After holding firm in mid-morning trade, key benchmark indices pared gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 134.71 points or 0.49% at 27,780.24. The market breadth indicating the overall health of the market was positive.
IT shares were in demand. Shares of power generation companies were mixed. Tata Power rose after the company reported turnaround results for Q4 March 2015 after trading hours yesterday.
In the global commodities markets, Brent crude oil prices dropped overnight. The decline in global crude oil prices augur well for India as the country imports about 80% of its crude oil requirements.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said yesterday, 19 May 2015, that inflation has come down tremendously in India.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their highest levels in almost four weeks in morning trade as these two key benchmark indices extended initial gains.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it.
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Foreign portfolio investors bought shares worth a net Rs 48.06 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 451.02 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges.
In the overseas markets, Asian indices were mixed. In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record.
At 12:20 IST, the S&P BSE Sensex was up 134.71 points or 0.49% at 27,780.24. The index jumped 257.48 points at the day's high of 27,903.01 in morning trade, its highest level since 23 April 2015. The index gained 98.46 points at the day's low of 27,743.99 at the onset of trading session.
The Nifty was up 47.65 points or 0.57% at 8,413.30. The index hit a high of 8,440.35 in intraday trade, its highest level since 23 April 2015. The index hit a low of 8,391.45 in intraday trade.
The BSE Mid-Cap index was up 17.91 points or 0.17% at 10,668.93. The BSE Small-Cap index was up 34.84 points or 0.31% at 11,222.57. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,273 shares rose and 1,090 shares fell. A total of 113 shares were unchanged.
IT stocks rose as the rupee edged lower against the dollar. Persistent Systems (up 3.12%), HCL Technologies (up 2.43%), Hexaware Technologies (up 2.3%), CMC (up 1.74%), Infosys (up 1.54%), Wipro (up 1.08%), Oracle Financial Services Software (up 0.87%), MphasiS (up 0.75%) and MindTree (up 0.42%) edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
TCS rose 1.63% to Rs 2,552.95. The company announced during trading hours that its client -- Euroclear Finland -- the central securities depository (CSD) for the Finnish capital markets, has launched a new transaction processing platform known as 'Infinity'. Infinity is a multi-year program powered by TCS BaNCS for market infrastructure and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017.
Infinity's processing capabilities for fixed-income was recently unveiled, following a 22 month implementation of this first phase, TCS said. The next phases will be rolled out in the course of 2016 and the processing environment will also feature a new central register as well as equity processing capabilities, TCS said.
Infinity is a multi-year program powered by TCS BaNCS for Market infrastructure, and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017. Through Infinity, TCS BaNCS has provided Euroclear with a single, consolidated platform for depository, registry and corporate actions functions, thereby, enabling simplified business operations.
Tech Mahindra rose 3.58% to Rs 641.40 after the company after market hours yesterday, 19 May 2015, announced that the company will build an Intelligent Electric Vehicle Charging System (IEVCS) designed to help build Ontario's clean energy future. The project, sponsored by Ontario Ministry of Energy and funded in part through the Ontario Smart Grid Fund initiative, will analyze the effects of electric vehicle charging on transformers by creating a real time transformer monitoring and analytics solution. The key benefit of the solution is the real time monitoring of the transformers and the ability to automatically manage the charging between vehicles to ensure the transformers do not overload as a result of EV charging.
In February 2015, Tech Mahindra announced plans to invest $150 million over the next three to four years to create innovative solutions and develop next-generation technologies
Shares of power generation companies were mixed. CESC (up 1.26%), JSW Energy (up 0.99%), NTPC (up 0.74%), Torrent Power (up 0.74%) and Adani Power (up 0.48%), edged higher. GMR Infrastructure (down 0.07%), Jaiprakash Power Ventures (down 0.13%), NHPC (down 0.26%), Reliance Power (down 0.82%) and Reliance Infrastructure (down 0.86%), edged lower.
Meanwhile, the Ministry of Power today, 20 May 2015, announced that transmission lines worth Rs 33900 crore were allotted for bidding during 2014-15. These transmission schemes includes 765 kV and 400 kV transmission system strengthening schemes in the Northern, Western, Southern, North Eastern Regions and would facilitate transfer of power from new hydro electric projects in Bhutan and the generation linked projects in Chhattisgarh and Odisha etc.
Tata Power rose after the company reported turnaround results for Q4 March 2015 after trading hours yesterday, 19 May 2015. The stock was up 1.78% to Rs 77.20. The stock hit a high of Rs 79.80 and a low of Rs 76.85 so far during the day. The company reported consolidated net profit of Rs 159.14 crore in Q4 March 2015 compared with consolidated net loss of Rs 145.33 crore in Q4 March 2014. Total income fell 8.12% to Rs 8227.14 crore in Q4 March 2015 over Q4 March 2014.
Net profit in Q4 March 2015 was up at Rs 159 crore mainly due to lower depreciation and lower coal prices in company's wholly owned subsidiary viz. Coastal Gujarat Power (CGPL) and better performance of Mumbai operations. The profits for the quarter also include adverse forex impact at the South African Joint Venture-Cennergi. The impact of lower coal price realization were offset by better operational efficiencies of coal mines as well as forex gains on value added tax (VAT) related settlement during the year. Operating profit rose 28% at Rs 1408 crore in Q4 March 2015 over Q4 March 2014, mainly due to lower depreciation and lower coal price in CGPL and higher contribution from Mumbai operations.
In the global commodities market, Brent crude oil prices dropped overnight. Brent for July settlement was up 28 cents at $64.30 a barrel. The contract had lost $2.25 a barrel or 3.39% to settle at $64.02 a barrel during the previous trading session. The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In the foreign exchange market the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.86, compared with its close of 63.68 during the previous trading session.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said in New York yesterday, 19 May 2015, that inflation has come down tremendously in India. Rajan also reportedly called the government's spending cuts significant. Rajan said that the depreciation of the rupee is due in part to the US dollar's strength and that the rupee has fallen less and in a less volatile fashion than other currencies. While the rupee has slid against the strengthening dollar, he said that it has actually strengthened against other currencies.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers' will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account, the proposal said. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams so that even small depositors are encouraged. The government has sought feedback on the scheme by 2 June 2015.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
In overseas markets, Asian indices were mixed today, 20 May 2015. Key benchmark indices in China, Indonesia, Japan and South Korea were up by 0.56% to 1.38%. Key benchmark indices in Taiwan, Singapore and Hong Kong were off 0.27% to 0.42%.
The latest data showed that Japan's economy grew an annualized 2.4% during the first quarter, much stronger than a revised 1.1% expansion in the previous quarter.
In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record. Falling oil prices weighed on energy stocks, with the sector selling off sharply. Meanwhile, investors digested a report showing a sharp increase in housing starts last month, pondering the effect it might have in determining the course of the Federal Reserve's interest rate policy.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released in the global day today, 20 May 2015.
In Europe, Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then.
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