Indian stocks surged in a broad based rally, mirroring gains in global equity markets triggered by signals from the Federal Open Market Committee that the US central bank isn't in a hurry to raise interest rates in the United States. The barometer index, the S&P BSE Sensex, reclaimed the psychological 27,000 mark. The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. A number of side counters witnessed decent to strong gains. The Sensex jumped 416.44 points or 1.56% to settle at 27,126.57. The BSE Mid-Cap index jumped 2.66%. The BSE Small-Cap index surged 3.28%. Both these indices outperformed the Sensex. All the 12 sectoral indices on BSE edged higher.
Stocks rose across the globe after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. A longer timeline for rate increases in the United States implies that equities will continue to be more appealing to investors, including those in riskier emerging markets, compared with the low returns on US bonds. Closer home, India's Union Cabinet yesterday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST).
Steel, metal and cement stocks gained after the coal ministry released an approach paper for e-auction coal mines, fixing a floor price of Rs 150 per tonne for unregulated sectors such as steel, sponge iron, cement and captive power. Shares of power generation companies surged after the ministry of coal said that the auction of coal mines for the power sector will be through reverse bidding.
After a firm opening, key benchmark indices retained positive zone throughout the trading session.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014.
Brent crude futures extended gains registered during the previous trading session.
Also Read
In overseas markets, Asian and European stocks edged higher after on signals from the final Federal Open Market Committee meeting that the US central bank will go slow with rate hikes. US stocks surged yesterday, 17 December 2014, after the Federal Reserve conveyed a more dovish posture at the conclusion of its two-day monetary policy meeting.
In Russia, Russian President Vladimir Putin sought to reassure Russians, saying in his annual address to the nation that the country's economic troubles won't last more than two years and the recovery in the country's currency will continue. He also said Russia would gradually shift away from its dependence on the energy industry. Russia's central bank unexpectedly hiked interest rates to 17% from 10.5% early this week in a bid to stem the ruble's decline triggered by a slump in global crude oil prices.
The S&P BSE Sensex rose 416.44 points or 1.56% to settle at 27,126.57, its highest closing level since 15 December 2014. The index jumped 470.79 points at the day's high of 27,180.92 in late trade. The index gained 190.44 points at the day's low of 26,900.57 in mid-morning trade.
The CNX Nifty rose 129.50 points or 1.61% at 8,159.30, its highest closing level since 15 December 2014. The index hit a high of 8,174.30 in intraday trade. The index hit a low of 8,084.90 in intraday trade.
The BSE Mid-Cap index rose 258.22 points or 2.66% to settle at 9,964.67. The BSE Small-Cap index rose 344.64 points or 3.28% to settle at 10,860.76. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. 2,172 shares rose and 683 shares fell. A total of 96 shares were unchanged.
The total turnover on BSE amounted to Rs 3000 crore, lower than Rs 3857.62 crore yesterday, 17 December 2014.
The S&P BSE Consumer Durables index (up 5.26%), the S&P BSE Power index (up 3.26%), the S&P BSE Capital Goods index (up 2.78%), the S&P BSE Bankex (up 2.49%), the S&P BSE Realty index (up 2.47%), the S&P BSE Auto index (up 2.06%), the S&P BSE Metal index (up 2%) and the S&P BSE Oil & Gas index (up 1.64%) outperformed the Sensex.
The S&P BSE Healthcare index (up 1.32%), the S&P BSE Teck index (up 1.26%), the S&P BSE FMCG index (up 1.17%) and the S&P BSE IT index (up 1.09%) underperformed the Sensex.
Sugar stocks rallied after the Cabinet Committee on Economic Affairs (CCEA) yesterday, 17 December 2014, gave its approval to ratify the methodology adopted to recalculate the incentive rate for bi-monthly periods of April-May 2014, June-July 2014 and August-September 2014, towards marketing and promotion services for raw sugar production. Bajaj Hindusthan (up 5.14%), Shree Renuka Sugars (up 4.53%), Balrampur Chini Mills (up 3.46%), Triveni Engineering & Industries (up 3.28%) and EID Parry (India) (up 1.62%), edged higher.
