A bout of volatility was witnessed as key benchmark indices recovered after hitting fresh intraday low in early afternoon trade as European stocks rose in early trade there. The barometer index, the S&P BSE Sensex, was almost flat. The 50-unit CNX Nifty turned positive. The Sensex was down 1.69 points or 0.01%, up 84 points from the day's low and off 63 points from the day's high. The market breadth indicating the overall health of the market was positive. The BSE Small-Cap index was up more than 1%.
Tea stocks were in demand. Sugar shares rose on fresh buying. Idea Cellular extended Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company.
At 13:15 IST, the S&P BSE Sensex was down 1.69 points or 0.01% to 25,188.79. The index gained 61.31 points at the day's high of 25,251.79 in morning trade. The index fell 85.98 points at the day's low of 25,104.50 in early afternoon trade.
The CNX Nifty was up 3.15 points or 0.04% to 7,536.70. The index hit a high of 7,553.50 in intraday trade, its highest level since 13 June 2014. The index hit a low of 7,509.25 in intraday trade.
The BSE Mid-Cap index was up 38 points or 0.42% at 9,004.88. The BSE Small-Cap index was up 98.95 points or 1.02% at 9,803.34. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,603 shares gained and 1,145 shares fell. A total of 110 shares were unchanged.
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Among the 30-share Sensex pack, 17 stocks declined and rest of them gained.
Mahindra & Mahindra (down 2.14%), Hindalco Industries (down 1.89%), HDFC (down 1.54%), Tata Steel (down 1.35%), Tata Power (down 1.28%), Bajaj Auto (down 1.18%), HDFC Bank (down 1.16%), Hero MotoCorp (down 1.09%), NTPC (down 0.75%), State Bank of India (down 0.55%) and Hindustan Unilever (down 0.5%), edged lower.
GAIL (India) (up 2.37%), ONGC (up 1.59%), Bharti Airtel (up 1.58%), Maruti Suzuki India (up 1.21%), Axis Bank (up 0.98%), Coal India (up 0.95%), TCS (up 0.63%), Infosys (up 0.43%), Wipro (up 0.24%) and ITC (up 0.19%), edged higher.
Idea Cellular rose 1.95% to Rs 138.70, with the stock extending Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company.
Shares of Idea Cellular have risen 2.66% in two trading sessions from a recent low of Rs 135.10 on Friday, 13 June 2014, after RBI notified hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company. The stock had risen 0.7% to settle at Rs 136.05 on Monday, 16 June 2014.
The RBI on Friday, 13 June 2014, notified that foreign institutional investors (FIIs), through primary market and stock exchanges, can now purchase up to 49% of the paid up capital of Idea Cellular under the portfolio investment scheme (PIS). The FII investment ceiling in the company's shares has been raised from earlier 24% after the company's board of director and shareholders approved the proposal for raising FII investment ceiling, the RBI said. Total holding of FIIs in Idea Cellular stood at 21.57% as per the shareholding pattern as on 11 June 2014.
Tea stocks were in demand. Asian Tea & Exports (up 4.35%), Diana Tea Company (up 2.51%), Duncans Industries (up 1.84%), Harrisons Malayalam (up 0.8%), Goodricke Group (up 0.69%), Jayshree Tea and Industries (up 0.2%) and McLeod Russel India (up 0.05%), edged higher.
Sugar shares rose on fresh buying. Eastern Sugar & Industries (up 9.80%), KCP Sugar & Industries Corporation (up 5.19%), Dwarikesh Sugar Industries (up 4.92%), Simbhaoli Sugar Mills (up 4.47%), DCM Shriram Industries (up 4.05%), Balrampur Chini Mills (up 3.51%), Triveni Engineering & Industries (up 3.50%), Dhampur Sugar Mills (up 2.05%), Shree Renuka Sugars (up 1.87%), Bajaj Hindusthan (up 1.25%), Oudh Sugar Mills (up 0.58%) and EID Parry (India) (up 0.25%), edged higher.
A bout of volatility was witnessed in early trade as the key benchmark indices turned negative after reversing initial decline. Key benchmark indices moved into positive zone in morning trade. Key benchmark indices slipped in negative zone from positive zone in mid-morning trade. Key benchmark indices alternately swung between positive and negative zone within a narrow range in early afternoon trade. A bout of volatility was witnessed as key benchmark indices recovered after hitting fresh intraday low in early afternoon trade as European stocks rose in early trade there.
