Key benchmark indices hovered in the positive terrain after hitting fresh intraday high in afternoon trade as firmness in global stocks underpinned sentiment. At 13:18 IST, the barometer index, the S&P BSE Sensex was up 61.83 points or 0.22% at 27,879.96. The Nifty 50 index was currently up 21.85 points or 0.26% at 8,541.35. The Nifty hit its highest level in more than eleven months.
The Nifty gained 31.45 points or 0.36% at the day's high of 8,550.95 in afternoon trade, its highest level since 11 August 2015. The index fell 18.80 points or 0.22% at the day's low of 8,500.70 in morning trade. The Sensex gained 92.43 points or 0.33% at the day's high of 27,907.61 in afternoon trade. The barometer index fell 52.03 points or 0.19% at the day's low of 27,763.15 in morning trade.
In overseas stock markets, European stocks gained and most Asian markets rose ahead of Bank of England's interest rate decision later in the global day. In US stocks, the S&P 500 and Dow Jones Industrial Average scored meager gains yesterday, 13 July 2016 but enough to extend their run into record territory and advance for a fourth session in a row. However, the tech-heavy Nasdaq Composite index took a breather following a five-session climb to end lower. Stocks got a slight bump from the US Fed's beige book report released yesterday, 13 July 2016 which indicated that the US economy is holding steady although consumption may be softening. The beige book is an anecdotal survey of economic conditions in the US compiled by the Fed's regional banks.
The Bank of England meets later in the global day today, 14 July 2016, and expectations are that it will lower its benchmark lending rate by a quarter of a percentage point to 0.25% to counter the fallout from the Brexit vote. In the UK, Theresa May became the country's prime minister after former leader David Cameron tendered his resignation to the Queen.
Closer home, the market breadth indicating the overall health of the market was strong. On BSE, 1,510 shares rose and 961 shares declined. A total of 160 shares were unchanged. The BSE Mid-Cap index was currently up 0.24%. The BSE Small-Cap index was currently up 0.7%. Both these indices outperformed the Sensex.
Bank stocks gained. Among public sector banks, Punjab National Bank (up 5.2%), Bank of Baroda (up 2.47%), State Bank of India (SBI) (up 1.32%), Union Bank of India (up 3.96%), Canara Bank (up 5.63%), and Bank of India (up 4.06%) edged higher.
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Among private sector banks, Axis Bank (up 0.35%), ICICI Bank (up 1.05%), HDFC Bank (up 0.1%), Yes Bank (up 0.36%), and IndusInd Bank (up 1.23%) edged higher.
Kotak Mahindra Bank rose 0.9%. The stock turned ex-dividend today, 14 July 2016, for dividend of Rs 0.50 per share for the year ended 31 March 2016 (FY 2016).
The BSE Bankex had outperformed the market over the past one month till 13 July 2016, advancing 5.84% compared with 5.37% rise in the Sensex. The index had also outperformed the market in past one quarter, surging 15.09% as against Sensex's 8.54% rise.
Capital goods stocks also gained. Bharat Heavy Electricals (Bhel) (up 0.81%), BEML (up 2.62%), Crompton Greaves (up 0.78%), and Siemens (up 0.34%) gained. Thermax (down 0.18%) and Bharat Electronics (down 0.02%) declined.
L&T rose 1.15% to Rs 1,567 after the company's subsidiary L&T Infotech received strong response from investors for its initial public offer (IPO) which concluded yesterday, 13 July 2016. IT outsourcing services provider Larsen & Toubro Infotech's (L&T Infotech) IPO received bids for 14.31 crore shares compared to 1.22 crore shares on offer. The IPO was subscribed 11.69 times. The IPO opened for bidding on 11 July 2016 and closed yesterday, 13 July 2016. The price band of the IPO was fixed at Rs 705-710 per share.
The BSE Capital Goods index had outperformed the market over the past one month till 13 July 2016, advancing 5.43% compared with 5.37% rise in the Sensex. The index had also outperformed the market in past one quarter, surging 15.8% as against Sensex's 8.54% rise.
Bharat Forge fell 3.23% to Rs 722.40 on reports that a foreign brokerage has maintained its sell rating on the stock citing weak earnings outlook. The foreign brokerage has reportedly cut its earnings per share (EPS) estimates for Bharat Forge by 11% for FY 2017-18 on weak export outlook. The brokerage reportedly said that the company's exports will remain under stress and margins will decline in the current financial year due to operating leverage.
On the macro front, data released by the government today, 14 July 2016 showed that the inflation based on wholesale price index (WPI), rose to 1.62% (provisional) in June 2016 as compared to 0.79% (provisional) in May 2016 and -2.13% in June 2015. WPI for April 2016 revised higher to 0.79% from 0.34% reported earlier. Build up inflation rate in the financial year so far was 3.82% compared to a build up rate of 1.70% in the corresponding period of the previous year.
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