Indian stocks surged after a decline in international crude oil prices. As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. The barometer index, the S&P BSE Sensex, was provisionally up 334.02 points or 1.33%, up about 250 points from the day's low and off close to 50 points from the day's high. The BSE Mid-Cap index was up 1.65%. The BSE Small-Cap index was up almost 1.6%. Both these indices outperformed the Sensex. The market breadth indicating the overall health of the market was strong.
Indian stocks snapped four-day losing streak today, 24 June 2014.
Media reports that the government may soon announce hike in natural gas prices lifted shares of gas production firms ONGC and Reliance Industries (RIL). Gas utility stocks surged. PSU OMCs jumped as crude oil prices declined and as the government's recent announcement of increase in railway passenger fare and freight rates raised expectations that the government may take pro-reform measures such as deregulation of diesel prices.
As per provisional figures, the S&P BSE Sensex was up 334.02 points or 1.33% to 25,365.34. The index jumped 383.37 points at the day's high of 25,414.69 in mid-afternoon trade, its highest level since 19 June 2014. The index gained 84.51 points at the day's low of 25,115.83 in early trade.
The CNX Nifty was up 83.80 points or 1.12% to 7,577.15, as per provisional figures. The index hit a high of 7,593.35 in intraday trade, its highest level since 19 June 2014. The index hit a low of 7,515.20 in intraday trade.
The total turnover on BSE amounted to Rs 3586 crore, higher than Rs 3022.95 crore on Monday, 23 June 2014.
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The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 2,038 shares gained and 993 shares fell. A total of 117 shares were unchanged.
The BSE Mid-Cap index was up 148.46 points or 1.65% at 9,166.53. The BSE Small-Cap index was up 160.90 points or 1.64% at 9,977.25. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 26 rose and the remaining shares fell. Axis Bank (up 2.46% to Rs 1,930), HDFC (up 2.91% to Rs 994.85) and Bharat Heavy Electricals (Bhel) (up 2.48% to Rs 250.40) edged higher from the Sensex pack.
PSU OMCs jumped as crude oil prices declined and as the government's recent announcement of increase in railway passenger fare and freight rates raised expectations that the government may take pro-reform measures such as deregulation of diesel prices. HPCL (up 7.12% to Rs 418.80), Indian Oil Corporation (IOCL) (up 4.82% to Rs 342) and BPCL (up 4.62% to Rs 582), edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs (public sector oil marketing companies) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
The under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective 16 June 2014 fell to Rs 1.62 per litre. This was Rs 2.80 per litre during first fortnight of June 2014 with effect from 1 June 2014. In the case of PDS kerosene and domestic LPG, the under-recoveries for the second fortnight of June 2014 continued to be Rs 32.87 per litre and Rs 432.71 per cylinder respectively, unchanged from the rates prevailing in the first fortnight of the month.
PSU OMCs, effective 16 June 2014, are incurring combined daily under-recovery of about Rs 249 crore on the sale of diesel, PDS kerosene and domestic LPG. This is less than Rs 262 crore daily under-recoveries during the first fortnight of June 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in the 2013-14.
Media reports that the government may soon announce hike in natural gas prices lifted shares of gas production firms ONGC and Reliance Industries (RIL). Reliance Industries (RIL) gained 2.1% to Rs 1,060.50. ONGC rose 1.23% to Rs 442.
The discussions between the oil ministry and Prime Minister's Office over the weekend suggest that gas price may be jacked up from $4.2 a unit to $5.5-6.8 per unit, report said. This increase will be lower than the price of $8.4 per unit that was expected based on the formula adopted by the UPA government. The UPA government had approved a new formula for pricing all domestic gas from 1 April 2014. However, gas price revision could not be implemented because of the electoral code of conduct due to Lok Sabha elections in April-May 2014.
Shares of state-run gas transmission major GAIL (India) rose 4.56% to Rs 459.65.
Gas utility stocks surged. Gujarat Gas Company (up 8.59% to Rs 433), Gujarat State Petronet (up 7.56% to Rs 82.35) and Indraprastha Gas (up 3.87% to Rs 346.50) surged.
Decline in crude oil prices triggered a firm opening on the domestic bourses today, 24 June 2014. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices remained firm after moving in a narrow range in early afternoon trade. The Sensex extended gains and hit fresh intraday high in mid-afternoon trade. The Sensex regained strength after paring intraday gains in late trade.
As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. Brent crude oil futures extended Monday's losses on reports that Iraq's army has regained control of the Baiji refinery in north Iraq from Islamist militants. Brent oil futures for August delivery were off 11 cents at $114.01 a barrel. The contract fell 0.6% to settle at $114.12 on Monday, 23 June 2014, the biggest percentage drop since 16 May 2014.
The recent spike in crude oil prices triggered by violence in Iraq sparked worries about India's macroeconomic situation as India imports majority of its crude oil requirements. Increase in crude oil prices raised concerns of increase in India's current account deficit and fiscal deficit. Firm global crude oil prices and the latest hike in railway freight rate also stoked inflation worries.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire on Thursday, 26 June 2014.
In the foreign exchange market, the rupee edged higher against the dollar as crude dropped. The partially convertible rupee was hovering at 60.1075, compared with its close of 60.20/21 on Monday, 23 June 2014.
Finance Minister Arun Jaitley reportedly said today, 24 June 2014, that India needs to act now to fix the health of its economy which is facing a challenging time. The comment comes just weeks ahead of the final Union Budget for 2014-15 which is likely to be tabled in parliament by mid July 2014.
European shares edged lower in choppy trade on Tuesday, 24 June 2014 after data showed German business confidence declined for a second month in June. Key benchmark indices in UK and Germany were off 0.1% to 0.27%. France's CAC 40 was up 0.08%.
German business confidence declined for a second month in June amid signs of slower growth in Europe's largest economy. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 109.7 from 110.4 in May.
Asian stocks edged higher on Tuesday, 24 June 2014, as utilities advanced. Key benchmark indices in Indonesia, Japan, South Korea, China, Singapore, Hong Kong and Taiwan were up by 0.05% to 0.98%.
Trading in US index futures indicated that the Dow could fall 32 points at the opening bell on Tuesday, 24 June 2014. Most US stocks slid on Monday, 23 June 2014, with the Standard & Poor's 500 Index dropping for the first time in seven sessions, as General Electric Co. led industrial shares lower to offset gains among energy producers.
Data on Monday showed US sales of existing homes climbed 4.9% to a 4.89 million annualized rate in May, the most since October. A separate report from Markit Economics showed a measure of US manufacturing growth rose to 57.5 in June from 56.4 in May.
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