Key benchmark indices edged higher amid expectations that further monetary stimulus in the euro zone could trigger more foreign fund flows to emerging markets. High volatility was witnessed in late trade as key indices recovered from lower level soon after trimming intraday gains. The barometer index, the S&P BSE Sensex, was provisionally up 131.65 points or 0.5% at 26,574.46. The market breadth indicating the overall health of the market was positive. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. HCL Technologies hit record high. Auto stocks were mixed. Maruti Suzuki India fell as the stock turned ex-dividend. Shares of two-wheeler makers gained.
Key indices remained in green throughout the trading session after a firm opening triggered by higher Asian stocks and a first closing for S&P 500 index in the US above 2,000 on Tuesday, 26 August 2014.
European shares edged lower after worse-than-projected German confidence data. Asian stocks rose after US data on durable goods and consumer confidence boosted optimism in the strength of the world's largest economy. Crude oil prices rose ahead of the weekly US oil inventory data from the US government.
As per provisional figures, the S&P BSE Sensex was up 131.65 points or 0.5% at 26,574.46. The index jumped 156.31 points at the day's high of 26,599.12 in early trade, its highest level since 25 August 2014. The index rose 49.69 points at the day's low of 26,492.50 in late trade.
The CNX Nifty was up 38.75 points or 0.49% at 7,943.50, as per provisional figures. The index hit a high of 7,946.85 in intraday trade, its highest level since 25 August 2014. The index hit a low of 7,916.55 in intraday trade.
The total turnover on BSE amounted to Rs 2902 crore, higher than Rs 2804.78 crore on Tuesday, 26 August 2014.
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The market breadth indicating the overall health of the market was positive. On BSE, 1,604 shares gained and 1,379 shares fell. A total of 121 shares were unchanged.
The BSE Mid-Cap index was up 67.06 points or 0.72% at 9,325.88. The BSE Small-Cap index was up 87.09 points or 0.86% at 10,260.47. Both these indices outperformed the Sensex.
IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. Wipro (up 1.34%), and TCS (up 0.53%) edged higher. But, Tech Mahindra fell 0.91%.
HCL Technologies rose 3.28% to Rs 1,649.65 after hitting record high of Rs 1,651.50 in intraday trade.
Infosys rose 0.45%. At an investor conference yesterday, 26 August 2014, Infosys' chief operating officer UB Pravin Rao reportedly reiterated the company's 7% to 9% dollar revenue growth guidance for the current financial year. Rao also reportedly said that Infosys would look to maintain operating profit margins at 24-25% for the current year.
Auto stocks were mixed. Mahindra & Mahindra (M&M) fell 0.36% to Rs 1,395, with the stock reversing gains after hitting record high of Rs 1,413.90. M&M proposes to appeal against the Competition Commission of India's recent order before the appropriate forum. The Competition Commission of India (CCI) on 25 August 2014 levied a total penalty of Rs 2544.64 crore on 14 car makers at the rate of 2% of the average turnover after it found them to be in contravention of the provisions of the Competition Act, 2002. The amount of penalty imposed on M&M is Rs 292.25 crore.
Tata Motors gained 1.85%. The company after market hours on Tuesday, 26 August 2014, said that it would be filing an appeal against the CCI order before the appropriate authorities. The penalty levied on Tata Motors is Rs 1346.46 crore.
Maruti Suzuki India fell 0.36% as the stock turned ex-dividend today, 27 August 2014, for final dividend of Rs 12 per share for the year ended 31 March 2014. The CCI's penalty on Maruti is Rs 471.14 crore.
The CCI said it found that the conduct of the car companies was in violation of the provisions of section 3(4) of the Competition Act, 2002 with respect to its agreements with local Original Equipment Suppliers (OESs) and agreements with authorized dealers whereby it imposed absolute restrictive covenants and completely foreclosed the aftermarket for supply of spare parts and other diagnostic tools.
Ashok Leyland gained 2.36%.
Shares of two wheeler makers gained. Hero MotoCorp (up 1.42%), TVS Motor Company (up 1.38%) and Bajaj Auto (up 0.92%) rose.