The incentive rate for bi-monthly periods of April-May 2014, June-July 2014 and August-September 2014 has been finalised respectively at Rs 2277, Rs 3300 & Rs 3371 per MT. Total financial help is expected to be around Rs 200 crore.
Steel, metal and cement stocks gained after the coal ministry released an approach paper for e-auction coal mines, fixing a floor price of Rs 150 per tonne for unregulated sectors such as steel, sponge iron, cement and captive power.
Among steel makers, Jindal Steel & Power (up 7.44%), Steel Authority of India (up 4.42%), Bhushan Steel (up 2.82%), Tata Steel (up 2.13%) and JSW Steel (up 1.05%), edged higher.
Among other metal and mining stocks, Hindalco Industries (up 4.31%), Hindustan Zinc (up 1.92%), NMDC (up 1.75%) and Sesa Sterlite (up 1.44%) edged higher.
Among cement shares, ACC (up 0.97%), Ambuja Cements (up 1.63%), and Shree Cement (up 1.18%) gained.
UltraTech Cement declined 0.24%. Grasim Industries declined 0.69%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement
According to an approach paper on proposed e-auction of coal mines released by the Ministry of Coal yesterday, 17 December 2014, a floor price of Rs 150 per tonne has been fixed for auction of coal blocks to unregulated sectors such as steel, sponge iron, cement and captive power. For the unregulated sectors, a regular bidding process will be adopted where the highest bidder will be declared the successful bidder. The approach paper put up on the coal ministry website has sought feedback from stakeholders.
Shares of power generation companies surged after the ministry of coal said that the auction of coal mines for the power sector will be through reverse bidding. Torrent Power (up 11.93%), Lanco Infratech (up 6.28%), Reliance Infrastructure (up 4.90%), JSW Energy (up 4.02%), GMR Infrastructure (up 3.96%), NTPC (up 3.83%), Tata Power Company (up 3.69%), Adani Power (up 3.62%), Reliance Power (up 3.17%) and NHPC (up 2.46%), edged higher.
According to an approach paper on proposed e-auction of coal mines released by the Ministry of Coal yesterday, 17 December 2014, auction of coal mines for the power sector, a regulated sector, will be through reverse bidding. A ceiling price will be fixed for each coal mine based on the prevailing Coal India notified price, where the bidder quoting the lowest below this ceiling will be successful. This methodology is expected to keep electricity tariffs in check by preventing irrational bidding. The approach paper put up on the coal ministry website has sought feedback from stakeholders.
On 25 August, the Supreme Court ruled that allocation of all coal mines between 1993 and 2010 were illegal. In September, the apex court cancelled allocation of 204 coal blocks.
Meanwhile, the Ministry of Power today, 18 December 2014, announced the setting up of Power System Operation Corporation (POSOCO) as an independent government company for reforms in power sector. It has been decided to establish POSOCO as a wholly-owned Government of India company under the Ministry of Power, thereby giving a big thrust to bringing in further reforms in the power sector at the Central level, the Ministry of Power said in a statement. POSOCO operates the National Load Despatch Centre (NLDC) and Regional Load Despatch Centres (RLDCs) which are also responsible for operating the vibrant electricity market working in the country, the Ministry of Power said. POSOCO is also designated as the nodal agency for major reforms in the power sector such as the Renewable Energy Certificate (REC) Mechanism, transmission pricing, short term open access in transmission, Deviation Settlement Mechanism, Power System Development Fund (PSDF), etc.
The strengthening of the institutional mechanism of System Operation would help bring in innovation in the power sector as the RLDCs/NLDC operated by POSOCO by achieving economy and efficiency in the power system operation and facilitating implementation of various Government of India policies for power sector as well as provide feedback to the policymakers, regulators and planners, the Ministry of Power said.
