Key indices jumped after the US Federal Reserve at the end of a two-day policy meeting on Wednesday, 17 September 2014, maintained a commitment to keep US interest rates near zero for a "considerable time". Meanwhile, the Indian and Chinese governments signed a five-year trade and economic co-operation pact and a railway co-operation pact. Chinese President Xi Jinping is on a three-day visit to India. The barometer index, the S&P BSE Sensex, reclaimed the psychological 27,000 mark to settle at over one week high. The 50-unit CNX Nifty also reclaimed the psychological 8,000 level to settle at over one high. The Sensex surged 480.92 points or 1.81% to settle at 27,112.21. All the twelve sectoral indices on BSE were in the green. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Small-Cap index jumped 2.69%. The BSE Mid-Cap index jumped 1.83%. Both these indices outperformed the Sensex. Realty stocks surged. Shares of power generation and power distribution companies edged higher. IT stocks gained. A number of second line IT stocks also surged.
In pharma pack, Dr Reddy's Laboratories scaled record high. In auto pack, Hero MotoCorp advanced to a record after Chief Executive Officer Pawan Munjal was quoted as saying that the motorcycle maker will enter the US and Europe by 2016. Bajaj Auto also scaled record high. Shares of car major Maruti Suzuki India scaled record high. L&T rose after the company said that its Buildings & Factories business of L&T Oman LLC, a subsidiary of L&T, has won a order from the Ministry of Defense, Sultanate of Oman against stiff international competition for the construction of Adam Air base. Bharat Heavy Electricals (Bhel) rose after the company won an order worth Rs 3536 crore from Gujarat State Electricity Corporation for setting up a coal-fired supercritical thermal unit at Wanakbori in Kheda district of Gujarat. Among side counters, Credit Analysis and Research (CARE), Blue Dart Express, Hexaware Technologies, Cyient and JK Lakshmi Cement scaled record high.
The US Federal Reserve at the end of a two-day policy meeting on Wednesday, 17 September 2014, maintained a commitment to keep US interest rates near zero for a "considerable time" after the bond-buying program ends even as its rate projections suggested some officials might have in mind a slightly more aggressive path of rate increases next year and in 2016 than previously thought. Low interest rates in the US have triggered large inflow of dollars into emerging markets as investors seek higher yields and India has been one of the major beneficiaries. The Fed has kept its short-term interest rate near-zero since December 2008.
In overseas markets, European stocks edged higher as US Federal Reserve Chair Janet Yellen indicated that interest rates won't increase anytime soon. Asian stocks extended previous day's gains triggered by reports that China's central bank is providing liquidity to support the economy and after the US Federal Reserve after a two-day policy meet on Wednesday, 17 September 2014, renewed a pledge to keep interest rates near zero for a considerable time. Overnight, US markets closed slightly higher after the Fed statement and Fed Chairwoman Janet Yellen's news conference, with the Dow Jones Industrial Average reaching a record high.
A sustained rise in intraday trade took the Sensex past the psychological 27,000 level and the Nifty past the psychological 8,000 level in afternoon trade. Earlier, key indices had seen a sudden surge after an initial slide.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
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Brent crude oil prices dropped in volatile trade.
The S&P BSE Sensex garnered 480.92 points or 1.81% to settle at 27,112.21, its highest closing level since 9 September 2014. The index jumped 500.91 points at the day's high of 27,132.20 in late trade. The index dropped 128.21 points at the day's low of 26,503.08 in early trade.
The CNX Nifty advanced 139.25 points or 1.75% to settle at 8,114.75, its highest closing level since 9 September 2014. The index hit a high of 8,120.85 in intraday trade. The index hit a low of 7,939.70 in intraday trade.
The total turnover on BSE amounted to Rs 3516 crore, lower than Rs 3900.43 crore on Wednesday, 17 September 2014.
The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. 2,235 shares gained and 827 shares fell. A total of 94 shares were unchanged.
The BSE Mid-Cap index gained 177.30 points or 1.83% to settle at 9,861.22. The BSE Small-Cap index advanced 291.32 points or 2.69% to settle at 11,121.16. Both these indices outperformed the Sensex.
All the 12 sectoral indices on BSE logged gains. The S&P BSE Realty index (up 4.65%), the S&P BSE Consumer Durables index (up 3.17%), the S&P BSE Capital Goods index (up 2.84%), the S&P BSE Auto index (up 2.67%), the S&P BSE Power index (up 2.23%), the S&P BSE Bankex (up 1.98%) outperformed the Sensex.
The S&P BSE Healthcare index (up 1.76%), the S&P BSE Oil & Gas index (up 1.61%), the S&P BSE Metal index (up 1.23%), the S&P BSE Teck index (up 0.83%), the S&P BSE FMCG index (up 0.79%) and the S&P BSE IT index (up 0.58%) underperformed the Sensex.
