After moving in a narrow range for most part of the trading session, Indian stocks rallied during the last one and half hour of trade as crude oil prices futures eased in volatile trade and as Reserve Bank of India Governor Raghuram Rajan's comments that India is currently better prepared to deal with any shocks on the external front compared to last year triggered recovery in rupee against the dollar. Gains in Asian and European stocks aided the rally on the domestic bourses. The barometer index, the S&P BSE Sensex, jumped 330.71 points or 1.31%, up 382.48 points from the day's low and off 24.17 points from the day's high. 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 rose 1.5%. The BSE Small-Cap index rose more than 2%. Both these indices outperformed the Sensex.
India's largest oil exploration firm ONGC extended gains in late trade. PSU OMCs extended Monday's gains as the under-recovery on diesel declined for the fortnight commencing 16 June 2014. Shares of state-run gas transmission and distribution company GAIL (India) extended Monday's rally triggered by buzz that a foreign brokerage has raised the price target on the stock. Maruti Suzuki India rose after a foreign brokerage maintained buy rating on the stock with a 15% increase in target price. Bank stocks rose on renewed buying. Cement stocks rose on expectations that cement demand will rise on government's thrust on the infrastructure sector.
Telecom stocks were in demand, with shares of Idea Cellular extending Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company. Fertiliser shares were in demand on renewed buying. Capital goods stocks rose on renewed buying. Shares of Thermax scaled record high and ABB India hit 52-week high. Aviation stocks rose on reports the aviation ministry has drawn up a plan to push infrastructure development, e-governance and air connectivity during the first 100 days of the new government. Tyre stocks were in demand on renewed buying, with shares of CEAT and Balkrishna Industries scaling record high. Sugar stocks rose on fresh buying.
The S&P BSE Sensex garnered 330.71 points or 1.31% to settle at 25,521.71, its highest closing level since 12 June 2014. The index jumped 355.40 points at the day's high of 25,545.88 in late trade. The index fell 85.98 points at the day's low of 25,104.50 in early afternoon trade.
The CNX Nifty garnered 98.15 points or 1.3% to settle at 7,631.70, its highest closing level since 12 June 2014. The index hit a high of 7,637.60 and a low of 7,509.25 in intraday trade.
The BSE Mid-Cap index garnered 134.59 points or 1.5% to settle at 9,101.47. The BSE Small-Cap index garnered 197.17 points or 2.03% to settle at 9,901.56. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 2,047 shares gained and 952 shares fell. A total of 111 shares were unchanged.
The total turnover on BSE amounted to Rs 3736 crore, higher than Rs 3423.29 crore on Monday, 16 June 2014.
Among the 30-share Sensex pack, 23 stocks gained and rest of them declined.
India's largest oil exploration firm ONGC jumped 4.41% to Rs 446, with the stock extending gain in late trade. The stock hit high of Rs 447.40 and low of Rs 425.70.
Shares of state-run gas transmission and distribution company GAIL (India) gained 2.71% to Rs 445. The stock extended Monday's 3.95% rally triggered by buzz that a foreign brokerage has raised the price target on the stock to Rs 525 from Rs 450 earlier. The brokerage remains optimistic about the performance of the company's key business segments barring the petrochemicals business, as per reports. According to the brokerage house, with the new reform-oriented government at the helm, the macro outlook is fast improving. GAIL's gas transmission volumes should start to improve, and trading earnings can rebound after the weak Q4 March 2014. The brokerage did not factor any tariff increase by the company, and highlighted that a 15% tariff increase can boost GAIL's target price by a further 10%.
PSU OMCs extended Monday's gains as the under-recovery on diesel declined for the fortnight commencing 16 June 2014. Indian Oil Corporation (IOCL) rose 4.57%. HPCL advanced 3.58%. BPCL gained 2.49%.
The oil ministry on Monday, 16 June 2014, said that the under-recovery on diesel applicable for second fortnight of June 2014, effective from 16 June 2014, has declined to Rs 1.62 per litre, from Rs 2.80 per litre during first fortnight of June 2014. In the case of PDS kerosene and domestic LPG, the under-recoveries for the second fortnight of June 2014 continue to be Rs 32.87 per litre and Rs 432.71 per cylinder respectively, as in the first fortnight of June.
