Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade, with 50-unit CNX Nifty scaling fresh record high as gains in Asian stocks boosted sentiment. The barometer index, the S&P BSE Sensex was currently up 122.49 points or 0.46% at 26,482.60. The market breadth indicating the overall health of the market was positive. The market sentiment was also boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Metal and mining stocks gained. Asian stocks rose today, 22 August 2014, after reports on US housing to manufacturing showed the world's largest economy is strengthening.
Key indices have remained firm after a higher opening triggered by higher Asian stocks and gains in US stocks on Thursday, 21 August 2014.
At 11:16 IST, the S&P BSE Sensex was up 122.49 points or 0.46% at 26,482.60. The index jumped 148.16 points at the day's high of 26,508.27 in mid-morning trade, its highest level since 19 August 2014. The index gained 59.42 points at the day's low of 26,419.53 in opening trade.
The CNX Nifty was up 28.10 points or 0.44% to 7,925.45. The index hit a high of 7,929.05 in intraday trade, a lifetime high for the index. The index hit a low of 7,903.60 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,358 shares gained and 1,006 shares fell. A total of 71 shares were unchanged.
The BSE Mid-Cap index was up 43.48 points or 0.47% at 9,364.03, outperforming the Sensex. The BSE Small-Cap index was up 26.04 points or 0.25% at 10,324.54, underperforming the Sensex.
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Metal and mining stocks gained. Steel Authority of India (up 0.06%), Tata Steel (up 0.59%), JSW Steel (up 1.01%), Sesa Sterlite (up 1.48%), Hindalco Industries (up 2.22%), Jindal Steel & Power (up 1.11%), Hindustan Zinc (up 0.66%), and NMDC (up 0.31%) gained. National Aluminum Company fell 0.17%.
KNR Constructions was locked at 5% upper circuit at Rs 227.60 on BSE after the company said it has bagged orders worth Rs 68.37 crore from the Government of Karnataka. The announcement was made after market hours on Thursday, 21 August 2014.
SpiceJet rose 2.54% after the company said its board approved allotting warrants to the promoters on preferential basis. The company made the announcement after market hours on Thursday, 21 August 2014. The board of SpiceJet approved to allot upto 18.91 crore warrants, convertible into equivalent number of equity shares, in various tranches, to the promoters of the company, on preferential basis. Further, the board has decided to increase the authorised share capital of the company from existing Rs 1000 crore divided into 100 crore equity share of Rs 10 each to Rs 1500 crore divided into 150 crore equity share of Rs 10 each.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 412.77 crore on Thursday, 21 August 2014, as per provisional data from the stock exchanges.
The Reserve Bank of India (RBI) has tightened norms related to lending against shares. In a notification issued on Thursday, 21 August 2014, the RBI said that non-banking finance companies (NBFCs) with asset size of Rs 100 crore and above shall maintain loan to value (LTV) ratio of 50% with regard to lending against shares. RBI further said that lending against shares by NBFCs will be restricted to Group 1 securities as collateral for loans of value more than Rs 5 lakh. The RBI 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.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.46 compared with its close of 60.6725 on Thursday, 21 August 2014.
The Reserve Bank of India in its Annual Report for the year ended 30 June 2014 released after trading hours on Thursday, 21 August 2014, said that the acceleration in consumer price inflation (CPI) in July 2014 driven by vegetable price spike indicates that the upside risks persist to RBI's disinflationary glide path of taking CPI inflation to 8% by January 2015. However, some of the increase in food prices could be temporary and there are early indications that the price corrections are underway in select items like tomato, the RBI said. The central bank also said that the recent decline in oil prices could partly offset the pressure from food prices.
The central bank said that while the disinflationary momentum that set in since December 2013 has taken inflation to a lower trajectory, downside risks to growth and upside risks to inflation arise from the sub-normal monsoon and the geopolitical situation in the Middle East. Though the balance of risks around the medium-term inflation path, and especially the target of 6% CPI inflation by January 2016 are still to the upside, the RBI remains committed to supporting the disinflationary process, the RBI said. To secure a sustainable growth of at least 7% over the medium term, microeconomic policies that improve activity levels and productivity will be needed so that they can work in tandem with a supportive macroeconomic regime with a reasonably positive real interest rate, low inflation, moderate CAD and low fiscal deficit, the RBI said.
According to RBI, an increase in interest rates in the United States may trigger a reversal in carry trade flows to emerging market and developing economies (EMDEs) and trigger higher volatility in the foreign exchange, equity and bond markets in EMDEs.
Prime Minister Narendra Modi on Thursday, 21 August 2014, said India is urbanizing rapidly, and he sees this not as a challenge but as an opportunity for economic development. The Prime Minister was addressing a gathering in Nagpur after laying the foundation stone for Nagpur metro.
Asian stocks rose today, 22 August 2014, after reports on US housing to manufacturing showed the world's largest economy is strengthening. Key benchmark indices in Taiwan, Hong Kong, China, Singapore and South Korea were up 0.23% to 1.31%. Key benchmark indices in Japan and Indonesia were off 0.32% to 0.36%.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Friday, 22 August 2014. US stocks advanced Thursday, with the S&P 500 logging its fourth straight daily gain and closing at a record high after a flurry of encouraging economic reports.
A report in the US yesterday showed fewer Americans than forecast applied for unemployment benefits last week. Data yesterday also showed existing home sales rose last month to the most since September, while the Conference Board's gauge of the economic outlook for the next three to six months increased 0.9%. Separately, the Markit Economics preliminary index of US manufacturing in August jumped to the highest level since April 2010.
Federal Reserve Chairwoman Janet Yellen will give a speech today, 22 August 2014, at the annual Fed summit in Jackson Hole, Wyo. Yellen is reportedly expected to acknowledge during the conference that while economic data has generally been supportive, she remains concerned about slack in the labor market.
The minutes from the two-day meeting of the Federal Open Market Committee in late July released on 20 August 2014, showed some officials arguing the groundwork should be laid for raising interest rates sooner than expected. At that meeting, the Fed trimmed its monthly bond-buying program by an additional $10 billion. The US central bank has kept its benchmark rate at almost zero since December 2008.
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