Reliance Industries rose 1.47%. GTL Infrastructure gained 4.51%. Reliance Jio Infocomm (Reliance Jio), a subsidiary of RIL and GTL Infrastructure today, 18 September 2014 announced the signing of a Master Services Agreement (MSA) for tower infrastructure sharing. The announcement was made after market hours today, 18 September 2014. The agreement with GTL Infra will help Reliance Jio accelerate the roll out of pan India next-generation voice and data services, Reliance Jio said.
Dr Reddy's Laboratories rose 3.67% to Rs 3,198 after scaling record high of Rs 3,199 in intraday trade.
Sun Pharmaceutical Industries gained 1.49%. Merck & Co. and Sun Pharmaceutical Industries through their respective subsidiaries after market hours on Wednesday, 17 September 2014 announced an exclusive worldwide licensing agreement for Merck's investigational therapeutic antibody candidate, tildrakizumab, (MK-3222), which is currently being evaluated in Phase 3 registration trials for the treatment of chronic plaque psoriasis, a skin ailment. Under terms of the agreement, Sun Pharma will acquire worldwide rights to tildrakizumab for use in all human indications from Merck in exchange for an upfront payment of $80 million. Merck will continue all clinical development and regulatory activities, which will be funded by Sun Pharma. Upon product approval, Sun Pharma will be responsible for regulatory activities, including subsequent submissions, pharmacovigilance, post approval studies, manufacturing and commercialization of the approved product. Merck is eligible to receive undisclosed payments associated with regulatory (including product approval) and sales milestones, as well as tiered royalties ranging from mid-single digit through teen percentage rates on sales.
Ranbaxy Laboratories gained 1.4%. The company after market hours on Wednesday, 17 September 2014, said that the company has received a Civil Investigative Demand (CID) from the United States Department of Justice relating to the manner in which it reports pricing data for certain products eligible for reimbursement under the Medicaid program. The CID is a request for documents and information and is not an allegation of wrongdoing or demand for compensation. The company would fully cooperate with this civil investigation, Ranbaxy Laboratories said.
Bank stocks rose across the board. Among private bank stocks, HDFC Bank (up 1.13%), Kotak Mahindra Bank (up 2.39%), IndusInd Bank (up 1.6%), Yes Bank (up 1.17%), Axis Bank (up 1.87%) and ICICI Bank (up 1.99%) gained.
Among PSU bank stocks, Punjab National Bank (up 2.26%), Bank of Baroda (up 3.26%), Bank of India (up 3.26%), State Bank of India (SBI) (up 2.07%), Union Bank of India (up 4.79%), Indian Overseas Bank (up 2.77%), Andhra Bank (up 4.38%), Oriental Bank of Commerce (up 3.39%) rose.
The Scheduled commercial banks' (SCBs) credit growth has moderated further to single digit level of 9.7% at Rs 6140925 crore as on 5 September 2014, from 10.9% growth a fortnight ago and 13.9% as at 31 March 2014. The bank credit growth was 9.68% as on 5 September, which was a five-year low. An incremental credit expansion till 5 September 2014 in the fiscal year ending 31 March 2015 (FY2015) so far stood at Rs 146800 crore, which shows sharp decline from Rs 338600 crore in the same period of FY 2014.
IT stocks edged higher. HCL Technologies (up 0.42%) and Tata Consultancy Services (TCS) (up 1.86%) gained.
Wipro rose 2.18%. Wipro early this week said that the company's subsidiary Wipro Arabia has entered into a strategic partnership with Saudi-based Saudi Electricity Company (SEC), the largest power utility company in the Middle East serving approximately 5 million customers in the Kingdom of Saudi Arabia (KSA). As part of this engagement, Wipro will implement and rollout the plant maintenance and project system functionality of the SAP ERP application for SEC's distribution business line across KSA.
But, Infosys fell 1.35%. Infosys today, 18 September 2014, announced a global partnership with Huawei, a leading global information and communication technology (ICT) solution provider. Through this partnership, the companies will jointly offer enterprise customers cloud, big data and communication solutions, along with other enterprise-oriented services which will combine Huawei's cloud infrastructure and global IT service expertise from Infosys. In addition, Infosys and Huawei will further strengthen their existing partnership in the Huawei business process and information technology space.
Tech Mahindra declined 0.11%.
A number of second line IT stocks also surged. R S Software (India) (up 20%), Polaris Financial Technology (up 13.92%), Rolta India (up 9.17%), Accelya Kale Solutions (up 7.42%), Zensar Technologies (up 8.3%), and Blue Star Infotech (up 6.42%) jumped.
