Trading for the week started on a strong note with the barometer index, the S&P BSE and the 50-unit CNX Nifty, both, scaling record high on closing as well as on intraday basis. Indian stocks rallied today, 8 September 2014, as a steep slide in crude oil prices boosted sentiment. The market sentiment was also boosted by provisional data showing that foreign funds were net buyers of Indian stocks during the previous trading session. The Sensex rose 293.15 points or 1.08% to settle at 27,319.85. The market breadth indicating the overall health of the market was strong with over two gainers for every loser. The BSE Mid-Cap index rose 1.29%. The BSE Small-Cap index gained 2.11%. Both these indices outperformed the Sensex. State-run upstream oil & gas firms and PSU OMCs gained as crude oil prices slumped on Friday, 5 September 2014. Bank, IT and metal stocks also participated in the rally.
Earlier, key indices held on to positive terrain after opening higher.
The S&P BSE Sensex rose 293.15 points or 1.08% to settle at 27,319.85, a record closing high for the index. The index gained 328.29 points at the day's high of 27,354.99 in late trade, a lifetime high for the barometer index. The index rose 117.86 points at the day's low of 27,144.56 in early trade.
The CNX Nifty advanced 87.05 points or 1.08% to settle at 8,173.90, a record closing high for the index. The index hit a high of 8,180.20 in intraday trade, a lifetime high for the index. The index hit a low of 8,126.15 in intraday trade.
The market breadth indicating the overall health of the market was strong with over two gainers for every loser. On BSE, 2,081 shares gained and 947 shares fell. A total of 98 shares were unchanged.
The BSE Mid-Cap index rose 124.91 points or 1.29% to 9,793.67. The BSE Small-Cap index rose 224.76 points or 2.11% to 10,851.83. Both these indices outperformed the Sensex.
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FMCG stocks were in demand on renewed buying. Britannia Industries (up 0.5%), Colgate-Palmolive (India) (up 2.06%), Dabur India (up 0.42%), Godrej Consumer Products (up 5.79%), Hindustan Unilever (up 1.65%), Marico (up 3.13%), Nestle India (up 3.73%) and Tata Global Beverages (up 1.67%) gained.
Index heavyweight and cigarette major ITC rose 0.93% to Rs 353.55. The stock hit high of Rs 355 and low of Rs 351.
Metal stocks gained on renewed buying. JSW Steel (up 1.81%), Hindalco Industries (up 3.49%), Jindal Steel & Power (up 1.93%), Hindustan Zinc (up 1.77%), Bhushan Steel (up 4.96%), Tata Steel (up 0.78%), National Aluminum Company (up 2.38%) and Hindustan Copper (up 1.41%) gained. But, NMDC fell 0.41%. Steel Authority of India (Sail) was flat.
Sesa Sterlite rose 0.98%. Sesa Sterlite's board of directors approved an enabling resolution for raising the company's borrowing limit from Rs 60000 crore to Rs 80000 crore. The announcement was made after market hours on Friday, 5 September 2014.
The company's board of directors also approved a proposal to issue convertible securities of up to Rs 6000 crore and private placement of non-convertible debentures and/or other debt securities with warrants upto Rs 4000 crore. The Board has also approved creation of charge/mortgage over properties of the company for the purpose of the borrowing, Sesa Sterlite said. The company Board has also approved re-appointment of Dindayal Jalan as Whole-Time Director, designated as Chief Financial Officer, for two years till 30 September 2016.
IT stocks also gained. TCS (up 1.5%), Infosys (up 1.329%), Tech Mahindra (up 0.9%), HCL Technologies (up 0.17%) and Wipro (up 1.66%) gained.
Bharti Airtel rose 0.66% after the company said its subsidiary divested African telecoms tower assets to Eaton Towers. The company made the announcement during trading hours today, 8 September 2014.
Bharti Airtel, a leading global telecommunications services provider with operations in 20 countries across Asia and Africa [through its subsidiary company Bharti Airtel International (Netherlands) BV (Airtel)] and Eaton Towers, a leading independent telecoms tower company in Africa, announced an agreement for the divestment of over 3500 telecoms towers from Airtel to Eaton Towers.
Airtel will sell and lease back over 3500 towers to Eaton in 6 countries across its African operations under a 10-year contract. The pact expands Eaton Towers' coverage in Africa to 7 countries with over 5000 towers. The agreement follows Airtel's and Eaton Towers' strategies to drive cost efficiencies throughout the industry via the use of shared passive infrastructure.
The agreements will allow Airtel to focus on its core business and customers, enable it to deleverage through debt reduction, and will significantly reduce its on-going capital expenditure on passive infrastructure.
For Eaton Towers, the acquisition is a major step towards the scale needed to provide shared telecoms infrastructure solutions, with its customers benefiting from lower operating costs, expanded network coverage and capacity and improved quality of service.
