Refinery and pharma stocks led rally for key benchmark indices, with the barometer index, the S&P BSE Sensex, regaining the psychological 27,000 level. The Sensex and the 50-unit CNX Nifty registered gains of more than 1% each as the US Federal Reserve said after the conclusion of a two-day monetary policy meeting yesterday, 17 June 2015, that its monetary-policy tightening would be gradual, easing concerns of a possible sudden outflows from emerging markets. The Sensex and the Nifty, both, hit their highest closing level in more than two weeks. The market breadth indicating the overall health of the market was strong. The Sensex gained 283.17 points or 1.06% to settle at 27,115.83. The BSE Small-Cap index rose 1.07%, outperforming the Sensex.
Index heavyweight Reliance Industries (RIL) surged on reports that a foreign brokerage had retained its buy rating on the stock on expectations of strong Q1 June 2015 earnings on the back of strong gross refining margins. Telecom stocks also edged higher. Bharti Airtel edged higher in volatile trade after the company after trading hours yesterday, 17 June 2015, announced that the agreements for sale of tower assets in Tanzania and Tchad between the respective subsidiaries of Bharti Airtel and Helios Towers Africa have lapsed and therefore stands terminated.
PSU bank stocks were mixed. Shares of private banks rose. Pharma shares edged higher on renewed buying. Shares of housing finance firms rose after the Union Cabinet yesterday, 17 June 2015, approved an interest subsidy for promoting affordable housing for the poor in urban areas. Auto stocks edged higher.
Concerns of a possible sudden outflows from emerging market assets receded after the US Federal Reserve said after the conclusion of a two-day monetary policy meeting yesterday, 17 June 2015, that its monetary-policy tightening would be gradual. There have been concerns that higher US interest rates will reduce the attraction of riskier emerging-markets assets. Higher interest rates in the United States will boost returns on US debt and bank deposits, drawing money back from riskier markets.
The US Federal Reserve left key interest rates unchanged near zero after the conclusion of a two-day monetary policy review yesterday, 17 June 2015, and signaled that there will be a gradual pace of interest rate increases starting with a first rate hike in the current calendar year. Meanwhile, Fed policy makers lowered their longer-term projections for US rates.
Key indices edged higher for the fifth trading session in a row today, 18 June 2015.
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In overseas stock markets, European shares fell as hopes of a deal between Greece and its creditors at a summit later in the global day today, 18 June 2015, receded, further straining investor nerves after weeks of fruitless negotiations. Stocks in mainland China led decline in Asian stocks. US stocks eked out small gains yesterday, 17 June 2015, after the Federal Reserve left key interest rates unchanged and as Fed Chairwoman Janet Yellen reiterated policy makers' commitment to watch economic data.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 835.27 crore into the secondary equity market yesterday, 17 June 2015, as per data from National Securities Depository. Domestic institutional investors (DIIs) bought shares worth a net Rs 1447.07 crore yesterday, 17 June 2015, as per provisional data released by the stock exchanges.
The S&P BSE Sensex rose 283.17 points or 1.06% to settle at 27,115.83, its highest closing level since 2 June 2015. The index jumped 342.73 points at the day's high of 27,175.39 in mid-afternoon trade. The index rose 77.60 points at the day's low of 26,910.26 in early trade.
The Nifty rose 83.05 points or 1.03% to settle at 8,174.60, its highest closing level since 2 June 2015. The index hit a high of 8,186.90 in intraday trade. The index hit a low of 8,101.80 in intraday trade.
The BSE Mid-Cap index rose 82.65 points or 0.8% to settle at 10,427.16, underperforming the Sensex. The BSE Small-Cap index rose 115.15 points or 1.07% to settle at 10,911.70, outperforming the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,640 shares rose and 1,088 shares fell. A total of 118 shares were unchanged.
The total turnover on BSE amounted to Rs 2992 crore, lower than turnover of Rs 3119.62 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Oil & Gas index (up 2.63%), the S&P BSE Consumer Durables index (up 2.12%), the S&P BSE Healthcare index (up 1.34%) and the S&P BSE Auto index (up 1.17%) outperformed the Sensex. The S&P BSE Realty index (down 0.21%), the S&P BSE Metal index (down 0.19%), the S&P BSE FMCG index (up 0.21%), the S&P BSE Teck index (up 0.45%), the S&P BSE IT index (up 0.54%), the S&P BSE Power index (up 0.56%), the S&P BSE Bankex (up 0.84%) and the S&P BSE Capital Goods index (up 0.87%) underperformed the Sensex.
