Stocks of metal and mining firms, IT companies and index heavyweights HDFC and Reliance Industries (RIL) led the rally for key benchmark indices on the last trading session of the week. The Sensex rose 275.37 points or 1.12% to settle at 24,952.74. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty gained 91.80 points or 1.22% to settle at 7,604.35. After hovering in positive zone throughout the trading session, the two key benchmark indices surged in late trade. The Sensex and Nifty, both, attained their highest closing level in more than 10 weeks.
The upmove on the domestic bourses was a part of the upmove in Asian stocks triggered by stronger currencies relative to the US dollar on the heels of the US Federal Reserve slashing its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review on Wednesday, 16 March 2016. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
The partially convertible Indian rupee was currently hovering at 66.535 against the dollar, higher than its close of 66.75 during the previous trading session.
Bank stocks edged higher after media reports suggested that the Reserve Bank of India (RBI) has allowed commercial banks to hold bonds issued by state electricity utilities as part of the Ujwal Discom Assurance Yojana (UDAY) scheme under the held-to-maturity (HTM) category. Shares of oil exploration and production firms rose after a surge in international crude oil prices. Shares of public sector oil marketing companies fell after a surge in global crude oil prices. GAIL (India) edged higher, with the stock extending previous trading session's gains triggered by the piped and natural gas regulator raising the tariff on the company's K.G. Basin natural gas pipeline network with effect from 1 April 2016.
Lupin tumbled amid speculation that widely followed investor Rakesh Jhunjhunwala is selling some of his stake. Torrent Pharmaceuticals edged higher after the company's announcement that it has successfully obtained the Establishment Inspection Report from the United States Food and Drug Administration (USFDA) for its plant located at Dahez SEZ, in Gujarat.
The Sensex rose 275.37 points or 1.12% to settle at 24,952.74, its highest closing level since 6 January 2016. The index jumped 309.57 points or 1.25% at the day's high of 24,986.94. The barometer index rose 4.27 points or 0.01% at the day's low of 24,681.64.
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The Nifty gained 91.80 points or 1.22% to settle at 7,604.35, its highest closing level since 6 January 2016. The index rose 101.05 points or 1.34% at the day's high of 7,613.60. The index rose 5.35 points or 0.07% at the day's low of 7,517.90.
The market breadth indicating the overall health of the market was negative. On BSE, 1,310 shares fell and 1,293 shares rose. A total of 185 shares were unchanged. The BSE Mid-Cap index rose 0.66%. The BSE Small-Cap index rose 0.61%. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2740 crore, higher than turnover of Rs 2627.87 crore registered during the previous trading session.
IT stocks advanced. Tech Mahindra (up 1.4%), HCL Technologies (up 1.12%), Infosys (up 2.48%), and Wipro (up 2%) edged higher.
Shares of IT major TCS rose 3.2% to Rs 2,427 after a foreign brokerage reportedly reiterated its 'outperform' rating on the stock. According to reports, the brokerage retained its outperform rating after the TCS management demonstrated the company's capabilities and investments in the digital services business at an analyst meeting held yesterday, 17 March 2016. The foreign brokerage is convinced about the management bandwidth to steer the company at a time when technology is fast evolving, reports added.
Cement stocks extended previous session's gains. Shree Cement (up 4.85%), ACC (up 4.73%) and Ambuja Cements (up 2.15%) gained.
UltraTech Cement edged higher on media reports that a domestic brokerage has maintained its 'buy' rating on the stock. The stock rose 2.75%. The brokerage expects UltraTech Cement's revenue to grow at compounded annual growth rate of 14% for the period from FY 2016 to FY 2018. The brokerage reportedly said that UltraTech Cement stock offers the best opportunity in the cement sector in India and the stock can continue to outperform in the near term.
Grasim Industries advanced 0.48%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Pharma stocks were mixed. Strides Shasun (down 0.24%), Glenmark Pharmaceuticals (down 1.15%), Sun Pharmaceutical Industries (down 1.49%), Wockhardt (down 1.81%), and Aurobindo Pharma (down 0.72%) dropped. Dr Reddy's Laboratories (up 1.56%), Alkem Laboratories (up 1.51%), Cipla (up 0.74%), Divi's Laboratories (up 0.6%), Cadila Healthcare (up 1.32%), IPCA Laboratories (up 4.66%), GlaxoSmithKline Pharmaceuticals (down 1.54%) and Piramal Enterprises (up 2.88%) gained.
Last week, the government through a notification in the official Gazette banned 344 fixed dose combination (FDC) drugs in the country after an expert panel appointed by the government found no therapeutic justification for those drugs. Later, a number of aggrieved pharma firms took legal recourse and got interim stay on the ban from the Delhi high court. The next hearing of the case is on 21 March 2016.
Lupin slumped amid speculation that widely followed investor Rakesh Jhunjhunwala is selling some of his stake. The stock dropped 6.9% to Rs 1,558.90. The stock hit low of Rs 1,539 in intraday trade, which is also a 52-week low for the stock. The stock had lost 4.23% to settle at Rs 1,674.50 yesterday, 17 March 2016. Jhunjhunwala held 1.65% stake in Lupin as per the shareholding pattern as on 31 December 2015.
Meanwhile, a foreign brokerage has reportedly downgraded the stock to underperform from buy in the wake of observations by the United States Food and Drug Administration (USFDA) on Lupin's Goa facility. The foreign brokerage reportedly said that two out of nine observations by USFDA are critical in nature. The brokerage added that due to the USFDA observations, many pending approvals linked to the company's Goa plant may get delayed.
