Bank stocks see across the board surge ahead of RBI policy on Monday
DATE: 14/09/2012
Firmness prevailed in mid-morning trade after strong global cues propelled the key benchmark indices to nearly 7-month highs in early trade. 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 377.71 points or 2.10%, up 114.12 points from the day's low and off 57.46 points from the day's high. The market breadth was strong.
Index heavyweight Reliance Industries (RIL) extended early gains. Index heavyweight and cigarette maker ITC scaled a record high. Bank stocks were in demand ahead of the RBI monetary policy review on Monday, 17 September 2012.
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 11:27 IST, the BSE Sensex was up 377.71 points or 2.10% to 18,398.87. 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 118.15 points or 2.17% to 5,553.50. 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, 1,550 shares rose and 996 shares fell. A total of 99 shares were unchanged.
The total turnover on BSE amounted to Rs 1163 crore by 11:25 IST compared with Rs 827 crore by 10:25 IST
All the 30 members from the Sensex pack gained.
Bank stocks were in demand ahead of the RBI monetary policy review on Monday, 17 September 2012.
ICICI Bank surged 4.82% 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.
HDFC Bank (up 1.53%) and Axis Bank (up 4.04%), gained. Both these private sector banks have reportedly cut interest rates on retail fixed deposits by up to 50 basis points for various maturities.
SBI (up 4.53%), Canara Bank (up 3.64%), Bank of Baroda (up 4.24%), Punjab National Bank (up 3.35%), Union Bank of India (up 4.10% to Rs 158.60), Bank of India (up 3.66%), Kotak Mahindra Bank (up 4.05%), and Federal Bank (up 2.24%) edged higher.
Index heavyweight and cigarette maker ITC rose 0.11% 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 2.94% to Rs 821.70, extending intraday 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 Mukesh Ambani 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.
Essar Oil surged 6.10% after the Supreme Court on Thursday, 13 September 2012, directed the company to pay sales tax dues of Rs 5165 crore in eight quarterly installments to the Gujarat Government. The announcement was made after market hours on Thursday, 13 September 2012.
Ranbaxy Laboratories rose 0.18% after the firm said its wholly owned Malaysian subsidiary has received approval from the Government of Malaysia for setting up a Greenfield manufacturing facility in Malaysia. The company made this announcement after market hours on Thursday, 13 September 2012.
Aurobindo Pharma rose 0.27% after the firm denied the rumors that it is considering restructuring by way of sale of some of its unit(s) or verticals. The company made this clarification during trading hours today, 14 September 2012.
Orissa Minerals Development Company hit a lower circuit limit of 10% at Rs 47,887.25 after the company said its board at the meeting held on Thursday, 13 September 2012, rejected the proposed bonus issue of shares. The announcement was made after market hours on Thursday, 13 September 2012.
The Cabinet Committee on Political Affairs (CCPA) raised price of heavily subsidised diesel by Rs 5 per liter on Thursday to balance its fiscal deficit situation. The diesel price hike will reduce the projected massive under-recoveries of Rs 1,87,127 crore by about Rs 20300 crore of oil marketing firms for the financial year 2012-13 in the wake of high international crude oil prices and sharp depreciation of rupee against dollar. PSU OMCs had suffered under-recovery of Rs 1,38,541 crore during 2011-12.
+POWERED BY: CAPITAL MARKET NEWS
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