In the foreign exchange market, the rupee edged lower against the dollar on caution ahead of the outcome of this week's meeting of the Federal Open Market Committee on US monetary policy. The partially convertible rupee was hovering at 60.2750, compared with its close of 60.155/60.165 on Monday, 16 June 2014.
Reacting to increase in inflation based on the wholesale price index to five-month high in May 2014, Finance Minister Arun Jaitley was quoted by the media as saying on Monday that the rising inflation was due to the hoarding of food stocks. He said that the Centre is committed to ease supply side bottlenecks and has also asked states to take firm measures against hoarders to check speculation. The Finance Minister reportedly said that the government is committed to take measures which will positively impact the GDP and result in higher growth than expected. The Finance Minister said inflation which is moving upward now would eventually come down.
The annual rate of inflation based on the monthly wholesale price index (WPI) accelerated to 6.01% for the month of May 2014, from 5.2% in April 2014, data released by the government on Monday, 16 June 2014, showed.
Meanwhile, crude oil prices eased after recent gains triggered by unrest in Iraq. Brent crude oil futures for August delivery were down 21 cents at $112.73 a barrel. The contract had risen 48 cents to settle at $112.94 a barrel on Monday, 16 June 2014, after touching an intraday high of $113.28 a barrel.
The recent increase in crude oil price and fall in rupee against the dollar have stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
Reserve Bank of India Governor Raghuram Rajan today, 17 June 2014, said that the country is watching the Iraq situation, but despite the uncertainty the domestic economy is currently better prepared to deal with any shocks on the external front compared to last year. Rajan reportedly said on the sidelines of an industry event that since India has sufficient foreign reserves and the current account deficit is low, one shouldn't worry too much about the external side at this point.
European stocks gained in early trade on Tuesday, 17 June 2014, raising hopes that an anxious week of selling tracking the renewed conflict in Iraq has taken the region's stock markets low enough. Key benchmark indices in UK, France and Germany were up by 0.23% to 0.76%.
Asian stocks fell on Tuesday, 17 June 2014, as the double-whammy of a deepening conflict in Iraq and a gas dispute between Ukraine and Russia sapped investors' appetite for risk. Key benchmark indices in Hong Kong, China and Singapore were down 0.46% to 0.92%. Key benchmark indices in Indonesia, Japan, South Korea and Taiwan were up 0.20% to 0.41%.
China attracted $8.6 billion of foreign direct investment in May, down 6.7% from a year earlier, the Ministry of Commerce said in a statement Tuesday. The figure was down from April's $8.7 billion, which was 3.4% higher from a year earlier. FDI in the January-May period rose 2.8% on year to $48.91 billion.
Japan's government late Monday, 16 June 2014, released a draft of Prime Minister Shinzo Abe's long-awaited growth strategy. This included already-flagged policies such as a plan to cut the corporate tax rate and other steps like a promise to ease regulation in agriculture and allow more foreign workers to be employed in the housekeeping and nursing sectors.
Trading in US index futures indicated that the Dow could advance 46 points at the opening bell on Tuesday, 17 June 2014. US stocks rose on Monday, 16 June 2014, as corporate deals and growth in American manufacturing overshadowed escalating tension in Iraq.
Fresh data from the factory sector showed that manufacturing remained a bright spot in the US economy at the end of the second quarter. Manufacturing activity in the New York region held steady in June after hitting an almost four-year high in May, the Federal Reserve Bank of New York said Monday.
Another data showed that industrial production in the US climbed in May. Output at factories, mines and utilities rose 0.6% after a revised 0.3% drop in April, a report from the Federal Reserve showed.
Home builders' confidence rose in June to the highest level in five months, but respondents were still a bit pessimistic, according to the National Association of Home Builders/Wells Fargo housing-market index released Monday.
A two-day meeting of the Federal Open Market Committee on US monetary policy begins today, 17 June 2014. The FOMC after a monetary policy review on 30 April 2014 reduced its monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve. The Fed also said at that time that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends.
The International Monetary Fund (IMF) cut its growth forecast for the US economy this year and said the Fed may have scope to keep interest rates at zero for longer than investors expect. The institution now sees the world's largest economy growing 2% in 2014, down from an April estimate of 2.8%. The IMF left a 2015 prediction unchanged at 3%, and said it doesn't expect the US to see full employment until the end of 2017, amid low inflation.
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