The key benchmark indices extended gains to hit fresh intraday
highs in mid-afternoon trade as European markets, which opened
after the Indian market, rose in early trade. The BSE Sensex was up
232.58 points or 2.4%. Sensex breached the psychological 10,000
mark in mid-afternoon trade but was now below that level. Data
showing rise in infrastructure sector output and positive global
cues boosted the domestic bourses
Most of the IT stocks came off the day's lows as a weak rupee
offset fall in American depository receipts overnight. PSU banks
rose on cut in lending rates.
Data showing rise in infrastructure output offset concerns of
economic slowdown triggered by productions cuts announced by
commercial vehicle makers in the last two days and steel maker JSW
Steel today and reduction in gross domestic product (GDP) forecast
for 2009 by the International Monetary Fund. India's infrastructure
sector output grew 5.1% in September 2008 from a year earlier, well
above 2.3% annual growth in August 2008, government data released
earlier in the day showed.
The International Monetary Fund, or IMF, on Thursday, 6 November
2008, predicted lower growth in India and economic contractions in
the US, Japan and euro region next year, calling for further
interest rate cuts and fiscal stimulus. Its estimate for India's
growth in 2009 is now 6.3%, 0.6% lower than its earlier estimate of
6.9% made just a month ago. Its estimate for the country's growth
in 2008 is down 0.1% to 7.8%.
European shares rose in early trade on Friday, as commodities
stocks tracked stronger crude and metals prices and banking shares
gained following interest rate cuts in the previous session. Key
benchmark indices in France, Germany and UK were up by between 0.7%
to 1.81%. The Bank of England slashed interest rate by a steep 1.5%
on Thursday, 6 November 2008 and on the same day the European
Central Bank cut rate by 50 basis points
Bargain hunting following a 25 basis points rate cut by the central
bank in South Korea on Friday, 7 November 2008, and rate cut in
Europe triggered a recovery in Asian stocks from an intra-day fall.
South Korea's Kospi was up almost 4% boosted by the rate cut. Key
benchmark indices in China, Singapore, Hong Kong, Taiwan, rose by
between 1.034% to 3.29%. Japan's Nikkei average was down 3.55% with
bargain hunting helping the benchmark pared losses that had taken
it down over 6% earlier in the day. The rate cut in Europe were
announced after Asian markets had closed on Thursday, 6 November
2008.
Trading in US index futures indicated the Dow will rise 163 points
at the opening bell.
At 14:24 IST, the 30-share BSE Sensex was up 232.58 points or 2.4%
at 9,972.41. The index fell 121 points at the day's low of 9,631.59
hit in early trade. The barometer index rose 291.58 points at the
day's high of 10,025.80 in mid-afternoon trade.
The 50-unit S&P Nifty was up 78.50 points or 2.71% to 2,971.15.
The BSE Mid-cap index was up 0.58% to 3,337.73, while the BSE
Small-cap index was up 0.41% to 3,896.19. Both the indices
underperformed the sensex.
The market breadth turned positive from earlier weak breadth. On
BSE, 1080 stocks declined while 1322 gained. 86 stocks remained
unchanged.
India's largest private sector firm by market capitalisation and
oil refiner Reliance Industries rose 3.88% to Rs 1,217 despite
reports it may delay commercial operations of its Jamnagar refinery
to early 2009 as it finishes the final testing of the facility.
Reliance Infrastrucutre (up 7.32% to Rs 542.50), Sterlite
Industries (up 5.15% to Rs 449.90), Jaiprakash Associates (up 4.65%
to Rs 87.70) and were the major gainers from the Sensex pack.
Grasim Industries (down 0.8% to Rs 1,016) and Maruti Suzuki India
(down 0.16% to Rs 599) were the major losers from the Sensex pack.
India's largest drug maker by sales Ranbaxy Laboratories fell 0.32%
even as Daiichi Sankyo Co, Japan's No. 3 drugmaker, said on Friday
it had completed the takeover of Ranbaxy Laboratories, buying a
63.9 % stake for Rs 19980 crore ($4.20 billion). Daiichi Sankyo
reached an agreement with the generic drugmaker in June 2008 to buy
a stake of at least 50.1 % through a tender offer, the private
placement of new shares and the purchase of outstanding shares from
the founding family.
