Key benchmark indices surged in early trade tracking strong Asian stocks. The barometer index, the S&P BSE Sensex was currently up 205.29 points or 0.76% at 27,331.86. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 0.99%. The BSE Small-Cap index was up 1.23%. Both these indices outperformed the Sensex.
Crompton Greaves jumped after the Reserve Bank of India advised that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 100% of the paid up capital of the company under the Portfolio Investment Scheme (PIS). NTPC gained after the company said its board will meet on 23 December 2014, to consider a proposal for issuing bonus debentures to its members.
Foreign portfolio investors sold shares worth a net Rs 874.89 crore yesterday, 18 December 2014, as per provisional data.
In overseas markets, Japanese stocks led Asian markets higher today, 19 December 2014, after US stocks boasted its biggest two-day advance since late 2011 yesterday, 18 December 2014, amid relief the Federal Reserve was in no rush to start hiking interest rates.
At 9:22 IST, the S&P BSE Sensex was up 205.29 points or 0.76% at 27,331.86. The index jumped 252.89 points at the day's high of 27,379.46 in early trade. The index gained 165.57 points at the day's low of 27,292.14 in early trade.
The CNX Nifty was up 64.95 points or 0.8% at 8,224.25. The index hit a high of 8,237.85 in intraday trade. The index hit a low of 8,208.60 in intraday trade.
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The BSE Mid-Cap index was up 98.51 points or 0.99% at 10,063.18. The BSE Small-Cap index was up 133.33 points or 1.23% at 10,994.09. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,012 shares rose and 181 shares fell. A total of 29 shares were unchanged.
NTPC gained 0.86% after the company said after market hours yesterday, 18 December 2014, its board will meet on 23 December 2014, to consider a proposal for issuing bonus debentures to its members, as the company has entered its 40th year of operations and is keen to reward its members for their continued support. These bonus debentures may be issued through a scheme of arrangement under Section 391-394 of Companies Act, 1956, subject to approval of the Board and receipt of requisite approvals under applicable laws.
Crompton Greaves jumped 4.42% after the Reserve Bank of India advised yesterday, 18 December 2014, that Foreign Institutional Investors (FIIs)/Registered Foreign Portfolios Investors (RFPIs) can now invest up to 100% of the paid up capital of Crompton Greaves under the Portfolio Investment Scheme (PIS). The Reserve Bank has stated that the company has passed resolutions at its Board of Directors' level and a special resolution by the shareholders, agreeing for enhancing the limit for the purchase of its equity shares and convertible debentures by FIIs/RFPIs. The purchases could be made through primary market and stock exchanges and would be subject to Regulation 5(2) of FEMA Notification No.20/2000-RB dated 3 May 2000 (as amended from time to time) and other terms and conditions stipulated by the Reserve Bank.
Closer home, the Union Cabinet on Wednesday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out. The Bill is likely to be introduced in parliament during the ongoing winter session.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. The Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
Japanese stocks led Asian markets higher today, 19 December 2014, after US stocks boasted its biggest two-day advance since late 2011 yesterday, 18 December 2014, amid relief the Federal Reserve was in no rush to start hiking interest rates. Key indices in South Korea, Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.76% to 1.92%. China's Shanghai Composite fell 0.48%.
US stocks rallied yesterday, 18 December 2014, to its best two-day gains in three years. Rally was kicked off Wednesday, 17 December 2014, after Federal Reserve Chairwoman Janet Yellen assured the markets that the central bank would be patient about lifting interest rate.
In economic news, a weekly jobless claims report came in stronger than expected, confirming the Fed's view that the economy is strengthening. Claims fell by 6,000 to 289,000, a low level typically associated with strong hiring.
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