Further gains took key indices to fresh record high in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, scaled record high. The Sensex was currently up 192.54 points or 0.73% at 26,612.09. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. The market breadth indicating the overall health of the market was positive. News reports said that the Reserve Bank of India may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. IT stocks gained. Among pharma stocks, Cipla and Lupin scaled record high.
Key indices have remained firm after hitting record high in early trade.
Brent crude futures fell for the second day in a row amid speculation that Middle East crude supplies will remain safe amid turmoil across the region. Asian stocks rose as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. US index futures were in green.
At 12:16 IST, the S&P BSE Sensex was up 192.54 points or 0.73% at 26,612.09. The index jumped 203.86 points at the day's high of 26,623.41 in early afternoon trade, a lifetime high for the index. The index gained 70.76 points at the day's low of 26,490.31 in opening trade.
The CNX Nifty was up 47.15 points or 0.6% to 7,960.35. The index hit a high of 7,963.30 in intraday trade, a lifetime high for the index. The index hit a low of 7,927.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1518 shares gained and 1,085 shares fell. A total of 78 shares were unchanged.
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The BSE Mid-Cap index was up 36.09 points or 0.39% at 9,376.96. The BSE Small-Cap index was up 66.94 points or 0.65% at 10,365.46. Both these indices underperformed the Sensex.
Lupin rose 0.49% to Rs 1,257.15 after hitting record high of Rs 1,266.50 in intraday trade.
Cipla gained 0.88% to Rs 502.50 after hitting record high of Rs 505 in intraday trade.
IT stocks gained. TCS (up 2.17%), Wipro (up 0.22%), Infosys (up 0.35%), Tech Mahindra (up 0.25%) and HCL Technologies (up 0.54%) gained.
GAIL (India) dropped in volatile trade. The stock off 0.67% at Rs 429.60. The stock hit high of Rs 433.30 and low of Rs 425.15 so far during the day. The company today, 25 August 2014, said that the work is all set to commence on its 2,050 kilometer (km) Jagdishpur - Phulpur - Haldia natural gas pipeline which will serve as the 'Energy Highway' to carry the efficient and environment-friendly fuel to West Bengal, Bihar, Jharkhand and Uttar Pradesh. The pipeline project, which will connect Eastern India with the national gas grid, was announced by the Prime Minister at a public function in Ranchi. The pipeline will benefit millions of people in the four states and lead to setting up of City Gas Networks in 17 major cities of the region. The residents of these cities can enjoy the convenience of piped natural gas (PNG) that directly reaches households and the economical compressed natural gas (CNG) for vehicles, GAIL (India) said.
Besides city gas distribution, the pipeline will supply feedstock/fuel to fertilizer and power plants and major industries located in the region. The estimated investment for the Jagdishpur - Phulpur - Haldia pipeline project is about Rs 10000 crore. The first phase of the pipeline will have a capacity of 16 million metric standard cubic meter per day (MMSCMD) which would be augmented to 32 MMSCMD in the second phase.
GAIL (India) has already started activities related to detailed survey of the pipeline route.
The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 302.06 crore on Friday, 22 August 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent crude futures fell for the second day in a row amid speculation that Middle East crude supplies will remain safe amid turmoil across the region. Brent for October settlement was off 18 cents at $102.11 a barrel. The contract decreased 34 cents to settle at $102.29 a barrel on Friday, 22 August 2014.
Meanwhile, news reports said that the Reserve Bank of India (RBI) may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. On 21 August 2014, RBI announced that NBFCs can lend only against Group 1 shares. The latest RBI directive could deprive small businessmen from raising money by pledging their holdings to fund their business. Group 1 shares include a limited set of top-grade shares. As per reports, the list includes 694 stocks traded on the NSE and 817 stocks traded on the BSE.
RBI has mandated loan to value (LTV) ratio of 50% with regard to lending against shares. The RBI had also said that all NBFCs with asset size of Rs 100 crore and above shall report on-line to stock exchanges, information on the shares pledged in their favour by borrowers for availing loans.
The stock market has shrugged off Indo-Pak tension. Indian and Pakistani troops reportedly intensified firing across the border over the weekend killing at least four, straining ties between the arch rivals who recently called off top-level diplomatic talks. Last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on 25 August 2014 because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.
In the foreign exchange market, the rupee was slightly higher against the dollar. The partially convertible rupee was hovering at 60.455 compared with its close of 60.47 on Friday, 22 August 2014.
Asian stocks rose today, 25 August 2014, as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Key benchmark indices in Japan, Hong Kong, Taiwan, Singapore and South Korea were up 0.11% to 0.51%. Key benchmark indices in Indonesia and China were off 0.03% to 0.32%.
Trading in US index futures indicated that the Dow could gain 76 points at the opening bell on Monday, 25 August 2014.
In her speech at US Federal Reserve's annual symposium in Jackson Hole, Wyo, Yellen on Friday, 22 August 2014, said that the US economy has made considerable progress in recovering from the largest and most sustained loss of employment since the Great Depression. She said that these developments are encouraging, but at the same time it speaks about the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover. Yellen reiterated that early rate hikes are possible, but it will depend on how the economy evolves in the next few months.
At the same event, European Central Bank President Mario Draghi called on European politicians to pivot away from tight budget policies that have held back euro-zone growth and pledged additional central-bank steps if needed to spur growth. Mr. Draghi said European central bankers and politicians both have a role to play in boosting demand and reducing joblessness. It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, he said. Expectations of future inflation in Europe exhibited significant declines at all horizons in August, he said.
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