Key benchmark indices held firm in early afternoon trade. The barometer index, the 30-share S&P BSE Sensex, was up 384.02 points or 1.95%, up close to 310 points from the day's low and off about 35 points from the day's high. Stock prices surged today, 15 May 2013, on expectations of a central bank interest rate cut to perk up economic growth after data released on Tuesday, 14 May 2013, showed a significant fall in inflation based on the wholesale price index in April 2013. Firm Asian stocks also supported domestic bourses. The market breadth, indicating the overall health of the market, was strong. All the 13 sectoral indices on BSE were in the green. All the shares from the 30-share Sensex pack rose.
Index heavyweight and cigarette major ITC held firm. Another index heavyweight Reliance Industries (RIL) extended intraday gains. In auto pack, Mahindra & Mahindra (M&M) and Maruti Suzuki India, both, hit record high. PSU OMCs rose after the Reserve Bank of India (RBI) Deputy Governor H.R. Khan on Tuesday said that the central bank has allowed oil marketing companies to raise a part of their short-term capital requirements through overseas borrowings. Most aviation stocks rose after Khan on Tuesday also said that the RBI has extended the time by a few more months for civil aviation firms to make foreign borrowings.
Gains in Asian stocks triggered a firm opening on the domestic bourses. The market extended initial gains to hit fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, regained the psychological 20,000 mark. The market surged to hit fresh intraday high in mid-morning trade. The 50-unit CNX Nifty hit its highest level in more than 28 month high above the psychological 6,000 level. The market held firm in early afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 14 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 420.99 crore on Tuesday, 14 May 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 384.02 points or 1.95% to 20,106.31. The index jumped 419.94 points at the day's high of 20,142.23 in mid-morning trade, its highest level since 11 May 2013. The index gained 75.89 points at the day's low of 19,798.18 in opening trade.
The CNX Nifty was up 114.40 points or 1.91% to 6,109.80. The index hit a high of 6,125.50 in intraday trade, its highest level since 5 January 2011. The index hit a low of 6,018.85 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,112 shares advanced and 500 shares declined. A total of 80 shares were unchanged.
All the shares from the 30-share Sensex pack rose. Hindalco Industries, HDFC and State Bank of India (SBI) rose by 2.85% to 4.38%.
Index heavyweight Reliance Industries (RIL) gained 2.19% to Rs 815.20. The stock hit a high of Rs 816.75 and low of Rs 802.35 so far during the day.
Index heavyweight and cigarette major ITC rose 1.47% to Rs 340.85. The stock hit a high of Rs 341.65 and low of Rs 336 so far during the day. The stock had hit record high of Rs 355 in intraday trade during the special trading session held on Saturday, 11 May 2013. The Centre raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14.
Mahindra & Mahindra (M&M) jumped 3.48% to Rs 983.55. The stock hit record high of Rs 985 in intraday trade today, 15 May 2013.
Maruti Suzuki India rose 2.3% to Rs 1742.95 on weaker yen against the dollar. The stock hit record high of Rs 1756 in intraday trade today, 15 May 2013. Weak yen could boost earnings of Maruti Suzuki as it imports raw materials from its Japanese parent Suzuki Motor Corporation. It also pays annual royalty on sales to the Japanese parent.
PSU OMCs rose after the Reserve Bank of India Deputy Governor H.R. Khan on Tuesday said that that the central bank has allowed oil marketing companies to raise a part of their short-term capital requirements through overseas borrowings. HPCL, BPCL and Indian Oil Corporation rose by 0.56% to 2.04%.
Oil market companies had hiked diesel prices by Rs 1.02 per litre effective Saturday, 11 May 2013. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Most aviation stocks rose after the RBI Deputy Governor H.R. Khan on Tuesday said that the RBI has extended the time by a few more months for civil aviation firms to make foreign borrowings. In early 2012, the government permitted companies in the aviation sector to raise a total of $1 billion to help tide over their capital shortages. These borrowings were to be made in the last year ended 31 March 2013.
Jet Airways (India) gained 1.56%. The company said after market hours on Tuesday, 14 May 2013, that Securities and Exchange Board of India has permitted the company and relaxed the requirement of 12 week cool off period after the proposed inter se transfer of shares to enable the company to undertake the Offer for Sale through Stock Exchange Mechanism (OFS) for the purpose of achieving the minimum level of public shareholding as required under the Securities Contracts Regulations, 1957.
SpiceJet rose 2.94%. Kingfisher Airlines fell 0.15%.
The focus of the market is on Q4 results. Bajaj Auto announces Q4 results tomorrow, 16 May 2013. ITC unveils Q4 results on Friday, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. ONGC, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government on Tuesday, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.
Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.
The consumer price inflation fell below the 10% mark in April 2013. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013, data released by the government on Monday, 13 May 2013, showed.
Reserve Bank of India Governor D Subbarao on Tuesday, 14 May 2013, said that the central bank will take note of falling inflation when discussing potential interest rate cuts.
The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The central bank said that with upside risks to inflation still significant in the near term in view of sectoral demand supply imbalances, ongoing correction in administered prices and pressures stemming from MSP increases, monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
Asian shares rose on Wednesday, with Japan's Nikkei Average surging to a fresh 5-1/2 year high on the back of a weaker yen and strengthening expectations for earnings growth of Japanese firms. Key benchmark indices in Indonesia, Japan, China, South Korea, Hong Kong, Taiwan, and Singapore rose by 0.05% to 2.29%.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 15 May 2013. US stocks rallied to record highs on Tuesday, continuing an ascent driven by the Federal Reserve's easy monetary policy, though investors' focus has turned to when the Fed may start to rein in its bond-purchase programme.
In Europe, France fell into recession, with the government's statistics agency on Wednesday reporting preliminary economic activity in the first quarter contracted by 0.2% compared with the fourth quarter of 2012. The contraction was the third decrease in the last four quarters, according to France's Insee agency. Total output in goods and services during the first quarter almost stabilized, while household consumption was nearly flat, it said in a statement.
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