After seeing a range bound movement in mid-morning trade, key benchmark indices trimmed gains in early afternoon trade. At 12:20 IST, the barometer index, the S&P BSE Sensex, was up 145.02 points or 0.59% at 24,827.50. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was up 57.15 points or 0.76% at 7,555.90. Gains in global stocks aided the upmove on the domestic bourses. World stocks rose after the US Federal Reserve slashed its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review yesterday, 16 March 2016.
The market breadth indicating the overall health of the market was strong. On BSE, 1,444 shares rose and 779 shares fell. A total of 156 shares were unchanged. The BSE Mid-Cap index was currently up 0.93%. The BSE Small-Cap index was currently up 0.67%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian stocks edged higher after the US Federal Reserve after its monetary policy review yesterday, 16 March 2016, reduced the number of interest rate hikes expected this year. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
US stocks rose yesterday, 16 March 2016, in the aftermath of the Fed statement. The Fed concluded a two-day policy meeting by leaving interest rates untouched, as expected, and signalling fewer rate hikes in coming months as the United States continues to face risks from an uncertain global economy. In light of the current shortfall of inflation from 2 percent, the committee will carefully monitor actual and expected progress toward its inflation goal, the Fed said in a statement. The stance of monetary policy remains accommodative, thereby supporting further improvement in labor market conditions and a return to 2 percent inflation, it said.
Bharti Airtel rose after the company announced that it has entered into a definitive agreement with Videocon Telecommunications (VTL) to acquire the right to use the latter's spectrum in the 1800 MHz band for six telecom circles for an aggregate consideration of Rs 4428 crore. The stock was up 2.65%. Videocon Industries jumped 12.84%. The spectrum trading pact is for six circles viz. Bihar, Haryana, Madhya Pradesh, UP (east), UP (west) and Gujarat. The validity of VTL's spectrum in these circles is until 18 December 2032.
Shares of Idea Cellular gained 1.56%. Idea Cellular and VTL mutually agreed to terminate their earlier agreement regarding the transfer of right to use 1800 MHz spectrum in two service areas with immediate effect. It may be recalled that the Board of Directors of Idea in November 2015 had empowered the company to enter into an acquisition agreement for right to use 1800 MHz spectrum of VTL in the telecom service areas of Gujarat and UP (west) for an aggregate consideration of around Rs 3310 crore pursuant to the Department of Telecommunications (DoT) guidelines for trading of access spectrum by access service providers. There is no cost implication to Idea on termination of the agreement, the company said in a statement.
Meanwhile, Idea Cellular continues to aggressively launch its high speed mobile broadband 4G LTE services. Idea yesterday, 16 March 2016, launched its 4G LTE services in the tenth telecom service area of Maharashtra & Goa from Nagpur city. The company remains on track to launch 4G LTE services in 750 key towns across 10 telecom circles latest by end of June 2016.
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Most realty stocks rose. DLF (up 0.19%), D B Realty (up 0.69%), Sobha (up 3.1%), Unitech (up 0.38%), Godrej Properties (up 0.81%), and Housing Development & Infrastructure (HDIL) (up 0.43%) edged higher. Oberoi Realty (down 0.7%), Indiabulls Real Estate (down 0.28%), and NBCC (down 0.37%) declined.
Metal and mining stocks gained as copper prices rose in global commodity markets. Hindustan Copper (up 7.44%), Vedanta (up 2.66%), Hindalco Industries (up 1.23%), Hindustan Zinc (up 0.89%), National Aluminum Company (up 1.01%) and NMDC (up 3.87%) gained.
High Grade Copper for May 2016 delivery was currently up 1.45% at $2.2665 per pound on the COMEX.
Steel stocks rose on media reports that an arm of the finance ministry has recommended maintaining import duties on some steel products until March 2018. JSW Steel (up 1.43%), Bhushan Steel (up 2.34%), Jindal Steel & Power (up 1.36%), Tata Steel (up 1.57%), and Steel Authority of India (Sail) (up 2%) gained. It may be recalled that, last month, the government set the minimum import price (MIP) on 173 steel products to check the influx of cheap imports. In September 2015, the government imposed a provisional safeguard duty of 20% on hot-rolled flat products of non-alloy and other alloy steel, in coils of a width of 600 mm or more, for a period of 200 days.
Meanwhile, Finance Minister Arun Jaitley was today, 17 March 2016, quoted as saying that it would be difficult for the government to accept the opposition Congress party's demand to cap the goods and services tax (GST) rate in the GST constitution amendment bill stuck in parliament. The Congress wants Jaitley to cap the rate of GST at less than 20%. Considered as a major indirect tax reform in the country, GST aims to remove barriers across states and unite the country into a common market. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
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