A range bound movement was witnessed as key benchmark indices hovered in green in mid-morning trade. At 11:18 IST, the barometer index, the S&P BSE Sensex, was up 142.87 points or 0.58% at 24,825.35. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was up 55.25 points or 0.74% at 7,554. Gains in global stocks aided the upmove on the domestic bourses. World stocks rose after the US Federal Reserve slashed its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review yesterday, 16 March 2016.
The Sensex rose 119.96 points or 0.48% at the day's low of 24,802.44 in mid-morning trade. The barometer index rose 265.82 points or 1.07% at the day's high of 24,948.30 in early trade, its highest level since 14 March 2016. The Nifty rose 43.20 points or 0.57% at the day's low of 7,541.95 in mid-morning trade. The index hit its highest level in more than six-weeks when it rose 86.55 points or 1.15% at the day's high of 7,585.30 in early trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,377 shares rose and 736 shares fell. A total of 133 shares were unchanged. The BSE Mid-Cap index was currently up 0.84%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.54%, underperforming the Sensex.
In overseas stock markets, Asian stocks edged higher after the US Federal Reserve after its monetary policy review yesterday, 16 March 2016, reduced the number of interest rate hikes expected this year. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
US stocks rose yesterday, 16 March 2016, in the aftermath of the Fed statement. The Fed concluded a two-day policy meeting by leaving interest rates untouched, as expected, and signalling fewer rate hikes in coming months as the United States continues to face risks from an uncertain global economy. In light of the current shortfall of inflation from 2 percent, the committee will carefully monitor actual and expected progress toward its inflation goal, the Fed said in a statement. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation, it said.
Shares of public sector oil marketing companies (PSU OMCs) rose after announcing a hike in petrol and diesel prices. BPCL (up 5.11%), HPCL (up 2.96%) and Indian Oil Corporation (up 3.73%) edged higher. Indian Oil Corporation (IOCL) yesterday, 16 March 2016, announced an increase in the price of petrol and diesel with effect from the midnight of 16/17 March 2016. Petrol price was hiked by Rs 3.07 per litre and diesel price was raised by Rs 1.90 a litre at Delhi (including state levies) with corresponding price revision in other states. After the latest revision, petrol in Delhi costs Rs 59.68 per litre and diesel costs Rs 48.33 a litre.
Shares of oil exploration and production firms rose after a surge in international crude oil prices. Cairn India (up 2.76%), Oil India (up 1.45%) and Reliance Industries (RIL) (up 0.79%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.
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In the global commodities markets, Brent futures edged higher after news reports said that Qatar will host a meeting of the world's major producers, both in and outside of the Organization of the Petroleum Exporting Countries to discuss oil supply freeze. Brent for May settlement was currently up 38 cents at $40.71 a barrel. The contract had jumped $1.59 a barrel or 4.1% to settle at $40.33 a barrel during the previous trading session.
ONGC moved higher after the company said that its overseas investment arm ONGC Videsh and Rosneft have signed a memorandum of understanding (MoU) for the acquisition of 11% shares in Vankorneft, a wholly owned subsidiary of Rosneft. The stock rose 2.08%. The acquisition is in addition to the 15% shares for which the definitive agreements were signed in September 2015. The MoU also provides for the parties to explore the possibility to conclude long-term crude oil and feedstock supply agreements whereunder Rosneft would supply oil to the refineries of ONGC Videsh located in India. The announcement was made during market hours today, 17 March 2016.
Most auto stocks gained. Mahindra & Mahindra (M&M) (up 0.12%), Ashok Leyland (up 0.99%), Maruti Suzuki India (up 1.12%), Bajaj Auto (up 0.63%), and Hero MotoCorp (up 1.18%) gained. TVS Motor Company was flat. Eicher Motors declined 1.13%.
Tata Motors rose after the company announced that it has signed a contract to supply 25 Tata Starbus Diesel Series hybrid electric buses with the Mumbai Metropolitan Region Development Authority (MMRDA). The stock gained 1.21%. This is the single largest order awarded for hybrid electric vehicle technology. The announcement was made after trading hours yesterday, 16 March 2016.
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