Nifty claws back 6000; rupee tests 63/$, Cairn India up 3%

Moneycontrol Bureau
Live Market Commentary

9:55 am Bond market check: Government bond yields rise slightly on Friday as traders shed positions ahead of the Rs 15000 crore  bond auction later in the session, which includes the sale of a new 10-year benchmark bond.

The most actively traded 8.28 percent 2027 bond yield is trading up 2 basis points at 9.09 percent.

Meanwhile, the soon-to-be-unveiled new 10-year bond is up 2 bps at 8.77 percent in the when-issued segment on the electronic trading platform.

9:45 am FII view: Ridham Desai of Morgan Stanley warns that India's growth outlook remains challenged. Real rates are likely rising relative to real GDP. "Without a discernible shift in the investment rate, India will be reliant on significant improvement in the external sector to drive earnings higher," he said. He feels broad market earnings will continue to decline.

According to Chris Wood of CLSA, greed and fear will add one more percentage point to the small India overweight. "This is primarily because of the potential catalyst provided by the forthcoming state elections. If an investment cycle does resume in India in the next 1-2 years then India probably becomes the best equity investment story in Asia again, just as it was between 2002-2009," he said in an interview.

9:35 am Currency check: Rupee breaches 63 per dollar level and is currently at 63.01 per dollar. Nizam Idris of Macquarie says rupee will be stuck within that 62-64/USD range for now. "I don't see the Federal Reserve (Fed) changing its views rapidly towards an earlier than expected taper for example. So I am still basing my expectation on a March taper, which will see the dollar rupee stuck within that 62-64/USD range for now," he said in an interview to CNBC-TV18.

9:30 am Buzzer: Cairn India jumped over 3 percent in early trade. The company said its board will meet on 26 November 2013, to consider a proposal for buyback of equity shares of the company.

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After getting butchered in last two sessions, the market has opened in green territory. The Sensex is up 92.65 points at 20321.70, and the Nifty is up 29.85 points at 6028.90. About 496 shares have advanced, 104 shares declined, and 16 shares are unchanged. 

Sesa Sterlite, Hindalco, Tata Steel, BHEL and L&T are top gainers in the Sensex. On the losing side are Sun Pharma, Hero Motocorp, HUL and TCS.

Indian rupee opened higher at 62.89 per dollar on Friday as against previous day's closing of 62.93 per dollar.

NS Venkatesh of IDBI Bank feels today currency markets will take cues from equity markets moves. "Better-than-expected US jobs data is positive for the dollar and could put a mild weakening bias to rupee," he adds. According to Venkatesh, the range for the day is seen between 62.5-62.95/USD.

The US markets rallied with the Dow posting its first finish above 16,000, as the number of Americans filing for jobless benefits declined to a near two-month low. Halting its longest-running losing streak in eight weeks, the S&P 500 too inched closer to 1800. And the Nasdaq-led the charge with gains of 1.20 percent. The CBOE volatility index, which has advanced nearly 4 percent this week, fell to below 13.

In the currency space, the yen falls to a fresh four-year low against the euro early in Asian trade, left exposed after promising data in both Germany and the United States underpinned the single currency and the US dollar.

In commodities, crude prices are subdued this morning after rising USD 1/bbl yesterday, boosted by positive US economic data and surging gasoline prices as demand was expected to rise.

From precious metals space, gold settled over 1 percent lower on Thursday, in the wake of constructive US jobless data, and hurt by fears the US Federal Reserve might be able to start scaling back its stimulus programme soon.