Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade as Prime Minister Narendra Modi stressed on the need to promote the manufacturing sector and infrastructure development. Decline in crude oil prices also boosted investor sentiment as barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in more than three weeks. India imports about 80% of its crude oil requirement. The Sensex was currently was currently up 119.32 points or 0.46% at 26,222.55. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Mid-Cap index was up 1.3%. The BSE Small-Cap index was up 1.69%. Both these indices outperformed the Sensex. Shares of PSU OMCs rose as crude oil futures declined. Shares of state run upstream oil and gas companies rose on hopes of a fall in subsidy sharing burden as crude oil prices dropped.
The market sentiment was also boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014.
Key benchmark indices had extended gains after a relatively steady start.
At 11:16 IST, the S&P BSE Sensex was up 119.32 points or 0.46% to 26,222.55. The index jumped 123.92 points at the day's high of 26,227.15 in mid-morning trade, its highest level since 25 July 2014. The index fell 27.95 points at the day's low of 26,075.28 in early trade.
The CNX Nifty was up 35.30 points or 0.45% to 7,827. The index hit a high of 7,826.15 in intraday trade, its highest level since 25 July 2014. The index hit a low of 7,779.20 in intraday trade.
The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 1,541 shares gained and 728 shares fell. A total of 102 shares were unchanged.
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The BSE Mid-Cap index was up 116.70 points or 1.3% at 9,124.55. The BSE Small-Cap index was up 165.82 points or 1.69% at 9989.88. Both these indices outperformed the Sensex.
Shares of PSU OMCs rose as crude oil futures declined. HPCL (up 3.56%), BPCL (up 3.14%) and Indian Oil Corporation (up 2.07%), edged higher.
Lower crude oil prices will reduce under-recovery of public sector oil marketing companies (PSU OMCs) on domestic sales of diesel, kerosene and LPG 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.
State run upstream oil and gas companies rose on hopes of a fall in subsidy sharing burden as crude oil prices dropped. ONGC (up 1.37%), GAIL (India) (up 0.85%) and Oil India (up 1.33%) gained. State run upstream oil and gas companies share a part of the under recovery or revenue loss of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PSD 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.
SpiceJet jumped 11.02% after the company said it achieved an operating profit of Rs 9 crore in Q1 June 2014. SpiceJet achieved an operating profit of Rs 9 crore in Q1 June 2014 (not considering restructuring and certain one-off costs described below) despite an adverse year-over-year impact on expenses of fuel price and foreign exchange rate of Rs 106 crore.
SpiceJet reported net loss of Rs 124.10 crore in Q1 June 2014 as against net profit of Rs 50.56 crore in Q1 June 2013. Net sales declined 0.59% to Rs 1678.59 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Thursday, 14 August 2014.
SpiceJet attributed positive operating performance to the positive impact of SpiceJet's new restructured network and schedule, its investments in brand, marketing, and customer experience, its ongoing cost reduction efforts, and importantly, to its active approach to demand generation via market stimulation through innovative pricing and revenue management.
During the quarter, SpiceJet incurred restructuring and certain one-off costs consisting of Rs 133 crore relating to restructuring of the network and fleet along with capacity rationalization that required early aircraft lease terminations and associated expenses for four aircraft, as well as additional interest and funding costs driven by unprecedented carry-forward losses from the previous fiscal.
Adani Enterprises rose 0.87%. The company after trading hours on Thursday, 14 August 2014, said it does not have any important information/announcement to be shared with respect to the media report "Adani Group in talks with Indian Oil Corporation for Rs 30000 crore Oil Refinery JV at Mundra". The news is purely media speculation, it said. As of now, the company is not having any talks with IOC for entering into JV. Indian Oil Corporation (IOC) is looking for land at various locations including Mundra for its refinery project, Adani Enterprises said.
India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent crude oil futures fell below $103 a barrel on Monday as Libya increased its oil output and as worries over supply from key producer Iraq eased. The October Brent crude contract was off 81 cents at $102.72 a barrel. The contract rose $1.52 a barrel to settle at at $103.53 on Friday, 15 August 2014.
The market sentiment was boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014. FPIs bought shares worth a net Rs 625.18 crore on Thursday, 14 August 2014, as per provisional data from the stock exchanges.
In his Independence Day address to the nation from the ramparts of the Red Fort, Prime Minister Narendra Modi on Friday, 15 August 2014, stressed on the need to promote the manufacturing sector. He invited manufacturers from across the world to start manufacturing in India, and help boost India's industrial growth. He also called upon the youth of India to unleash their entrepreneurial spirit and work towards manufacturing in India, the various items that add to the country's import bill. Let "Made in India" become a synonym of excellence, he added. Modi also announced that a new institution would be created to replace the Planning Commission. This new institution would respect the federal structure of the country, he asserted.
In a major new scheme to universalize banking access and financial inclusion, the Prime Minister announced the Pradhanmantri Jan-Dhan Yojana which will provide for a bank account, a debit card and an insurance amount of Rs 1 lakh to poor families.
The Prime Minister said development and good governance are the only two tracks which could take the nation forward.
At a function at Solapur in Maharashtra, the Prime Minister on 16 August 2014 outlined a comprehensive vision for new modes of infrastructure development in the country, which would include nationwide connectivity networks of roads, power transmission lines, gas grids and water grids. He asserted that roads and highways development will be given priority by the new Government, drawing inspiration from the Golden Quadrilateral and Pradhan Mantri Gram Sadak Yojana launched by former Prime Minister Atal Bihari Vajpayee. The Prime Minister said the Government is concerned at the large number of stalled SEZ projects across the country, and a high-level team has been constituted to review the problems and resolve them at the earliest. He added that his Government wishes to create an environment for ease of business, and encouragement for youth. Elaborating his theme of Come, make in India, which he mentioned during his Independence Day address, the Prime Minister said his Government will encourage foreign investment in shipbuilding.
Asian stocks declined on Monday, 18 August 2014, as another bout of tensions in the Ukrainian conflict sapped investor confidence. Key benchmark indices in South Korea, Taiwan, Singapore and Hong Kong were off 0.29% to 0.55%. Key benchmark indices in China, Japan, and Indonesia were up 0.06% to 0.51%.
China's foreign-direct investment slumped 17% in July from a year earlier, the Ministry of Commerce said today, 18 August 2014. Another data showed that China's new-home prices fell in July in almost all cities that the government tracks.
Trading in US index futures indicated that the Dow could gain 53 points at the opening bell on Monday, 18 August 2014. Most US stocks ended lower on Friday, 15 August 2014, as increasing violence in Ukraine sent oil prices to the biggest increase in a month.
Ukrainian forces have reportedly raised their national flag over a police station in the city of Luhansk which was for months under rebel control, Kiev said on Sunday, 17 August 2014, in what could be a breakthrough in Ukraine's efforts to crush pro-Moscow separatists. Russia denies helping the rebels and accuses Kiev, backed by the West, of triggering a humanitarian crisis through indiscriminate use of force against Russian speakers in eastern Ukraine who reject the Ukrainian government's rule.
Meanwhile, the US widened its airstrikes on Iraq over the weekend and used bombers for the first time since the offensive began on 8 August to help secure the country's largest dam near Mosul that had been seized by insurgents.
Global markets will be focused on the Aug. 21-23 annual meeting of top central bankers at Jackson Hole, Wyoming, for possible clues about the path for monetary policy in the months ahead.
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