Key benchmark indices held firm at higher level in mid-morning trade. At 11:19 IST, the barometer index, the S&P BSE Sensex, was up 140.56 points, or 0.57% at 24,763.90. The Nifty 50 index was up 38.30 points, or 0.51% at 7,524.45. Gains were triggered by the government announcing a series of reforms yesterday, 10 March 2016.
Reforms took a front seat yesterday, 10 March 2016, with the government unshackling the oil & gas sector with a new exploration regime that allows a higher price of gas for new deep-sea fields. Besides, a Real Estate Bill to protect interests of buyers and bring more transparency to the sector was passed in the Rajya Sabha.
The Sensex rose 194.46 points, or 0.79% at the day's high of 24,817.80 in mid-morning trade. The index fell 33.06 points, or 0.13% at the day's low of 24,590.28 in early trade. The Nifty rose 57.80 points, or 0.77% at the day's high of 7,543.95 in morning trade. The index fell 10.30 points, or 0.14% at the day's low of 7,475.85 in early trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,226 shares rose and 868 shares fell. A total of 138 shares were unchanged. The BSE Mid-Cap index was currently up 0.37%. The BSE Small-Cap index was currently up 0.33%. Both these indices underperformed the Sensex.
In the overseas market, Asian stocks were trading higher after initial slide. US market finished almost flat in frenetic trading yesterday, 10 March 2016, as investors dismissed new easing measures from the ECB. Earlier in the session, US stocks had been firmly higher, tracking a rally in Europe, fueled by stimulus measures from the ECB.
The European Central Bank (ECB) cut the bank's key lending rate to zero from 0.05% and pushed the rate on its deposit facility to minus 0.4% from minus 0.3%. It also announced it would expand the size of its monthly bond purchases to 80 billion euros ($86.86 billion) from its current level of 60 billion euros beginning in April 2016 and expand the scope of those purchases to include investment-grade, euro-denominated, nonbank corporate bonds.
Shares of oil and gas exploration companies rose after the government approved major policy initiatives to give a boost to petroleum and hydrocarbon sector. The government made the announcement after market hours yesterday, 10 March 2016.
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ONGC (up 0.24%), Oil India (up 0.78%), Reliance Industries (RIL) (up 1.33%) and Cairn India (up 1.81%) gained.
State-run GAIL (India) was up 0.40% at Rs 342.70.
Shares of public sector oil marketing companies also rose. BPCL (up 2.47%), HPCL (up 1.93%) and Indian Oil Corporation (IOCL) (up 1.23%), edged higher.
In a major policy drive to give a boost to petroleum and hydrocarbon sector, the Government has unveiled a series of initiatives yesterday, 10 March 2016. The Union Cabinet and the Cabinet Committee on Economic Affairs in its meeting yesterday, 10 March 2016 gave its approval for Hydrocarbon Exploration Licensing Policy, HELP, an innovative policy for future which provides for a uniform licensing system to cover all hydrocarbons such as oil, gas, coal bed methane etc. under a single licensing framework. There will be marketing and pricing freedom for new gas production from deepwater, ultra deepwater and high pressure-high temperature areas. Policy is also approved for grant of extension to the Production Sharing Contracts for small, medium sized and discovered fields. The government has also cancelled the Ratna offshore field award from Essar Oil and assigned it to the original licensee, ONGC.
The new policy regime marks a generational shift and modernization of the oil and gas exploration policy. It is expected to stimulate new exploration activity for oil, gas and other hydrocarbons and eventually reduce import dependence. It is also expected to create substantial new job opportunities in the petroleum sector. The introduction of the concept of revenue sharing is a major step in the direction of minimum government maximum governance, as it will not be necessary for the Government to verify the costs incurred by the contractor. Marketing and pricing freedom will further simplify the process. These will remove the discretion in the hands of the Government, reduce disputes, avoid opportunities for corruption, reduce administrative delays and thus stimulate growth.
Most pharmaceutical shares were trading higher. Strides Shasun (up 3.41%), Piramal Enterprises (up 0.91%), Aurobindo Pharma (up 0.87%), Wockhardt (up 0.75%), Dr Reddy's Laboratories (up 0.64%), GlaxoSmithKline Pharmaceuticals (up 0.40%), IPCA Laboratories (up 0.39%), Cipla (up 0.38%), Cadila Healthcare (up 0.29%), Alkem Laboratories (up 0.24%) and Lupin (up 0.22%), edged higher. Glenmark Pharmaceuticals (down 0.02%), Divi's Laboratories (down 0.22%) and Sun Pharmaceutical Industries (down 1.52%), edged lower.
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