The 50-unit CNX Nifty scaled fresh record high and the barometer index, the S&P BSE Sensex, hovered close to its record high hit in afternoon trade. The Sensex was currently up 192.86 points or 0.73% at 26,612.41. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Firmness in European stocks also underpinned sentiment. The market breadth indicating the overall health of the market was positive. The BSE Small-Cap index was up more than 1%, outperforming the Sensex. News reports said that the Reserve Bank of India may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. Pharma stocks gained with Cipla and Lupin scaling record high. Among auto shares, Mahindra & Mahindra (M&M) hit record high.
Key indices have remained firm after hitting record high in early trade.
In overseas markets, European stocks rose after comments from European Central Bank President Mario Draghi indicated that further stimulus could be on the way for the region. Asian stocks ended higher. Crude was slightly higher.
At 14:16 IST, the Sensex was up 192.86 points or 0.73% at 26,612.41. The index jumped 211.08 points at the day's high of 26,630.63 in afternoon trade, a lifetime high for the index. The index gained 70.76 points at the day's low of 26,490.31 in opening trade.
The CNX Nifty was up 49.35 points or 0.62% to 7,962.55. The index hit a high of 7,968.25 in intraday trade, a lifetime high for the index. The index hit a low of 7,927.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,598 shares gained and 1,280 shares fell. A total of 92 shares were unchanged.
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The BSE Mid-Cap index was up 46.56 points or 0.5% at 9,387.43, underperforming the Sensex. The BSE Small-Cap index was up 107.53 points or 1.04% at 10,406.05, outperforming the Sensex.
Mahindra & Mahindra (M&M) rose 0.84% to Rs 1,399.75 after hitting record high of Rs 1,409 in intraday trade.
Pharma stocks gained. Dr Reddy's Laboratories (up 1.61%), Ranbaxy Laboratories (up 0.22%), Divi's Laboratories (up 1.56%), Strides Arcolab (up 1.22%), Shasun Pharmaceuticals (up 10.12%), Wockhardt (up 2.64%) and Sun Pharmaceutical Industries (up 0.14%) gained.
Lupin rose 0.89% to Rs 1,262.20 after hitting record high of Rs 1,266.50 in intraday trade.
Cipla gained 1.15% to Rs 503.85 after hitting record high of Rs 505.30 in intraday trade.
The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 302.06 crore on Friday, 22 August 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
Meanwhile, news reports said that the Reserve Bank of India (RBI) may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. On 21 August 2014, RBI announced that NBFCs can lend only against Group 1 shares. The latest RBI directive could deprive small businessmen from raising money by pledging their holdings to fund their business. Group 1 shares include a limited set of top-grade shares. As per reports, the list includes 694 stocks traded on the NSE and 817 stocks traded on the BSE.
RBI has mandated loan to value (LTV) ratio of 50% with regard to lending against shares. The RBI had also said that all NBFCs with asset size of Rs 100 crore and above shall report on-line to stock exchanges, information on the shares pledged in their favour by borrowers for availing loans.
Lower crude oil prices augur well for India as the country imports about 80% of its crude oil requirement. Brent for October settlement was up 2 cents at $102.31 a barrel. The contract decreased 34 cents to settle at $102.29 a barrel on Friday, 22 August 2014.
The stock market has shrugged off Indo-Pak tension. Indian and Pakistani troops reportedly intensified firing across the border over the weekend killing at least four, straining ties between the arch rivals who recently called off top-level diplomatic talks. Last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on 25 August 2014 because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.
In the foreign exchange market, the rupee was almost unchanged against the dollar. The partially convertible rupee was hovering at 60.4675 compared with its close of 60.47 on Friday, 22 August 2014.
European stocks rose today, 25 August 2014, after comments from European Central Bank President Mario Draghi suggesting that further stimulus could be on the way for the region. In Germany, the DAX index was up 1.01% while France's CAC 40 index was up 0.95%. Financial markets in the UK are closed today, 25 August 2014, for a Bank Holiday.
German business confidence declined for a fourth month, reflecting a faltering euro-area economy that European Central Bank President Mario Draghi says might need more stimulus. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 106.3 in August from 108 in July.
Speaking at the Kansas City Federal Reserve's annual symposium in United States, Draghi called on European politicians to pivot away from tight budget policies that have held back euro-zone growth and pledged additional central-bank steps if needed to spur growth. Draghi said European central bankers and politicians both have a role to play in boosting demand and reducing joblessness. It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, he said. Expectations of future inflation in Europe exhibited significant declines at all horizons in August, he said.
Asian stocks rose today, 25 August 2014, as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Key benchmark indices in Japan, Hong Kong, Taiwan, Singapore and South Korea were up 0.11% to 0.48%. Key benchmark indices in Indonesia and China were off 0.21% to 0.51%.
Trading in US index futures indicated that the Dow could gain 50 points at the opening bell on Monday, 25 August 2014.
In her speech at US Federal Reserve's annual symposium in Jackson Hole, Wyo, Yellen on Friday, 22 August 2014, said that the US economy has made considerable progress in recovering from the largest and most sustained loss of employment since the Great Depression. She said that these developments are encouraging, but at the same time it speaks about the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover. Yellen reiterated that early rate hikes are possible, but it will depend on how the economy evolves in the next few months.
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