Index heavyweight Reliance Industries (RIL) surged on reports that a foreign brokerage has retained its buy rating on the stock on expectations of strong Q1 June 2015 earnings on the back of strong gross refining margins. The stock surged 5.31% to Rs 980.50. The stock hit a high of Rs 982 and low of Rs 933.
PSU OMCs edged higher on renewed buying. HPCL (up 2.89%), BPCL (up 2.82%) and Indian Oil Corporation (IOCL) (up 6.31%) edged higher.
Auto stocks also edged higher. Mahindra & Mahindra (M&M) (up 0.98%), Ashok Leyland (up 4.49%), Maruti Suzuki India (up 1.82%), Bajaj Auto (up 0.73%) and TVS Motor Company (up 0.15%) gained. Hero MotoCorp ended unchanged at Rs 2,525.
Tata Motors rose 2.55% on reports that a foreign brokerage has maintained a buy rating on the stock citing volume growth in Jaguar Land Rover to be key catalyst for the stock. The foreign brokerage reportedly said that the current stock price of Tata Motors builds in a very pessimistic scenario of a sharp volume slowdown of Jaguar Land Rover (JLR) and pricing erosion in China. JLR has consistently grown ahead of its German peers in China and its China market share has climbed from 4.6% in 2010 to 8.5% in 2014, the brokerage said.
Eicher Motors was up 1.1%. Eicher Polaris Pvt. Ltd., a 50:50 joint venture between Eicher Motors and Polaris Industries Inc., today, 18 June 2015, announced the launch India's first personal utility vehicle under the name Multix, thereby creating a new category in the automotive segment. The announcement was made during market hours today, 18 June 2015.
Multix is specially designed for independent businessmen, having an estimated population of 5.8 crores in India. Purpose-built, specially designed and powered by a reliable diesel engine, Multix will be available in two variants and four colors, starting at a price of Rs 2.32 lakh (ex-showroom Jaipur).
Eicher Polaris has made an investment of Rs 350 crore towards product development and setting up a worldclass manufacturing facility with state-of-the-art technology at Jaipur, Rajasthan. The plant has an annual capacity of 60,000 units which can be scaled up to 1.2 lakh units. The facility is also equipped with robotic weld lines and in-house paint system.
Pharma shares edged higher on renewed buying. Lupin (up 4.02%), Sun Pharmaceutical Industries (up 1.93%), Dr Reddy's Laboratories (up 1.49%), Glenmark Pharmaceuticals (up 1.95%), Aurobindo Pharma (up 0.68%) and Wockhardt (up 1.43%) gained. Cipla (down 0.81%), Cadila Healthcare (down 0.25%) and GlaxoSmithKline Pharmaceuticals (down 0.41%) fell.
Orchid Chemicals & Pharmaceuticals jumped 14.59%. Orchid Chemicals & Pharmaceuticals after market hours yesterday, 17 June 2015, said that the company has received approval from the US Food and Drug Administration (USFDA) for the Abbreviated New Drug Application (ANDA) for Gemifloxacin Mesylate Tablets (320 mg) with 180 days of generic drug exclusivity.
Telecom stocks edged higher on renewed buying. Idea Cellular (up 1.82%), Tata Teleservices (Maharashtra) (up 4.13%) and Reliance Communications (up 0.09%) rose. MTNL fell 0.65%.
Bharti Airtel edged higher in volatile trade after the company after trading hours yesterday, 17 June 2015, said that the agreements for sale of tower assets in Tanzania and Tchad between the respective subsidiaries of Bharti Airtel and Helios Towers Africa have lapsed and therefore stands terminated. The stock rose 1.21% at Rs 426.20. The stock hit a high of Rs 433.20 and low of Rs 414.10. It may be recalled that Bharti Airtel had on 9 July 2014 signed a deal with Helios Towers Africa for sale of 3,100 towers in four countries across its African operations.
Shares of PSU banks were mixed. UCO Bank (up 0.89%), Corporation Bank (up 0.98%), State Bank of India (SBI) (up 1.2%), and Bank of India (up 0.72%) edged higher. Bank of Baroda (down 0.82%), United Bank of India (down 1.26%) and Canara Bank (down 0.05%), declined.
Shares of Allahabad Bank declined 1.37% as the stock turned ex-dividend today, 18 June 2015 for dividend of Rs 1.63 per share for the year ended 31 March 2015.
Shares of Union Bank of India dropped 3.71% as the stock turned ex-dividend today, 18 June 2015 for dividend of Rs 6 per share for the year ended 31 March 2015.
