A small amount of volatility was witnessed as key benchmark indices once gain pared gains after recovering from lower level in morning trade. At 11:18 IST, the barometer index, the S&P BSE Sensex, was up 112.66 points or 0.44% at 25,768.17. The Nifty 50 index was currently up 37.30 points or 0.47% at 7,898.05. The market sentiment was positive with exit polls predicting a historic win for the BJP led National Democratic Alliance (NDA) in assembly election in Assam. Gains in global stocks aided the upmove on the domestic bourses.
The Sensex jumped 176.83 points or 0.68% at the day's high of 25,830.06 at onset of the trading session, its highest level since 28 April 2016. The barometer index rose 87.96 points or 0.34% at the day's low of 25,741.19 in morning trade. The Nifty rose 53.35 points or 0.67% at the day's high of 7,914.10 at onset of the trading session, its highest level since 12 May 2016. The index rose 28.45 points or 0.36% at the day's low of 7,889.20 in mid-morning trade.
On the political front, exit polls for the assembly elections showed the Dravida Munnetra Kazhagam (DMK)-Congress alliance heading to victory in Tamil Nadu, West Bengal Chief Minister Mamata Banerjee retaining power in that state, a victory for Communist Party of India-Marxist (CPM)-led Left Democratic Front government in Kerala and a historic win for the BJP led National Democratic Alliance (NDA) in Assam. The Congress-DMK alliance looks set to form government in the Union territory of Puducherry, the post-poll surveys indicated. The counting of votes for assembly elections held in these four states and the Union territory of Puducherry takes place on Thursday, 19 May 2016.
A win for the BJP led NDA in Assam will put BJP in the right shape for the 2017 assembly election in Uttar Pradesh (UP). The UP assembly has 403 seats. The number of seats in Rajya Sabha, or the upper house of parliament, depends on representation in states. A lack of a majority for the NDA in the Rajya Sabha has delayed passage of a key tax reform bill viz. the Goods and Services Tax (GST) bill in the upper house. Finance Minister Arun Jaitley said in an interview to All India Radio recently that the GST Bill will be put to vote in the monsoon session of Parliament if Congress continues to oppose the Legislation. The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of stiff resistance by the Congress.
In overseas stock markets, energy stocks led gains in Asian equities as crude oil prices rose. US stocks closed higher yesterday, 16 May 2016, as a surge in oil prices and a rally in tech stocks overshadowed weaker-than-expected manufacturing data from the New York region. The Empire State general business-conditions index, which measures activity in the New York area, nosedived to a reading of negative 9 in early May, from positive 9.6 in April.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,207 shares rose and 871 shares fell. A total of 145 shares were unchanged. The BSE Mid-Cap index was currently up 0.51%, outperforming the Sensex. The BSE Small-Cap index was currently up 0.3%, underperforming the Sensex.
Capital goods stocks rose. ABB India (up 1.44%), Bharat Heavy Electricals (Bhel) (up 0.21%), BEML (up 0.42%), Punj Lloyd (up 0.92%), L&T (up 1.36%), Siemens (up 0.1%) rose. Bharat Electronics (down 0.21%) and Thermax (down 0.77%) fell.
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FMCG stocks declined. Nestle India (down 1.65%), Hindustan Unilever (down 1.23%), Colgate-Palmolive (India) (down 0.22%), Dabur India (down 1.44%), Tata Global Beverages (down 0.54%), Procter & Gamble Hygiene and Health Care (down 0.16%), Jyothy Laboratories (down 1.14%) fell. Britannia Industries (up 1.86%), GlaxoSmithkline Consumer Healthcare (up 0.92%), Godrej Consumer Products (up 0.36%), Marico (up 0.34%) and Bajaj Corp (up 0.25%) rose.
Petronet LNG rose 1.75% on strong Q4 March 2016 results. The company's net profit fell 20.43% to Rs 239.27 crore on 15.39% decline in total income to Rs 6107.95 crore in Q4 March 2016 over Q4 March 2015. The fall in bottom line was due to the base effect. The company's bottom line in Q4 March 2015 was boosted by a tax reversal of Rs 170.14 crore.
Advani Hotels & Resorts (India) was locked in 20% upper circuit at Rs 57.65 after net profit rose 79% to Rs 4.23 crore on 18% rise in operational income to Rs 17.14 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 16 May 2016.
Meanwhile, with a view to aid the development of corporate bond market, the Reserve Bank of India in consultation with the Ministry of Finance has decided to allow investment by foreign portfolio investors (FPIs) in unlisted debt securities and securitised debt instruments subject to certain restrictions. In a draft circular issued yesterday, 16 May 2016, the RBI said that FPIs can invest in the primary issues of non-convertible debentures/bonds by a public company issued in demat form, provided that the issuing company does not use the borrowing proceeds for real estate activities, purchase of land, investing in capital market or on-lending to other entities. FPIs can also invest in securitised debt instruments issued by a special purpose vehicle (SPV) set up for securitisation of assets where banks, FIs or NBFCs are originators. FPIs can also invest in securitised debt instruments issued and listed in terms of the Securities and Exchange Board of India Regulations on Public Offer and Listing of Securitised Debt Instruments, 2008. The RBI has invited public comments on draft circular by 25 May 2016.
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