Key benchmark indices provisionally registered with small gains after moving in a narrow range in intraday trade. The barometer index, the S&P BSE Sensex, was provisionally up 16.78 points or 0.08%, off about 115 points from the day's high and up close to 25 points from the day's low. The market breadth, indicating the overall health of the market was positive.
Tyre stocks jumped, with Apollo Tyres, CEAT and MRF hitting record high. Metal and mining stocks eged higher on renewed buying.
The market edged higher in early trade on firm Asian stocks. The Sensex trimmed initial gains in morning trade. The Sensex regained positive zone soon after sliding into the red for a brief period in mid-morning trade. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. Key benchmark indices hovered in positive zone in afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed gains in mid-afternoon trade.
The stock exchanges are conducting a special live trading session tomorrow, 22 March 2014, as the National Stock Exchange (NSE) is testing its software. Trading will take place from 11:15 IST to 12:45 IST.
As per provisional figures, the S&P BSE Sensex was up 16.78 points or 0.08% to 21,756.87. The index jumped 130.02 points at the day's high of 21,870.11 in early trade, its highest level since 19 March 2014. The index fell 10.19 points at the day's low of 21,729.90 in afternoon trade.
The CNX Nifty was up 9.75 points or 0.15% to 6,492.85, as per provisional figures. The index hit a high of 6,522.90 in intraday trade. The index hit a low of 6,485.70 in intraday trade.
The BSE Mid-Cap index was up 58.22 points or 0.87% at 6,773.52. The BSE Small-Cap index was up 62.93 points or 0.94% at 6,780.60. Both these indices outperformed the Sensex.
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The total turnover on BSE amounted to Rs 9676 crore, much higher than Rs 2386.55 crore on Thursday, 20 March 2014 as government sold 9% stake in Axis bank in a block deal today, 21 March 2014.
The market breadth, indicating the overall health of the market was positive. On BSE, 1,582 shares rose and 1,250 shares fell. A total of 146 shares were unchanged.
Tata Power Company (up 2.43%), Tata Motors (up 2.34%) and Wipro (up 2.91%) edged higher from the Sensex pack.
Axis Bank edge higher in choppy trade amid huge volumes on reports that the government has sold about 4.22 crore shares, constituting a 9% stake in India's third-largest private-sector bank by assets, via block deals on BSE today, 21 March 2014. The stock rose 2.59% to Rs 1,392. The scrip hit high of Rs 1,410.60 and low of Rs 1,313.25. On BSE, 5.26 crore shares changed hands on the counter, compared with average daily volume of 2.46 lakh shares in the past one quarter.
The government holds stake in Axis Bank via a trust fund called Specified Undertaking of the Unit Trust of India (SUUTI). The share sale was launched on Thursday, 20 March 2014, in the indicative price band of roughly Rs 1,290 to Rs 1,357 per share. As on 31 December 2013, SUUTI's total holding in Axis Bank stood at 9.72 crore shares, constituting 20.72% stake.
Metal and mining stocks gained. Sesa Sterlite (up 1.53%), Hindustan Zinc (up 0.62%), Jindal Steel & Power (up 1.68%), Hindalco Industries (up 3.31%), Hindustan Copper (up 4.61%), JSW Steel (up 3.67%), Tata Steel (up 3.43%), Steel Authority of India (SAIL) (up 3.35%) and National Aluminum Company (up 2.15%) edged higher. NMDC fell 2.05%.
Tyre stocks surged. Goodyear India (up 2.37%) and JK Tyre & Industries (up 8.49%) gained.
CEAT surged 13.87% to Rs 436 after hitting a record high of Rs 444.90 in intraday trade.
Apollo Tyres gained 4.47% to Rs 143.60 after hitting a record high of Rs 143.80 in intraday trade.
MRF gained 4.03% to Rs 22,300 after hitting a record high of Rs 22,448.90 in intraday trade.
Jain Irrigation Systems rose 1.38% to Rs 58.90 after the company said it has allotted 75 lakh equity shares at an issue price of Rs 86.30 per share upon conversion of share warrants by the promoter group entities. The announcement was made after market hours on Thursday, 20 March 2014.