DLF tumbled 4.28% on reports the Supreme Court today, 27 August 2014, penalised the company Rs 630 crore for exploiting its dominant position to the disadvantage of its customers in three projects in Gurgaon. The court said that DLF will deposit Rs.50 crore of the Rs 630 crore within three weeks and the balance of Rs 580 crore within three months from today. The court directed the registry to put this amount in a fixed deposit in a nationalised bank.
MCX jumped 5.34% after the company during market hours said that the commodities market regulator Forward Market Commission (FMC) has approved Kotak Mahindra Bank's (KMBL) proposed acquisition of upto 15% of equity share capital of MCX. In July 2014, Financial Technologies (India) (FTIL) entered into a share purchase agreement (SPA) to sell 15% stake in MCX to Kotak Mahindra Bank for a total consideration of Rs 459 crore.
The sentiment on the bourses 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 364.72 crore on Tuesday, 26 August 2014, as per provisional data from the stock exchanges.
The market may remain volatile tomorrow, 28 August 2014, 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 tomorrow, 28 August 2014.
In the foreign exchange market, the rupee was tad lower against the dollar. The partially convertible rupee was hovering at 60.45, compared with its close of 60.44 on Tuesday, 26 August 2014.
Crude oil prices rose ahead of the weekly US oil inventory data from the US government. Brent for October settlement was up 14 cents at $102.64 a barrel. The contract fell 15 cents to settle at $102.50 a barrel yesterday, 26 August 2014, after reaching $103.40 during the session. The US is the world's biggest oil consumer.
Geopolitical developments were in focus. Talks between the Russian and Ukrainian presidents yesterday, 26 August 2014, were inconclusive, and the conflict in eastern Ukraine continued with Kiev releasing videos of captured Russian soldiers.
At a meeting yesterday, 26 August 2014, the Central Board of Trustees (CBT) of the Employees' Provident Fund Organization (EPFO) decided against investing in equities and Exchange Traded Funds (ETFs). The finance ministry had suggested EPFO to invest in equities to enhance returns for subscribers.
The government yesterday, 26 August 2014, notified increase in foreign direct investment limit to 49% from 26% in the defence sector. The hike in FDI ceiling could encourage domestic manufacture of defence goods which are imported.
European shares edged lower after worse-than-projected German confidence data. Key indices in Germany and France were off 0.02% to 0.03%. In UK, the FTSE 100 index was up 0.09%.
A consumer confidence index in Germany will fall to 8.6 in September from a revised 8.9 in August, GfK AG forecast in a report today, 27 August 2014.
French factory confidence fell to the lowest in 13 months in August, adding to signs that the economy may struggle to grow after a stagnant first half. A manufacturing-sentiment index slipped to 96, the lowest since July 2013, from 97 the previous month, the French national statistics office INSEE said today in Paris.
There are expectations of quantitative easing and other steps by the European Central Bank (ECB) to bolster growth and counter downward pressures on prices in the euro zone. At US Federal Reserve's annual symposium in the United States on 22 August 2014, ECB President Mario Draghi said that expectations of future inflation in Europe exhibited significant declines at all horizons this month.
Asian stocks rose today, 27 August 2014, after data signaled a stronger US economy and Russia's president hailed as "positive" talks over Ukraine. Key benchmark indices in Indonesia, Japan, China, Taiwan, Singapore and South Korea were up 0.09% to 0.98%. Hong Kong's Hang Seng fell 0.62%.
Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Wednesday, 27 August 2014. US stocks edged higher on Tuesday, 26 August 2014, to lift the S&P 500 index just a hair above the 2,000 mark, its first close above that milestone, after data that pointed to a brighter future for the US economy.
Bookings for goods meant to last at least three years climbed by a record 22.6% in July after a 2.7% gain in June that was bigger than previously reported, data from the Commerce Department in Washington showed. The Conference Board's US consumer confidence index rose to 92.4 in August, the highest since October 2007, the New York-based private research group said.
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