Mirroring a rally in world stocks, key equity benchmark indices in India surged. The rally on the domestic bourses was broad based. The barometer index, the S&P BSE Sensex, reclaimed the psychological 27,000 mark. The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. A number of side counters witnessed decent to strong gains. The Sensex was provisionally up 405.11 points or 1.52% at 27,115.24. The BSE Mid-Cap index was up 2.66%. The BSE Small-Cap index was up 3.28%. Both these indices outperformed the Sensex.
Stocks rose across the globe after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. A longer timeline for rate increases in the United States implies that equities will continue to be more appealing to investors, including those in riskier emerging markets, compared with the low returns on US bonds. Closer home, India's Union Cabinet yesterday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST).
Steel, metal and cement stocks gained after the coal ministry released an approach paper for e-auction coal mines, fixing a floor price of Rs 150 per tonne for unregulated sectors such as steel, sponge iron, cement and captive power. Shares of power generation companies surged after the ministry of coal said that the auction of coal mines for the power sector will be through reverse bidding.
After a firm opening, key benchmark indices retained positive zone throughout the trading session.
Key indices snapped five-day losing streak today, 18 Decemebr 2014.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014.
Brent crude futures extended gains registered during the previous trading session.
Foreign portfolio investors sold shares worth a net Rs 1636.36 crore yesterday, 17 December 2014, as per provisional data.
In overseas markets, Asian and European stocks edged higher after a Federal Reserve pledge to be patient on interest-rate increases in the United States sent US stocks surging yesterday, 17 December 2014.
As per provisional figures, the S&P BSE Sensex was up 405.11 points or 1.52% at 27,115.24. The index jumped 470.79 points at the day's high of 27,180.92 in late trade, its highest level since 16 December 2014. The index gained 190.44 points at the day's low of 26,900.57 in mid-morning trade.
The CNX Nifty was up 128.90 points or 1.61% at 8,158.70, as per provisional figures. The index hit a high of 8,174.30 in intraday trade, its highest level since 16 December 2014. The index hit a low of 8,084.90 in intraday trade.
The BSE Mid-Cap index was up 258.22 points or 2.66% at 9,964.67. The BSE Small-Cap index was up 344.64 points or 3.28% at 10,860.76. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3000 crore, lower than Rs 3857.62 crore yesterday, 17 December 2014.
The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. 2,163 shares rose and 689 shares fell. A total of 99 shares were unchanged.
Steel, metal and cement stocks gained after the coal ministry released an approach paper for e-auction coal mines, fixing a floor price of Rs 150 per tonne for unregulated sectors such as steel, sponge iron, cement and captive power. Among cement shares, ACC (up 0.38%), Ambuja Cements (up 1.63%), and Shree Cement (up 1.18%) gained.
UltraTech Cement declined 0.24%. Grasim Industries declined 0.59%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement
According to an approach paper on proposed e-auction of coal mines released by the Ministry of Coal yesterday, 17 December 2014, a floor price of Rs 150 per tonne has been fixed for auction of coal blocks to unregulated sectors such as steel, sponge iron, cement and captive power. For the unregulated sectors, a regular bidding process will be adopted where the highest bidder will be declared the successful bidder. The approach paper put up on the coal ministry website has sought feedback from stakeholders.
Shares of power generation companies surged after the ministry of coal said that the auction of coal mines for the power sector will be through reverse bidding. JSW Energy (up 4.8%), Torrent Power (up 12.11%), GVK Power & Infrastructure (up 5.86%), NHPC (up 2.19%), NTPC (up 3.67%), Adani Power (up 3.49%), Reliance Power (up 3.42%), Tata Power Company (up 3.62%) and Reliance Infrastructure (up 4.92%) edged higher.
According to an approach paper on proposed e-auction of coal mines released by the Ministry of Coal yesterday, 17 December 2014, auction of coal mines for the power sector, a regulated sector, will be through reverse bidding. A ceiling price will be fixed for each coal mine based on the prevailing Coal India notified price, where the bidder quoting the lowest below this ceiling will be successful. This methodology is expected to keep electricity tariffs in check by preventing irrational bidding. The approach paper put up on the coal ministry website has sought feedback from stakeholders.
On 25 August, the Supreme Court ruled that allocation of all coal mines between 1993 and 2010 were illegal. In September, the apex court cancelled allocation of 204 coal blocks.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. The partially convertible rupee was hovering at 63.19, compared with its close of 63.62 during the previous trading session.
Brent crude futures extended gains registered during the previous trading session. Brent for February settlement was up $1.09 a barrel at $62.27 a barrel. The contract had risen $1.17 a barrel or 2% to settle at $61.18 a barrel during the previous session.
Closer home, the Union Cabinet yesterday, 17 December 2014, approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out. The Bill is likely to be introduced in parliament during the ongoing winter session.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. The Indian government intends to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
European stocks jumped today, 18 December 2014, on confidence over global growth after a Federal Reserve pledge to be patient on interest-rate increases in the United States. Key indices in France, Germany and UK were up 0.81% to 2.35%.
German business confidence improved for the second consecutive month, a key indicator showed Thursday, as the eurozone's largest economy benefits from lower oil prices and a weaker euro. The Munich-based Ifo institute's lead indicator rose to 105.5 in December from 104.7 the previous month.
Retail sales in the UK grew at the fastest annual pace in November in 10 years, official figures said on Thursday, boosted by British stores embracing aggressive Black Friday discounts. Volumes sold by UK retailers increased 6.4% on year, according to the Office for National Statistics today, 18 December 2014. This was the highest increase since May 2004 and marks 20 consecutive months of growth. Compared with October, sales rose 1.6%.
In Greece, Prime Minister Antonis Samaras failed to get enough support for his nominee in a parliamentary vote for a new head of state. If Samaras also fails to get enough support for his candidate in the second and third round of votes, snap elections will take place in early 2015
Asian stocks surged today, 18 December 2014, rebounding from an almost nine-month low, after a Federal Reserve pledge to be patient on interest-rate increases sent US equities up the most since 2013 yesterday, 17 December 2014. Key indices in Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.51% to 2.32%. Key indices in China and South Korea were down 0.11% to 0.14%.
Trading in US index futures indicated that the Dow could gain 136 points at the opening bell today, 18 December 2014. US stocks surged the most since 2013 yesterday, 17 December 2014, with the Standard & Poor's 500 Index erasing about half of its December drop, after the Federal Reserve pledged patience on its first interest-rate increase since 2006.
The Federal Reserve after two-day policy meet yesterday, 17 December 2014, said it will be patient when it comes to the timing of rate increases, replacing a pledge in its statement to keep borrowing costs near zero for a considerable time, and raising its assessment of the job market.
Federal Reserve Chair Janet Yellen restored clarity to the central bank's monetary policy plans, saying it was on course to raise interest rates, though not right away. Yellen also laid out the economic parameters that would need to be met for liftoff to begin later in the year and said that rates probably would be raised gradually thereafter. They may not return to more normal levels until 2017, she added.
Among economic data in the US, the US consumer-price index dropped 0.3% in November from the previous month, the most since December 2008, after being little changed the prior month, a Labor Department report showed yesterday, 17 December 2014.
Powered by Capital Market - Live News
