After hitting fresh record high, key indices pared gains in afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 173.85 points or 0.66% at 26,593.40. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. The market breadth indicating the overall health of the market was positive. News reports said that the Reserve Bank of India may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. Metal stocks declined.
Key indices have remained firm after hitting record high in early trade.
In overseas markets, European stocks rose in early trade after comments from European Central Bank President Mario Draghi suggesting that further stimulus could be on the way for the region. Asian stocks were in green. Crude was slightly higher.
At 13:15 IST, the Sensex was up 173.85 points or 0.66% at 26,593.40. The index jumped 211.08 points at the day's high of 26,630.63 in afternoon trade, a lifetime high for the index. The index gained 70.76 points at the day's low of 26,490.31 in opening trade.
The CNX Nifty was up 42.20 points or 0.53% to 7,955.40. The index hit a high of 7,966.40 in intraday trade, a lifetime high for the index. The index hit a low of 7,927.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,545 shares gained and 1,229 shares fell. A total of 91 shares were unchanged.
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The BSE Mid-Cap index was up 39.61 points or 0.42% at 9,380.48, underperforming the Sensex. The BSE Small-Cap index was up 72.33 points or 0.7% at 10,370.85, outperforming the Sensex.
Metal stocks declined. JSW Steel (down 1.21%), Sesa Sterlite (down 1.06%), Tata Steel (down 0.91%), NMDC (down 0.2%) Hindustan Zinc (down 0.12%), edged lower.
Hindalco industries lost 1.65% at Rs 179.05. As per report, the Central Bureau of Investigation (CBI) has decided to close a coal scam case against Kumar Mangalam Birla and a former top bureaucrat that surfaced in 2012 after a government auditor's report. The CBI filed the case against Birla and former coal secretary P.C. Parakh late last year in relation to a block allocated in 2005 to Hindalco Industries, part of the $40 billion Aditya Birla Group. Kumar Mangalam Birla is the chairman of the group.
Emami (up 6.01%), Torrent Power (up 5.77%), Financial Technologies (India) (up 4.45%), TTK Prestige (up 3.84%), and CESC (up 3.52%) were top gainers from BSE's A group shares.
Bhushan Steel was locked at 5% lower circuit at Rs 118.15. It was the biggest loser from BSE's A group. Jet Airways (India) (down 3.91%), Gitanjali Gems (down 3.22%), Sobha Developers (down 3.05%), and Jindal Steel & Power (down 3.04%) were the top losers from BSE's A group shares.
Sonata Software gained 3.17% after the company during market hours today, 25 August 2014, announced acquisition of a strategic controlling stake in Rezopia Inc., the first cloud based end to end reservations, contracts, operations and distribution management systems platform for travel providers, headquartered in California, USA. The acquisition is aimed at enabling both companies to leverage mutual strengths and opportunities in serving emerging IT solution needs in the global travel industry. In a separate transaction, Sonata Software will also acquire the businesses of Xyka India which is the primary service provider to Rezopia's platform. The initial announcement of the twin acquisitions was made by Sonata Software at the fag end of market hours on Friday, 22 August 2014.
The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 302.06 crore on Friday, 22 August 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
Meanwhile, news reports said that the Reserve Bank of India (RBI) may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. On 21 August 2014, RBI announced that NBFCs can lend only against Group 1 shares. The latest RBI directive could deprive small businessmen from raising money by pledging their holdings to fund their business. Group 1 shares include a limited set of top-grade shares. As per reports, the list includes 694 stocks traded on the NSE and 817 stocks traded on the BSE.
RBI has mandated loan to value (LTV) ratio of 50% with regard to lending against shares. The RBI had also said that all NBFCs with asset size of Rs 100 crore and above shall report on-line to stock exchanges, information on the shares pledged in their favour by borrowers for availing loans.
Lower crude oil prices augur well for India as the country imports about 80% of its crude oil requirement. Brent for October settlement was up 2 cents at $102.31 a barrel. The contract decreased 34 cents to settle at $102.29 a barrel on Friday, 22 August 2014.
The stock market has shrugged off Indo-Pak tension. Indian and Pakistani troops reportedly intensified firing across the border over the weekend killing at least four, straining ties between the arch rivals who recently called off top-level diplomatic talks. Last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on 25 August 2014 because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.
In the foreign exchange market, the rupee was slightly higher against the dollar. The partially convertible rupee was hovering at 60.455 compared with its close of 60.47 on Friday, 22 August 2014.
European stocks rose in early trade today, 25 August 2014, after comments from European Central Bank President Mario Draghi suggesting that further stimulus could be on the way for the region. In Germany, the DAX index was up 1.17% while France's CAC 40 index was up 1.11%. Financial markets in the UK are closed today, 25 August 2014, for a Bank Holiday.
Speaking at the Kansas City Federal Reserve's annual symposium in United States, Draghi called on European politicians to pivot away from tight budget policies that have held back euro-zone growth and pledged additional central-bank steps if needed to spur growth. Draghi said European central bankers and politicians both have a role to play in boosting demand and reducing joblessness. It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, he said. Expectations of future inflation in Europe exhibited significant declines at all horizons in August, he said.
Asian stocks rose today, 25 August 2014, as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Key benchmark indices in Japan, Hong Kong, Taiwan, Singapore and South Korea were up 0.11% to 0.48%. Key benchmark indices in Indonesia and China were off 0.14% to 0.32%.
Trading in US index futures indicated that the Dow could gain 62 points at the opening bell on Monday, 25 August 2014.
In her speech at US Federal Reserve's annual symposium in Jackson Hole, Wyo, Yellen on Friday, 22 August 2014, said that the US economy has made considerable progress in recovering from the largest and most sustained loss of employment since the Great Depression. She said that these developments are encouraging, but at the same time it speaks about the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover. Yellen reiterated that early rate hikes are possible, but it will depend on how the economy evolves in the next few months.
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