Key benchmark indices snapped five-day losing streak 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 economic growth. The barometer index, the S&P BSE Sensex, garnered 221.67 points or 0.89%, up close to 205 points from the day's low and off about 25 close to points from the day's high. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up almost 2%. The BSE Small-Cap index was up over 2%. Both these indices outperformed the Sensex.
Interest rate sensitive banking, realty and auto stocks gained after the latest data showed easing of retail inflation in June 2014. State Bank of India (SBI) advanced after the state-run bank said it has revised downwards its bulk and retail term deposit interest rates for select maturities with effect from 18 July 2014. Reliance Power rose after the company said that boiler light up has been achieved for the fifth 660 megawatts (MW) unit at the 3,960 MW Sasan ultra mega power project.
Oil & gas stocks rose across the board. PSU OMCs edged higher as crude oil prices declined. Metal and mining stocks gained ahead of Chinese gross domestic product (GDP) data for the second quarter due to be released tomorrow, 16 July 2014.
The S&P BSE Sensex garnered 221.67 points or 0.89% to settle at 25,228.65, its highest closing level since 10 July 2014. The index jumped 247.50 points at the day's high of 25,254.48 in late trade. The index rose 13.34 points at the day's low of 25,020.32 in early afternoon trade.
The CNX Nifty garnered 72.50 points or 0.97% to settle at 7,526.65, its highest closing level since 10 July 2014. The index hit a high of 7,534.90 and a low of 7,459.15 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,847 shares gained and 1,078 shares fell. A total of 104 shares were unchanged.
The BSE Mid-Cap index garnered 171.22 points or 1.93% to settle at 9,044.92. The BSE Small-Cap index garnered 213.54 points or 2.21% to settle at 9,956. Both these indices outperformed the Sensex.
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The S&P BSE Power index (up 1.52%), the S&P BSE Metal index (up 1.3%), the S&P BSE Realty index (up 2.15%), the S&P BSE Consumer Durables index (up 2.82%), the S&P BSE Capital Goods index (up 2.23%), the S&P BSE Oil & Gas index (up 1.58%), the S&P BSE Auto index (up 1.4%), and the S&P BSE Bankex (up 2.76%), outperformed the Sensex.
The S&P BSE FMCG index (down 0.31%), the S&P BSE IT index (down 0.17%), the S&P BSE Teck index (up 0.09%), and the S&P BSE Healthcare index (up 0.22%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 2669 crore, higher than Rs 2479.60 crore on Monday, 14 July 2014.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Interest rate sensitive realty 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. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.
DLF (up 3.06%), Housing Development and Infrastructure (up 3.2%), Unitech (up 4.34%), Godrej Properties (up 0.16%), and Parsvnath Developers (up 1%) gained. Sobha Developers fell 2.52%.
Interest rate sensitive auto stocks gained after the latest data showed retail inflation eased in June 2014. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. TVS Motor Company (up 4.17%) and Bajaj Auto (up 1.49%), gained. But, Hero MotoCorp fell 1.74%.
Maruti Suzuki India rose 0.24%. 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 2.59%), Tata Motors (up 1.37%), and Ashok Leyland (up 3.49%), 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.
Before the Union Budget, the government had on 25 June 2014 extended concessional excise duty on automobiles by six months up to 31 December 2014.
Tech Mahindra rose 1.21%. Tech Mahindra today, 15 July 2014, said that the company is not in negotiations for acquisition of HP's stake in MphasiS. The company issued this clarification after news reports said Tech Mahindra has expressed an interest in buying out HP in MphasiS. HP has been over the last couple of years looking at exiting MphasiS, according to reports. HP holds 60.49% stake in MphasiS (as per the shareholding pattern as on 30 June 2014).
Shares of MphasiS jumped 7.28%.
Oil & gas stocks rose across the board. Among upstream oil & gas companies, GAIL (India) (up 1.26%), Oil India (up 1.7%) and Cairn India (up 1.05%) rose.
