A rally in global stocks aided fresh upmove on the domestic bourses as investors interpreted the US Federal Reserve's move to raise interest rates for the first time in nearly a decade as a sign of confidence in the strength of the world's biggest economy. The barometer index, the S&P BSE Sensex, jumped 309.41 points or 1.21% to settle at 25,803.78. The 50-unit Nifty 50 index rose 93.45 points or 1.21% to settle at 7,844.35. The Sensex and the Nifty, both, attained a 2-week closing high.
Metal and auto sector stocks and heavyweights Reliance Industries (RIL), HDFC and L&T led gains for key benchmark indices which edged higher for the fourth straight trading session. Hindustan Unilever (HUL) rose after the company announced that it has signed an agreement with Mosons Group to acquire its flagship Indulekha hair oil brand. Tata Power Company rose after the company announced the completion of uprating of an existing transmission line to enhance firm transmission capacity for Mumbai city. Bank stocks edged higher on renewed buying.
The broad market depicted strength. More than two stocks rose for each stock that fell on BSE. 1,946 shares rose and 743 shares declined. A total of 212 shares were unchanged. All the 19 sectoral indices on BSE edged higher.
In overseas stock markets, European shares surged as investors saw the US Federal Reserve's move to raise interest rates for the first time in nearly a decade as a sign of confidence in the world's biggest economy. Asian stocks edged higher after the US Federal Reserve emphasized a gradual path for future interest rate hikes after raising the benchmark rate by 25 basis points to 0.25%-to-0.50% at the conclusion of its two-day monetary policy meeting yesterday, 16 December 2015. US stocks rallied yesterday, 16 December 2015, in the aftermath of the Fed's widely expected decision to raise the benchmark interest rate by 25 basis points. Citing improvement in the US economy, the Fed policy makers voted unanimously to raise the target range of its fed-funds rate, which had been stuck at zero for seven years.
The Sensex rose 309.41 points or 1.21% to settle at 25,803.78, its highest closing level since 3 December 2015. The index jumped 336.94 points or 1.32% at the day's high of 25,831.31. The index fell 46.05 points or 0.18% at the day's low of 25,448.32.
The Nifty rose 93.45 points or 1.21% to settle at 7,844.35, its highest closing level since 3 December 2015. The index surged 102 points or 1.31% at the day's high of 7,852.90. The index fell 13.35 points or 0.17% at the day's low of 7,737.55.
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The BSE Mid-Cap index rose 1.56%. The BSE Small-Cap index rose 1.72%. Both these indices outperformed the Sensex.
All the 19 sectoral indices on BSE edged higher. The S&P BSE Basic Materials index (up 2.05%), BSE Consumer Discretionary Goods & Services index (up 1.68%), BSE Energy index (up 1.52%), BSE Finance index (up 1.36%), BSE Healthcare index (up 1.39%), BSE IT index (up 1.23%), BSE Utilities index (up 1.43%), BSE Auto index (up 1.33%), BSE Metal index (up 2.46%), BSE Power index (up 1.44%) and BSE Realty index (up 1.3%) outperformed the Sensex. The S&P BSE Industrials index (up 1.14%), BSE Bankex index (up 1.03%), BSE Capital Goods index (up 1.04%) and BSE Teck index (up 1.07%) underperformed the Sensex.
Bank stocks edged higher on renewed buying. Among PSU banks, IDBI Bank (up 6.07%), Syndicate Bank (up 2.35%), Oriental Bank of Commerce (up 2.12%), Union Bank of India (up 1.54%), Punjab National Bank (up 1.2%), Bank of India (up 1.29%), Canara Bank (up 1%) and Bank of Baroda (up 0.69%) gained. Corporation Bank (down 0.25%) edged lower.
State Bank of India (SBI) rose 1.63% at Rs 231 after the bank announced after market hours yesterday, 16 December 2015, that a meeting of its Committee of Directors is scheduled on 21 December 2015 for seeking umbrella approval of the shareholders of the bank for a period of one year for raising equity capital in the domestic or overseas markets and also for mopping up additional non-equity capital by way of bonds denominated either in dollars or rupees.
Among private sector banks, Yes Bank (up 3.19%), IndusInd Bank (up 1.79%), Kotak Mahindra Bank (up 1.41%) and HDFC Bank (up 1.2%) edged higher. Axis Bank (down 0.45%) edged lower.
ICICI Bank rose 0.42% at Rs 253.05. The stock was volatile. The stock hit a high of Rs 255.30 and a low of Rs 250.40 in intraday trade. A total of 20.24 lakh shares of the bank changed hands in two bulk deals on BSE today, 17 December 2015. A bulk deal of 5.28 lakh shares was executed on the scrip at Rs 252.60 per share at 10:04 IST. Another bulk deal of 15.06 lakh shares was executed on scrip at Rs 252 per share at 10:13 IST.
Auto stocks were in demand. Escorts (up 3.72%), Eicher Motors (up 1.75%), Ashok Leyland (up 1.48%), Maruti Suzuki India (up 1.02%) and Tata Motors (up 0.59%) edged higher.
