to 20995.

However, the Indian rupee opened weaker at 61.42 against the US dollar after yesterday’s close of 61.31.

Banking stocks extended gains in opening trade.

Bharti Airtel is up 4 percent after the telecom operator posted its Q2 results. The company has done better on the revenues front but missed the profit forecast due to massive forex loss.Bharti Airtel net profit for the second quarter came in at Rs 512 crore against expectations of Rs 772 Cr due to a forex loss of Rs 342 cr during the quarter. The second quarter sales are up 5 percent at Rs 21324 crore against Rs 20264 crore (QoQ).The telecom major’s Africa net $ revenue is up 5.6% (QoQ); Minutes of usage at 437 vs 417 (YoY) while net debt has been reduced to $9.7 Billion.

Ranbaxy shares are down 4 percent after it posted a loss for a second straight quarter on Tuesday, hurt by foreign exchange charges and a one-time write-off related to one of its plants under an import ban by the U.S. health regulator.Net loss in July-September was Rs 450 crore ($73 million) from a profit of Rs 750 crore a year earlier, it said. Ranbaxy is 63.5 percent owned by Japan’s Daiichi Sankyo Co .

“This is more of a risk-on rally, which is ignoring the fact that RBI may hike rates further as growth picks up amid inflation,” Aneesh Srivastava, chief investment officer at IDBI Federal Life Insurance, was quoted as saying by Reuters.

The RBI increased the repo rate by 25bps to 7.75% and lowered the rate under the marginal standing facility by 25bps to 8.75%. It also eased liquidity slightly by increasing the liquidity support under term-repos by Rs200bn. However, MSF will still continue to be the effective policy rate and thus liquidity conditions will still remain tight.

While on one hand raising repo rate ensured that Rajan kept up his fight against inflation; the MSF cut made short term borrowing cheaper, thereby easing liquidity stress.

Sensex rose nearly 2 per cent on Tuesday, snapping a five-day losing streak to hit its highest close in nearly three years; while Nifty hit 35-month high to register its best closing since November 10, 2010.

Globally, US stocks ended at record highs after economic data supported views that the Federal Reserve would keep its stimulus intact for several months aided investor sentiment.Markets seem to be operating on the assumption that the Fed’s policy statement will not challenge the growing consensus that any tapering of its USD 85 billion of monthly asset purchases will not start until March at the earliest.

European markets closed higher ahead of the fed meeting and thanks to strong earnings from BP and Nokia. But banking stocks weighed on the markets led by UBS.

Asian markets are higher. Japan’s Nikkei is up over a percent while Hong Kong’s Hang Seng index is up 0.6%. South Korea’s Kospi gained 0.04% while China’s Shanghai index is marginally up.

End of updates on 29 October

Nifty ends at 35-month high: Market’s romance with Rajan continues

The Indian marketsgained nearly two percent after the Reserve Bank of India (RBI) raised the repo rate by 25 basis points as widely expected, while lowering short-term interest rates.

Some traders had been worried the RBI would raise interest rates more aggressively on Tuesday after saying on Monday it expects inflation to remain near the current elevated levels for the remainder of the fiscal year that ends in March.

The BSE Sensex closed at20922.70, up 352.42 points or 1.71 percent. Nifty also gained 119 points or 1.96 percent to close at 6220.

The Nifty closed at a 35-month high, while the Sensex is just 70 points short of its record high.

The rupee was also trading higher at 61.45/46 versus its previous close of 61.52/53, led by gains in the domestic share market after an in-line monetary policy review.

Traders said there was dollar selling by exporters, tracking gains in the share market, but month-end demand from importers preventing further fall in the pair.

Ahead of the policy review there were speculation that the policy rate may be increased by 50 bps. The market is now relieved that this did not happen, Dhananjay Sinha, head of research, Emkay Global said. “It is the cut in MSF rate that has propped the market today,” he told Firstpost.

Sinha said the MSF rate cut is likely to help banks such as YES Bank. However, the brokerage’s continued to prefer private sector banks to public sector ones.

The Indian markets gained soon after the RBI announced a hike inrepo rate by 25 bps to 7.75 percent in the second quarter monetary policy review as was expected.

At 11.45 am, after the announcement, the BSE Sensex was at 20655.80, up 85.52 points or 0.42 percent. The Niftywas at 6133.25, up 32.15 points or 0.53 percent.

Banks gained the most, with all banks trading in green. TheBanking index was up 0.8 percent after the RBI announcement.Yes Bank was up 3 percent, Indus Bank gained 2 percent, ICICI Bank was up 3 percent.

The RBI also increased the liquidity provided through term repos of 7-day and 14-day tenor from 0.25 percent of NDTL of the banking system to 0.5 percent with immediate effect. Consequently, the reverse repo rate under the LAF stands adjusted to 6.75 percent and the Bank Rate stands reduced to 8.75 percent with immediate effect.

With these changes, the MSF rate and the Bank Rate are recalibrated to 100 basis points above the repo rate.

Repo rate is the effective policy rate that decides lending rates in the economy.

Consensus on the street pointed to a 25 bps rate hike to 7.75 percent and rolling back of emergency measures applied to tame the rupee.

In his previous monetary policyreview, announced weeks after assuming office as RBI governor, Rajan stunned market by raising repo rates. The RBI has been struggling for a yearnow to bring down inflation which has remained stubbornly high despite all possible measures, which led to slowdown in growth. Meanwhile, annual food inflation touched its highest point since mid-2010 to 18.4 percent in September.

“Overall WPI inflation is expected to remain higher than current levels through most of the remaining part of the year, warranting an appropriate policy response,” Rajan said in his review.

Rupa Rege Nitsure, Chief economist, Bank of Baroda, said, “The RBI policy has certainly become more transparent as it has fulfilled market expectations of 25 bps hike in repo and 25 bps cut in MSF. As market expectations have been fulfilled there will not be any knee-jerk reaction across financial markets.

Stocks in news:

ICICI Bank was the top gainer among the banks. The stocks closed 5.88 percent up at 1074.65.

Maruti Suzuki is the top gainer on the BSE Sensex, as the stocks gained up 6.41 percent. The company’s second quarter net profit grew 6 percent quarter-on-quarter (up 3 times year-on-year) to Rs 670 crore due to lag impact of currency benefits. However, the auto major is cautious about the road ahead and expects operating margins to take a hit due to indirect imports.

Realty stocks such as HDIL was up 7.6 percent, IndiaBulls Real Estate was up 5.71 percent and DLF was up 2.49 percent.

With inputs from Reuters