The agreements are subject to statutory and regulatory approvals in the respective countries.
L&T rose 1.02%. L&T Hydrocarbon Engineering, a fully-owned subsidiary of L&T, secured orders worth Rs 1920 crore from domestic oil and gas majors. The announcement was made during market hours today, 8 September 2014.
An offshore contract worth Rs 1340 crore from Oil & Natural Gas Corporation (ONGC), includes engineering, procurement, construction and installation of five wellhead platforms at the Mumbai High North field. The project is scheduled for completion by March 2016.
In the onshore segment, it has secured a contract valued at about Rs 580 crore from a leading company engaged in hydrocarbon downstream processing. The contract involves engineering, procurement and construction of a dual service cryogenic storage tank facility suitable for liquid ethane and liquefied natural gas and engineering work for the balance of the facilities to be installed at the manufacturing complex.
Bank stocks rose after Moody's reportedly said today, 8 September 2014 that the changes in the rules for raising Basel III-compliant capital announced by RBI this month are "credit positive". State Bank of India (SBI) (up 1.94%), Canara Bank (up 2.08%), Union Bank of India (up 0.46%), Punjab National Bank (up 1.04%) Syndicate Bank (up 1.77%), Indian Overseas Bank (up 0.08%), Andhra Bank (up 0.76%), Oriental Bank of Commerce (up 1.49%), and Dena Bank (up 0.76%), rose. But, Bank of India fell 0.07%.
Among private sector banks, ICICI Bank (up 1.28%), IndusInd Bank (up 1.21%), Yes Bank (up 1.25%), Federal Bank (up 1.24%), HDFC Bank (up 1.8%), Kotak Mahindra Bank (up 1.04%) and Axis Bank (up 1.18%), gained.
Moody's reportedly said today, 8 September 2014 that the changes in the rules for raising Basel III-compliant capital announced by the Reserve Bank of India (RBI) this month are "credit positive" as they make it easier for banks to raise funds and attract more investors.
The RBI on 1 September cut the minimum maturity for Tier 2 capital that banks can issue to five years from 10 years. It also allowed retail investors to buy Tier 1 capital.
State-run upstream oil & gas companies gained as crude oil prices slumped on Friday, 5 September 2014.
ONGC (up 2.82%), GAIL (India) (up 0.32%) and Oil India (up 2.44%) gained.
State run upstream companies share a part of the under recoveries of PSU OMCs by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Shares of PSU OMCs also gained as crude oil prices slumped on Friday, 5 September 2014.
HPCL (up 5.26%), Indian Oil Corporation (up 3.55%) and BPCL (up 1.97%) edged higher.
Lower crude oil prices will decrease under recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the second fortnight of August 2014. The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of September 2014, effective from 1 September 2014, will go down to Rs 0.08 per litre, from Rs 1.78 per litre during second fortnight of August 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the first fortnight of September 2014 was Rs 32.67 per litre (Rs 32.98 per litre in second fortnight of August 2014) and Rs 427.82 per cylinder (Rs 447.87 per cylinder in second fortnight of August 2014) respectively. Effective from 1 September 2014, PSU OMCs are incurring combined daily under-recovery of about Rs 195 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 230 crore daily under-recoveries during second fortnight of August 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 1.39 lakh crore in 2013-14.
Mahindra & Mahindra (M&M) shed 0.83%. M&M during market hours said that that ICRA has upgraded long-term rating for Non-Convertible Debenture programme and bank facilities of the company to [ICRA]AAA (stable) (pronounced ICRA triple A).The rating indicates highest degree of safety regarding timely servicing of financial obligations, M&M said.
Cipla rose 1.04%. Cipla aftermarket hours announced the commercial collaboration with S&D Pharma in the Czech Republic and Slovakia. This collaboration will enable Cipla to focus on its core therapy areas, while S&D Pharma will be the key partner for generics, the company said.
Under the collaboration, Cipla will be driving its respiratory product portfolio in both Czech Republic and Slovakia through a Cipla owned sales force team, managed by Cipla commercial head. S&D Pharma will physically distribute all products, including respiratory products, and this portfolio will increase over the next few years, Cipla said.
In a separate announcement, Cipla said that its wholly owned subsidiary Medispray Laboratories at its board meeting held on 5 September 2014 approved the acquisition of two manufacturing undertakings. The consideration for the above two transactions are Rs 29 crore and Rs 71.93 crore respectively. The first manufacturing facility located at Goa is owned by Okasa and the second manufacturing facility located at Satara (Maharashtra) is owned by Okasa Pharma. Entities controlled by relatives of the promoters hold majority interest in the companies which own the aforesaid undertakings, Cipla said.
A significant portion of the capacities of the two undertakings are dedicated for the manufacture of Cipla's products. Acquisition of the aforesaid undertakings is expected to yield operational synergies, Cipla said.
