Investors cheered Barack Obama's election as the next US president.
However, the market soon sharply cut its early strong gains. Though
the BSE Sensex was up 95.44 points or 0.9%, the barometer index had
shed close to 220 points from the day's high.
Rally in Asian stocks and expectations that a cut in interest rates
by state-run banks that would result in lower borrowing costs for
the corporates supported the market. The sentiment was also firm
following a statement by the Commerce and Industry Minister Kamal
Nath after trading hours on Tuesday, 3 November 2008, that the
government will further ease foreign investment rules, including
those relating to defence production.
Asian stocks surged as investors welcomed the end to the
uncertainty around the US presidential election. Japan's Nikkei
average pared gains briefly after news of Democrat Barack Obama
winning the US presidential election but still remained up 2.6%,
buoyed by exporters boosted by a softer yen. Key benchmark indices
in China, Singapore, Hong Kong, Taiwan and South Korea were up by
between 0.29% to 5.63%.
Democrat Barack Obama captured the White House today, defeating
Republican John McCain to make history as the first black to be
elected US president.
At 10:10 IST, the BSE 30-share Sensex was up 95.44 points or 0.9%
to 10,726.56. The Sensex surged 314.29 points at day's high of
10,945.41 in early trade. The index rose 19.04 points at the day's
low of 10,650.16 in early trade.
The S&P CNX Nifty was down 37 points or 1.18% to 3,179.10.
The BSE Mid-Cap index was up 1.92% at 3,513.94 and the BSE
Small-Cap index was up 2.01% at 4,116.07. Both the indices
outperformed the Sensex.
The market breadth was strong. On BSE, 1,176 shares advanced as
compared to 379 that declined. 29 shares remained unchanged.
India's largest private sector company by market capitalization and
oil refiner Reliance Industries (RIL) slipped 1.39% to Rs 1432.90
on reports of shutting down five of its seven polyester and
petrochemical units at Patalganga near Mumbai soon after offering
exit option to employees. The move, which comes in the backdrop of
a global slowdown, aims to improve profit margin amid falling
demand for polyester products worldwide, reports suggest.
Reliance Infrastructure (up 4.64% to Rs 568.50), Jaiprakash
Associates (up 4.42% to Rs 93.60) and DLF (up 3.57% to Rs 300.50)
were the major gainers from Sensex pack.
Reliance Communications (down 1.56% to Rs 246.60), ACC (down 0.47%
to Rs 504) were the major losers from Sensex pack.
IT stocks were mixed on strong rupee and on 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. India's third largest IT exporter by sales Satyam
Computer Services fell 0.74% as its American depository receipt
(ADR) fell 0.83% overnight.
India's fourth largest IT exporter by sales Wipro rose 0.76% as ADR
rose 5.25%. India's second largest IT exporter by sales Infosys
slipped 1.33%, even as ADR rose 4.84%.
India's largest IT exporter by sales Tata Consultancy Services
slipped 0.04%.
Democrat Barack 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.
The Indian rupee strengthened by 1% in opening deals on Wednesday
on expectations the stock market may rise for a sixth successive
session and attract foreign inflows. The partially convertible
rupee was at 47.20/21 per dollar, compared to Tuesday's close of
47.69/71 per dollar. A strong rupee affects the IT companies as
they earn most of their revenues in dollar terms.
Bank stocks extended yesterday's (4 November 2008)'s gains on
reports public sector banks are likely to cut deposit and lending
rates by 50 to 75 basis points within one week. India's largest
commercial bank State Bank of India rose 2.25% after its chairman O
P Bhatt said on 4 November 2008 the bank was likely to cut interest
rates by up to 50 basis points.
Punjab National Bank, Bank of India, Union Bank of India, Federal
Bank, IDBI Bank, Canara Bank, Indian Overseas Bank, Allahabad Bank
and IndusInd Bank rose by between 2.84% to 6..97%. Indian Bank rose
1.53% after the bank said yesterday it will consider cutting its
lending and deposit rates by 50-75 basis points this week.
State Bank of Bikaner & Jaipur was flat at Rs 2651.70 after it cut
its benchmark prime lending rate to 13.25% from 14%, effective 5
November 2008.
India's largest private sector bank by net profit ICICI Bank rose
4.29% as American depository receipt (ADR) spurted 7.28% 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 2.81% as ADR jumped 7.63% on Tuesday.
India's largest home loan lender by operating income HDFC jumped
2.28%.
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.
India Infoline rose 0.72% after the company received an
in-principle approval from the market regulator, Securities and
Exchange Board of India (Sebi), to set up an asset management
company.
Kingfisher Airlines fell 2.86 on reports the of defaulting on lease
rentals to GE Commercial Aviation Services for four A 320
aircrafts.
Balaji Telefilms rose 0.57% on reports of plans to enter
broadcasting
GMR Infrastructure surged 6.43% on reports it is close to acquiring
a coal mine in Indonesia for over $100 million
US stocks had their biggest Election Day rally ever on Tuesday as
investors looked forward to the end of the uncertainty surrounding
the long fight for the White House, while global credit markets
showed more signs of a thaw. The Dow Jones Industrial Average
jumped 305.45 points or 3.28%. The tech-laden Nasdaq Composite
Index surged 53.79 points or 3.12%.
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