PSU OMCs are now incurring combined daily under-recovery of about Rs 249 crore on the sale of diesel, PDS kerosene and domestic LPG. This is lower than daily under-recovery of Rs 262 crore during the first fortnight of June 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in 2013-14.
Prime Minister Narendra Modi on 14 June 2014 said that repairing the economy would require unpleasant decisions and tough actions. His comments have triggered speculation that the government may raise fuel prices and/or announce diesel price deregulation to reduce the government's fuel subsidy burden.
Mangalore Refinery & Petrochemicals (MRPL) rose 3.72% to Rs 66.85, with the stock recovering on bargain hunting after recent steep slide. Shares of MRPL had declined 14% in five trading sessions to settle at Rs 64.45 on Monday, 16 June 2014, from a recent high of Rs 74.95 on 9 June 2014.
Index heavyweight Reliance Industries rose 2.62% to Rs 1,092.40. The stock hit high of Rs 1,092.75 and low of Rs 1,058.
Cairn India rose 1.57% on reports the company has received environmental clearance for raising crude oil production from its Rajasthan block to 300,000 barrels per day. According to reports, Cairn India received approval to augment hydrocarbon production from the RJ-ON-90/01 Block in Barmer to 300,000 barrels of oil per day (bopd) from the current limit of 200,000 bopd.
The panel set up by the environment ministry, however, imposed certain conditions for the company, including uploading the status of environment compliance and results of monitored data on its website and updating it periodically, reports added.
Tata Steel rose 1.51%. Tata Steel during market hours said that a committee constituted by the Board of Directors at its meeting today, 17 June 2014, has proposed to seek approval of the shareholders of the company through postal ballot for increase in borrowing limit from Rs 50000 crore to Rs 70000 crore or the aggregate of the paid up capital and free reserves of the company, whichever is higher. The approval of the shareholders is also being sought for further issuance of privately placed debt securities (convertible into equity or otherwise) in the international and/or domestic capital markets for an amount not exceeding Rs 14000 crore.
Cipla shed 0.11% to Rs 413.15 in volatile trade. The stock hit high of Rs 416 and low of Rs 410.65. Cipla (Mauritius), a wholly owned subsidiary of the Cipla, has signed a definitive agreement with parent Cipla's existing Sri Lankan distributor for acquisition of 60% stake in a new company which will market Cipla's products in Sri Lanka. The consideration payable for the transaction is $14 million, Cipla said during market hours today, 17 June 2014. The proposed acquisition is subject to regulatory approvals.
Capital goods stocks were in demand on renewed buying. Siemens (up 1.89%), BEML (up 1.73%), Bharat Heavy Electricals (Bhel) (up 3.07%), L&T (up 2.01%), Crompton Greaves (up 1.19%) gained. Bharat Electronics shed 0.28%.
ABB India surged 4.83% to Rs 1,035.55 after hitting 52-week high of Rs 1,069 in intraday trade.
Thermax gained 2.27% to Rs 955 after hitting record high of Rs 976.85 in intraday trade.
Maruti Suzuki India rose 1.45% to Rs 2,411.25 after a foreign brokerage maintained buy rating on the stock with a 15% increase in target price to Rs 2,700 per share.
According to the brokerage, Maruti Suzuki India has a blue sky scenario with a potential to touch Rs 3,750 per share over two years. The brokerage feels that Maruti is well-placed to benefit from an upturn in domestic four-wheeler demand, particularly in entry-level compact cars which account for 24% and 35% of industry and the car maker's volumes, respectively.
Bank stocks were in demand. Among private sector banks, Axis Bank (up 3.88%), ICICI Bank (up 2.36%), IndusInd Bank (up 4.14%), Kotak Mahindra Bank (up 1.55%) and HDFC Bank (up 1.06%) gained.
Yes Bank rose 2.69%. The stock extended Monday's gain triggered by the bank's announcement that its advance tax payment rose 20.19% to Rs 125 crore in Q1 June 2014 over Q1 June 2013. Indian companies are required to pay not less than 15% of estimated tax liability for the full year on or before 15 June every year which is the first advance tax installment.
