Key benchmark indices remained firm in mid-morning trade as announcements of various measures taken by the government to spur economy, including psu banks' capitalisation plan to massive road building program boosted sentiment. At 11:20 IST, the barometer index, the S&P BSE Sensex gained 302.25 points or 0.93% at 32,909.59. The Nifty 50 index rose 53.45 points or 0.52% at 10,261.15. Firmness in Asian stocks also supported gains on the bourses.
Market witnessed a gap up opening in early trade and scaled fresh record highs. Indices trimmed gains in morning trade. The Sensex slipped below the psychologically important 33,000 level after marching past that mark for the first time in its history in early trade.
The Sensex jumped 509.99 points or 1.56% at the day's high of 33,117.33 at the onset of the trading session, its record high. The index gained 197.26 points or 0.6% at the day's low of 32,804.60 in morning trade. The Nifty spurted 132.85 points or 1.3% at the day's high of 10,340.55 at the onset of the trading session, its record high. The index gained 33.20 points or 0.32% at the day's low of 10,240.90 in morning trade.
However, side counters were sluggish. The S&P BSE Mid-Cap index rose 0.16%. The S&P BSE Small-Cap index gained 0.08%. Both these indices underperformed the Sensex.
The breadth, indicating the overall health of the market, was almost even. On the BSE, 1,165 shares rose and 1,142 shares rose. A total of 111 shares were unchanged.
Ambuja Cements rose 0.97% after consolidated net profit surged 49.93% to Rs 351.29 crore on 19.35% increase in total income to Rs 5452.68 crore in Q3 September 2017 over Q3 September 2016.
In its outlook, Ambuja Cements said that the government has identified the construction and infrastructure sector as one of the key sectors that will help improve overall economic growth. Infrastructure projects in the areas of power, irrigation, roads, metros and railways, as well as dedicated freight and industrial corridors, are likely to generate strong cement demand in the country. Furthermore, increased spending on affordable and low cost housing coupled with the normal monsoon is expected to boost the rural economy which augurs well for the cement industry.
Shares of other cement stocks rose after Ambuja Cements' strong Q3 results. ACC (up 1.15%), Shree Cement (up 0.38%), and UltraTech Cement (up 4.36%) gained.
Grasim Industries advanced 2.49%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Most IT stocks gained after Infosys announced its Q2 results. TCS (up 0.46%), Tech Mahindra (up 2.42%) and Wipro (up 0.94%) rose.
Infosys was up 1.11% after consolidated net profit rose 7% to Rs 3726 crore on 2.9% growth in revenue to Rs 17567 crore in Q2 September 2017 over Q1 June 2017. The results are as per International Financial Reporting Standards (IFRS). The result was announced after market hours yesterday, 24 October 2017.
In its outlook, Infosys said it now expects consolidated revenue to grow by 6.5%-7.5% in dollar terms for the financial year ending 31 March 2018 (FY 2018). It expects a revenue growth of 5.5%-6.5% in constant currency terms for FY 2018.
Among other developments, Infosys said that the process of identifying the next CEO and shareholder consultation outreach has been initiated and are progressing well.
HCL Technologies declined 1.69% after the company's net income rose 0.8% to Rs 2188 crore on 2.3% increase in revenue at Rs 12434 crore in Q2 September 2017 over Q1 June 2017. The result was announced before trading hours today, 25 October 2017.
In its outlook, the company said that its financial year ending March 2018 (FY 2018) revenues are expected to grow between 10.5% to 12.5% in constant currency. The above constant currency guidance translates to 12.1% to 14.1% in dollar terms based on 30 September 2017 rates. FY 2018 expected operating margin (EBIT) range is from 19.5% to 20.5%. The operating margin guidance assumes USD-INR currency rate of $1 = Rs. 65.5 and other currencies at FY 2017 average exchange rates.
Yes Bank declined 2.14% after the bank said that the Reserve Bank of India imposed a monetary penalty of Rs 6 crore on the bank for non-compliance with the directions issued by RBI on income recognition asset norms and delayed reporting of information security incident involving ATMs of the bank. The announcement was made during market hours today, 25 October 2017.
ABB India gained 1% after net profit rose 18.17% to Rs 83.39 crore on 7.28% fall in total income to Rs 1953.12 crore in Q3 September 2017 over Q3 September 2016. The result was announced after market hours yesterday, 24 October 2017.
On the macro front, government yesterday, 24 October 2017, decided to take a massive step to capitalise pulic sector banks (PSBs) in a front-loaded manner, with a view to support credit growth and job creation. This entails mobilization of capital, with maximum allocation in the current year, to the tune of about Rs 2.11 lakh crore over the next two years, through budgetary provisions of Rs 18139 crore, recapitalisation bonds to the tune of Rs 1.35 lakh crore, and the balance through raising of capital by banks from the market while diluting government equity (estimated potential Rs 58000 crore). There will be a strong push on enabling growth of micro- small and medium enterprises (MSMEs) through enhanced access to financing and markets, and a drive to finance MSMEs in 50 clusters.
Taking forward its commitment to providing more efficient transportation, government has debottlenecked the roads sector and significantly stepped up the Highway development and road building program. In order to further optimise the efficiency of movement of goods and people across the country, government has launched a new umbrella program. This road building program, for 83,677 kilometers of roads involving capex of Rs 6.92 lakhs crore over next 5 years. Out of this, Bharatmala Pariyojana to be implemented with an outlay of Rs 5.35 lakh crore will generate 14.2 crores mandays of jobs.
Ministry of finance secretaries at the press conference held yesterday, 24 October 2017 said that industrial production, core sector, index, automobile, consumer spending etc. pointing out a strong growth pick up and there is expectation of very good economic growth from second quarter of current year itself. The recapitalisation and the initiatives announced on Tuesday, 24 October 2017, are expected to have a noticeable impact in the near-term, contributing to accelerated economic activity, employment and growth of the economy, it added.
Overseas, Asian stocks rose following the overnight gains on Wall Street as upbeat corporate earnings results and optimism about global economic growth boosted investor sentiment. China's Communist Party revealed its new top leadership helmed by President Xi Jinping, breaking with recent precedent by failing to include a clear successor among the seven-man line-up. Apart from Xi, Premier Li Keqiang was the only one to retain his spot amid sweeping changes on the Politburo Standing Committee, the height of power in China.
On Wall Street, stocks continued to surge yesterday, 24 October 2017, touching new record highs after strong earnings from heavy-hitters Caterpillar and 3M.
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