Key benchmark indices regained strength after paring gains after an initial surge triggered by the government's gas and energy sector reforms and firm Asian stocks. The S&P BSE Sensex was up 291.61 points or 1.54%, up 90.27 points from the day's low and off 25.64 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Capital goods shares gained on renewed buying. Crompton Greaves advanced ahead of a board meeting today, 28 June 2013, to consider share buyback proposal. Shares of non-banking finance companies (NBFC) were in demand as a number of companies announced their plans to apply for a banking license. Shares of liquor maker United Spirits dropped on high early volume. Shares of diamond jewellery maker Gitanjali Gems was locked at 10% lower circuit.
The government on Thursday agreed to double natural gas prices to industrial and retail consumers to help fund investment in exploration and reverse declining domestic gas output. In another decision, the government on Thursday approved setting up of a coal regulator in a bid to further liberalize the energy sector and revitalize economic growth.
Key benchmark indices rallied in early trade on the government's gas and energy sector reforms, with market sentiment also lifted by higher Asian stocks. The barometer index, the S&P BSE Sensex, hit over one-week high above the psychological 19,000 mark. Key benchmark indices regained strength after paring gains after an initial surge.
At 10:22 IST, the S&P BSE Sensex was up 307.50 points or 1.62% to 19,183.45. The index jumped 333.14 points at the day's high of 19,209.09 in early trade, its highest level since 19 June 2013. The index gained 217.23 points at the day's low of 19,093.18 in opening trade.
The CNX Nifty was up 92.15 points or 1.62% to 5,774.50. The index hit a high of 5,784.30 in intraday trade, its highest level since 19 June 2013. The index hit a low of 5,749.50 in intraday trade.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 1,219 shares gained and 454 shares fell. A total of 79 shares were unchanged.
The total turnover on BSE amounted to Rs 436 crore by 10:20 IST on BSE compared to Rs 113 crore by 09:25 IST.
Among the 30-share Sensex pack, 26 stocks gained and only four of them declined.
Capital goods shares gained on renewed buying. ABB (up 0.68%), Bhel (up 3.16%), BEML (up 1.27%), Bharat Electronics (up 1.98%), L&T (up 2.27%), Siemens (up 2.05%) and Thermax (up 1.34%) gained.
Crompton Greaves advanced 1.68%. A meeting of the board of directors of the company is scheduled today, 28 June 2013, to consider share buyback proposal.
Shares of non-banking finance companies (NBFC) were in demand as a number of companies announced their plans to apply for a banking license.
Edelweiss Financial Services (up 0.83%), IFCI (up 9.23%), India Infoline (up 4.1%), Bajaj Finance (up 4.23%), Reliance Capital (up 1.94%), IDFC (up 1.66%), SREI Infrastructure Finance (up 2.49%) and Tourism Finance Corporation of India (up 2.43%) edged higher.
Bajaj Finserv after market hours on Thursday, 27 June 2013, said it has submitted its application to Reserve Bank of India on 26 June 2013 for a licence to commence banking business in terms of section 22 of the Banking Companies Act, 1949. It is proposed to do this by converting its subsidiary Bajaj Finance into a bank in terms of RBI guidelines for licensing of new banks in the private sector dated 22 February 2013.
The boards of IFCI and India Infoline after market hours on Thursday, 27 June 2013, approved to apply for the banking license.
Applicants seeking licenses to set up banks are required to submit their applications to the RBI by 1 July 2013.
Entities in the private and public sector and NBFCs will be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC). However, they need to have sound credentials, integrity and financials with a successful track record of 10 years.
United Spirits dropped 7% to Rs 2070 on high early volume of 3.08 lakh shares.
Shares of diamond jewellery maker Gitanjali Gems was locked at 10% lower circuit at Rs 236.50, also its 52-week low. The stock has witnessed a steep slide this week.
Asian stocks edged higher on Friday, 28 June 2013, tracking an overnight rise in global equities on easing fears of an early end to US monetary stimulus. Key benchmark indices in Hong Kong, Indonesia, Taiwan, Singapore, China and South Korea were up 0.69% to 1.67%.
In Japan, the Nikkei 225 index jumped 3.72% as a weakened yen combined with upbeat industrial-production data to lift sentiment.
Japan's industrial production showed a surprise jump in May, while retail sales for the same month also gained, though the largest retailers saw a decline. Industrial output rose 2% during the last month, the Ministry of Economy, Trade and Industry said Friday, accelerating from a 0.9% gain in April.
Trading in US index futures indicated that the Dow could gain 34 points at the opening bell on Friday, 28 June 2013. US stocks surged for a third session on Thursday on upbeat economic data and reiterations from Federal Reserve officials that monetary policy depends on the economic outlook. In a speech on Thursday, Federal Reserve Bank of New York President William Dudley played down the possibility that rate hikes are in the cards anytime soon. Atlanta Fed President Dennis Lockhart said that the markets had mistaken Bernanke's framework for tapering central-bank asset purchases, and reiterated the Fed's approach would be flexible, and based on economic conditions. On Wednesday, Fed Bank of Richmond President Jeffrey Lacker said he believes the economic recovery will remain lackluster for a few more years.
The US Department of Labor reported the number of Americans filing for state unemployment benefits fell by 9,000 to 346,000 last week. The National Association of Realtors reported that pending home sales jumped to a six-year high in May.
Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
Data on Wednesday had gross domestic product expanding at a less-than-estimated 1.8% annualized pace in the first quarter, bolstering the view that the Fed would continue the rate of its quantitative easing until late this year or early in 2014.
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