Among PSU bank stocks, Canara Bank (up 2.96%), Punjab National Bank (up 3.85%), State Bank of India (SBI) (up 2.74%), Union Bank of India (up 4.41%), Bank of India (up 4.01%) and Bank of Baroda (up 3.25%) edged higher.
State Bank of Travancore rose 3.01% after the bank said its board of directors will meet on 20 June 2014 to consider and review the issue size of the proposed rights issue of the equity shares of the bank. The announcement was made during market hours today, 17 June 2014. It may be recalled that the board of directors of State Bank of Travancore had on 26 March 2014 given in-principle approval for raising up to Rs 629 crore from rights issue.
Cement stocks rose on expectations that cement demand will rise on government's thrust on the infrastructure sector. Ambuja Cements (up 1.46%), ACC (up 1.59%), UltraTech Cement (up 2.38%) and Shree Cement (up 1.19%) gained. Prime Minister Narendra Modi on Saturday, 14 June 2014, said the government would lay targeted focus on infrastructure, entrepreneurship and skill development.
United Spirits fell 1.14%. United Spirits during market hours today, 17 June 2014, said that the company is in the process of making certain enquiries in relation to the position of certain balances owing to the company from certain trade debtors, including distributors, contract bottlers and other third parties aggregating to an amount of up to approximately Rs 590 crore as on 31 March 2014 and consequently its treatment in the company's accounts.
In relation to the unsecured loan given by the company to United Breweries (Holdings) (UBHL), United Spirits said it is awaiting certain information from UBHL for determining the treatment in the company's accounts of the loan together with the applicable interest accrued until 31 March 2014.
The company said it is aiming to complete the above enquiries as expeditiously as practicable, in order to finalise the accounts, United Spirits said. United Spirits is yet to announce its Q4 and year ended 31 March 2014 results.
Telecom stocks were in demand. MTNL (up 9.86%), Tata Teleservices (Maharashtra) (up 8.69%), Reliance Communications (up 2.48%) and Bharti Airtel (up 1.46%) gained.
Idea Cellular rose 3.45% to Rs 140.75, with the stock extending Monday's gains triggered by the Reserve Bank of India (RBI) allowing hike in FII investment ceiling to 49% from earlier 24% of the paid-up capital of the company.
The RBI on Friday, 13 June 2014, notified that foreign institutional investors (FIIs), through primary market and stock exchanges, can now purchase up to 49% of the paid up capital of Idea Cellular under the portfolio investment scheme (PIS). The FII investment ceiling in the company's shares has been raised from earlier 24% after the company's board of director and shareholders approved the proposal for raising FII investment ceiling, the RBI said. Total holding of FIIs in Idea Cellular stood at 21.57% as per the shareholding pattern as on 11 June 2014.
Fertiliser shares were in demand on renewed buying. Coromandel International (up 2.69%), Gujarat Narmada Valley Fertilizers & Chemicals (up 5.35%), National Fertilizers (up 5.56%), Rashtriya Chemicals and Fertilizers (up 9.27%), Chambal Fertilisers & Chemicals (up 9.4%), Gujarat State Fertilizers & Chemicals (up 4.53%), Deepak Fertilisers & Petrochemicals Corporation (up 4.42%) gained.
Aviation stocks rose on reports the aviation ministry has drawn up a plan to push infrastructure development, e-governance and air connectivity during the first 100 days of the new government. Jet Airways (India) (up 3.03%) and SpiceJet (up 5.49%) edged higher.
Reports suggested that last fortnight the aviation ministry followed up on a string of consultations to hand over a list of over a dozen action points to the Prime Minister's Office (PMO) to be achieved in the next 100 days. State-owned Airports Authority of India (AAI) has identified 50 airports across the country to be built on the low-cost model, as per reports. The strategic Port Blair airport is also likely to be modernized, the contract for which will be awarded within 100 days, reports added.
Tyre stocks were in demand on renewed buying. Goodyear India (up 2.95%), Apollo Tyres (up 1.21%), JK Tyre & Industries (up 7.26%), MRF (up 2.5%) and TVS Srichakra (up 2.74%) gained.
