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BW Businessworld

Sensex Gains; Earnings In Focus With Eyes On RBI Policy

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The BSE Sensex rose on 8 October' 2013 to their highest close in nearly two weeks, led by gains in lenders after the Reserve bank of India (RBI) cut an overnight interest rate on 7 October' 2013, further unwinding extraordinary measures taken to defend the rupee.
 
Still, indexes failed to hold onto early gains of more than 1 per cent as broader sentiment is expected to turn cautious ahead of July-September earnings which are expected to be weighed down by weakening economic growth and the rupee volatility.
 
The government will have to rein in spending and cut subsidies to meet its fiscal deficit target, Finance Minister P. Chidambaram told Reuters on Monday, underlining that an austerity drive will not be blown off course by an election due next year.
 
The continued U.S. government shutdown and political stalemate over the country's debt ceiling also continues to dent sentiment globally.
 
"Markets would be watchful of the earnings season from here onwards alongside more clarity on the RBI's stance on rates, as the rollback of extraordinary measures has already been factored in," said Deven Choksey, managing director of K R Choksey Securities.
 
The benchmark BSE index closed up 0.44 per cent, or 88.51 points, at 19,983.61 after rising as much as 1.3 per cent.
 
The broader NSE index rose 0.38 per cent, or 22.25 points, to end at 5,928.40.
 
Although banks had initially rallied on expectations the Reserve Bank of India's move late on Monday to cut the margin standing facility would lower funding costs, some of that positive sentiment waned as any benefits would be offset by expected interest rate hikes by the central bank in its next policy review on October 29.
 
Yes Bank Ltd ended up 4.3 per cent after gaining as much as 9.3 per cent, while ICICI Bank Ltd ended higher 2.3 per cent after rising nearly 4 pe cent.
 
Among state-owned banks, Oriental Bank of Commerce Ltd gained 1.4 per cent, while Canara Bank rose 1 per cent.
 
Infrastructure companies gained after TV channels ET Now and CNBC-TV 18 reported that the cabinet has allowed developers to defer the bulk of the payments they must pay to the state as part of a revenue-sharing agreement for projects, without citing sources.
 
GVK Power and Infrastructure Ltd surged 17.7 per cent, while NCC Ltd gained 6 per cent and GMR Infrastructure Ltd ended 1.1 per cent higher.
 
However, a government spokesperson said the issue was not on the agenda of the cabinet panel that met on Tuesday. It was not immediately clear whether the issue was discussed informally.
 
Apollo Tyres Ltd  gained 1.2 per cent as the Indian company and Cooper Tire & Rubber Co are at odds over whether Apollo can reduce the price for its proposed takeover of the U.S. firm, the latest hurdle in a deal beset by lawsuits and labour issues.
 
Among stocks that fell, Tata Consultancy Services Ltd ended 1.4 per cent lower on profit-taking after making its all-time high at 2,098 rupees.

(Reuters)