Shares of Syndicate Bank dropped 5.82% as the stock turned ex-dividend today, 18 June 2015 for dividend of Rs 4.70 per share for the year ended 31 March 2015.
Punjab National Bank (PNB) shed 0.72%. With respect to news titled "PNB seeks to sell Electrotherm, Bharati Shipyard loans to ARCs", the state-run bank clarified during market hours today, 18 June 2015, that acceptance of deposits, disbursement of loans, settlement of non-performing assets (NPA) accounts under compromise or by sale under SARFAESI or through asset reconstruction companies (ARCs) etc irrespective of the value, are part of normal banking activities. The subject matter does not fall under clause 36 of the listing agreement to be reported to the stock exchanges, PNB said.
Shares of private sector banks gained. Axis Bank (up 0.24%) and IndusInd Bank (up 1.54%) edged higher.
HDFC Bank gained 1.23%. The bank has reportedly cut its base rate by 15 basis points to 9.7% with effect from 15 June 2015.
Shares of Kotak Mahindra Bank rose 0.4%. The stock turned ex-dividend today, 18 June 2015 for dividend of Rs 0.90 per share for the year ended 31 March 2015.
ICICI Bank rose 0.65%. A foreign brokerage has reportedly maintained its 'buy' call on ICICI Bank. It expects the bank to post strong growth in retail profits and expects profits to grow at compounded annual growth rate of 17% over FY 2015 to FY 2018.
Yes Bank rose 0.77%. The bank has cut its base rate by 25 basis points from 10.75% per annum to 10.5% per annum effective from 22 June 2015. The bank made the announcement during market hours today, 18 June 2015. The reduction is a consequence of the recent term deposit rate cuts of upto 25 basis points carried out by the bank across various tenors which were made effective from 17 June 2015.
Meanwhile, the bank announced after market hours yesterday, 17 June 2015, that the Bombay High Court yesterday, 17 June 2015, upheld the rights of Madhu Kapur as a successor of her husband and an initial promoter of Yes Bank, Ashok Kapur. The court said that Madhu Kapur, along with the promoter Rana Kapoor, has the right to jointly nominate the appointment of three directors on the bank's board and none of them can unilaterally exercise the right.
However, it turned down Madhu Kapur's request for appointing her daughter Shagun Kapur Gogia on the board of Yes Bank. The court further observed that the bank had not complied with the procedures in the appointment of Diwan Arun Nanda and Ajay Vohra to the board last year. Yes Bank said in a release that it will decide on further legal action based on the advice of its solicitors.
Madhu Kapur and her daughter had petitioned the Bombay High Court in 2013 about their lack of say in the appointment of directors and wanted the court to uphold their right to jointly nominate directors.
Shares of housing finance firms rose after the Union Cabinet yesterday, 17 June 2015, approved an interest subsidy for promoting affordable housing for the poor in urban areas. LIC Housing Finance (up 3.14%), Dewan Housing Finance Corporation (up 2.96%), GIC Housing Finance (up 4.28%), Indiabulls Housing Finance (up 2.51%) and Housing Development Finance Corporation (HDFC) (up 0.85%) edged higher.
Under the National Mission for Urban Housing initiative, the Cabinet approved promotion of affordable housing for weaker section through credit linked subsidy. The Cabinet also approved subsidy for beneficiary-led individual house construction or enhancement. Credit linked subsidy component of the scheme would be implemented across the country in all statutory towns from the very beginning.
Under the credit linked interest subsidy component, interest subsidy of 6.5% on housing loans availed upto a tenure of 15 years will be provided to economically weaker section (EWS) and low income group (LIG) categories, wherein the subsidy pay-out on NPV basis would be about Rs 2.3 lakh per house for both the categories. Central assistance at the rate of Rs 1.5 lakh per house for EWS category will be provided under the Affordable Housing in Partnership and Beneficiary-led individual house construction or enhancement. State governments or their para statals like housing boards can take up project of affordable housing to avail the central government grant.
