A bout of volatility was witnessed as the key benchmark indices regained strength after paring intraday gains in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was up 195.37 points or 0.94%, off 49.09 points from the day's high and up 158.05 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Investor sentiment was boosted after news reports said that the stock market regulator Securities and Exchange Board of India (Sebi) has relaxed the rules on trading of thinly-traded stocks. The market sentiment was also boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 19 December 2013.
Metal and mining stocks rose. Shares of Bosch, known for its technology prowess in the automotive market, hit record high.
Sebi has reportedly rationalized the periodic call auction mechanism by modifying how it classifies the so-called illiquid stocks. A stock would now be classified as illiquid if its average daily turnover is less than Rs 2 lakh in the previous two quarters and if it is classified as illiquid at all the exchanges where it is traded. Earlier, a stock was classified to be illiquid if its average daily trading volume in a quarter was less than 10,000, the average daily number of trades was less than 50 in a quarter and if it was classified as illiquid by all the exchanges where it traded.
Henceforth, call auctions will not apply to shares where a company is profitable in at least two of the past three years and not more than 20% of promoters' shareholding is pledged in the latest quarter and the book value is three times or more than the face value. The new rules also exclude companies with a market capitalisation of at least Rs 10 crore or which have paid a dividend in at least two of the past three years.
From now, stock exchanges will determine the number of call auction sessions for illiquid stocks. Exchanges will, however, have at least two sessions in a trading day, with one uniform closing session across the exchanges. So far, periodic call auction sessions of one hour each were conducted throughout trading hours, with the first session starting at 9:30 IST.
Key benchmark indices pared gains after a firm opening. Key benchmark indices retained positive zone in morning trade. The Sensex hovered in positive zone in mid-morning trade. Key benchmark indices surged in early afternoon trade. The Sensex extended gains and hit fresh intraday high in afternoon trade. A bout of volatility was witnessed as the key benchmark indices regained strength after paring intraday gains in mid-afternoon trade.
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The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 19 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 2264.11 crore on Thursday, 19 December 2013, as per provisional data from the stock exchanges.
At 14:18 IST, the S&P BSE Sensex was up 195.37 points or 0.94% to 20,903.99. The index jumped 244.46 points at the day's high of 20,953.08 in afternoon trade. The index rose 37.32 points at the day's low of 20,745.94 in morning trade.
The CNX Nifty was up 58.10 points or 0.94% to 6,224.75. The index hit a high of 6,237.40 in intraday trade. The index hit a low of 6,170.35 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,448 shares gained and 966 shares fell. A total of 139 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks gained and rest of them declined.
ONGC (up 2.41%), Mahindra & Mahindra (up 1.95%) and Hindustan Unilever (up 1.88%) edged higher from the Sensex pack.
Metal and mining stocks were in demand on renewed buying. Hindalco Industries (up 0.42%), Hindustan Zinc (up 0.79%), National Aluminum Company (up 0.26%), JSW Steel (up 0.09%), SAIL (up 1%), Hindustan Copper (up 0.6%) and NMDC (up 0.52%) and Tata Steel (up 1.31%) gained. Jindal Steel & Power fell 0.71%. Sesa Sterlite slipped 0.95%.
Bosch jumped 4.96% to Rs 9,368 after striking a record high of Rs 9,600 in intraday trade.
Alstom T&D India rose 2.98% after the company said it has secured two orders worth Rs 298.30 crore in Himachal Pradesh. The new orders were announced during trading hours today, 20 December 2013.
Alstom T&D India said it has been awarded two contracts worth Rs 298.30 crore to supply two 400/220/66 kV gas-insulated substations (GIS) at Wangtoo and Gumma in Himachal Pradesh. The projects respectively received from L&T and HP Power Transmission Corporation (FIPPTCL)1, respectively, aim to improve the transmission capacity of HPPTCL for the transport of electricity generated by hydropower sources across the state, Alstom T&D India said.
The scope of the VVangtoo project, worth about Rs 155 crore, covers the design, engineering, manufacture, supply, testing, and commissioning of 400 kV, 220 kV and 66 kV gas-insulated switchgear, power transformers, instrument transformers and substation automation system, the company said.