Jain Irrigation Systems said that the Securities Issuance Committee of Directors met on Thursday, 20 March 2014 and allotted 75 lakh ordinary equity shares of Rs 2 each at a issue price (including premium) of Rs 86.30 per share arising out of exercise of option attached to 75 lakh equity warrants of Rs 86.30 each issued on 21 September 2012. The ordinary shares allotted upon conversion of share warrants shall rank paripassu with the existing equity shares of the company in all respects, Jain Irrigation Systems said.
It may be recalled that Jain Irrigation Systems had on 21 September 2012 allotted 75 lakh equity warrants of Rs 86.30 each to the promoter group entities viz. Mr. Anil B Jain and Mr. Atul B Jain. A sum of 25% of the exercise price i.e. Rs 21.575 per warrant aggregating Rs 16.18 crore was paid by the promoter entities at the time of allotment of equity warrants. The balance 75% shall be payable by them at the time of exercise of option to convert the equity warrants to ordinary equity shares, Jain Irrigation said at that time.
Emami Paper Mills rose by maximum permissible circuit limit of 10% at Rs 26.95 on BSE after the company said that a committee will meet on 28 March 2014 to consider preferential allotment of cumulative redeemable non-convertible preference shares. The company made the announcement after market hours on Thursday, 20 March 2014. Emami Paper Mills said that a meeting of the members of the preference share committee of the company has been convened on 28 March 2014 to consider the applications received from the promoters and allotment of the cumulative redeemable non-convertible preference shares on preferential basis.
Claris Lifesciences fell 0.19% to Rs 180. The company announced buyback of upto 92.50 lakh equity shares at Rs 250 per share for an amount not exceeding Rs 231.25 crore. The announcement was made after market hours on Thursday, 20 March 2014.
Claris Lifesciences after market hours on Thursday, 20 March 2014 announced buyback of equity shares of the company from its shareholders through tender offer. The company would buyback upto 92.50 lakh fully paid up equity shares of face value of Rs 10 each at Rs 250 per fully paid-up equity share for an aggregate maximum amount of Rs 231.25 crore on a proportionate basis through the tender offer process. The record date for the buyback of equity shares is fixed as 2 April 2014.
With regard to motive behind buyback of shares, Claris Lifesciences said that subsequent to the sale of the company's infusion business for India and emerging markets to Claris Otsuka (joint venture) wherein Otsuka Pharmaceutical Factory, Inc., Japan, Mitsui & Co., Japan and Claris Lifesciences are shareholders for 60%, 20% and 20% respectively, the board of directors of Claris Lifesciences at its meeting held on 7 January 2014 considered various alternatives for rewarding the equity shareholders. After considering several factors and benefits to the equity shareholders, the board decided to recommend share buyback, Claris Lifesciences said in its buyback offer document.
The promoters and promoter entities currently held 60.21% stake in Claris Lifesciences.
In the foreign exchange market, the rupee edged higher against the dollar on optimism a recovering economy will lure inflows even as the US Federal Reserve keeps cutting stimulus. The partially convertible rupee was hovering at 61.045, compared with its close of 61.34/35 on Thursday, 20 March 2014.
Government bond prices rose after Reserve Bank of India Governor Raghuram Rajan said that the central bank has not yet moved to an inflation target, and was still exploring the suggestions on the subject drafted by a panel with the government. A panel headed by Reserve Bank of India deputy governor Urjit Patel recommended in January moving to an inflation target, with an aim to eventually bring down consumer-price based inflation to 4% with a 2% band on either side. "We haven't moved to inflation targeting as yet," Rajan said at an event in Mumbai today, 21 March 2014. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8033%, lower than its close of 8.8188% on Thursday, 20 March 2014. Bond yields and bond prices move in opposite direction.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
European stocks edged higher on Friday, 21 March 2014, in line with firm Asian stocks and overnight gains in US stocks. Key benchmark indices in France, Germany and UK were up 0.32% to 0.47%.
Greece's credit rating was maintained at six steps below investment grade by Standard & Poor's, which said the country's debt remains large even as its government's fiscal performance improves. The country's long-term local currency debt was kept at B-, with a stable outlook, S&P said in a statement. "Steps the Greek government has taken to strengthen the institutional framework and improve policy effectiveness have enhanced external and fiscal performance," the New York-based rating company said. "Greece's external vulnerabilities persist given its high level of external debt, deflating economy, and limited monetary flexibility".
Asian stocks edged higher on Friday, 21 March 2014, with investor sentiment boosted by overnight gains in US stocks. Key benchmark indices in China, Hong Kong, Singapore, Indonesia and South Korea were up 0.03% to 2.72%. In Taiwan, Taiwan Weighted index fell 0.23%. The Japanese stock market was closed for a holiday.
