Gains in banking stocks helped key benchmark indices extend gains in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was up 253.57 points or 1.02% at 25,154.03. The Nifty 50 index was up currently up 80.90 points or 1.06% at 7,677.90. The Sensex retained the psychologically important 25,000 mark after surpassing that mark after opening with upward gap. Strong global cues boosted investors' sentiment. World stocks rose as investors welcomed the latest signal from the US Federal Reserve that it would move slowly to raise interest rates in the US.
The Sensex jumped 257.21 points, or 1.03% at the day's high of 25,157.67 in early afternoon trade, its highest level since 28 March 2016. The barometer index rose 154.96 points, or 0.62% at the day's low of 25,055.42 in morning trade. The Nifty rose 82.25 points, or 1.08% at the day's high of 7,679.25 in early afternoon trade, its highest level since 28 March 2016. The index rose 46.45 points, or 0.61% at the day's low of 7,643.45 in morning trade.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,655 shares rose and 624 shares fell. A total of 127 shares were unchanged. The BSE Mid-Cap index was currently up 1.28%. The BSE Small-Cap index was currently up 1.51%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian stocks edged higher tracking overnight gains in US shares as investors welcomed the latest signal from the US Federal Reserve that it would move slowly to raise interest rates in the US. US stocks edged higher yesterday, 29 March 2016, after Federal Reserve chairwoman Janet Yellen in a speech in New York reiterated a need to proceed cautiously in lifting interest rates in the backdrop of weaker-than-expected growth overseas and a cloudy US inflation outlook.
IT shares edged higher. MphasiS (up 0.69%), Wipro (up 0.66%), HCL Technologies (up 0.59%), Persistent Systems (up 0.58%), Infosys (up 0.49%), Tech Mahindra (up 0.22%) and Oracle Financial Services Software (up 0.19%) edged higher. Hexaware Technologies was down 0.42%.
TCS rose 0.33% after the company announced the opening of its new office in Toronto, Canada. Located in the heart of Toronto city, the new facility becomes a hub for technical innovation, partner collaboration and industry leading client service, TCS said.
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MindTree rose 3.17% on media reports that a foreign brokerage has upgraded the stock to outperform from neutral citing attractive valuations. The foreign brokerage expects a 15% plus compound annual growth rate (CAGR) in MindTree's earnings per share (EPS) over FY 2016-18.
Sugar shares surged. Upper Ganges Sugar & Industries (up 14.50%), DCM Shriram Industries (up 13.89%), Sakthi Sugars (up 12.16%), Empee Sugars and Chemicals (up 11.11%), Dhampur Sugar Mills (up 10.78%), KCP Sugar & Industries Corporation (up 10.38%), Triveni Engineering & Industries (up 10.18%), Oudh Sugar Mills (up 9.97%), Rana Sugars (up 8.55%), Balrampur Chini Mills (up 8.18%), Bajaj Hindusthan Sugar (up 7.83%), EID Parry (India) (up 6.35%), Shree Renuka Sugar (up 5.54%) and Dwarikesh Sugar Industries (up 4.96%) edged higher.
Tata Steel was up 2.20% to Rs 310.60 after the company announced that it has decided to explore all options for portfolio restructuring including the potential divestment of its UK subsidiary Tata Steel UK, in whole or in parts. Tata Steel said that its board of directors after reviewing the recent performance of the European business of the company noted with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months. The management has advised the board of its European holding company Tata Steel Europe to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts. Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe board will be advised to evaluate and implement the most feasible option in a time bound manner, Tata Steel said in a statement.
While global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency. These factors are likely to continue into the future and have significantly impacted the long-term competitive position of the UK operations in spite of several initiatives undertaken by the management and the workers of the business in recent years.
Further, the Tata Steel board also reviewed the proposed restructuring and transformation plan for Strip Products UK, prepared by the European subsidiary in consultation with an independent and internationally reputed consultancy firm. Based on the review conducted, the Tata Steel board came to a unanimous conclusion that the plan is unaffordable, requires material funding support in the next two years in addition to significant capital commitments over the long term, the assumptions behind it are inherently very risky, and its likelihood of delivery is highly uncertain. Therefore, the board concluded that it would not be able to support the investment necessary to proceed with the proposed transformation plan for strip products UK.
Tata Steel further said that the company's discussions with Greybull in relation to a sale of the UK Long Products business would continue.
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