Gains in frontline stocks sent key benchmark indices surging on the last trading session of the week. The barometer index, the S&P BSE Sensex, was provisionally up 402.11 points or 1.46% at 27,909.65. Bank stocks rose on renewed buying. The market breadth indicating the overall health of the market was strong. The rally for key indices materialised today, 2 January 2015, after the government yesterday, 1 January 2015, evening announced the setting up of NITI Aayog (National Institution for Transforming India) as replacement for the Planning Commission and said that the NITI Aayog will seek to provide a critical directional and strategic input into the development process.
The government after trading hours yesterday, 1 January 2015, also announced increase in excise duty on petrol and diesel by Rs 2 a litre each to raise money to build 15,000 kilometers of roads during current and next financial year. Meanwhile, a monthly survey today, 2 January 2015, showed that manufacturing activity momentum in India accelerated to a two-year high in December, led by a healthy increase in new orders from both at home and from abroad.
Earlier, key indices surged to their highest level in more than three weeks in mid-afternoon trade.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 18.20 crore yesterday, 1 January 2015, as per provisional data.
In overseas markets, European stocks reversed initial gains as a measure of euro-area manufacturing expanded less in December than initially estimated. Asian stocks edged higher amid thin volumes following the New Year's Day holiday.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
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Brent crude futures reversed intraday gains as an abundance of oil erased earlier support drawn from a larger-than-expected fall in US weekly crude stocks.
As per provisional closing, the S&P BSE Sensex was up 402.11 points or 1.46% at 27,909.65. The index jumped 429.93 points at the day's high of 27,937.47 in mid-afternoon trade, its highest level since 9 December 2014. The index rose 11.72 points at the day's low of 27,519.26 in early trade.
The CNX Nifty was up 111.45 points or 1.35% at 8,395.45. The index hit a high of 8,410.60 in intraday trade, its highest level since 9 December 2014. The index hit a low of 8,288.70 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,773 shares gained and 1,157 shares fell. A total of 112 shares were unchanged.
The BSE Mid-Cap index was up 90.03 points or 0.86% at 10,530.20. The BSE Small-Cap index was up 82.93 points or 0.74% at 11,308.15. Both these indices underperformed the Sensex.
Bank stocks rose on renewed buying. BSE's banking sector index, the S&P BSE Bankex was up 1.66% at 21,830.10. The index hit record high of 21,891.26 in intraday trade. Among PSU bank stocks, State Bank of India (SBI) (up 0.46%), Bank of Baroda (up 0.98%), Bank of India (up 1.2%) gained. Punjab National Bank (down 0.14%), Canara Bank (down 0.34%), Union Bank of India (down 0.46%) declined.
A two-day Bankers Retreat called 'Gyan Sangam' organized by the Department of Financial Services (DFS), Ministry of Finance begins in Pune today, 2 January 2015, to prepare a blue print of reform action plan for banking sector. This retreat has been held to take forward the government's commitment to reforms in the financial sector, the finance ministry said in a statement today, 2 January 2015, ahead of the beginning of the seminar. The growth and change in the financial sector ought to be in tune with the development in the real sector, the finance ministry said. The idea of organising such a retreat is to provide an informal academic environment, which can bring out the creative best of the minds of professionals and regulators, the finance ministry said. The objective of this retreat is to arrive at a common understanding among the professionals, regulators and the government on the reform, required in the public sector banks in the current economic situations, the finance ministry said.
Among private bank stocks, HDFC Bank (up 1.86%), IndusInd Bank (up 0.55%), ING Vysya Bank (up 1.81%), Kotak Mahindra Bank (up 1.48%), Axis Bank (up 2.43%), Yes Bank (up 3.28%) and ICICI Bank (up 2.91%) gained.