CEAT spurted 13.09% to Rs 514 after scaling record high of Rs 515 in intraday trade.
Balkrishna Industries advanced 3.48% to Rs 749.30 after hitting record high of Rs 771.95 in intraday trade.
Sugar stocks rose on fresh buying. Dwarikesh Sugar Industries (up 4.92%), Balrampur Chini Mills (up 6.33%), Dhampur Sugar Mills (up 4.95%), Simbhaoli Sugar Mills (up 4.96%), Triveni Engineering & Industries (up 5.42%), Sakthi Sugars (up 2.76%), Shree Renuka Sugars (up 5.04%), Bajaj Hindusthan (up 5%) gained.
Jaypee Infratech jumped 12.82% to Rs 33, with the stock recovering on bargain hunting after recent steep slide. Shares of Jaypee Infratech had dropped 21.68% in five trading sessions to settle at Rs 29.25 on Monday, 16 June 2014, from a recent high of Rs 37.35 on 9 June 2014.
IFCI spurted 5.65% to Rs 40.20 on bargain hunting after the stock slumped 14.01% in the preceding five trading sessions to Rs 38.05 on 16 June 2014, from a recent high of Rs 44.25 on 9 June 2014.
Fulford (India) fell by maximum permissible limit of 5% to Rs 1,584.30 after the company said its promoter may consider other strategic alternatives in relation to its ownership of shares in the company if the delisting offer fails. The company's overseas parent firm Dashtag feels that the spurt in the share price of Fulford (India) after the announcement of the proposed delisting of the company's shares does not truely reflect of the business fundamentals of the Fulford (India).
Hanung Toys & Textiles rose by maximum permissible limit of 5% to Rs 34.25 after the firm said its board has given its nod for issue and allotment of equity shares to promoters, promoters group by way of preferential issue. The announcement was made after market hours on Monday, 16 June 2014.
Ricoh India fell by maximum permissible limit of 20% to Rs 172.80 after the company said its delisting offer has failed and the equity shares of the company will continue to remain listed on the BSE. The company made the announcement during trading hours today, 17 June 2014.
Ricoh India said its promoter, Ricoh Asia Pacific Pte, has rejected price of Rs 225, where the total number of shares to be acquired for successful delisting offer were tendered.
The total number of equity shares tendered by the public shareholders in the delisting offer were 69.42 lakh, of which the number of offer shares tendered at or below the discovered price of Rs 200 per share were 41.82 lakh.
Furthermore, the number of offer shares tendered is less than the minimum number of offer shares required to be accepted by the promoter for the delisting.
Accordingly, the acquirer will not acquire any offer shares tendered by the public shareholders pursuant to the delisting offer and the equity shares will continue to remain listed on the BSE, the company said in a statement.
Ricoh Asia Pacific Pte was seeking to acquire up to 1.04 crore equity shares, or 26.40% equity of Ricoh India from the public shareholders. Foreign promoters owned 73.60% stake in Ricoh India as on 31 March 2014.
A bout of volatility was witnessed in early trade as the key benchmark indices turned negative after reversing initial decline. Key benchmark indices moved into positive zone in morning trade. Key benchmark indices slipped into negative zone from positive zone in mid-morning trade. Key benchmark indices alternately swung between positive and negative zone within a narrow range in early afternoon trade. A bout of volatility was witnessed as key benchmark indices recovered after hitting fresh intraday low in early afternoon trade as European stocks rose in early trade there. A sudden rise took key benchmark indices to fresh intraday high in mid-afternoon trade. The Sensex extended gains in late trade.
In the foreign exchange market, the rupee reversed intraday fall against the dollar. The partially convertible rupee was hovering at 60.04, compared with its close of 60.155/60.165 on Monday, 16 June 2014.
India's macroeconomic worries eased as crude dropped after recent gains triggered by unrest in Iraq. Brent crude oil futures for August delivery were down 27 cents at $112.67 a barrel. Crude witnessed intraday volatility. The contract had risen 37 cents to settle at $112.57 a barrel on Monday, 16 June 2014, after touching an intraday high of $113.28 a barrel. The recent increase in crude oil price and fall in rupee against the dollar stoked concerns of fuel price inflation and increase in India's current account deficit and fiscal deficit. India imports majority of its crude oil requirements.
