A rally in global stocks aided fresh upmove on the domestic bourses as investors saw the US Federal Reserve's move to raise interest rates for the first time in nearly a decade as a sign of confidence in the world's biggest economy. The barometer index, the S&P BSE Sensex, gained 301.21 points or 1.18% at 25,795.58, as per the provisional closing data. The Nifty 50 index rose 86.50 points or 1.12% at 7,837.40, as per the provisional closing data. Key indices witnessed intraday volatility. The Sensex and the Nifty, both, hit two-week high as these two key benchmark indices surged in late trade taking cues from a rally in European stocks.
The Sensex jumped 336.94 points or 1.32% at the day's high of 25,831.31 at the fag end of the trading session, its highest level since 3 December 2015. The barometer index fell 46.05 points or 0.18% at the day's low of 25,448.32 in mid-morning trade. The Nifty rose 102 points or 1.31% at the day's high of 7,852.90 at the fag end of the trading session, its highest level since 3 December 2015. The Nifty fell 13.35 points or 0.17% at the day's low of 7,737.55 in mid-morning trade.
Metal and auto sector stocks and heavyweights Reliance Industries (RIL), HDFC and L&T led gains for key benchmark indices which edged higher for the fourth straight trading session.
In overseas stock markets, European shares surged as investors saw the US Federal Reserve's move to raise interest rates for the first time in nearly a decade as a sign of confidence in the world's biggest economy. Asian stocks edged higher after the US Federal Reserve emphasized a gradual path for future interest rate hikes after raising the benchmark rate by 25 basis points to 0.25%-to-0.50% at the conclusion of its two-day monetary policy meeting yesterday, 16 December 2015. US stocks rallied yesterday, 16 December 2015, in the aftermath of the Fed's widely expected decision to raise the benchmark interest rate by 25 basis points. Citing improvement in the US economy, the Fed policy makers voted unanimously to raise the target range of its fed-funds rate, which had been stuck at zero for seven years.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,927 shares rose and 757 shares rose. A total of 217 shares were unchanged. The BSE Mid-Cap index provisionally rose 1.56%. The BSE Small-Cap index provisionally rose 1.72%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3135 crore, higher than turnover of Rs 2722.72 crore registered during the previous trading session.
Tata Power Company rose 3.95% at Rs 64.50. The stock hit a high of Rs 64.75 and a low of Rs 62.25 in intraday trade.
Index heavyweight Reliance Industries rose 3.48% at Rs 1,012. The stock hit a high of Rs 1,013.25 and a low of Rs 978 in intraday trade.
Index heavyweight L&T rose 1.32% at Rs 1,298.05. The stock hit a high of Rs 1,299.20 and a low of Rs 1,282.45 in intraday trade.
Index heavyweight and cigarette major ITC edged higher in volatile trade. The stock rose 0.23% at Rs 320.25. The stock hit a high of Rs 322.05 and a low of Rs 316.50 in intraday trade.
Hindustan Unilever (HUL) rose 1.08% to Rs 863 after the company announced during trading hours today, 17 December 2015, that it has signed an agreement with Mosons Group to acquire its flagship Indulekha hair oil brand. The proposed acquisition is in line with HUL's strategic intent to strengthen its leadership position in the personal care segment. The deal envisages the acquisition of the trademarks 'Indulekha' and 'Vayodha', intellectual property, design and knowhow for a consideration of Rs 330 crore payable upon closing of the transaction and a deferred consideration of 10% on the domestic turnover of the brands each year, payable annually for a 5-year period commencing from the year ending 31 March 2018 (FY 2018). The transaction is subject to fulfilment of certain conditions and the parties will work together to complete this over the next few months. Mosons will continue to manage the business until the completion of the transaction.
The Indulekha brand which has a strong presence in Kerala, Tamil Nadu and Karnataka had a turnover of Rs 100 crore and EBITDA (earnings before interest, taxes, depreciation and amortization) margin of around 30% for the year ended 31 March 2015 (FY 2015). The brand was recently launched in Maharashtra.
Metal stocks edged higher on renewed buying. National Aluminium Company (up 4.65%), NMDC (up 4.05%), Hindalco Industries (up 3.88%), Vedanta (up 3.81%), Hindustan Copper (up 1.55%) and Hindustan Zinc (up 1.05%), edged higher.
Among steel makers, Steel Authority of India (up 6.53%), Tata Steel (up 5%), JSW Steel (up 3.56%), Jindal Steel & Power (up 2.67%) and Bhushan Steel (up 1.23%), edged higher.
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