Mangalore Refinery and Petrochemicals (MRPL) rose 0.75%. MRPL clarified after market hours on Monday, 14 July 2014, that the company currently holds only 3% equity in ONGC Mangalore Petrochemicals (OMPL) and that it is examining the possibility of acquiring more stake in OMPL. The company issued the clarification after media reports suggested that ONGC is evaluating a proposal to merge ONGC Mangalore Petrochemicals with MRPL.
OMPL is building an aromatic complex in 442 acres of land acquired in Mangalore Special Economic Zone with a project cost estimate of Rs 5750 crore. The project is reportedly scheduled to be completed by August 2014. The complex is totally integrated with MRPL refinery.
ONGC rose 2.31% after news reports said that the government will decide in August 2014 whether to sell a 5% stake in the company.
Index heavyweight Reliance Industries (RIL) rose 1.16% to Rs 973. The stock was volatile. The stock hit high of Rs 979.90 and low of Rs 963. As per reports, government has disallowed RIL from recovering $2.376 billion invested to develop offshore gas fields in the D6 block on the country's east coast as output has fallen drastically and is way below the promised volumes. Under exploration policy, the government allows companies to first recover their costs from oil and gas revenue, and subsequently share profits with the government.
PSU OMCs edged higher as crude oil prices declined. HPCL (up 3.83%), Indian Oil Corporation (IOCL) (up 1.89%) and BPCL (up 2.38%) gained.
Brent crude oil futures for August delivery were down 85 cents or 0.79% to $106.13 a barrel in electronic trading today, 15 July 2014. The contract gained 32 cents to settle at $106.98 a barrel on Monday, 14 July 2014. The August Brent futures contract expires tomorrow, 16 July 2014. Brent crude oil futures for September delivery were off 19 cents at $107.52 a barrel. The September Brent contract is now the most active contract.
Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
Metal and mining stocks gained ahead of Chinese gross domestic product (GDP) data for the second quarter due to be released tomorrow, 16 July 2014. China is the world's largest consumer of copper and aluminum.
NMDC (up 3.46%), National Aluminium Company (up 3.89%) and Hindustan Copper (up 1.78%) edged higher.
Hindustan Zinc rose 1.3% as zinc prices hovered near a three-year high. The stock had jumped 5.07% on Monday, 14 July 2014. Three month zinc on the London Metal Exchange struck the highest since August 2011 at $2,325.50 on Monday, 14 July 2014.
Hindalco Industries rose 0.75%. The government raised export duty on bauxite from 10% to 20% in Union Budget 2014-15. Increase in export duty on bauxite will be favourable for aluminium smelters like Hindalco and Sesa Sterlite who will benefit from the resultant increase in domestic bauxite supply.
Shares of Sesa Sterlite fell 1.17%.
Steel stocks gained across the board as higher outlay for housing, road, port, urban and rural housing and infrastructure development in Union Budget 2014-15 would help improve steel consumption.
Jindal Steel & Power rose 1.01%. JSW Steel rose 2.97%. Tata Steel rose 2.91%. Steel Authority of India (Sail) gained 1.74%. Bhushan Steel gained 1.11%.
Index heavyweight and cigarette maker ITC fell 1% to Rs 341.65. The stock was volatile. The stock hit high of Rs 348 and low of Rs 341.65. With regard to media reports that ITC Hotels is close to acquiring the Ramada Caravela Beach Resort from Advani Hotels & Resorts in Goa at a cost of Rs 700 crore, ITC clarified after market hours on Monday, 14 July 2014, that the report is speculative in nature and as a matter of best practice, the company does not respond to market rumours. ITC further said that the company routinely scans strategic opportunities for business growth and this process involves dialogues from time to time with relevant parties across the country for different businesses. As and when there is conclusive development of a substantive nature, the company keeps the stock exchanges informed.
Shares of Advani Hotels & Resorts were locked at 20% upper circuit at Rs 61.90. The stock extended Monday's 20% rally.
L&T rose 2.27%. L&T after market hours on Monday, 14 July 2014, said that its wholly owned subsidiary dedicated to oil and gas -- L&T Hydrocarbon -- has secured an order worth Rs 5076 crore from Kuwait Oil Company (KOC). L&T Hydrocarbon will execute complete Engineer-Procure-Construct contract for a gathering centre for KOC, a subsidiary of Kuwait Petroleum Corporation (KPC) and fully owned by the State of Kuwait. Located in North Kuwait, the oil gathering facilities will receive crude from the Raudhatain fields.