Reserve Bank of India Governor Raghuram Rajan today, 17 June 2014, said that the country is watching the Iraq situation, but despite the uncertainty the domestic economy is currently better prepared to deal with any shocks on the external front compared to last year. Rajan reportedly said on the sidelines of an industry event that since India has sufficient foreign reserves and the current account deficit is low, one shouldn't worry too much about the external side at this point.
Reacting to increase in inflation based on the wholesale price index to five-month high in May 2014, Finance Minister Arun Jaitley was quoted by the media as saying on Monday that the rising inflation was due to the hoarding of food stocks. He said that the Centre is committed to ease supply side bottlenecks and has also asked states to take firm measures against hoarders to check speculation. The Finance Minister reportedly said that the government is committed to take measures which will positively impact the GDP and result in higher growth than expected. The Finance Minister said inflation which is moving upward now would eventually come down.
The annual rate of inflation based on the monthly wholesale price index (WPI) accelerated to 6.01% for the month of May 2014, from 5.2% in April 2014, data released by the government on Monday, 16 June 2014, showed.
European stocks gained on Tuesday, 17 June 2014. Key benchmark indices in UK, France and Germany were up by 0.03% to 0.19%.
Investor confidence in Europe's largest economy fell for a sixth straight month in June. The Center for European Economic Research, or ZEW institute, said on Tuesday economic expectations for Germany dropped to 29.8 points in June, down from 33.1 in May.
Asian stocks rose on Tuesday, 17 June 2014. Key benchmark indices in Indonesia, Japan, South Korea and Taiwan were up 0.29% to 0.49%. Key benchmark indices in Hong Kong, China and Singapore were down 0.42% to 0.92%.
China attracted $8.6 billion of foreign direct investment in May, down 6.7% from a year earlier, the Ministry of Commerce said in a statement Tuesday. The figure was down from April's $8.7 billion, which was 3.4% higher from a year earlier. FDI in the January-May period rose 2.8% on year to $48.91 billion.
Japan's government late Monday, 16 June 2014, released a draft of Prime Minister Shinzo Abe's long-awaited growth strategy. This included already-flagged policies such as a plan to cut the corporate tax rate and other steps like a promise to ease regulation in agriculture and allow more foreign workers to be employed in the housekeeping and nursing sectors.
Trading in US index futures indicated that the Dow could advance 9 points at the opening bell on Tuesday, 17 June 2014. US stocks rose on Monday, 16 June 2014, as corporate deals and growth in American manufacturing overshadowed escalating tension in Iraq.
Fresh data from the factory sector showed that manufacturing remained a bright spot in the US economy at the end of the second quarter. Manufacturing activity in the New York region held steady in June after hitting an almost four-year high in May, the Federal Reserve Bank of New York said Monday.
Another data showed that industrial production in the US climbed in May. Output at factories, mines and utilities rose 0.6% after a revised 0.3% drop in April, a report from the Federal Reserve showed.
Home builders' confidence rose in June to the highest level in five months, but respondents were still a bit pessimistic, according to the National Association of Home Builders/Wells Fargo housing-market index released Monday.
A two-day meeting of the Federal Open Market Committee on US monetary policy begins today, 17 June 2014. The FOMC after a monetary policy review on 30 April 2014 reduced its monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve. The Fed also said at that time that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends.
The International Monetary Fund (IMF) cut its growth forecast for the US economy this year and said the Fed may have scope to keep interest rates at zero for longer than investors expect. The institution now sees the world's largest economy growing 2% in 2014, down from an April estimate of 2.8%. The IMF left a 2015 prediction unchanged at 3%, and said it doesn't expect the US to see full employment until the end of 2017, amid low inflation.
The Bank of Russia said Tuesday it is cutting forex intervention aimed at smoothing ruble volatility, partially removing a defense implemented in early March before Moscow annexed Crimea. The central bank plans to let the ruble float freely from 2015 and will focus on taming inflation through interest rates. The regulator would still intervene if needed to maintain financial stability.
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