The Gumma project, worth Rs 143.30 crore, includes design, engineering, manufacture, supply, erection, testing, commissioning and covers civil works of 400 kV and 220 kV GIS substation on a turnkey basis. All key equipment for both the projects will be produced by Alstom's state-of-the-art manufacturing facilities across India, the company said.
Commenting on the orders, Rathin Basu, Managing Director, Alstom T&D India says, "With these dual contract wins for HPPTCL, Alstom is pleased to earn the confidence of its customer for the provision of advanced G15 solutions at the Wangtoo and Gumma substations. Alstom is the leader in India's 615 activity and has so far supplied over 500 615 bays in India, covering a range of voltages from 66k1/ to 400A-V. Over 50% of the supplied solutions are produced in India".
Omaxe rose 0.68% to Rs 126 after two block deals aggregating 8.31 lakh shares were executed in the counter on BSE at Rs 125 per share at 11:26 IST. One block deal was of 4 lakh shares while another deal was of 4.31 lakh shares. The two block deals constitute 0.45% of Omaxe's equity.
MCX (up 11.37%), Financial Technologies (India) (up 6.86%), GMR Infrastructure (up 5.58%), United Phosphorus (up 5.44%) and Videocon Industries (up 5.22%) were among the major gainers from the BSE's A group.
European stocks edged lower amid initial volatility on Friday, 20 December 2013, after global credit-rating firm Standard & Poor's downgraded the European Union's long-term credit rating one notch, citing weaker creditworthiness among the 28-member bloc. Key benchmark indices in UK and France were off 0.08% to 0.11%. In Germany, the DAX rose 0.24%.
The European Union lost its top credit rating from Standard & Poor's, which said the group's cohesion has weakened and its financial profile has deteriorated. S&P cut its long-term rating on the EU to AA+ from AAA and maintained its short-term rating at A-1+. The outlook is stable, the agency said in a statement today. "The downgrade reflects our view of the overall weaker creditworthiness of the EU's 28 member states," S&P said. The reduction follows ratings cuts in recent years on EU members including France, Italy and Spain, as a sovereign-debt crisis roiled the region. "We believe the financial profile of the EU has deteriorated and that cohesion among EU members has lessened," S&P said. "EU budgetary negotiations have become more contentious, signaling what we consider to be rising risks to the support of the EU from some member states," it said.
In Germany, data from Nuremberg-based GfK SE showed a gauge of consumer confidence in Europe's largest economy will climb to 7.6 in January from 7.4 this month, the highest reading since August 2007.
UK consumer confidence unexpectedly fell for a third month in November. A consumer sentiment index by GfK NOP dropped 1 point from October to minus 13, the London-based research group said.
Asian stocks were mostly higher on Friday, 20 December 2013. Key benchmark indices in Japan, Taiwan, Singapore and South Korea rose 0.01% to 0.73%. In Indonesia, the Jakarta Composite was off 1.02%.
Chinese stocks fell amid concern funding costs for the nation's lenders will remain high even after the central bank injected cash into the financial system. Key benchmark indices in Hong Kong and China were off 0.33% to 2.02%. The Chinese central bank said at the close of market trading yesterday, 19 December 2013, that it added funding to selected lenders using short-term liquidity operations.
The Bank of Japan kept its asset-purchase levels and overall monetary policy unchanged after a monetary policy review. The central bank's statement also retained previous language on the economic outlook, saying the nation's economy "has been recovering moderately," while "inflation expectations appear to be rising on the whole."
Trading in US index futures indicated that the Dow could advance 20 points at the opening bell on Friday, 20 December 2013. US stocks on Thursday recovered most earlier losses as investors shrugged off disappointing housing, manufacturing and employment reports, sending the Dow Jones Industrial Average to a record closing.
The Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The Fed has said it will keep buying bonds until the outlook for the labor market has "improved substantially". Federal Reserve Chairman Ben S. Bernanke said after the Fed's monetary policy review on 18 December 2013 that the program was on its way to meeting that test, as the jobless rate fell to a five-year low of 7 percent in November.
The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
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