Bank stocks gained across the board after the latest data showed easing of retail inflation in June 2014. Among private bank stocks, HDFC Bank (up 0.96%), IndusInd Bank (up 0.55%), Kotak Mahindra Bank (up 1.86%), Axis Bank (up 2.78%), Yes Bank (up 1.65%), and ICICI Bank (up 3.34%) gained.
DCB Bank rose 3.69% after net profit rose 4.65% to Rs 45 crore on 35.15% growth in total income to Rs 173 crore in Q1 June 2014 over Q1 June 2013. The Q1 result was announced after market hours on Monday, 14 July 2014.
Among PSU bank stocks, Punjab National Bank (up 2.84%), Bank of Baroda (up 4.29%), Bank of India (up 3.69%) and Union Bank of India (up 3.57%) edged higher.
State Bank of India (SBI) advanced 4.35%. The state-run bank during market hours said it has revised downwards its bulk term deposit interest rates (Rs 1 crore and above) to 6.25% from 6.5% for deposits between 7 days to 60 days with effect from 18 July 2014. SBI also revised downwards its bulk term deposit interest rates to 6.75% from 7% for deposits between 61 days to less than 1 year.
SBI also revised downwards its retail term deposit interest rates (below Rs 1 crore) to 7% from 7.5% for deposits between 7 days to 179 days with effect from 18 July 2014.
Reliance Power rose 2.74% after the company said that boiler light up has been achieved for the fifth 660 megawatts (MW) unit at the 3,960 MW Sasan ultra mega power project (UMPP). The sixth and last unit at the project is in advanced stages of construction, Reliance Power said. The Sasan UMPP is the largest integrated power plant and coal mining project in the world. Coal production has already commenced from the 20 million tonnes Moher and Moher-Amlohri coal mines associated with the power project.
Rajesh Exports (up 11.17% at Rs 171.75), BF Utilities (up 10% at Rs 716.20), Trinity Tradelink (up 9.74% at Rs 82.80), Cox & Kings (up 9.41% at Rs 250), Symphony (up 9.08% at Rs 1,134.70), Multi Commodity Exchange of India (MCX) (up 8.81% at Rs 769), Future Retail (up 8.16% at Rs 128.60) and Voltas (up 7.02% at Rs 201.95) were the top gainers in that order from the BSE Mid-Cap index.
Marksans Pharma (up 15.06% at Rs 31.70), Orchid Chemicals & Pharmaceuticals (up 14.03% at Rs 83.30), AVT Natutral Products (up 11.99% at Rs 44.35), Timken India (up 11.76% at Rs 308.95), Bombay Burmah Trading Corporation (up 10.91% at Rs 137.20), Inox Leisure (up 10.46% at Rs 162.10), Financial Technologies (India) (up 10% at Rs 243.70), Hitachi Home & Life Solutions (India) (up 9.55% at Rs 294.80) and Astra Microwave Products (up 9.1% at Rs 127.05) were the top gainers in that order from the BSE Small-Cap index.
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. Volatility continued as the key benchmark indices traded off the day's highs in mid-afternoon trade. Key benchmark indices extended gains and hit fresh intraday day high in late trade.
Indian stocks snapped five-day losing streak today, 15 July 2014. The Sensex had fallen 1,093.10 points or 4.18% in five trading sessions to settle at 25,006.98 on Monday, 14 July 2014, from a record closing high of 26,100.08 on 7 July 2014. The Sensex has fallen 185.13 points or 0.72% in this month so far (till 15 July 2014). The Sensex has gained 4,057.97 points or 19.16% in calendar year 2014 so far (till 15 July 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,779.94 points or 44.58%. From a record high of 26,190.44 on 8 July 2014, the Sensex has fallen 961.79 points or 3.67%.
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 UK, France and Germany were off 0.26% to 0.53%.
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, Singapore, Hong Kong, Japan, Indonesia, China and South Korea rose by 0.01% to 0.99%.
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 fall 17 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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