Domestic shares rose for a third straight trading session on Tuesday. Easing global trade war worries and expectations of more stimulus measures by the government boosted sentiment. A huge dividend from the Reserve Bank of India (RBI) to the government also supported buying.
The barometer index, the S&P BSE Sensex, rose 147.15 points or 0.39% to 37,641.12, as per the provisional closing data. The Nifty 50 index rose 47.5 points or 0.43% to 11,105.35 as per the provisional closing data.
The Nifty opened above 11,100-mark and posted an intraday high in mid-morning trade. However, it faced strong resistance at 11,150 mark.
The rally was broad based. The S&P BSE Small-Cap index was up 1.63%. The S&P BSE Mid-Cap index was up 0.53%.
The market breadth was strong. On the BSE, 1666 shares rose and 867 shares fell. A total of 156 shares were unchanged.
The central board of RBI said it will transfer Rs 1,76,051 crore to the government, comprising of Rs 1,23,414 crore of surplus for the year 2018-19 and Rs 52,637 crore of excess provisions. The RBI, in consultation with the Government of India, had constituted an Bimal Jalan committee to review the extant economic capital framework of RBI. The announcement was made in the evening yesterday, 26 August 2019.
The yield on 10-year benchmark federal paper rose to 6.507% at 15:28 IST compared with 6.472% at close in the previous trading session.
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Tata Motors (up 8.82%), Britannia (up 6.01%) and Tata Steel (up 3.67%) advanced. Indiabulls Housing Finance (down 3.78%), Bharti Airtel (down 3.51%) and Grasim (down 2.04%) declined.
Among index majors, Reliance Industries (up 0.68%) and HDFC Bank (up 0.23%) gained.
Metal stocks rebounded after yesterday's poor show. Hindustan Copper (up 6.28%), Jindal Steel & Power (up 3.41%), Steel Authority of India (up 3.13%), Hindustan Zinc (up 3.12%), Vedanta (up 2.52%), National Aluminium Company (up 1.61%) and Hindalco Industries (up 1.26%) gained.
IT shares lagged the broader market trend as rupee edged higher. MindTree (down 3.64%), MphasiS (down 2.43%), Tech Mahindra (down 2.38%), Infosys (down 2.3%), TCS (down 1.62%) and Oracle Financial Services Software (down 0.11%) declined. The S&P BSE IT was down 1.48% at 15,817.17.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 71.7150, compared with its close of 72.025 during the previous trading session.
PSU banks were in demand. Oriental Bank of Commerce (up 9.01%), Allahabad Bank (up 4.14%), Bank of India (up 3.81%), Syndicate Bank (up 2.44%), Punjab National Bank (up 2.43%), Union Bank of India (up 2.28%) and State Bank of India (up 2.16%) advanced.
Bank of Baroda rose 2.21%. The Capital Raising Committee of the bank approved issuance of Basel III Compliant Additional Tier I Bonds for aggregate total issue size not exceeding Rs 1650 crore, with a base issue size of Rs. 500 crore and a Green Shoe Option to retain oversubscription up to Rs 1150 crore. The Committee also approved issuance of Basel III Compliant Tier II Capital Bonds for aggregate total issue size not exceeding Rs 500 crore, with a base issue size of Rs 250 crore and a Green Shoe Option to retain oversubscription up to Rs 250 crore. The announcement was made after market hours yesterday, 26 August 2019.
Pidilite Industries fell 0.85%. The adhesive maker has entered into a joint venture with Chetana Expotential Technologies (Chetana), a Bangalore based engineering technologies company, to establish a Joint Venture Company (JV company) in India. Chetana has invented a technology in the field of Post Compressed Aerated Concrete Wall Panels. The JV company will be responsible for deploying this innovative technology and other ancillary products in projects in India, Sri Lanka and Bangladesh. The company shall be the majority partner in this joint venture. The announcement was made after market hours yesterday, 26 August 2019
Reliance Nippon Life Asset Management gained 2.23% after Nippon Life Insurance Company acquired additional shares in the company. Nippon Life Insurance raised its stake in the company by 10.59% to 53.46%. With additional acquisition of shares, Reliance Nippon Life Asset Management has become a subsidiary of Nippon Life Insurance Company. Nippon assured that with this acquisition there won't be any change in management
Kajaria Ceramics fell 1.46%. The board of directors of ceramic tiles manufacturer approved the Scheme of Amalgamation for merger of Kajaria Tiles Private Limited (formerly known as Kajaria Floera Ceramics Private Limited), wholly-owned subsidiary of the company with the company
Overseas, European stocks were trading lower. The French President, Emmanuel Macron, on Monday, 26 August 2019, said that the United States and France has reached an agreement on the so called 3% "digital tax" levied on tech companies like Facebook, Amazon and Google. Earlier, US President Donald Trump threatened to hit the French economy by imposing a retaliatory tax on its French wine.
Asian markets closed marginally higher on signs of Sino-US trade hostilities easing. This helped to restore investor confidence after the previous session's rout.
US stocks rose on Monday, following a sharp sell-off in the prior session, after US President Donald Trump predicted a trade deal with China, cooling investor concerns after a ramp-up in rhetoric derailed markets last week.
Trump, under pressure to scale back a US-China trade war partly blamed for a global economic slowdown, claimed on August 26 that the two sides will begin serious negotiations soon.
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