Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade as European stocks trimmed initial losses. The barometer index, the S&P BSE, Sensex hit its highest level in more than 3-1/2 weeks. The 50-unit CNX Nifty hit four-week high. The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 21 February 2014. The Sensex was up 107.15 points or 0.52%, up 170.60 points from the day's low and off 4.98 points from the day's high. The market breadth, indicating the overall health of the market, was positive. In the foreign exchange market, the rupee reversed initial losses against the dollar.
Pharma stocks gained on renewed buying. Dr. Reddy's Laboratories, Divi's Laboratories and GlaxoSmithKline Pharma hit record highs. Shares of state-run power generation major NTPC tumbled to hit 52-week on huge volume after the Central Electricity Regulatory Commission in its latest order directed power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization.
Key benchmark indices edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed in morning trade as the key benchmark indices trimmed initial losses in morning trade. Intraday volatility continued as key benchmark indices once again slipped into the red after moving into positive zone from negative zone in mid-morning trade. Key benchmark indices once again moved into positive zone from negative zone in early afternoon trade. The Sensex hit its highest level in more than 3-1/2 weeks. The 50-unit CNX Nifty hit four-week high. Key benchmark indices retained positive zone in afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 21 February 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 603.41 crore on Friday, 21 February 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures and options (F&O) segment from the near-month February 2014 series to March 2014 series. The near month February 2014 F&O contracts expire on Wednesday, 26 February 2014. The stock market remains closed on Thursday, 27 February 2014, on account of Mahashivratri.
At 14:16 IST, the S&P BSE Sensex was up 107.15 points or 0.52% to 20,807.90. The index jumped 112.13 points at the day's high of 20,812.88 in mid-afternoon trade, its highest level since 29 January 2014. The index fell 63.45 points at the day's low of 20,637.30 in early trade.
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The CNX Nifty was up 29.20 points or 0.47% to 6,184.65. The index hit a high of 6,186.15 in intraday trade, its highest level since 27 January 2014. The index hit a low of 6,130.80 in intraday trade.
The BSE Mid-Cap index was up 23.59 points or 0.37% at 6,445.64. The BSE Small-Cap index was up 27.05 points or 0.42% at 6,420.38. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,273 shares gained and 1,223 shares fell. A total of 161 shares were unchanged.
Bharti Airtel (down 1.72%), Tata Steel (down 1.74%) and TCS (down 1.13%) edged lower from the Sensex pack.
Index heavyweight and cigarette maker ITC rose 0.79% at Rs 320 in volatile trade. The stock hit high of Rs 320 and low of Rs 316.10 so far during the day.
Index heavyweight Reliance Industries (RIL) rose 0.23% at Rs 813.20 in volatile trade. The scrip hit high of Rs 814.50 and low of Rs 805.75 so far during the day.
Pharma stocks gained on renewed buying. Cadila Healthcare (up 5.05%), Glenmark Pharmaceuticals (up 2.07%), Lupin (up 1.8%), Ranbaxy Laboratories (up 2.5%) and Sun Pharmaceutical Industries (up 0.55%) gained. Cipla shed 0.24%.
Dr. Reddy's Laboratories rose 1.49% to Rs 2,770 after striking a record high of Rs 2,772 in intraday trade.
Divi's Laboratories gained 0.85% to Rs 1,433.45 after striking a record high of Rs 1,435 in intraday trade.
GlaxoSmithKline Pharma rose 0.16% to Rs 3,030.75 after striking a record high of Rs 3,034.65 in intraday trade. The Cabinet Committee on Economic Affairs last week approved the proposal of GlaxoSmithKline Pte, Singapore for acquisition of 24.33% of shares in the existing Indian subsidiary company of the GSK Group in India by way of a voluntary open offer under SEBI (SAST Regulations) in the pharmaceutical sector. The approval would result in foreign investment of approximately Rs 6,390 crore in the country, the government said in a statement on 20 February 2014.
Shares of India's largest power generation firm by capacity NTPC tumbled on huge volume after the Central Electricity Regulatory Commission in its latest order directed power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization. The stock was off 10.97% at Rs 117.65. The scrip hit 52-week low of Rs 116.95 in intraday trade. On BSE, so far 39.49 lakh shares were traded in the counter, compared with an average volume of 5.08 lakh shares in the past one quarter.
Aditya Birla Nuvo rose 1.77%. Aditya Birla Nuvo during market hours today, 24 February 2014, said that the maintenance shutdown of the Urea Plant at Jagdishpur (UP) will commence from 26 February 2014 instead of first week of March 2014 as informed on 11 February 2014. The maintenance shutdown will be for a period of around 35 days.
United Bank of India surged 6.37%. The state-run bank before market hours today, 24 February 2014, said that its board of directors at its meeting held on Saturday, 22 February 2014, has accorded its approval to create, offer, issue and allot by conversion of up to 80000 PNCPS of Rs 100,000 each into such number of equity shares of Rs 10 each at an conversion price as may be determined in accordance with the Regulation 76(1) of SEBI ICDR Regulations on preferential basis to Government of India in one or more tranches.
The Board further approved issuance and allotment by conversion of PNCPS up to 11 crore equity shares of Rs 10 each at such price as may be determined in accordance with the Regulation 76(1) of SEBI ICDR Regulations on preferential basis to the President of India within 31 March 2014.
