Key benchmark indices extended gains and hit fresh intraday high in early afternoon trade after data showed inflation based on the wholesale price index (WPI) eased to 6.16% in December 2013. Easing inflation provided a legroom for the central bank to cut interest rates in order to perk up slowing growth. Firmness in Asian stocks also boosted sentiment. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, hit their highest level in nearly two weeks. The Sensex was up 239.65 points or 1.14%, off close to 10 points from the day's high and up about 180 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Except BSE FMCG index all the other sectoral indices on BSE were in the green.
Auto stocks gained as inflation based on the wholesale price index (WPI) easing to 6.16% in December 2013 raised hopes that the central bank could cut interest rates to perk up slowing growth. Index heavyweight and cigarette maker ITC declined. Dr Reddy's Laboratories scaled record high.
The market edged higher in early trade. Firmness continued on bourses in morning trade. It extended gains and hit fresh intraday high in mid-morning trade. It hit fresh intraday high in early afternoon trade.
Asian stocks rose on Wednesday on optimism the global economy is strengthening.
At 12:20 IST, the S&P BSE Sensex was up 239.65 points or 1.14% to 21,272.53. The index rose 252.91 points at the day's high of 21,285.79 in early afternoon trade, its highest level since 2 January 2014. The index gained 58.58 points at the day's low of 21,091.46 in opening trade.
The CNX Nifty was up 68.40 points or 1.1% to 6,310.25. The index hit a high of 6,316.70 in intraday trade, its highest level since 2 January 2014. The index hit a low of 6,265.30 in intraday trade.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 1,306 shares gained and 938 shares fell. A total of 133 shares were unchanged.
All the 30-shares from the Sensex pack rose. ICICI Bank (up 2.69%), Cipla (up 2.15%) and Hindalco Industries (up 2.05%) gained.
Index heavyweight and cigarette maker ITC declined 0.37%.
Dr Reddy's Laboratories advanced 0.48% to Rs 2660.50 after hitting record high of Rs 2662.90 in intraday trade.
Auto stocks gained as inflation based on the wholesale price index (WPI) easing to 6.16% in December 2013 raised hopes that the central bank could cut interest rates to tackle slowdown in growth. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Tata Motors gained 1.1%. The Tata Motors Group's global wholesales declined 19.95% to 79,220 units in December 2013 over December 2012. Global wholesales for Jaguar Land Rover (JLR) jumped 24.66% to 40,244 units in December 2013 over December 2012. Tata Motors unveiled the data on monthly wholesales after trading hours on Tuesday, 14 January 2014.
M&M rose 0.29%.
Maruti Suzuki India rose 0.09%. The company clarified before market hours regarding reports Maruti's parent may hike its stake in the company that the company is in no position to comment on the contents of the article in question as the matter has never been placed before the board of directors of the company.
Bajaj Auto (up 1.22%), Hero MotoCorp (up 2.43%) gained. TVS Motor Company declined 0.99%.
McNally Bharat Engineering Company rose 2.94% after the company said it has received an order worth Rs 97.19 crore for civil, structural & supply works of an ash handling package. The company announced the new order during trading hours today, 15 January 2014.
Usha Martin rose 1.03% after the company said that the iron ore benefication and pellet plant at Jamshedpur has been commissioned and the same is under trial run. The announcement was made during trading hours today, 15 January 2014.
Inflation based on the wholesale price index (WPI) eased to 6.16% in December 2013 as compared to 7.52% (provisional) for the previous month and 7.31% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 5.35% compared to a build up rate of 4.84% in the corresponding period of the previous year. Index for October 2013 revised upwards to 7.24% as compared to earlier reported 7%.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The Reserve Bank of India kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
Asian stocks rose on Wednesday on optimism the global economy is strengthening. Key benchmark indices in Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan were up 0.37% to 2.5%. China's Shanghai Composite fell 0.55%.
Trading in US index futures indicated that the Dow could gain 8 points at the opening bell on Wednesday, 15 January 2014. US stocks rose on Tuesday, giving the Standard & Poor's 500 Index its biggest gain of the year, as better-than-forecast retail sales and corporate merger activity signaled confidence in the economy.
US retail sales increased 0.2% after a 0.4% advance in November, Commerce Department figures showed in Washington.
Philadelphia Fed President Charles Plosser said that the central bank's stimulus program should end later this year because the economy is on a "firmer footing" than it has been in the past several years. Richard Fisher, Fed president in Dallas, likened quantitative easing to "beer goggles" that makes everything look good. There are signs that "we have made for an intoxicating brew as we have continued pouring liquidity down the economy's throat," he said in a speech.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
The World Bank raised its global growth forecasts as the easing of austerity policies in advanced economies supports their recovery, boosting prospects for developing markets' exports. The Washington-based lender sees the world economy expanding 3.2% this year, compared with a June projection of 3 percent and up from 2.4% in 2013. The forecast for the richest nations was raised to 2.2% from 2%. Part of the increase reflects improvement in the 18-country euro area, with the US ahead of developed peers, growing twice as fast as Japan. The report by the institution that's trying to eradicate extreme poverty by 2030 indicates a near-doubling of the growth in world trade this year from 2012, as developed economies lift export-reliant emerging nations. At the same time, the withdrawal of monetary stimulus in the US may raise market interest rates, hurting poorer countries as investors return to assets such as Treasuries, according to the bank.
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