A bout of volatility was witnessed as key benchmark indices recovered soon after paring intraday gains in early afternoon trade. At 12:18 IST, the barometer index, the S&P BSE Sensex was up 108.89 points or 0.44% at 24,786.26. The 50-unit Nifty 50 index was up 38.45 points or 0.51% at 7,551. Gains in global stocks supported the upmove on the domestic bourses.
The market breadth indicating the overall health of the market turned negative from positive in early afternoon trade. On BSE, 1,169 shares fell and 1,040 shares rose. A total of 145 shares were unchanged. The BSE Mid-Cap index was currently down 0.15%. The BSE Small-Cap index was currently down 0.1%. Both these indices underperformed the Sensex.
In overseas stock markets, Asian stocks edged higher on stronger currencies relative to the US dollar. A broad based weakness in the dollar aided gains in Asian currencies on the heels of the US Federal Reserve slashing its projections for rate increases to two in 2016 from an earlier projection of four after keeping rates unchanged at the conclusion of a two-day monetary policy review on Wednesday, 16 March 2016. Fewer US interest rates hikes could support demand for emerging-market assets because investors have less incentive to draw out money from risky assets in their search for higher yields in the US.
Chinese stocks led gains in Asian markets after Chinese authorities guided the yuan stronger against the dollar. In mainland China, the Shanghai Composite was currently up 1.3%. In Hong Kong, the Hang Seng index was currently up 0.39%. US stocks edged higher yesterday, 17 March 2016, as energy, materials and industrials sectors rose sharply, helped by soaring commodity prices.
Bank stocks gained. Among public sector banks, Punjab National Bank (up 0.01%), Bank of Baroda (up 0.82%), State Bank of India (SBI) (up 0.43%), Canara Bank (up 0.24%), and Bank of India (up 0.16%) edged higher. Union Bank of India fell 0.52%.
Among private sector banks, HDFC Bank (up 0.92%), Axis Bank (up 0.74%), Kotak Mahindra Bank (up 0.08%), Yes Bank (up 0.62%), and IndusInd Bank (up 0.82%) edged higher.
The Reserve Bank of India (RBI) has reportedly allowed commercial banks to hold bonds issued by state electricity utilities as part of the Ujwal Discom Assurance Yojana (UDAY) scheme under the held-to-maturity (HTM) category. For bonds held under the HTM category, lenders are allowed to hold the bonds until they mature without needing to mark-to-market them to daily price movements. The central bank will also provide banks greater flexibility in selling the state utility debt, according to reports. The UDAY scheme is aimed at reviving debt-laden state electricity utilities.
ICICI Bank declined 0.09% to Rs 227.35. The stock was volatile. The stock hit high of Rs 229.90 and low of Rs 226.25 so far during the day. The private sector bank after market hours yesterday, 17 March 2016, announced that it is evaluating issuance of long term bonds in the nature of debentures on a private placement basis for lending to long term projects in infrastructure and affordable housing on a private placement basis. The borrowing proposal will be considered in the meeting of Committee of Executive Directors at any time in next week starting from 21 March 2016, ICICI Bank said.
Shares of oil exploration and production firms rose after a surge in international crude oil prices. ONGC (up 0.73%), Cairn India (up 0.82%), Oil India (up 1.57%) and Reliance Industries (RIL) (up 0.48%) edged higher. Higher crude oil prices would result in higher realization from crude sales for oil exploration firms.
Shares of public sector oil marketing companies fell after a surge in global crude oil prices. BPCL (down 0.76%), Indian Oil Corporation (down 0.25%) and HPCL (down 0.9%) edged lower. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
In the global commodities markets, Brent for May settlement was currently down 8 cents at $41.46 a barrel. The contract had jumped $1.21 a barrel or 3% to settle at $41.54 a barrel during the previous trading session on hopes for curb in output from oil producing nations and a sharp drop in the US dollar.
DLF rose after the company's board of directors approved the sale of a shopping mall at Saket, Delhi, along with land parcel on which the mall is situated. The stock rose 1.57%. DLF said that based on the recommendations/approval of Audit Committee, the board of directors of the company at its meeting held yesterday, 17 March 2016, approved the sale of 'DLF Place, Saket', a shopping mall, having built up area of about 5.16 lakh square feet along with land parcel on which the mall is situated to Nambi Buildwell, a wholly-owned subsidiary of DLF. The sale is made on arm's length basis for an aggregate consideration of Rs 904.50 crore. The sale is in line with the strategy to structure ownership of existing assets in order to facilitate potential monetization either through Real Estate Investment Trust (REITs) or otherwise in future, subject to necessary regulatory and statutory approvals, DLF said. The announcement was made after market hours yesterday, 17 March 2016.
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