The approvals of the Board are subject to all applicable approvals/consents from various Regulators and specific approval by the Central Government in this regard.
Union Bank of India edged higher in choppy trade after the state-run bank denied media reports that it is in merger talks with troubled state-run bank United Bank of India. The stock was up 0.19% at Rs 103.35. The scrip hit high of Rs 103.60 and low of Rs 101 so far during the day. "We once again deny the news that United Bank of India may merge with Union Bank of India and no such negotiations are in place. Furthermore, there is no information with us that needs to be submitted to Stock Exchanges in terms of Clause 36 of the Listing Agreement," Union Bank of India said in a statement.
In the foreign exchange market, the rupee reversed initial losses against the dollar. The partially convertible rupee was hovering at 61.99, compared with its close of 62.12/13 on Friday, 21 February 2014.
Government bond prices dropped after Reserve Bank of India Governor Raghuram Rajan on Sunday, 23 February 2014, warned that inflation remains the biggest threat to economic growth. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8651%, higher than its close of 8.7954% on Friday, 21 February 2014. Bond yield and bond prices move in opposite direction.
Rajan said reining in price gains is the Reserve Bank of India's number one challenge and action will be data dependent. "Even at this point our challenge really is to bring inflation down, because inflation is hurting growth. As inflation comes down, we will get much more possibilities for growth," Rajan said in Sydney in an interview to a news agency. Rajan, who last month warned of a breakdown in international monetary policy cooperation, said there was "widespread agreement" that advanced economies should worry about spillover effects of central bank actions.
Finance Minister P. Chidambaram last week said that RBI must strike a balance between price stability and growth, while adding that the elected government must determine the pace of growth and policies that help the economy expand.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks though still in red were off initial lows on Monday, 24 February 2014, ahead of a report on German business confidence. Key benchmark indices in UK, Germany and France were off 0.06% to 0.43%.
Italian Prime Minister Matteo Renzi faces his first confidence vote in parliament today, 24 February 2014, since taking office last week. Renzi will address the Senate at 2 p.m. in Rome to introduce his 16-member cabinet and outline his strategy for governance.
In Ukraine, lawmakers on Sunday, 23 Febraury 2014, gave presidential powers to parliament speaker Oleksandr Turchynov, after ousting Viktor Yanukovych from the role as violence amid anti-government protests killed at least 82 people last week. The new regime issued an arrest warrant for Yanukovych. The US, Europe and the UK have said they would help with financial aid when a new cabinet is formed.
Asian stocks edged lower on Monday, 24 February 2014, amid speculation that reduced lending to the property industry will curb growth in the world's second-largest economy after a Chinese state-owned newspaper said some Chinese banks curbed loans to property developers. Key benchmark indices in Japan, Indonesia, Taiwan, China, Hong Kong and South Korea fell by 0.19% to 1.75%. In Singapore, the Straits Times index rose 0.05%
Industrial Bank Co. and other unidentified banks have curbed lending to the property sector and related industries such as steel and cement, Shanghai Securities News reported as China said new home prices rose in 69 of 70 cities last month from a year before. But the growth in new-home prices in China's first-tier cities slowed in January, National Bureau of Statistics data today showed.
Trading in US index futures indicated that the Dow could advance 13 points at the opening bell on Monday, 24 February 2014. US stocks edged lower in choppy trade on Friday, 21 February 2014, after the latest data showed existing-home sales in January showed a bigger-than-expected decline. In other economic news on Friday, Dallas Federal Reserve President Richard Fisher said the central bank should continue to taper its bond-buying program that's boosted stocks.
Richmond Fed President Jeffrey Lacker on Friday, 21 February 2014, said the 2008 Federal Open Market Committee transcripts released earlier in the day show "me and several other consumers of economic research grappling with some very difficult policy decisions." In prepared comments at Arizona State, he said there wasn't enough discussion during the crisis about specific models of banking and financial markets that there could have been, and there wasn't enough discussion about long-term consequences. Lacker said he still opposes the Fed's credit market interventions and said he remains "deeply skeptical about the advisability of those actions." Speaking of the market for asset-backed commercial paper, he said markets were responding in a plausibly efficient manner to significant revisions in expectations about the underlying economic fundamentals. Lacker also said the Fed's emergency lending program simply reallocated credit and was not like the "lender of last resort" that Henry Thornton and Walter Bagehot wrote about in the 1800s.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Finance leaders from the world's biggest economies leaned on central banks and governments to help spur growth, reverting to the global economy's playbook of recent years, in an effort to safeguard a fragile recovery. Group of 20 officials ended their two-day summit on Sunday, 23 February 2014, saying they would look to boost world growth by more than $2 trillion over the next few years under a strategy crafted by the International Monetary Fund.
Under the G-20 plan, advanced economies would continue with their easy-money policies while emerging markets would seek to restructure their economies and tame inflation. In addition, governments everywhere would be expected to channel private-sector finance into new infrastructure projects.
The G-20's final communiquhighlights agreement among central banks to communicate their stimulus-exit strategies clearly and in a timely fashion. The communiquwarned that the global economy faces a period of potential "excessive volatility" harmful to growth as countries adjust their economic policies. "We do not want any surprises," Joe Hockey, Australia's treasurer and G-20 host, said at the conclusion of the summit on Sunday.
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