Key benchmark indices edged higher for the fifth straight trading session today, 18 June 2015. The Sensex has risen 744.85 points or 2.82% in the preceding five trading sessions from a recent low of 26,370.98 on 11 June 2015. The Sensex has lost 712.61 points or 2.56% in this month so far (till 18 June 2015). The Sensex has lost 383.59 points or 1.39% in this calendar year so far (till 18 June 2015). From a 52-week low of 24,878.66 on 23 June 2014, the Sensex has risen 2,237.17 points or 8.99%. The Sensex is off 2,908.91 points or 9.68% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, finance Minister Arun Jaitley yesterday, 17 June 2015, approved the formation of two separate committees for facilitating implementation of a nationwide Goods and Services Tax (GST) from 1 April 2016. The finance ministry said in a statement issued after trading hours yesterday, 17 June 2015, that progress is underway to finalise various aspects of GST design like business processes, payment systems, matters relating to dual control, threshold, exemptions, place of supply rules and also making of model GST, SGST and IGST laws and rules. A Steering Committee been formed under the co-chairmanship of Additional Secretary, Department of Revenue and Member Secretary, Empowered Committee of State Finance Ministers. This committee will monitor the progress of IT preparedness of Goods and Services Tax Network (GSTN)/CBEC/tax authorities, finalisation of reports of all the Sub-Committees constituted on different aspects relating to the mechanics of GST and drafting of CGST, IGST and SGST laws/rules. The committee will also monitor the progress on consultations with various stakeholders like trade and industry and training of officers.
Another committee has been formed under the chairmanship of the Chief Economic Advisor, Ministry of Finance to recommend possible tax rates under GST that would be consistent with the present level of revenue collection of the Central Government and the state governments. While making recommendations, this committee would take into account expected levels of growth of economy, different levels of compliance and broadening of tax base under GST, the finance ministry said in a statement. This committee would also analyse the sector-wise and state-wise impact of GST on the economy. The committee is expected to give its report within two months.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update issued yesterday, 17 June 2015, that the Southwest Monsoon was active over Marathwada, Vidarbha and Telangana during past 24 hours ending at 0830 hrs. Conditions are favourable for further advance of southwest monsoon into some more parts of Chhattisgarh, Odisha and West Bengal, remaining parts of Coastal Andhra Pradesh and Bay of Bengal during next 2-3 days, the IMD said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 12% above the Long Period Average (LPA) until 16 June 2015. Region wise, the southwest monsoon was 19% above the LPA in East & Northeast India, 17% above the LPA in Central India, 1% above the LPA in South Peninsula and 5% below the LPA in Northwest India until 16 June 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas stock markets, European shares fell today, 18 June 2015, as hopes of a deal between Greece and its creditors at a summit later in the global day today, 18 June 2015, receded, further straining investor nerves after weeks of fruitless negotiations. Key benchmark indices in UK, France and Germany were off 0.02% to 0.59%.
The Eurogroup of eurozone finance ministers meets in Luxembourg today, 18 June 2015, with Greece high on the agenda. Greece is still struggling to reach a reform agreement with its lenders, which would unlock the next portion of bailout money needed to repay 1.6 billion euros ($1.82 billion) to the International Monetary Fund by the end of June.
Meanwhile, while addressing the German parliament, German Chancellor Angela Merkel today, 18 June 2015, said that a Greek deal is still possible.
In UK, the latest data showed that sales by British retailers grew at a slower pace in May 2015, as colder weather dampened clothing sales. UK retail sales volumes rose 0.2% on the month, the Office for National Statistics said, a 4.6% increase compared with May 2014.
Stocks in mainland China led decline in Asian stocks today, 18 June 2015. Chinese stocks skidded as high flying startup stocks suffered one of their worst days on record and investors turn increasingly wary of what they see as a bubble in the country's equities. The Shanghai Composite index plunged 3.67%. In Hong Kong, the Hang Seng index lost 0.22%.
China attracted $9.33 billion worth of foreign direct investment in May, up 7.8% from a year earlier, the Ministry of Commerce said today, 18 June 2015. The figure was down from April's $9.61 billion, which was 10.5% higher from a year earlier.
In other Asian markets, key benchmark indices in Indonesia, Japan and Singapore were off 0.01% to 1.13%. Key benchmark indices in Taiwan and South Korea rose 0.31% to 0.34%.
US stocks eked out small gains yesterday, 17 June 2015, after the Federal Reserve left key interest rates unchanged and as Fed Chairwoman Janet Yellen reiterated policy makers' commitment to watch economic data. In a press conference following the conclusion of the Federal Reserve's two-day policy meeting yesterday, 17 June 2015, Fed Chairwoman Janet Yellen said she wanted "more decisive evidence" that labour markets were healing, and that wages would increase beyond their current "subdued pace."
The US economy is growing moderately after a winter swoon and likely strong enough to support an interest rate increase by the end of the year, but concerns remain over the recovery of the labour market, US Federal Reserve officials said. With the economy still on track to grow as much as 2% for the year, the central bank's latest policy statement keeps it on track for at least one and perhaps a second rate increase later this year.
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