The rally on the bourses gathered steam as key benchmark indices extended gains in afternoon trade, with the 50-unit CNX Nifty hitting a record high. The barometer index, the S&P BSE Sensex, hit 6-1/2-week high. The Sensex was currently up 250.48 points or 0.89% at 28,512.49. The market breadth indicating the overall health of the market was positive.
Realty stocks edged higher. Reliance Communications (RCom) gained after the company said that a committee of directors has allotted 8.66 crore shares to Telecom Infrastructure Finance Private (TIFPL), a promoter group company against warrants issued to TIFPL. Shares of companies whose fortunes are linked to orders from Indian railways edged higher. Axis Bank edged higher after the private sector bank said that the the Board of Directors of the bank reappointed Shikha Sharma as Managing Director and CEO of the Bank for a further period of three years.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 433.72 crore yesterday, 19 January 2015, as per provisional data.
In the foreign exchange market, the rupee edged lower against the dollar.
Brent crude futures edged lower after the International Monetary Fund lowered its global economic growth outlook and China's growth expanded at its slowest pace in decades. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports.
The Indian government has used the steep fall in global crude oil prices to raise excise duty on petrol and diesel four times since November last year which will help increase the government's indirect tax revenue mobilization.
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In overseas markets, Asian stocks rose after the latest data showed China's GDP grew 7.3% in Q4 December 2014, a tad higher than market expectations.
At 13:17 IST, the S&P BSE Sensex was up 250.48 points or 0.89% at 28,512.49. The index jumped 272.71 points at the day's high of 28,534.72 in afternoon trade, its highest level since 5 December 2014. The index rose 62.84 points at the day's low of 28,324.85 in opening trade.
The CNX Nifty was up 72.65 points or 0.85% at 8,623.35. The index hit a high of 8,629.85 in intraday trade, a lifetime high for the index. The index hit a low of 8,574.50 in intraday trade.
The BSE Mid-Cap index was up 62.06 points or 0.58% at 10,743.08. The BSE Small-Cap index was up 75.17 points or 0.66% at 11,475.03. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,532 shares advanced and 1,207 shares declined. A total of 127 shares were unchanged.
Axis Bank rose 3.18%. The bank said during market hours that the board of directors of the bank at its meeting held on 16 January 2015 has reappointed Shikha Sharma as Managing Director and CEO of the bank for a further period of three years with effect from 1 June 2015 i.e. for the period 1 June 2015 to 31 May 2018. The re-appointment is subject to approval of the Reserve Bank of India and the shareholders of the bank.
Realty stocks edged higher. Sobha (up 1.83%), DLF (up 0.59%), Godrej Properties (up 0.63%), Indiabulls Real Estate (up 1.81%), Anant Raj (up 0.64%), Omaxe (up 0.31%), Oberoi Realty (up 2.25%) and Prestige Estates (up 0.85%), edged higher. Unitech (down 0.59%) and Housing Development & Infrastructure (HDIL) (down 1.13%) declined.
Reliance Communications (RCom) gained 1.82% to Rs 81.10. The company said during market hours that a committee of directors at their meeting held on 20 January 2015 has allotted 8.66 crore shares to Telecom Infrastructure Finance Private (TIFPL), a promoter group company on conversion of warrants issued to TIFPL into equity shares. As a result of issue of shares against warrants, the promoter group's holding in RCom has gone up to 59.7% from existing 58.25%.
Shares of companies whose fortunes are linked to orders from Indian railways edged higher. Hind Rectifiers (up 1.27%), NELCO (up 2.26%), Kalindee Rail Nirman (up 0.46%), Titagarh Wagons (up 0.48%), Stone India (up 4.92%), Texmaco Rail & Engineering (up 0.37%), and Zicom Electronic Security Systems (up 4.13%) gained. Kernex Microsystems (down 2.4%), and BEML (down 1.26%) declined.
Minister of Railways Suresh Prabhu yesterday, 19 January 2015, said that Indian Railways needs investment from all possible sources for speedy development of the railway infrastructure. Towards this, Indian Railways is exploring to draw investments from new sources such as foreign pension funds and other institutions, Prabhu said at a Seminar on "PPP and FDI in Indian Railways" organized by the Centre for Transportation Research and Management (CTRAM) in Secunderabad. In his speech at the seminar, D.P. Pande, Member/Traffic, Railway Board and President, CTRAM, stated that Indian Railways is at the crossroads, unable to meet the present demands due to resource crunch. He said that a staggering amount of Rs 1.18 lakh crore is needed for the completion of 359 major sanctioned railway projects. The need of the hour is for a fresh outlook and innovative thinking to generate required resources, he added.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.815, compared with its close of 61.705 during the previous trading session.
Brent crude futures edged lower after the International Monetary Fund lowered its global economic growth outlook and China's growth expanded at its slowest pace in decades. Brent for March settlement was off 24 cents cent at $48.60 a barrel. The contract declined $1.33 a barrel or 2.65% to settle at $48.84 a barrel in the previous trading session.
The International Monetary Fund (IMF) yesterday, 19 January 2015, downgraded global growth outlook for this year and the next as it downgraded its outlook for more than a dozen of the world's largest economies. The IMF said global growth would be 0.3 percentage point lower this year and next than it had previously expected. It now expects the world economy to expand 3.5% this year and 3.7% in 2016. Sliding oil prices will give global growth a brief jolt, but the benefits won't be strong enough to keep the world economy out of a deepening long-term rut, the IMF said.
Asian markets rose today, 20 January 2015, after China reported its economy had not slowed as far as many had feared, a rare glint of brightness amid gloom over the global outlook. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.75% to 2.07%. Indonesia's Jakarta Composite was off 0.09%.
China's National Bureau of Statistics said the economy grew 7.4% last year and 7.3% in the October-December 2014 quarter. Beijing had targeted 7.5% growth for last year.
Trading in US index futures indicated that the Dow could advance 50 points at the opening bell today, 20 January 2015. The US stock market was closed yesterday, 19 January 2015, for Martin Luther King, Jr. Day holiday.
In Europe, the governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review on Thursday, 22 January 2015. The ECB may introduce a large-scale bond-buying program on 22 January 2015.
Meanwhile, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country on 25 January 2015. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
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