Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was up 342.77 points or 1.37%, up about 260 points from the day's low and off close to 40 points from the day's high. The BSE Mid-Cap index was up almost 1.6%. The BSE Small-Cap index was up more than 1.8%. Both these indices outperformed the Sensex. The market breadth indicating the overall health of the market was strong. A decline in crude oil prices aided rally on the domestic bourses. As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased.
Gas utility stocks surged on reports that the government may soon finalise hike in natural gas prices and that the price hike will be lower than that as per a formula adopted by the previous UPA government that recommended doubling the price. Aviation stocks rose as crude oil prices eased.
At 14:20 IST, the S&P BSE Sensex was up 342.77 points or 1.37% to 25,374.09. The index jumped 383.37 points at the day's high of 25,414.69 in mid-afternoon trade, its highest level since 19 June 2014. The index gained 84.51 points at the day's low of 25,115.83 in early trade.
The CNX Nifty was up 84.50 points or 1.13% to 7,577.85. The index hit a high of 7,593.35 in intraday trade, its highest level since 19 June 2014. The index hit a low of 7,515.20 in intraday trade.
The market breadth indicating the overall health of the market was strong, with over two gainers for every loser on BSE. On BSE, 2,009 shares gained and 875 shares fell. A total of 111 shares were unchanged.
The BSE Mid-Cap index was up 141.56 points or 1.57% at 9,159.63. The BSE Small-Cap index was up 181.18 points or 1.85% at 9,997.53. Both these indices outperformed the Sensex.
Among the 30 Sensex shares, 25 rose and the remaining shares fell. Tata Power Company (up 2.76% to Rs 104.40), HDFC (up 2.53% to Rs 991.25) and Bharat Heavy Electricals (Bhel) (up 2.37% to Rs 250.15) edged higher from the Sensex pack.
Gas utility stocks surged on reports that the government may soon finalise hike in natural gas prices and that the price hike will be lower than that as per a formula adopted by the previous UPA government that recommended doubling the price. Gujarat Gas Company (up 6.7% to Rs 425.45), Gujarat State Petronet (up 6.07% to Rs 81.10), Indraprastha Gas (up 3.12% to Rs 344) and Petronet LNG (up 3.35% to Rs 180.80) edged higher.
The discussions between the oil ministry and Prime Minister's Office over the weekend suggest that gas price may be jacked up from $4.2 a unit to $5.5-6.8 per unit, report said. This increase will be lower than the price of $8.4 per unit that was expected based on the formula adopted by the UPA government. The UPA government had approved a new formula for pricing all domestic gas from 1 April 2014. However, gas price revision could not be implemented because of the electoral code of conduct due to Lok Sabha elections in April-May 2014.
Shares of state-run gas transmission major GAIL (India) rose 4.29% to Rs 458.45.
Aviation stocks rose as crude oil prices eased. Jet Airways (India) (up 2.74% at Rs 251.50) and SpiceJet (up 4.18% at Rs 18.70) edged higher. The price of aviation turbine fuel (ATF) or jet fuel is directly linked to international crude oil prices. Jet fuel constitutes about 40% of airlines' operating cost.
Decline in crude oil prices triggered a firm opening on the domestic bourses today, 24 June 2014. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices remained firm after moving in a narrow range in early afternoon trade. The Sensex extended gains and hit fresh intraday high in mid-afternoon trade.
As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. Brent crude oil futures extended Monday's losses on reports that Iraq's army has regained control of the Baiji refinery in north Iraq from Islamist militants. Brent oil futures for August delivery were off 35 cents at $113.77 a barrel. The contract fell 0.6% to settle at $114.12 on Monday, 23 June 2014, the biggest percentage drop since 16 May 2014.
The recent spike in crude oil prices triggered by violence in Iraq sparked worries about India's macroeconomic situation as India imports majority of its crude oil requirements. Increase in crude oil prices raised concerns of increase in India's current account deficit and fiscal deficit. Firm global crude oil prices and the latest hike in railway freight rate also stoked inflation worries.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire on Thursday, 26 June 2014.
In the foreign exchange market, the rupee edged higher against the dollar as crude dropped. The partially convertible rupee was hovering at 60.1125, compared with its close of 60.20/21 on Monday, 23 June 2014.
Finance Minister Arun Jaitley reportedly said today, 24 June 2014, that India needs to act now to fix the health of its economy which is facing a challenging time. The comment comes just weeks ahead of the final Union Budget for 2014-15 which is likely to be tabled in parliament by mid July 2014.
European shares edged lower in choppy trade on Tuesday, 24 June 2014 after data showed German business confidence declined for a second month in June. Key benchmark indices in UK and Germany were off 0.03% to 0.08%. France's CAC 40 was up 0.12%.
German business confidence declined for a second month in June amid signs of slower growth in Europe's largest economy. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 109.7 from 110.4 in May.
Asian stocks edged higher on Tuesday, 24 June 2014, as utilities advanced. Key benchmark indices in Indonesia, Japan, South Korea, China, Singapore, Hong Kong and Taiwan were up by 0.05% to 0.98%.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Tuesday, 24 June 2014. Most US stocks slid on Monday, 23 June 2014, with the Standard & Poor's 500 Index dropping for the first time in seven sessions, as General Electric Co. led industrial shares lower to offset gains among energy producers.
Data on Monday showed US sales of existing homes climbed 4.9% to a 4.89 million annualized rate in May, the most since October. A separate report from Markit Economics showed a measure of US manufacturing growth rose to 57.5 in June from 56.4 in May.
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