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RIL inches up amid initial volatility

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Last Updated : Mar 22 2014 | 11:56 PM IST

Key benchmark indices edged lower amid initial volatility. The barometer index, the S&P BSE Sensex, was down 3.78 points or 0.02%, off close to 15 points from the day's high and up about 25 points from the day's low. The market breadth, indicating the overall health of the market, was strong. The stock exchanges are conducting a special live trading session today, 22 March 2014, as the National Stock Exchange (NSE) is testing its software. Trading started at 11:15 IST and will end at 12:45 IST.

Reliance Industries (RIL) edged higher amid initial volatility after the company on Friday, 21 March 2014, dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates. Oil India fell after the company's board announced second interim dividend of Rs 10 per share for the year ending March 2014.

Foreign institutional investors (FIIs) bought shares worth a net Rs 4222.10 crore on Friday, 21 March 2014, as per provisional data from the stock exchanges.

At 11:25 IST, the S&P BSE Sensex was down 3.78 points or 0.02% to 21,749.97. The index rose 9.63 points at the day's high of 21,762.38 in early trade. The index fell 28.23 points at the day's low of 21,725.52 in early trade.

The CNX Nifty was up 0.35 points or 0.01% to 6,493.55. The index hit a high of 6,502.65 in intraday trade. The index hit a low of 6,481.35 in intraday trade.

The BSE Mid-Cap index was up rose 22.86 points or 0.34% at 6,792.80. The BSE Small-Cap index was up 26.45 points or 0.39% at 6,811.56. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 657 shares rose and 393 shares fell. A total of 39 shares were unchanged.

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Reliance Industries (RIL) edged higher amid initial volatility after the company on Friday, 21 March 2014, dubbed as a "canard" allegations that the near-doubling of natural gas prices will lead to a similar hike in domestic cooking gas (LPG) and inflation in food item rates. The stock was 0.14% at Rs 887. The scrip hit high of Rs 889 and low of Rs 884 so far during the day. RIL after market hours on Friday, 21 March 2014, said that a fear psychosis is being created in the minds of the masses that come April 1, inflation will start raging in the country as gas prices shall be increased by the government. The most common allegation is that the LPG price will double once gas prices are increased. Nothing can be far from truth, RIL said. LPG can neither be made nor is being made from KG-D6 gas, RIL said. Gas from these fields contains 99.9% pure methane (natural gas) and does not have any Propane and Butane which are used to make LPG. Therefore there cannot be any correlation between LPG prices and increase in natural gas prices, RIL said.

This can be further corroborated from the fact that for the last five years natural gas price have been constant but the price of LPG cylinder has increased from about Rs 280 to about Rs 450 for 14.2 kg cylinder. Obviously, the sole purpose of perpetuating these lies is to scare the consumers, RIL said. Most of the LPG is produced in refinery from crude oil. It has no correlation with natural gas prices, RIL said. The second lie that is being perpetuated is that with a hike in gas prices from April 1, the cost of food grains are set to increase. "However, the fact is that trucks, tempos and tractors that use diesel and not gas, so how will increase n gas price impact these costs?," RIL questioned.

Oil India fell 0.81%. The company said after market hours on Friday, 21 March 2014, that the board of directors of the company at its meeting held on 21 March 2014, inter alia, has declared second interim dividend of Rs 10 per share (i.e. 100%) for the year ending March 2014. Dividend is payable on and from 28 March 2014. Payment will be completed on and before 19 April 2014.

The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 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.

The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

HSBC Holdings Plc and Markit Economics' gauge of Chinese manufacturing will be released on Monday, 24 March 2014.

US stocks dropped on Friday, 21 March 2014, pressured by a selloff in the health-care sector, but major equity indexes still posted solid weekly gains.

President Vladimir Putin signed laws completing Russia's annexation of Crimea on Friday as investors took fright at a US decision to slap sanctions on his inner circle of money men and security officials. Putin promised to protect a bank partly owned by an old ally, which Washington has blacklisted and Russia would respond in kind to the latest financial and visa curbs after producing one blacklist of its own. Obama's national security adviser said the world was reassessing its relationship with Russia and Washington was sceptical of Russian assurances that troop movements on the Ukraine border were no more than military exercises.

European Union leaders - who like Obama insist Crimea is still part of Ukraine - imposed their own sanctions on 12 people, including Russian deputy prime minister Dmitry Rogozin and two aides to Putin. Canada sanctioned 14 people.

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First Published: Mar 22 2014 | 11:33 AM IST

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