Key benchmark indices retained positive zone in afternoon trade as European stocks rose in early trade there. The barometer index, the S&P BSE Sensex, was up 97.37 points or 0.39%, up about 80 points from the day's low and off close to 50 points from the day's high. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.02%. The BSE Small-Cap index was up 1.52%. Both these indices outperformed the Sensex. The market sentiment was positive after the Reserve Bank of India (RBI) on Tuesday, 15 July 2014, announced incentives to raise long term bonds for infrastructure financing and after the latest data showed a decent growth in merchandise exports in June 2014.
Index heavyweight Reliance Industries (RIL) rose on reports that the oil ministry seeking Cabinet nod to allow RIL to retain three gas discoveries which hold an estimated 345 billion cubic feet of reserves in the eastern offshore KG-D6 block even after expiry of timelines. IT stocks edged lower.
At 13:20 IST, the S&P BSE Sensex was up 97.37 points or 0.39% to 25,326.02. The index jumped 149.34 points at the day's high of 25,377.99 in early trade, its highest level since 11 July 2014. The index rose 18.10 points at the day's low of 25,246.75 in early afternoon trade.
The CNX Nifty was up 30.05 points or 0.4% to 7,556.70. The index hit a high of 7,571.35 in intraday trade, its highest level since 11 July 2014. The index hit a low of 7,532.45 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,665 shares gained and 967 shares fell. A total of 107 shares were unchanged.
The BSE Mid-Cap index was up 92.24 points or 1.02% at 9,137.26. The BSE Small-Cap index was up 150.18 points or 1.52% at 10,006.18. Both these indices outperformed the Sensex.
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Among the 30-share Sensex pack, 17 stocks gained and rest of them declined.
ICICI Bank (up 3.26%), Axis Bank (up 2.11%) and Hindalco Industries (up 1.58%) edged higher from the Sensex pack.
IT stocks edged lower. Wipro fell 0.42%.
IT major Infosys dropped 0.26%. Infosys expects its consolidated revenue to grow 7%-9% in dollar terms in the year ending 31 March 2015 (FY 2015). The company expects its revenue to grow 5.6%-7.6% in rupee terms in FY 2015.
At a conference call held last week after the first quarter results, Infosys management said it expects margins to remain flattish in the current year, excluding the impact of the depreciation as it plans to invest in the business as growth remains top priority. Infosys' depreciation outgo was lower by sharp 36% at Rs 230 crore in Q1 June 2014 over Q4 March 2014 due to a change in depreciation policy during the quarter.
Infosys said that the deal pipeline is stable with marginal improvement. There is greater comfort in the pipeline over the last year due to the increase in the discretionary spending, the management said in conference call. The company is focusing lot more on execution.
TCS dropped 0.08%. The company announces its Q1 result tomorrow, 17 July 2014.
Tech Mahindra rose 0.17%. Tech Mahindra announced after market hours on Tuesday, 15 July 2014, that it will be establishing its new Canadian Aerospace head office in Greater Montrl. This was made possible in part due to the support provided by Montreal International. Tech Mahindra anticipates the creation of approximately 300 jobs over the next three years, mainly in the aerospace industry. The announcement was made at the 2014 Farnborough Air Show.
HCL Technologies rose 0.41%.
No major sops were announced in the Union budget 2014-15 for the IT industry. While presenting the Union Budget 2014-15 on 10 July 2014, Finance Minster Arun Jaitley said all Central Government Departments and Ministries will integrate their services with a single window IT platform - the eBiz platform -- on priority by 31 December this year. Jaitley also announced the launch of a pan India programme viz. Digital India. This would ensure broad band connectivity at village level, improved access to services through IT enabled platforms, greater transparency in government processes and increased indigenous production of IT hardware and software for exports and improved domestic availability.
The increase in tax from 10% to 20% on long term capital gains from transfer of units of mutual funds, other than equity oriented funds is negative for the Indian IT companies as they invest surplus cash in these instruments.
Index heavyweight Reliance Industries (RIL) rose 1.5% to Rs 987.25. The stock hit high of Rs 989.20 and low of Rs 975. The oil ministry is reportedly seeking Cabinet nod to allow RIL to retain three gas discoveries which hold an estimated 345 billion cubic feet of reserves in the eastern offshore KG-D6 block even after expiry of timelines. The oil ministry feels that taking away the discoveries and rebidding the finds may lead to delay in development, according to reports. There is also a possibility of RIL going for arbitration if oil ministry takes away the discoveries which may lead to further delay in production and extra cost associated with the arbitration for the government.
A bout of volatility was seen in early trade as key benchmark indices trimmed initial gains. Volatility continued as the key benchmark indices recovered from lower level after trimming intraday gains in morning trade. Key benchmark indices strengthened in mid-morning trade after the government announced trade data for June 2014. Key benchmark indices extended gains in mid-morning trade after the latest data showed a decent growth in merchandise exports in June 2014. Volatility ruled the roost as the key benchmark indices trimmed gains in early afternoon trade. Key benchmark indices retained positive zone in afternoon trade.
India's merchandise exports jumped 10.22% to $26.48 billion in June 2014 over June 2013, data released by the government today, 16 July 2014, showed. Imports rose 8.33% to $38.24 billion in June 2014 over June 2013. The trade deficit stood at $11.76 billion in June 2014, which was higher than trade deficit of $11.28 billion in June 2013.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.14, compared with its close of 60.12/13 on Tuesday, 15 July 2014.
At a summit in Brazil, the five BRICS nations -- Brazil, Russia, India, China and South Africa -- on Tuesday, 15 July 2014, announced the signing of an agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. The bank will have an initial authorized capital of $100 billion. The initial subscribed capital will be $50 billion, equally shared by the five BRICS nations. The five BRICS nations also announced the signing of the treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of $100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements, according to a statement issued on Tuesday. The agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.
European stocks edged higher today, 16 July 2014, after a report showed China's economy expanded in second quarter in line with the government's target. Key benchmark indices in France, Germany and UK rose by 0.42% to 0.67%.
Asian stocks edged higher on Wednesday, 16 July 2014, as a slide in oil prices to the lowest in over three months on Tuesday, 15 July 2014, was taken as a potential positive for global growth. Key benchmark indices in Hong Kong, Singapore, Indonesia, and South Korea rose by 0.04% to 1.11%. Key benchmark indices in China, Japan and Taiwan fell by 0.1% to 0.88%.
China today, 16 July 2014 reported second-quarter GDP growth of 7.5% compared with 7.4% in the previous three months. Other data showed retail sales gained 12.4% in June from a year earlier and industrial production jumped 9.2%. Fixed asset investment, a mainstay driver of the Chinese economy, climbed 17.3% in the first six months.
Trading in US index futures indicated that the Dow could rise 27 points at the opening bell on Wednesday, 16 July 2014. US markets saw mixed trend on Tuesday, 15 July 2014, after the US Federal Reserve raised concerns about social-media and biotech companies' valuations.
Federal Reserve Chair Janet Yellen reportedly indicated in testimony before US lawmakers on Tuesday, 15 July 2014, that stimulus is still required for the US economy. A high degree of monetary policy accommodation continues to be appropriate, Yellen said in her semi-annual address to the Senate Banking Committee.
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