Key benchmark indices hovered in positive terrain in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 31.30 points or 0.15%, off close to 30 points from the day's high and up about 35 points from the day's low. The market breadth, indicating the overall health of the market was positive. PSU OMCs fell as crude oil prices rose.
The market edged higher amid initial volatility. The Sensex pared gains after hitting fresh intraday high in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit 3-week high. The Sensex hovered in positive terrain in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 292.23 crore on Tuesday, 18 February 2014, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was up 31.30 points or 0.15% to 20,665.51. The index gained 60.21 points at the day's high of 20,694.42 in morning trade, its highest level since 29 January 2014. The index fell 4.65 points at the day's low of 20,629.56 in early trade.
The CNX Nifty was up 7.80 points or 0.13% to 6,134.90. The index hit a high of 6,143.75 in intraday trade, its highest level since 29 January 2014. The index hit a low of 6,125.75 in intraday trade.
The BSE Mid-Cap index was up 26.77 points or 0.42% at 6,372.23. The BSE Small-Cap index was up 42.81 points or 0.68% at 6,373.53. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market was positive. On BSE, 1,209 shares rose and 861 shares fell. A total of 111 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks rose and rest fell. Infosys (up 1.15%), M&M (up 0.84%) and Bhel (up 0.97%) edged higher from the Sensex pack.
PSU OMCs fell as crude oil prices rose. HPCL (down 0.48%) Indian Oil Corporation (down 1.47%) and BPCL (down 0.7%) declined.
West Texas Intermediate crude surged above $102 a barrel, the highest level in four months, on speculation that inventories in Cushing, Oklahoma, decreased last week and as cold weather in the US boosted fuel demand.
Higher crude oil prices will increase under recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.
The under-recovery on High Speed Diesel (HSD) applicable for the second fortnight of February 2014, effective from 16 February 2014, rose to Rs 8.31 per litre. This was Rs 7.39 per litre during first fortnight of February 2014. PSU OMCs are currently incurring combined daily under-recovery of about Rs 456 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices. This is higher than Rs 446 crore daily under-recoveries for the first fortnight of February 2014.
PSU OMCs reported a total of Rs 100632 crore as under-recoveries during first nine months of 2013-14 (April-December 2013) on Diesel, PDS Kerosene, Domestic LPG.
In the interim budget announced on Monday, 17 February 2014, Finance Minister P. Chidambaram provided Rs 65000 crore for fuel subsidy for 2014-15. The government, this year, absorbed the rollover of Rs 45000 crore from the fourth quarter of 2012-13 and it will rollover only Rs 35000 crore from the fourth quarter of this year into the next year, Chidambaram said in the budget speech on Monday, 17 February 2014.
Bharti Airtel rose 0.88%. The company and Loop Mobile jointly announced on Tuesday, 18 February 2014, a strategic agreement for their operations in Mumbai (India) service area. The proposed association will undergo seamless integration once definitive agreements are signed, and is subject to regulatory and statutory approvals. Under the agreement, Loop Mobile's 3 million subscribers in Mumbai will join Airtel's over 4 million subscribers, creating an unmatched mobile network in Mumbai.
Ranbaxy Laboratories rose 3.37%. The New York Attorney General and the US units of Ranbaxy Laboratories and Teva Pharmaceutical Industries have reportedly settled claims that an agreement between the two drugmakers unlawfully restricted competition. Under the terms of the settlement, the two generic drug makers will end a 2010 agreement of not challenging each other's rights to sell certain drugs exclusively in the United States. Teva and Ranbaxy will pay the New York state $300,000 and have agreed to refrain from similar agreements in the future.
The Reserve Bank of India said on Tuesday, 18 February 2014, said it will conduct term repo auctions of appropriate amount and tenor during March 2014 to address liquidity tightness. In order to address the anticipated tightening in liquidity conditions on account of advance tax payments by corporates commencing mid-March 2014 and with a view to providing flexibility to the banking system in its liquidity management towards March-end 2014, the Reserve Bank of India (RBI) will conduct term repo auctions of appropriate amount and tenor during March 2014, the RBI said in a press release issued on Tuesday. The details of the term repo auctions will be announced in due course, the RBI said.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
On political front, the Lok Sabha passed a contentious proposal to split Andhra Pradesh and create the new state of Telangana on Tuesday amid chaotic scenes and uproar in parliament from opponents of the bill. The state capital Hyderabad will remain the common capital for the two states for a period of 10 years if the bill is passed in the upper house.
The decision to break up the state was made ahead of elections due by May 2014. The Bharatiya Janata Party, which is the frontrunner in the national election race, voted in favor of the bill, allowing it to pass. It still needs approval in the upper house by Friday, when parliament's final session before the election ends. The new state would account for 17 seats in parliament.
Asian stocks were mixed on Wednesday, 19 February 2014. Key benchmark indices in Japan, South Korea and Taiwan were off 0.12% to 0.62%. Key benchmark indices in Indonesia, China and Singapore were up 0.42% to 0.63%. Hong Kong's Hang Seng was flat.
Trading in US index futures indicated that the Dow could drop 14 points at the opening bell on Wednesday, 19 February 2014. US stocks settled mostly higher on Tuesday with the Nasdaq Composite recording its eighth consecutive session of gains, the longest since July 2013.
Manufacturing activity in the New York region gave up most of the strong gains made during the prior month although it remained in positive territory, according to data released Tuesday. The report fits a picture of a manufacturing sector struggling with severe winter weather. The ISM index for the US showed manufacturers suffered from the January chill last month.
A gauge of confidence among home builders plunged in February, dropping to the lowest level in nine months, led by weaker views on present sales of single-family homes, according to data released Tuesday. The housing-market index dropped to 46 this month from 56 in January 2014.
Minutes of the Federal Reserve's January meeting will be released later in the global day today, 19 February 2014. Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
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