Shares of real estate developers jumped on reports the Union Cabinet yesterday, 17 December 2014, deferred a decision on setting up a regulator for the real estate sector. Housing Development and Infrastructure (HDIL) (up 10.79%), Peninsula Land (up 6.84%), Anant Raj (up 6.46%), D B Realty (up 5.08%), Unitech (up 3.92%), Indiabulls Real Estate (up 3.56%), Oberoi Realty (up 3%), Parsvnath Developers (up 2.42%), DLF (up 1.53%), Godrej Properties (up 1.30%), Prestige Estates (up 1.05%) and Sobha (up 0.88%) edged higher.
According to reports, the Union Cabinet discussed the Real Estate Development and Regulation Bill yesterday, 17 December 2014, but deferred a decision on it. The bill, which was introduced in the Rajya Sabha in August last year, seeks to protect home buyers from unscrupulous developers. It was then referred to a Parliamentary Standing Committee, which had submitted its report in February 2014. The bill provides for mandatory registration of all projects, besides mandatory disclosure of information like details of promoters, layout plan, land status, schedule of execution, status of various approvals and carpet area. It also seeks to enforce the contract between the developer and buyer and provides for quick remedial measures in case of disputes.
Bank shares were in demand. Among PSU banks, Bank of Baroda (up 4.73%, Canara Bank (up 6.86%), Allahabad Bank (up 5.03%), Corporation Bank (up 4.48%), Punjab National Bank (up 4.05%), IDBI Bank (up 3.83%), Andhra Bank (up 3.76%), Union Bank of India (up 3.54%), UCO Bank (up 3.52%), Vijaya Bank (up 3.30%), United Bank of India (up 3.14%), Dena Bank (up 3.05%), Syndicate Bank (up 2.85%), Bank of India (up 2.79%), Punjab & Sind Bank (up 2.54%), Central Bank (up 2.10%), State Bank of India (up 1.66%), Bank of Maharashtra (up 1.96%) and Indian Bank (up 1.60%), edged higher.
Among private sector bank, Yes Bank (up 4.93%), ICICI Bank (up 3.82%), Axis Bank (up 2.56%), Federal Bank (up 2.56%), City Union Bank (up 2.18%), IndusInd Bank (up 1.79%), HDFC Bank (up 1.32%) and Kotak Mahindra Bank (up 0.65%), edged higher.
The Reserve Bank of India (RBI) after trading hours yesterday, 17 December 2014, said it has imposed penalty of Rs 25 lakh on Bank of Baroda and Rs 50 lakh on ICICI Bank for violation of its instructions, among other things, on know your customer/anti money laundering Know Your Customer(KYC)/Anti Money Laundering (AML). The Reserve Bank of India (RBI) received a complaint from a reputed statutory organisation in August 2013 through which the details of a fraud perpetrated in five banks, namely, State Bank of India, ICICI Bank, Bank of Baroda, Axis Bank and State Bank of Patiala, with the connivance of certain officials of the statutory organisation were brought to the Reserve Bank of India's notice. The fraudsters had managed to open fictitious accounts in the name of the statutory organisation in these five banks and operated the accounts mainly for encashing cheques/demand drafts/postal orders of which they were not the rightful owners, for periods ranging from one month to two years, without being detected by the banks. After considering the facts of each case and individual bank's reply, as also, personal submissions, information submitted and documents furnished, the Reserve Bank of India came to the conclusion that some of the violations of serious nature were substantiated and warranted imposition of monetary penalty on ICICI Bank and Bank of Baroda, the RBI said in a statement. Failure on the part of these banks to take timely remedial measures had aggravated the seriousness of the contraventions and their impact, the RBI said. In respect State Bank of India, Axis Bank and State Bank of Patiala, it was decided not to impose any monetary penalty as the banks' explanations regarding the circumstances which led to the fictitious accounts getting opened and operated without detection, was judged to be reasonable, the RBI said. However, these banks have been cautioned to put in place appropriate measures and review them from time to time to ensure strict compliance of Know Your Customer (KYC ) requirements in future, the RBI said in a statement.