Reliance Power rose 1.44%. Reliance Power during market hours today, 2 January 2015, announced that boiler light up has been achieved for sixth and last 660 megawatts (MW) unit of the 3,960 MW Sasan Ultra Mega Power Plant (UMPP) of the company. This is a critical milestone of the boiler commissioning activities for the unit, Reliance Power said. 3300 MW of the project are already operating and have been performing well, the company said.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 63.2975, compared with its close of 63.34 during the previous trading session.
Brent crude futures reversed intraday gains as an abundance of oil erased earlier support drawn from a larger-than-expected fall in US weekly crude stocks. Brent for February settlement was off 11 cents at $57.22 a barrel.
A monthly survey today, 2 January 2015, showed that manufacturing activity momentum in India accelerated to a two-year high in December, led by a healthy increase in new orders from both at home and from abroad. Adjusted for seasonal factors, the headline HSBC India Purchasing Managers' Index (PMI) climbed to a two-year high of 54.5 in December, up from 53.3 in November. A steep rise in new orders from the consumer sector more than offset a slowdown in new order growth from investment goods. In line with falling commodity prices over the last few months, input price inflation was modest, and this trend was also mirrored in output prices. With the disinflationary trend gaining ground, the Reserve Bank of India (RBI) is expected to find space for some rate cuts in 2015, according to Pranjul Bhandari, Chief India Economist at HSBC. Cost pressures at Indian manufacturers eased to weakest in more than five-and-a-half years, according to the survey.
Meanwhile, the Indian government yesterday, 1 January 2015, announced the setting up of NITI Aayog (National Institution for Transforming India) as replacement for the Planning Commission and said that the NITI Aayog will seek to provide a critical directional and strategic input into the development process. The centre-to-state one-way flow of policy, that was the hallmark of the Planning Commission era, is now sought to be replaced by a genuine and continuing partnership of states, the Prime Minister's Office (PMO) said in a statement. NITI Aayog will emerge as a "think-tank" that will provide governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy. The NITI Aayog will also seek to put an end to slow and tardy implementation of policy, by fostering better Inter-Ministry coordination and better Centre-State coordination, the PMO said. It will help evolve a shared vision of national development priorities, and foster cooperative federalism, recognizing that strong states make a strong nation. The NITI Aayog will create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners. It will offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda. Among other obectives, the NITI Aayog aims to enable India to better face complex challenges, through policy support to more than 50 million small businesses, which are a major source of employment creation.
The government after trading hours yesterday, 1 January 2015, also announced increase in excise duty on petrol and diesel by Rs 2 a litre each to raise money to build 15,000 kilometers of roads during current and next financial year.
European stocks reversed intraday gains today, 2 January 2015, as a measure of euro-area manufacturing expanded less in December than initially estimated. Key benchmark indices in UK, France and Germany were off 0.67% to 0.75%.
Activity in the eurozone's manufacturing sector grew at a slower pace in December, a survey today, 2 January 2015 showed. The headline measure from data firm Markit's monthly survey of purchasing managers of around 3,000 manufacturers rose to 50.6 in December from 50.1 in November, but was lower than the preliminary estimate of 50.8. A reading above 50 for the index indicates an expansion in activity, while one below that level signals a contraction.
Meanwhile, European Central Bank President Mario Draghi hinted that the bank is moving closer to launching a full-scale quantitative easing program.
UK manufacturing unexpectedly slowed to a three-month low in December as weak growth in overseas markets such as the euro area undermined demand. Markit Economics said its Purchasing Managers' Index fell to 52.5 from a revised 53.3 in November. A reading above 50 indicates expansion.
Asian stocks edged higher today, 2 January 2015, amid thin volumes following the New Year's Day holiday. Key benchmark indices in Hong Kong, Singapore, Indonesia and South Korea were up by 0.16% to 1.07%.
Stock markets in China, Japan and Taiwan are closed today, 2 January 2015, for holiday.
Trading in US index futures indicated that the Dow could rise 59 points at the opening bell today, 2 January 2015. US markets had remained shut yesterday, 1 January 2015 for New Year's Day holiday.
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