HSBC Holdings Plc and Markit Economics' gauge of Chinese manufacturing will be released on Monday, 24 March 2014.
China equity funds had a record outflow of $1.5 billion for the week ended 19 March 2014, of which $1.3 billion came from exchange-traded funds, according to reports.
The China Beige Book survey, published by New York-based CBB International, signaled the nation's economy slowed this quarter, with industries including retail and mining showing weaker revenue growth. Loans through non-traditional channels became more expensive, it said.
China's cabinet said this week it will speed up construction projects and other measures to support the economy after data showed moderating growth in industrial production and investment. The government is targeting 7.5% growth this year, which would be the slowest pace since 1990.
Trading in US index futures indicated that the Dow could advance 37 points at the opening bell on Friday, 21 March 2014. US stocks rose on Thursday, 20 March 2014, as reports on leading indicators and regional manufacturing fueled optimism in the economy, overshadowing concern that interest rates may rise in the middle of next year.
The Conference Board's gauge of the US economic outlook for the next three to six months climbed 0.5% in February, the biggest gain since November, data showed. The Philadelphia Fed's manufacturing gauge rose to 9.0 in March from minus 6.3 the prior month. Separate data showed purchases of previously owned homes declined in February to the lowest level since July 2012.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
Fitch Ratings today, 21 March 2014, affirmed the United States' credit ratings at "AAA" with a stable outlook, removing the distant danger that it might downgrade the world's largest economy. The action resolves the negative watch that Fitch had placed on the United States back in October, when political wrangling over the debt ceiling had raised the risk of default. "Fitch's sensitivity analysis does not currently anticipate developments with a material likelihood, individually or collectively, of leading to a rating downgrade," it said in a statement. Fitch said the latest crisis over the debt limit had not adversely affected US Treasury yields or the appetite of foreign investors for the debt. "Therefore Fitch does not believe the role of the US dollar, sovereign financing flexibility or debt tolerance has been materially damaged," it said.
Fitch noted the United States had greater debt tolerance than other triple-A peers owing to the unparalleled financing flexibility provided by being the issuer of the world's reserve currency and benchmark fixed-income asset. "Strong fiscal consolidation has been achieved," the agency added. It expected the US budget deficit to decline to 2.9% of gross domestic product (GDP) in the 2014 fiscal year, from 4% in fiscal 2013 and 6.7% in 2012. But Fitch cautioned there were still risks to the ratings outlook, including if authorities failed to address rising expenditure pressures from an ageing population and higher interest rates later in the decade.
Russia's credit rating outlook was cut to negative by Fitch Ratings, citing the potential impact on a slowing economy of widening US and European Union sanctions imposed as it absorbs Ukraine's Crimea region. Fitch followed a similar move by Standard & Poor's yesterday. Both companies affirmed the former Soviet republic at BBB, the second-lowest investment grade, on par with Brazil.
US President Barack Obama raised the stakes in an East-West confrontation over Crimea on Thursday by targeting some of Russian President Vladimir Putin's closest long-time political and business allies with personal sanctions. The extension of visa bans and asset freezes into Putin's inner circle came as Moscow rushed to consolidate the annexation of the Black Sea peninsula, seized from Ukraine last month, and to boost its military presence in the region.
Russian troops took over three Ukrainian warships in Crimea on Thursday, using stun grenades in one incident. Kiev also said it had begun withdrawing its border guards, surrounded and outnumbered by Russian forces, from Crimea to the mainland.
Successful legal challenges against European Union (EU) sanctions over the past year have made the bloc wary of taking aggressive actions against Russian businessmen and companies as it works to contain Moscow's ambitions in Ukraine. EU leaders meeting in Brussels on Thursday, 20 March 2014, agreed to apply asset freezes and visa bans on 12 more Russian officials, but stopped short of penalizing any powerful oligarchs or companies. German Chancellor Angela Merkel said legal concerns were the main reason leaders had avoided targeting people outside Russia's political and military circles. "We in Europe are bound to having an obvious connection to Crimea-i.e. the offense that is at the base of the sanctions. That's a different legal situation from the US," she told journalists after the meeting. Concerns over legal challenges to EU sanctions have increased over the past year after the bloc's courts struck down financial sanctions against several individuals and companies.
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