Hexaware Technologies surged 9.85% to Rs 191.90 after scaling record high of Rs 195.55 in intraday trade.
Cyient advanced 3.72% to Rs 479 after scaling record high of Rs 481 in intraday trade.
Shares of power generation and power distribution companies edged higher. GVK Power & Infrastructure (up 1.57%), Tata Power Company (up 2.51%), NTPC (up 2.17%), Adani Power (up 7.22%), Reliance Infrastructure (up 2.7%), Torrent Power (up 1.91%), JSW Energy (up 4.04%), Power Grid Corporation of India (up 0.48%) and Reliance Power (up 4.41%) gained.
Capital goods stocks gained. BEML (up 2.26%), Bharat Electronics (up 0.12%), Crompton Greaves (up 1.67%), Thermax (up 3.84%) and Siemens (up 0.86%) gained. ABB (India) shed 0.77% to Rs 1,211.40 after hitting a 52-week high of Rs 1,247.70 in intraday trade.
Bharat Heavy Electricals (Bhel) rose after the company won an order worth Rs 3536 crore from Gujarat State Electricity Corporation for setting up a coal-fired supercritical thermal unit at Wanakbori in Kheda district of Gujarat. The stock was up 3.53% at Rs 228.50. Significantly, this is the first ever project of 800 megawatts (MW) unit rating ordered in the country on EPC basis and is also the highest valued order placed by GSECL, Bhel said in a statement today, 18 September 2014.
L&T rose 3.9% after the company said that its Buildings & Factories business of L&T Oman LLC, a subsidiary of L&T, has won an order from the Ministry of Defense, Sultanate of Oman against stiff international competition for the construction of Adam Air base. The contract is for the construction of the Adam Airbase in Al Dakhiliya Governorate, Sultanate of Oman.
Shares of two-wheeler makers gained. TVS Motor Company gained 3.42%.
Bajaj Auto rose 3.33% to Rs 2,392.20 after scaling a record high of Rs 2,404.80 in intraday trade.
Hero MotoCorp advanced to a record high after Chief Executive Officer Pawan Munjal was quoted as saying that the motorcycle maker will enter the US and Europe by 2016. The stock was up 5.64% to Rs 3,000 after scaling record high of Rs 3,080 in intraday trade. The company early this week said that it has entered into a Memorandum of Understanding (MOU) with the state government of Andhra Pradesh to set-up a manufacturing plant in Chittoor district of the state of Andhra Pradesh. The plant with an investment of about Rs 1600 crore will have a production capacity of around 1.8 million per annum.
Maruti Suzuki India rose 2.96% to Rs 3,060 after scaling record high of Rs 3,098.05 in intraday trade. The company early this week said that its Manesar facility has crossed the 25 lakh production milestone this month. The company's twin facilities at Gurgaon and Manesar have together rolled out over 1.4 crore vehicles cumulatively, it added.
Tata Motors gained 3.58%. Ashok Leyland jumped 5.41%
Mahindra & Mahindra (M&M) rose 0.81%.
Zee Entertainment Enterprises jumped 5.53% ahead of the stock's inclusion in the 50-share CNX Nifty index tomorrow, 19 September 2014. Zee Entertainment Enterprises will replace United Spirits in the 50-share CNX Nifty index from tomorrow, 19 September 2014. Shares of United Spirits gained 0.46%.
PSU OMCs edged higher on renewed buying. BPCL (up 3.62%), HPCL (up 2.82%) and Indian Oil Corporation (IOCL) (up 2.82%) gained.
PSU OMCs suffer under-recoveries on domestic sale of LPG and kerosene at controlled prices. PSU OMCs now have over recovery in sale of diesel. The government has already freed pricing of petrol.
Reliance Communications gained 2.39%. With respect to the news flash "Rel Comm, ZTE sign agreement of $153 million, Rel Comm. Huawei sign agreement of $157 million" the company clarified during market hours that as a part of the routine and ongoing business requirement, the company has placed letter of intent with Huawei Communications for $157 million and ZTE Corporation for $162 million.
Realty stocks surged. DLF (up 3.9%), Indiabulls Real Estate (up 3.8%), Housing Development & Infrastructure (HDIL) (up 9.36%), Oberoi Realty (up 2.52%), D B Realty (up 3.96%), Sobha (up 0.34%) and Unitech (up 13.73%) jumped.
Parsvnath Developers rose 4.84% after the company said it has entered into a transaction with Supertech in terms of which the company has transferred the development rights held by it in the township project at Sohna Road, Gurgaon. The company has also transferred its shareholding in Honey Builders, with whom the company has held joint development rights in the said project, to Supertech.
Blue Dart Express jumped 11.05% to Rs 5,250 after scaling a record high of Rs 5,515 in intraday trade.
