A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving away most of the intraday gains in afternoon trade. The barometer index, the S&P BSE Sensex, was up 101.19 points or 0.4%, up about 90 points from the day's low and off close to 130 points from the day's high. The market breadth indicating the overall health of the market was positive. The BSE Mid-Cap and the Small-Cap indices rose over 1% each. The market sentiment was positive as data released by the government after trading hours yesterday, 14 July 2014, showed that retail inflation eased in June 2014. Easing inflation provides space for the Reserve Bank of India (RBI) to cut policy rates to revive stalled economic growth.
Interest rate sensitive auto stocks gained after the latest data showed retail inflation eased in June 2014. Maruti Suzuki India edged higher after the company introduced Ertiga Limited Edition to mark the milestone of 1.5 lakh unit sales of the Ertiga model in the Indian market.
At 13:20 IST, the S&P BSE Sensex was up 101.19 points or 0.4% to 25,108.17. The index jumped 229.68 points at the day's high of 25,236.66 in morning trade, its highest level since 11 July 2014. The index rose 13.34 points at the day's low of 25,020.32 in early afternoon trade.
The CNX Nifty was up 31.85 points or 0.43% to 7,486. The index hit a high of 7,524.20 in intraday trade, its highest level since 11 July 2014. The index hit a low of 7,459.15 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,553 shares gained and 1,085 shares fell. A total of 86 shares were unchanged.
The BSE Mid-Cap index was up 97.93 points or 1.1% at 8,971.63. The BSE Small-Cap index was up 128.02 points or 1.33% to 9,700.48. Both these indices outperformed the Sensex.
Among the 30-share Sensex pack, 16 stocks gained and rest of them declined.
ICICI Bank (up 2.5%), State Bank of India (up 2.39%) and Bharat Heavy Electricals (Bhel) (up 1.36%) edged higher from the Sensex pack.
Interest rate sensitive auto stocks gained after the latest data showed retail inflation eased in June 2014. Easing inflation provides space for the Reserve Bank of India (RBI) to cut policy rates to revive stalled economic growth. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. TVS Motor Company (up 3.95%) and Bajaj Auto (up 1.16%), gained. But, Hero MotoCorp fell 1.53%.
Maruti Suzuki India rose 0.36%. The company said during market hours that it has introduced Ertiga Limited Edition to mark the milestone of 1.5 lakh unit sales of the Ertiga model in the Indian market. Ertiga Limited Edition petrol version has been priced at Rs 6.76 lakh ex-showroom Delhi. The CNG version has been priced at Rs 7.34 lakh ex-showroom Delhi. The diesel version has been priced at Rs 8.05 lakh ex-showroom Delhi.
Mahindra & Mahindra (M&M) (up 1.09%), Tata Motors (up 0.69%), Ashok Leyland (up 1.43%), gained. The announcement in the budget on 10 July 2014 of investment in National Highways Authority of India and State Roads of an amount of Rs 37880 crore, which includes Rs 3000 crore for the North East is positive for the auto sector.
The government had before the Union Budget on 25 June 2014 extended concessional excise duty on automobiles by six months up to 31 December 2014.
Easing of retail inflation in June 2014, gains in Asian stocks and overnight upmove in US stocks triggered a firm opening on the domestic bourses. Key benchmark indices trimmed gains after hitting fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices trimmed gains after a sudden slide in early afternoon trade. A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving away most of the intraday gains in afternoon trade.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.145, compared with its close of 60.07/08 on Monday, 14 July 2014.
On the macro front, the annual rate of inflation based on the combined consumer price indices (CPI) for urban and rural India eased to 7.31% in June 2014, from 8.28% in May 2014, data released by the government after trading hours on Monday, 14 July 2014, showed. The rate of inflation based on the combined consumer food price indices (CFPI) for urban and rural India eased to 7.97% in June 2014, from 9.56% in May 2014, the data showed. Core CPI inflation which excludes food and energy prices, eased to 7.39% in June 2014, from 7.71% in May 2014.
Inflation based on the wholesale price index eased to 5.43% in June 2014, from 6.01% in May 2014, data released by the government during trading hours on Monday, 14 July 2014, showed.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 5 August 2014.
European stocks edged lower on Tuesday, 15 July 2014, as investors awaited Federal Reserve Chair Janet Yellen's semi-annual testimony later in the global day. Key benchmark indices in France and Germany were off 0.01% to 0.03%. UK's FTSE 100 rose 0.12%.
Asian stocks edged higher on Tuesday, 15 July 2014, after the Dow Jones industrial average hit an intraday record on Monday, 14 July 2014, boosted by Citigroup's better-than-expected earnings and a fresh round of merger and acquisition activity in the US healthcare industry. Key benchmark indices in Taiwan, Hong Kong, Japan, Indonesia, China and South Korea rose by 0.18% to 0.94%. Singapore's Straits Times fell 0.06%.
The Bank of Japan kept its record stimulus unchanged and forecast inflation will pick up to its 2% price target. The central bank stuck with its goal of an annual increase in the monetary base of between 60 trillion yen and 70 trillion yen ($690 billion), it said in a statement today, 15 July 2014, in Tokyo at the end of a two-day monetary policy review.
China will release second-quarter GDP data tomorrow, 16 July 2014.
Trading in US index futures indicated that the Dow could gain 18 points at the opening bell on Tuesday, 15 July 2014. US stocks ended higher on Monday, 14 July 2014, with the Dow Jones industrial average hitting an intraday record, helped by Citigroup's better-than-expected earnings and more deals in the healthcare sector.
Investors are awaiting Federal Reserve Chair Janet Yellen's testimony before the congress due later in the day.
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