Tyre stocks rallied on optimism the recent steep slide in rubber prices could boost profitability of tyre makers. Rubber is key raw material in tyre making.
Apollo Tyres (up 8.32%), CEAT (up 20%), Goodyear India (up 5.92%), JK Tyre & Industries (up 18.13%), MRF (up 8.92%) and TVS Srichakra (up 5%) gained.
The Sensex snapped two-day losing streak today, 8 September 2014. From a recent high of 27,139.94 on 3 September 2014, the Sensex had declined 113.24 points or 0.41% in two trading sessions to settle at 27.026.70 on 8 September 2014. The Sensex has gained 681.74 points or 2.55% in this month so far (till 8 September 2014). The Sensex has gained 6,149.17 points or 29.04% in calendar year 2014 so far (till 8 September 2014). From a 52-week low of 18,847.02 on 5 September 2013, the Sensex has risen 8,472.83 points or 44.95%.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 310.51 crore on Friday, 5 September 2014, as per provisional data from the stock exchanges.
Brent crude oil futures edged lower today, 8 September 2014. Brent for October settlement was down $1 at $99.82 a barrel. The contract fell $1.01, or 1%, at $100.82 a barrel on Friday, 5 September 2014, after downbeat US jobs data fuelled demand concerns and a ceasefire in Ukraine cooled geopolitical tensions.
Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement.
In the foreign exchange market, the rupee edged higher against the dollar on increased selling of the American unit by exporters and banks amid sustained foreign fund inflows. The partially convertible rupee was hovering at 60.2925, compared with its close of 60.4050 on Friday, 5 September 2014.
India and Australia signed a civil nuclear deal on Friday, 5 September 2014, providing a boost to India's energy sector. Prime Minister Narendra Modi and visiting Australian Prime Minister Tony Abbott signed the agreement in New Delhi on cooperation in the peaceful uses of nuclear energy. The two leaders also agreed to work towards the long-term, sustainable and reliable supply of Australian resources based on India's energy needs, including increasing sales of conventional fuels such as coal and natural gas to India.
European stocks declined today, 8 September 2014, on profit booking after recent rally. Key benchmark indices in Germany, France and UK fell 0.04% to 0.91%.
Data published today, 8 September 2014 showed that Germany's exports increased by 4.7% in July in adjusted terms, following June's 0.9% increase. Imports fell 1.8% in July, after June's robust 4.5% rise.
Asian stocks were trading mixed today, 8 September 2014. Key benchmark indices in Hong Kong and Singapore were off 0.2% each. Key benchmark indices in Japan and Indonesia rose 0.23% to 0.56%. Markets in China, South Korea and Taiwan are closed for a holiday.
According to a government report today, 8 September 2014, China's exports rose 9.4% in August from a year earlier, down from a 14.5% rise in July. Imports slid 2.4% in August from a year earlier, after a 1.6% drop in July. China's trade surplus with the rest of the world widened to a record of $49.8 billion in August, from $47.3 billion in July.
Japan's economy shrank an annualised 7.1% in April-June from the previous quarter, revised down from a preliminary 6.8% contraction due to weaker-than-expected capital spending, the Cabinet Office said today, 8 September 2014 in Tokyo.
Trading in US index futures indicated that the Dow could fall 25 points at the opening bell on Monday, 8 September 2014. US stocks rose modestly on Friday, 5 September 2014, with the S&P 500 attaining fresh record closing high as a softer-than-expected US jobs report for August 2014 triggered speculation that the Federal Reserve will maintain a cautious approach toward any interest-rate increases. The S&P 500 rose 10.06, or 0.5%, to settle at 2,007.71, its 33rd record close of the year. The Dow Jones Industrial Average gained 67.78, or 0.4%, to settle at 17,137.36, just shy of its July 16 record. The Nasdaq Composite Index added 20.61, or 0.5%, to 4,582.90.
Data released by the US Labor Department on Friday, 5 September 2014, showed that the US economy added 142,000 new jobs in August 2014, the smallest gain since December 2013 and well below expectations of increase of more than 200,000. The jobless rate declined to 6.1% in August, from 6.2% in July.
Investors expect the Fed to wind down its bond-buying program before the end of this year and raise interest rates in mid 2015 as the economy continues to improve at a steady pace. The Fed has kept its benchmark interest rate near zero since December 2008.
The European Union (EU) reportedly said on Friday, 5 September 2014 it had agreed on a tough new package of economic sanctions against Russia, despite a ceasefire between government forces and pro-Kremlin rebels in Ukraine. The sanctions tighten existing measures imposed in July, targeting more individuals with travel bans and asset freezes, as well as tightening access to capital markets for Russian oil and defence companies. The new EU sanctions will be formally approved on Monday, 8 September 2014 although the full details of the people and organisations targeted will not be released for another day.
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