Diesel sport utility vehicles maker Mahindra & Mahindra (M&M) edged higher in volatile trade. The stock rose 2.3% at Rs 1,246.90. The stock hit a high of Rs 1,253 and a low of Rs 1,196.30 in intraday trade. The stock had lost 5.44% yesterday, 16 December 2015, after the Supreme court imposed a ban on registration of new diesel sport utility vehicles and private cars in Delhi with an engine capacity of over 2000cc until 31 March 2016. The court ordered temporary ban on diesel sport utility vehicles and private cars in Delhi to rein in the alarming pollution levels in the capital city.
Among two-wheeler makers, TVS Motor Company (up 1.97%), Hero MotoCorp (up 1.99%) and Bajaj Auto (up 2.96%) edged higher.
Metal stocks edged higher on renewed buying. National Aluminium Company (up 4.15%), Hindalco Industries (up 3.44%), NMDC (up 4.05%), Vedanta (up 3.75%) and Hindustan Zinc (up 1.12%) gained.
Among steel makers, Steel Authority of India (up 6.53%), Jindal Steel & Power (up 2.62%), JSW Steel (up 3.55%), Tata Steel (up 4.76%) and Bhushan Steel (up 1.12%) edged higher.
Index heavyweight Reliance Industries (RIL) rose 3.1% at Rs 1,008.35. The stock hit a high of Rs 1,013.25 and a low of Rs 978 in intraday trade.
Another index heavyweight and housing finance major HDFC rose 1.63% at Rs 1,239. The stock hit a high of Rs 1,244.05 and a low of Rs 1,204 in intraday trade.
Index heavyweight and IT major Infosys rose 1.05% at Rs 1,106.95. The stock hit a high of Rs 1,110 and a low of Rs 1,088 in intraday trade.
Index heavyweight L&T rose 1.22% at Rs 1,296.85. The stock hit a high of Rs 1,299.20 and a low of Rs 1,282.45 in intraday trade.
Another index heavyweight and cigarette major ITC edged higher in volatile trade. The stock rose 0.3% at Rs 320.45. The stock hit a high of Rs 322.05 and a low of Rs 316.50 in intraday trade.
Tata Power Company (Tata Power) rose 4.03% at Rs 64.55 after the company announced the completion of uprating of an existing transmission line to enhance firm transmission capacity for Mumbai city. The uprated 220kV line MSETCL Kalwa Receiving Station and Tata Power Salsette Receiving Station will relieve critical loading of the Kalwa-Salsette lines and will enhance firm transmission capacity for bringing power from outside to Mumbai city, Tata Power said in a statement.
Separately, Tata Power announced after market hours today, 17 December 2015, that it has issued a turkey contract to Gamesa India for commissioning a 100 megawatts (MW) wind power project at Nimbagallu in Andhra Pradesh. The project is to be commissioned by May 2017. The company has also signed Gamesa for long term operations & maintenance to ensure smooth functioning of the wind farm, Tata Power said
Hindustan Unilever (HUL) rose 1.21% at Rs 864.10 after the company announced during trading hours today, 17 December 2015, that it has signed an agreement with Mosons Group to acquire its flagship Indulekha hair oil brand. The proposed acquisition is in line with HUL's strategic intent to strengthen its leadership position in the personal care segment. The deal envisages the acquisition of the trademarks 'Indulekha' and 'Vayodha', intellectual property, design and knowhow for a consideration of Rs 330 crore payable upon closing of the transaction and a deferred consideration of 10% on the domestic turnover of the brands each year, payable annually for a 5-year period commencing from the year ending 31 March 2018 (FY 2018). The transaction is subject to fulfilment of certain conditions and the parties will work together to complete this over the next few months. Mosons will continue to manage the business until the completion of the transaction.
The Indulekha brand which has a strong presence in Kerala, Tamil Nadu and Karnataka had a turnover of Rs 100 crore and EBITDA (earnings before interest, taxes, depreciation and amortization) margin of around 30% for the year ended 31 March 2015 (FY 2015). The brand was recently launched in Maharashtra.
Voltas dropped 0.82% at Rs 303.45 on reports that a foreign brokerage has downgraded the stock to underperform from buy. The stock hit a high of Rs 305.50 and a low of Rs 296.85 in intraday trade. The brokerage reportedly said that competition in AC segment is intensifying and this can lead to lower margins for the company going ahead. Voltas may lose market share in near term, the foreign brokerage reportedly said.
Majesco gained 3.9% at Rs 652 after the company announced that Maryland Auto Insurance successfully implemented Majesco P&C Suite and Majesco Bureau and Content Services for its commercial auto line of business. The announcement was made after market hours yesterday, 16 December 2015. Majesco said the implementation aims to enable Maryland Auto Insurance (MAI) to transform its business by providing enhanced customer service through real-time policy issuance.
Key indices gained for the fourth straight session. The Sensex has risen 759.35 points or 3.03% in preceding four trading sessions from its close of 25,044.43 on 11 December 2015. The Sensex has declined 341.89 points or 1.3% in this month so far (till 17 December 2015). The Sensex has fallen 1,695.64 points or 6.16% in this calendar year so far (till 17 December 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 970.24 points or 3.9%. The Sensex is off 4,220.96 points or 14.05% from a record high of 30,024.74 hit on 4 March 2015.
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