Credit Analysis and Research (CARE) gained 5.06% to Rs 1,497.45 after scaling record high of Rs 1,499 in intraday trade.
JK Lakshmi Cement gained 6.98% to Rs 338.90 after scaling record high of Rs 344.35 in intraday trade.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 60.875, compared with its close of 60.9175 during the previous trading session.
Brent crude oil prices dropped in volatile trade, pressured by a stronger dollar on fears about a looming US interest rate increase and a steep spike in US crude stocks. Brent for November settlement was down 6 cents at $98.91 a barrel. The contract had fallen 8 cents a barrel or 0.08% to settle at $98.97 a barrel on Wednesday, 17 September 2014.
Key indices gained for the second day in a row today, 18 September 2014. The Sensex has risen 619.70 points or 2.33% in two trading days from recent low of 26,492.51 on 16 September 2014. The Sensex has gained 474.10 points or 1.77% in this month so far (till 18 September 2014). The Sensex has gained 5,941.53 points or 28.06% in calendar year 2014 so far (till 18 September 2014). From a record high of 27,354.99 on 8 September 2014, the Sensex has declined 242.78 points or 0.88%. From a 52-week low of 19,264.72 on 1 October 2013, the Sensex has risen 7,847.49 points or 40.73%.
Meanwhile, on the second day of a three day tour of Chinese President Xi Jinping, the Indian and Chinese governments signed a five-year trade and economic co-operation pact. India and China also agreed on specific steps to enhance cooperation in upgrading India's railways sector. China has pledged $20 billion in investment in India over the next 5 years. China will set up two industrial parks in India.
The Chinese President reportedly assured at a joint press conference with Indian Prime Minister Narendra Modi that China will give Indian companies and products - especially including those made by the pharmaceutical, farming and fuel industries - greater access to Chinese markets.
European stocks advanced today, 18 September 2014, as US Federal Reserve Chair Janet Yellen indicated that interest rates won't increase anytime soon. Key benchmark indices in UK, France and Germany were up 0.39% to 0.96%.
The European Central Bank's first targeted-loan program came in below estimates in a sign that President Mario Draghi has a way to go to meet his stimulus target. The Frankfurt-based central bank said it alloted 82.6 billion euros ($106.5 billion) at a fixed interest rate of 0.15% in its targeted longer-term refinancing operations today. The lending program is part of a range of ECB measures to stave off deflation in the euro area that Draghi says will boost the institution's balance sheet to as much as 3 trillion euros from 2 trillion euros. By tying the cheap four-year loans to the size of banks' loan books, the ECB intends to spur lending to the real economy.
In UK, a crucial vote on Scottish independence is underway today, 18 September 2014. Scotland is currently a part of United Kingdom.
Asian stocks today, 18 September 2014, extended previous day's gains triggered by reports that China's central bank is providing liquidity to support the economy and after the US Federal Reserve after a two-day policy meet on Wednesday, 17 September 2014, renewed a pledge to keep interest rates near zero for a considerable time. Key benchmark indices in China, Indonesia, Singapore, Taiwan and Japan were up 0.02% to 1.13%. Key benchmark indices in Hong Kong and South Korea fell by 0.72% to 0.85%.
China's new-home prices fell in all but two cities monitored by the government last month as tight credit damped demand even as local home-purchase restrictions were eased. Prices dropped in 68 of the 70 cities in August from July, including in Beijing and Shanghai, the National Bureau of Statistics said in a statement today, the most since January 2011 when the government changed the way it compiles the data.
Trading in US index futures indicated that the Dow could gain 60 points at the opening bell on Thursday, 18 September 2014. US stocks edged higher in volatile trading on Wednesday, 17 September 2014, after the US Federal Reserve renewed its pledge to keep interest rates near zero for a "considerable time" and repeated concerns over slack in the labor market, standing firm against calls to overhaul its policy statement.
In a statement after a two-day meeting, it announced a further $10 billion reduction in its monthly purchases, leaving the program on course to be shuttered next month. While the Fed expects to keep rates low for a considerable time, Yellen in a news conference declined to say how much time that meant. She also repeatedly stressed the timing depends on how the economy performs.
While the Fed's policy statement emphasised rates would stay low for now, its rate projections suggested some officials might have in mind a slightly more aggressive path of rate increases next year and in 2016 than previously thought. In June, the median estimate among Fed officials for the Fed's target interest meaning half of estimates were above and half were below at the end of 2016 was 2.5%. The latest estimate for the end of 2016 was between 2.75% and 3%.
Meanwhile, the latest economic data showed that US consumer prices fell for the first time in nearly 1-1/2 years in August and underlying inflation pressures were muted, giving the Fed more ammunition in its argument to keep rates low.
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