India�s largest aluminum maker by sales, Hindalco Industries
spurted 9.26% on reports the company has cleared the bridge loan
taken to acquire Canada's Novelis.
Telecom stocks rose on bargain hunting after steep losses of the
past two days caused by reports of the government planning to levy
higher spectrum fee. Bharti Airtel, Reliance Communications, Spice
Communictions and Idea Cellular rose by between 0.24% to 2.85%.
Most of the IT stocks spurted after weak start as a weak rupee
offset slide in weak American depository receipts overnight caused
by worries the US outsourcing business will be curtailed and the
direct impact will be on IT sector after Barack Obama won the US
presidential election early this week. India's third largest IT
exporter by sales Satyam Computer Services rose 3.06% to Rs 277.95,
off the day�s low of Rs 263. Its American depository receipt
(ADR) fell 7.19% overnight.
India's second largest IT exporter by sales Infosys rose 2.45% to
Rs 1277, off the day�s low of Rs 1205.25 even as ADR fell 10.47%.
India's fourth largest IT exporter by sales Wipro rose 4.03% to Rs
263.30 even as ADR slipped 8.56%. The stock had slipped 6.31% in
previous trading session. India's largest IT exporter by sales Tata
Consultancy Services rose 5.36% to Rs 526.50 off day�s low of Rs
485.10. The stock had slipped 1.08% in previous trading session.
Obama has strong reservations on outsourcing from the US. He had
made many statements during his election speeches that he would
discourage outsourcing from the US when he comes into power.
Meanwhile, the Indian rupee weakened on Friday as expectations of
further foreign investor outflows from the stock market weighed on
sentiment. The partially convertible rupee was at 47.77/78 per
dollar, 0.1 % weaker than 47.66/69 at close on Thursday.
PSU banks rose after top state-owned banks on Thursday, 6 November
2008, cut their prime lending rates (PLR). Bank of Baroda,
Allahabad Bank, Central Bank of India, Oriental Bank of Commerce
and Corporation Bank rose by between 0.81% to 4.16%. All of them
reduced lending rates by 75 bps to 13.25% with effect from 10
November 2008.
India's largest commercial bank State Bank of India (SBI) rose
1.19% on a decision to cut the PLR by 75 basis points (bps) with
effect from 10 November 2008 and deposit rates by 25 to 50 bps
across all maturities effective 1 December 2008.
India's largest private sector bank by net profit ICICI Bank rose
0.17% to Rs 435 off day�s low of Rs 406.60 even as American
depository receipt (ADR) lost 2.68% overnight. ICICI Bank's chief
executive K.V. Kamath said on 3 November 2008, the bank will review
interest rates in the next few days.
India's second largest private sector bank by net profit HDFC Bank
rose 2.47% to Rs 1085.20 off day�s low of Rs 1,032 even as ADR
slumped 4.81% on Thursday.
India's largest home loan lender by operating income HDFC jumped
3.39%. HDFC is yet to revise its rates, since the firm's borrowing
costs have not come down.
The Reserve Bank of India (RBI) on Saturday, 1 November 2008,
unexpectedly cut its main short-term lending rate viz. the repo
rate to ease a growing cash squeeze, spur faltering economic growth
and fend off damage from the global financial crisis.
Meanwhile, inflation based on the wholesale price index rose 10.72%
in the year through 25 October 2008, higher than previous week�s
10.68% rise.
India's largest commercial vehicle maker by sales Tata Motors
recovered from the day's low. The stock was now down 0.69% to Rs
158.15, off the day's low of Rs 148. Its ADR lost 3.81% overnight
after the company on 6 November 2008 had announced closing of the
commercial vehicle plant at Jamshedpur owing to a demand slump.
Shares in iron ore exporters such as Sesa Goa and NMDC rose by
between 3.12% to 3.23% after a TV channel said railway freight
rates for iron ore have been cut by 50% from 8 November 2008 to 31
December 2008.
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