Key benchmark indices pared gains in afternoon trade. The Sensex was up 150.19 points or 0.71%, off close to 103 points from the day's high and up about 92 points from the day's low. However, firmness prevailed in the market as a government 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 market breadth, indicating the overall health of the market, was positive. Most realty shares were trading higher.
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. Key benchmark indices pared gains in afternoon trade.
Asian stocks rose on Wednesday on optimism the global economy is strengthening.
At 13:15 IST, the S&P BSE Sensex was up 150.19 points or 0.71% to 21,183.07. 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 44.15 points or 0.71% to 6,286. 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.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,247 shares gained and 1,158 shares fell. A total of 162 shares were unchanged.
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Among the 30 Sensex shares, 27 shares rose and remaining shares fell. Hero MotoCorp (up 2.09%), Coal India (up 2%), ICICI Bank (up 1.85%), Cipla (up 1.65%), Larsen & Toubro (up 1.62%), Hindalco Industries (up 1.60%), HDFC (up 1.58%), Sesa Sterlite (up 1.27%), Reliance Industries (up 0.97%), Tata Motors (up 0.93%) and Hindustan Unilever (up 0.88%), edged higher from the Sensex pack.
Maruti Suzuki India (down 0.15%), ITC (down 0.14%) and Tata Steel (down 0.13%), edged lower from the Sensex pack.
Most realty shares were trading higher. HDIL (up 1.21%), Parsvnath Developers (up 1.01%), Sunteck Realty (up 0.71%), Peninsula Land (up 0.70%), Sobha Developers (up 0.48%), Indiabulls Real Estate (up 0.62%), DLF (up 0.32%), Phoenix Mills (up 0.28%) and Godrej Properties (up 0.24%), edged higher.
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 0.17%.
Trading in US index futures indicated that the Dow could gain 2 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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