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Bank stocks in demand as inflation eases

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Last Updated : Jul 15 2014 | 11:57 PM IST

Key benchmark indices trimmed gains after hitting fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, was up 198.04 points or 0.79%, off 31.64 points from the day's high and up 104.88 points from the day's low. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. Easing of retail inflation in June 2014, gains in Asian stocks and overnight upmove in US stocks underpinned sentiment on the domestic bourses.

Bank stocks gained across the board after the latest data showed easing of retail inflation in June 2014.

At 10:15 IST, the S&P BSE Sensex was up 198.04 points or 0.79% to 25,205.02. The index jumped 229.68 points at the day's high of 25,236.66 in morning trade, its highest level since 11 July 2014. The index rose 93.16 points at the day's low of 25,100.14 in early trade.

The CNX Nifty was up 57.70 points or 0.77% to 7,511.85. The index hit a high of 7,524.20 in intraday trade, its highest level since 11 July 2014. The index hit a low of 7,490.55 in intraday trade.

The market breadth indicating the overall health of the market was strong with more than two gainers for every loser. On BSE, 1,403 shares gained and 545 shares fell. A total of 62 shares were unchanged.

The BSE Mid-Cap index was up 130.98 points or 1.48% at 9,004.68. The BSE Small-Cap index was up 167.41 points or 1.74% to 9,809.87. Both these indices outperformed the Sensex.

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The total turnover on BSE amounted to Rs 566 crore by 10:15 IST, compared with Rs 233 crore by 09:30 IST.

Among the 30-share Sensex pack, 22 stocks gained and rest of them declined.

L&T (up 2.27%), ONGC (up 2.27%) and Bharat Heavy Electricals (Bhel) (up 2.21%) edged higher from the Sensex pack.

Bank stocks gained across the board after the latest data showed easing of retail inflation in June 2014. Among private bank stocks, HDFC Bank (up 0.58%), IndusInd Bank (up 0.64%), Kotak Mahindra Bank (up 1%), Axis Bank (up 1.69%), Yes Bank (up 1.26%), and ICICI Bank (up 2.82%) gained.

DCB Bank rose 2.92% after net profit rose 4.65% to Rs 45 crore on 35.15% growth in total income to Rs 173 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Monday, 14 July 2014.

Among PSU bank stocks, State Bank of India (SBI) (up 1.7%), Punjab National Bank (up 1.69%), Bank of Baroda (up 2.25%), Bank of India (up 2.76%) and Union Bank of India (up 3.07%) edged higher.

Easing of retail inflation in June 2014, gains in Asian stocks and overnight upmove in US stocks triggered a firm opening on the domestic bourses. Key benchmark indices trimmed gains after hitting fresh intraday high in morning trade.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.22, compared with its close of 60.07/08 on Monday, 14 July 2014.

On the macro front, the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 7.31% in June 2014, from 8.28% in May 2014, data released by the government after trading hours on Monday, 14 July 2014, showed. The rate of inflation based on the combined consumer food price indices (CFPI) for urban and rural India eased to 7.97% in June 2014, from 9.56% in May 2014, the data showed. Core CPI inflation which excludes food and energy prices, eased to 7.39% in June 2014, from 7.71% in May 2014.

Inflation based on the wholesale price index eased to 5.43% in June 2014, from 6.01% in May 2014, data released by the government during trading hours on Monday, 14 July 2014, showed.

The Reserve Bank of India (RBI) next undertakes monetary policy review on 5 August 2014.

Asian stocks edged higher on Tuesday, 15 July 2014, after the Dow Jones industrial average hit an intraday record on Monday, 14 July 2014, boosted by Citigroup's better-than-expected earnings and a fresh round of merger and acquisition activity in the US healthcare industry. Key benchmark indices in Taiwan, Hong Kong, Japan, Indonesia, South Korea and China rose by 0.03% to 0.88%. Singapore's Straits Times index was unchanged.

The Bank of Japan kept its record stimulus unchanged and forecast inflation will pick up to its 2% price target. The central bank stuck with its goal of an annual increase in the monetary base of between 60 trillion yen and 70 trillion yen ($690 billion), it said in a statement today, 15 July 2014, in Tokyo at the end of a two-day monetary policy review.

China will release second-quarter GDP data tomorrow, 16 July 2014.

Trading in US index futures indicated that the Dow could rise 17 points at the opening bell on Tuesday, 15 July 2014. US stocks ended higher on Monday, 14 July 2014, with the Dow Jones industrial average hitting an intraday record, helped by Citigroup's better-than-expected earnings and more deals in the healthcare sector.

Investors are awaiting Federal Reserve Chair Janet Yellen's testimony before the congress due later in the day.

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First Published: Jul 15 2014 | 10:19 AM IST

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