It may be recalled that Lupin had announced early this week that USFDA recently inspected its Goa facility and cited nine observations. Lupin said that the observations by USFDA were on aspects such as inadequacy and adherence to Standard Operating Procedures (SOPs). Lupin had said that it is in the midst of putting together a response to address the USFDA's observations.
Torrent Pharmaceuticals rose 4.4% after the company's announcement that it has successfully obtained the Establishment Inspection Report from the United States Food and Drug Administration (USFDA) for its plant located at Dahez SEZ, in Gujarat. This plant has been set up to cater mainly to the regulated international markets such as US, Brazil, Germany etc, Torrent Pharma said. The plant has an installed capacity of about 7,500 million tablets/capsules and 25 metric tonne (MT) active pharmaceutical ingredient (API) per annum, the company said. Construction of phase II will commence soon and once commissioned the total capacity will increase to about 14,000 million tablets/capsules and 80 MT API per annum, it added.
Bank stocks edged higher after media reports suggested that the Reserve Bank of India (RBI) has allowed commercial banks to hold bonds issued by state electricity utilities as part of the Ujwal Discom Assurance Yojana (UDAY) scheme under the held-to-maturity (HTM) category. Among public sector banks, Punjab National Bank (up 1.87%), Bank of Baroda (up 1.37%), State Bank of India (SBI) (up 2.63%), Canara Bank (up 1.68%), Union Bank of India (up 1.35%) and Bank of India (up 1.9%) edged higher.
Among private sector banks, HDFC Bank (up 1.06%), Axis Bank (up 1.87%), Yes Bank (up 1.86%), and IndusInd Bank (up 1.71%) edged higher.
For bonds held under the HTM category, lenders are allowed to hold the bonds until they mature without needing to mark-to-market them to daily price movements. The central bank will also provide banks greater flexibility in selling the state utility debt, according to reports. The UDAY scheme is aimed at reviving debt-laden state electricity utilities.
Kotak Mahindra Bank gained 0.88% to Rs 657.75 after a large bulk deal of 40.01 lakh shares was executed on the scrip at Rs 652.30 per share in opening bell on BSE.
ICICI Bank rose 1.23% to Rs 230.35. The stock was volatile. The stock hit high of Rs 231.10 and low of Rs 226.25 in intraday trade. The private sector bank after market hours yesterday, 17 March 2016, announced that it is evaluating issuance of long term bonds in the nature of debentures on a private placement basis for lending to long term projects in infrastructure and affordable housing on a private placement basis. The borrowing proposal will be considered in the meeting of Committee of Executive Directors at any time in next week starting from 21 March 2016, ICICI Bank said.
Index heavyweight and housing finance major HDFC gained 1,62% to Rs 1,127.65. The stock hit high of Rs 1,132.50 and low of Rs 1,104.55 in intraday trade.
Shares of oil exploration and production firms rose after a surge in international crude oil prices. ONGC (up 0.94%), Cairn India (up 1.57%), Oil India (up 2.04%) and Reliance Industries (RIL) (up 0.95%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.
Shares of public sector oil marketing companies fell after a surge in global crude oil prices. BPCL (down 0.81%), Indian Oil Corporation (down 1.72%) and HPCL (down 1.76%) edged lower. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
In the global commodities markets, Brent for May settlement was currently down 10 cents at $41.44 a barrel. The contract had jumped $1.21 a barrel or 3% to settle at $41.54 a barrel during the previous trading session on hopes for curb in output from oil producing nations and a sharp drop in the US dollar.
GAIL (India) rose 3.13% to Rs 364.15, with the stock extending previous trading session's gains triggered by the piped and natural gas regulator raising the tariff on the company's K.G. Basin natural gas pipeline network with effect from 1 April 2016. The stock had risen 4.04% to settle at Rs 353.10 yesterday, 17 March 2016. The Petroleum and Natural Gas Regulatory Board (PNGRB) has raised the tariff on the company's K.G. Basin natural gas pipeline network sharply with effect from 1 April 2016. PNGRB raised the tariff on GAIL's K.G. Basin natural gas pipeline network sharply to Rs 45.32 per mmbtu on Gross Calorific Value (GCV) basis from Rs 5.56 per mmbtu with effect from 1 April 2016.
Metal and mining stocks edged higher on renewed buying. JSW Steel (up 0.77%), Hindustan Copper (up 1.9%), Vedanta (up 6.43%), Hindalco Industries (up 5.06%), Hindustan Zinc (up 1.69%), Jindal Steel & Power (up 2.63%), Tata Steel (up 2.1%), Steel Authority of India (Sail) (up 0.12%), National Aluminum Company (up 0.13%) and NMDC (up 2.24%) gained. Bhushan Steel fell 1.62%.
Reliance Power rose 1.41% after the company said that its board of directors at a meeting held today, 18 March 2016, gave in-principle approval for issue of non-convertible debentures for an aggregate amount not exceeding Rs 1000 crore in one or more tranches. The announcement was made during market hours today, 18 March 2016.
The Sensex has risen 1,950.74 points or 8.48% in this month so far (till 18 March 2016). The Sensex has fallen 1,164.80 points or 4.45% in calendar year 2016 so far (till 18 March 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,458.13 points or 10.92%. The Sensex is off 4,141.87 points or 14.23% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 5,072 points or 16.89% from a record high of 30,024.74 hit on 4 March 2015.
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