Key benchmark indices edged higher in early trade as firmness in Asian stocks boosted sentiment. The S&P BSE Sensex slipped below the psychological 22,000 mark after regaining that mark in early trade. The Sensex was up 40 points or 0.18%, up about 65 points from the day's low and off close to 30 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Capital goods pivotals rose with L&T hitting 52-week high.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Monday, 10 March 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1,253.65 crore on Monday, 10 March 2014, as per provisional data from the stock exchanges.
At 9:34 IST, the S&P BSE Sensex was up 40 points or 0.18% to 21,974.83. The index gained 67.24 points at the day's high of 22,002.07 in early trade. The index shed 23.88 points at the day's low of 21,910.95 in early trade.
The CNX Nifty was up 25.50 points or 0.39% to 6,562.75. The index hit a high of 6,560.70 in intraday trade. The index hit a low of 6,534.05 in intraday trade.
The BSE Mid-Cap index rose 40.29 points or 0.6% to 6,763.03. The BSE Small-Cap index rose 28.70 points or 0.43% to 6,691.80. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 776 shares gained and 301 shares fell. A total of 47 shares were unchanged.
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Tata Power Company (up 2.66%), ICICI Bank (up 2.28%) and Bajaj Auto (up 1.34%) edged higher from the Sensex pack.
Tata Steel dropped 1.99%. The company said after market hours on Monday, 10 March 2014 that since announcement dated 10 April 2013 regarding amalgamation of Kalimati with the company under the Scheme of Amalgamation, the company has taken various steps to complete the amalgamation of Kalimati with the company. Currently, the Scheme of Amalgamation is pending for final hearing before the Bombay High Court.
Clause 15.C of the Scheme of Amalgamation reads that "In the event of this Scheme failing to take effect by 31 March 2014 or such later date as may be agreed by the respective boards of directors of the Transferor company and the Transferee company, this Scheme shall stand revoked, cancelled and be of no effect and become null and void, and in that event, no rights and liabilities shall accrue to or be incurred inter se between the parties or their shareholders or creditors or employees or any other person. In such case, each of the Transferor Company and the Transferee Company shall bear its own costs and expenses or as may be otherwise mutually agreed."
Pursuant to the aforesaid clause, the board of directors of the company and Kalimati have at their respective board meetings held on 10 March 2014, passed the resolutions extending the long-stop date of the Scheme by one year, i.e. from 31 March 2014 to 31 March 2015.
State Bank of India (SBI) rose 1.19%. The stock turned ex-dividend for interim dividend of Rs 15 per share for the year ending March 2014.
Capital goods pivotals rose. Bhel rose 0.03%.
L&T rose 0.63%, with the stock extending Monday's gains triggered by the company announcing its construction division won new orders worth Rs 2935 crore across various business segments in February and March 2014. The stock hit a 52-week high of Rs 1,248.90 in intraday trade. The company made the announcement during trading hours on Monday, 10 March 2014.
On the macro front, the government will unveil industrial production data for January 2014 tomorrow, 12 March 2014. Industrial output fell 0.6% in December 2013 after contracting a revised 1.3% in November 2013.
The government unveils data on inflation based on the combined consumer price index (CPI) for urban and rural India for February 2014 tomorrow, 12 March 2014. CPI inflation eased to 24-month low of 8.79% in January 2014.
The data on inflation based on the wholesale price index (WPI) for February 2014 is due on Friday, 14 March 2014. WPI inflation stood at 5.05% (provisional) in January 2014 as compared to 6.16% (provisional) for December 2013.
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.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
With the election code of conduct coming into force, government authorities will not be able to announce any major policy initiatives. However, they can announce routine or unavoidable policy measures after taking the approval of the election commission.
Asian stocks rose on Tuesday as investors weighed data showing China's credit growth trailed estimates in February and awaited the conclusion of the Bank of Japan's policy meeting. Key benchmark indices in China, Indonesia, South Korea, Hong Kong, Taiwan, Singapore and Japan were up 0.14% to 0.74%.
A report showed aggregate financing in China dropped to 938.7 billion yuan ($153 billion) last month amid a crackdown on shadow lending, down from January's record 2.58 trillion.
The Bank of Japan maintained record easing, keeping ammunition as an April sales-tax bump threatens to trigger the deepest one-quarter contraction since the March 2011 earthquake. The BOJ kept a pledge to expand the monetary base at a pace of 60 trillion to 70 trillion yen ($677 billion) per year, the central bank said in a statement in Tokyo today.
US stocks slid on Monday, pulling the Standard & Poor's 500 Index down from a record, as a slowdown in Chinese exports fueled concern about global economic growth.
The Federal Reserve will continue to trim its monthly asset purchases at a $10 billion pace, Charles Evans, president of the Chicago Fed and among the most dovish US policymakers said on Monday as he also detailed how the US central bank might rewrite its plan for keeping interest rates low.
"We're at a point now where we're, moving away from purchasing assets, we're tapering, and our balance sheet continues to be very large but we're not going to add to it as much," Evans told a gathering at Columbus State University. "The last two meetings we reduced the purchase flow rate by $10 billion and we're going to continue to do that," he said flatly.
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.
Russian forces advanced in Ukraine's Crimean peninsula, ignoring Western calls to halt a military takeover before the region's separatist referendum. The US estimates Russia now has 20,000 troops confronting a smaller Ukrainian force there. Ukrainian Prime Minister Arseniy Yatsenyuk said yesterday he'd travel to Washington this week as Russian President Vladimir Putin defended Crimea's local government, which may use the March 16 vote to leave Ukraine and join the country's Soviet-era master.
Meanwhile, Ukraine began military drills as Russian forces tightened their hold on the Crimean peninsula and the Foreign Ministry in Moscow warned of "lawlessness" in the former Soviet republic's eastern provinces.
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