State Bank of India clocked a highest turnover of Rs 65.30 crore on BSE. Wockhardt (Rs 62.59 crore), Mahindra & Mahindra Financial Services (Rs 54.50 crore), Mastek (Rs 49.05 crore) and Reliance Industries (Rs 46.90 crore), were the other turnover toppers on BSE in that order.
Yantra Natural Resources recorded highest volumes of 5.85 crore shares on BSE. Aadhaar Ventures India (3.30 crore shares), SpiceJet (1.72 crore shares), Visesh Infotechnics (1.02 crore shares) and Luminaire Technologies (76.03 lakh shares), were the other volume toppers on BSE in that order.
Key indices snapped five-day losing streak today, 18 December 2014. The Sensex had slumped 1,120.97 points or 4.03% in the preceding five trading sessions to settle at 26,710.13 yesterday, 17 December 2014, from a recent high of 27,831.10 on 10 December 2014. The Sensex has declined 1,567.42 points or 5.46% in this month so far (till 18 December 2014). The Sensex has gained 5,955.89 points or 28.13% in calendar year 2014 so far (till 18 December 2014). From a record high of 28,822.37 struck on 28 November 2014, the Sensex has fallen 1,695.80 points or 5.88%. From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 7163.45 points or 35.88%.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. The partially convertible rupee was hovering at 63.16, compared with its close of 63.62 during the previous trading session.
Brent crude futures extended gains registered during the previous trading session. Brent for February settlement was up $1.41 a barrel at $62.59 a barrel. The contract had risen $1.17 a barrel or 2% to settle at $61.18 a barrel during the previous session.
Closer home, the Union Cabinet yesterday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out. The Bill is likely to be introduced in parliament during the ongoing winter session.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. The Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
European stocks jumped today, 18 December 2014, on confidence over global growth after a Federal Reserve pledge to be patient on interest-rate increases in the United States. Key indices in France, Germany and UK were up 0.84% to 2.28%.
German business confidence improved for the second consecutive month, a key indicator showed Thursday, as the eurozone's largest economy benefits from lower oil prices and a weaker euro. The Munich-based Ifo institute's lead indicator rose to 105.5 in December from 104.7 the previous month.
Retail sales in the UK grew at the fastest annual pace in November in 10 years, official figures said on Thursday, boosted by British stores embracing aggressive Black Friday discounts. Volumes sold by UK retailers increased 6.4% on year, according to the Office for National Statistics today, 18 December 2014. This was the highest increase since May 2004 and marks 20 consecutive months of growth. Compared with October, sales rose 1.6%.
In Greece, Prime Minister Antonis Samaras failed to get enough support for his nominee in a parliamentary vote for a new head of state. If Samaras also fails to get enough support for his candidate in the second and third round of votes, snap elections will take place in early 2015
Asian stocks surged today, 18 December 2014, rebounding from an almost nine-month low, after a Federal Reserve pledge to be patient on interest-rate increases sent US equities up the most since 2013 yesterday, 17 December 2014. Key indices in Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.51% to 2.32%. Key indices in China and South Korea were down 0.11% to 0.14%.
Trading in US index futures indicated that the Dow could gain 208 points at the opening bell today, 18 December 2014. US stocks surged the most since 2013 yesterday, 17 December 2014, with the Standard & Poor's 500 Index erasing about half of its December drop, after the Federal Reserve pledged patience on its first interest-rate increase since 2006.
The Federal Reserve after two-day policy meet yesterday, 17 December 2014, said it will be patient when it comes to the timing of rate increases, replacing a pledge in its statement to keep borrowing costs near zero for a considerable time, and raising its assessment of the job market.
Federal Reserve Chair Janet Yellen restored clarity to the central bank's monetary policy plans, saying it was on course to raise interest rates, though not right away. Yellen also laid out the economic parameters that would need to be met for liftoff to begin later in the year and said that rates probably would be raised gradually thereafter. They may not return to more normal levels until 2017, she added.
Among economic data in the US, the US consumer-price index dropped 0.3% in November from the previous month, the most since December 2008, after being little changed the prior month, a Labor Department report showed yesterday, 17 December 2014.
Powered by Capital Market - Live News