Key benchmark indices edged higher in early trade as firmness in Asian stocks boosted sentiment. The barometer index, the S&P BSE Sensex, was up 118.13 points or 0.58%, off close to 15 points from the day's high and up about 55 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Adani Ports and Special Economic Zone (APSEZ) rose after the company said it has received Letter of Award from Ennore Port for the development of a container terminal at Ennore Port on DBFOT basis. TCS gained after the company said it has partnered with the Finnish Wheelchair Curling Team, supporting the team in their quest for Olympic glory at the Paralympic Winter Games in Sochi.
Asian stocks rose on Friday after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth.
Foreign institutional investors (FIIs) bought shares worth a net Rs 206.46 crore on Thursday, 20 February 2014, as per provisional data from the stock exchanges.
At 9:33 IST, the S&P BSE Sensex was up 118.13 points or 0.58% to 20,654.77. The index jumped 136.52 points at the day's high of 20,663.16 in early trade. The index rose 63.27 points at the day's low of 20,599.91 in early trade.
The CNX Nifty was up 35.15 points or 0.58% to 6,126.60. The index hit a high of 6,128.95 in intraday trade. The index hit a low of 6,108 in intraday trade.
The BSE Mid-Cap index was up 37.85 points or 0.59% at 6,414.87. The BSE Small-Cap index was up 39.44 points or 0.62% at 6,401.29. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 663 shares rose and 182 shares fell. A total of 20 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks rose and rest fell. ICICI Bank (up 1.3%), AXIS Bank (up 1.03%) and Infosys (up 0.73%) edged higher from the Sensex pack.
Bharti Airtel dropped 0.37%. The company said after market hours on Thursday, 20 February 2014 it is not satisfied with the judgment of the Court of Appeal, Lagos delivered on 14 February 2014 and will lodge an appeal against that decision at the Supreme Court of Nigeria. Bharti Airtel said that the judgment has no impact on the equity holding of Bharti Airtel or of the other shareholders in Airtel Networks, Nigeria (Airtel Nigeria). Bharti Airtel owns 79.06% stake in Airtel Nigeria.
Airtel Nigeria has already launched an appeal before the Supreme Court of Nigeria against the Judgment of the Court of Appeal in Kaduna in the matter relating to Econet's claim for 5% shares in Airtel Nigeria. These shares in any case are held in an escrow account and do not affect Bharti Airtel's 79.06% stake in Airtel Nigeria, Bharti Airtel said in a statement.
Bharti Airtel and Airtel Nigeria have full confidence in the laws of the land, and believe the Supreme Court in Nigeria will determine the appeals on merits, Bharti Airtel said. Bharti Airtel wishes to assure its customers, employees and business partners that these judgments will in no way affect operations of Airtel Nigeria, the company said. "As regards the quantum of the claim as mentioned in some media reports, we would like to unequivocally state that neither of these orders of the Court of Appeals in Lagos and in Kaduna deal with the quantum of damages and no such quantum has been determined," Bharti Airtel said in a statement.
TCS gained 0.54% after the company said after market hours on Thursday, 20 February 2014, that it has partnered with the Finnish Wheelchair Curling Team, supporting the team in their quest for Olympic glory at the Paralympic Winter Games in Sochi. TCS will serve as a partner to the team for one year and provide support for the team towards their equipment, logistics and digital devices such as smart phones at Sochi.
Adani Ports and Special Economic Zone (APSEZ) rose 1.06% after the company said market hours on Thursday, 20 February 2014 that it has received Letter of Award from Ennore Port for the development of a container terminal at Ennore Port on DBFOT basis.
On political front, lawmakers passed a bill to create India's 29th state on Thursday despite mayhem in parliament, as opponents made a futile last attempt to stop the upper house carving landlocked Telangana from coastal Andhra Pradesh. Demands that the southern region be made a separate state have existed almost as long as independent India. Thursday's vote fulfils a promise made by the government in 2009, and comes just weeks before a national election in April.
The vote passed with the support of the two main parties, who are usually bitterly opposed but are both seeking to build support in the south ahead of the election. The new state will have a population of around 3.5 crore people. The bill must now be signed by president to become law, a formality expected to take place in a few days.
The Reserve Bank of India will need to continue raising its policy interest rate given the sticky nature of inflation, the International Monetary Fund said on Thursday. "The ingrained nature of inflation and inflation expectations mean that reducing inflation-even over a protracted horizon-will require significant increases in policy rates, which will weigh on growth," the IMF said in a report.
"Should high inflation expectations persist and inflation remain sticky, a more front-loaded path of interest rate increases may be needed," the IMF said.
RBI Governor Raghuram Rajan, a former IMF chief economist, has raised the key repo rate by 75 basis points to 8% since becoming head of India's central bank in September. He has made consumer prices its key inflation barometer, a shift away from using wholesale price inflation.
The IMF expects India's consumer price index to remain near double digits well into next year driven by food prices. It endorsed giving more emphasis to consumer prices for making policy decisions. "Headline CPI should provide the principal nominal anchor for monetary policy, as food and fuel price shocks propagate rapidly into core inflation, and inflation expectations and wage formation are closely linked to CPI inflation," the IMF said.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
Asian stocks rose on Friday after a larger-than-forecast climb in a measure of US manufacturing in February tempered concern about global growth. Key benchmark indices in Indonesia, Taiwan, Singapore, Japan, Hong Kong and South Korea were up by 0.44% to 2.02%. China's Shanghai Composite fell 0.97%.
Minutes from the Bank of Japan's Jan. 22 policy meeting showed some board members said the central bank should provide a clearer explanation that an expected decline in second-quarter domestic growth was factored into its outlook.
US stocks rose on Thursday on data showing that US factory activity accelerated in February at its fastest pace in nearly four years.
The Markit Economics preliminary index of US manufacturing increased to 56.7 in February, surpassing economists' estimates, while Labor Department figures indicated fewer applications for unemployment benefits last week. The Conference Board's index of US leading indicators, a gauge of the outlook for the next three to six months, rose in January in line with estimates.
Federal Reserve policy makers backed away from their year-old commitment to consider raising interest rates when unemployment falls below 6.5%, according to minutes of their January meeting released on Wednesday, 19 February 2014. Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Sweeping reforms are urgently needed to boost productivity and lower barriers to trade if the world is to avoid a new era of slow growth and stubbornly high unemployment, the OECD warned on Friday.
In its 2014 study on "Going for Growth", The Organisation for Economic Co-operation and Development said momentum on reforms had slowed in the aftermath of the global financial crisis, with much of it now piecemeal and incremental.
"The widespread deceleration in productivity since the crisis could presage the beginning of a new low-growth era," warned Pier Carlo Padoan, deputy secretary-general and chief economist at the Paris-based OECD. "These concerns, already prevalent among advanced OECD countries for some time, now encompass emerging-market economies and are fuelled also by high unemployment and falling labour force participation in many countries."
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