After hovering in green throughout the trading session, key benchmark indices surged in late trade as European stocks reversed initial losses. The barometer index, the S&P BSE Sensex, rose 332.63 points or 1.33% at 25,285.37, as per the provisional closing data. The 50-unit Nifty 50 index rose 99.90 points or 1.31% at 7,704.25, as per the provisional closing data. The Sensex provisionally settled above the psychologically important 25,000 mark after regaining that level in intraday trade.
The Sensex and the Nifty, both, hit their highest level in almost 11 weeks as these two key benchmark indices extended gains in late trade. The Sensex jumped 374.71 points or 1.5% at the day's high of 25,327.45 in late trade, its highest level since 6 January 2016. The barometer index rose 35.53 points or 0.14% at the day's low of 24,988.27 in early trade. The Nifty rose 109.20 points or 1.43% at the day's high of 7,713. 55 in late trade, its highest level since 6 January 2016. The index rose 13.35 points or 0.17% at the day's low of 7,617.70 in early trade.
The market sentiment was upbeat after the latest data showed that foreign portfolio investors (FPIs) made heavy purchases of Indian stocks during the previous trading session. FPIs bought shares worth a net Rs 1712.62 crore on Friday, 18 March 2016, as per provisional data released by the stock exchanges. The Sensex had risen 275.37 points or 1.12% to settle at 24,952.74 on that day.
The market breadth indicating the overall health of the market was positive. On BSE, 1,495 shares rose and 1,170 shares fell. A total of 184 shares were unchanged. The BSE Mid-Cap index was provisionally up 1.4%. The BSE Small-Cap index was provisionally up 1.36%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2848 crore, higher than turnover of Rs 2755.22 crore registered during the previous trading session on Friday, 18 March 2016.
In overseas stock markets, European stocks reversed initial losses. Earlier during the global day, Chinese stocks edged higher after authorities signaled a loosening stance toward margin trading, the practice of using borrowed money to buy shares. In mainland China, the Shanghai Composite settled 2.15% higher. In Hong Kong, the Hang Seng index closed 0.06% higher. US stocks edged higher during the previous trading session on Friday, 18 March 2016, extending the rally that followed the Federal Reserve's accommodative policy decision during the week.
Bank stocks edged higher on expectations of a bigger rate cut of 50 basis points from the Reserve Bank of India (RBI) at its monetary policy review early next month after the government announced reduction in interest rates on various small savings schemes for Q1 June 2016 based on the prevailing G-Sec (government securities) yields. Among PSU bank stocks, State Bank of India (SBI) (up 3.11%), Punjab National Bank (up 2.25%), Canara Bank (up 1.18%), IDBI Bank (up 4.62%), Bank of India (up 1.92%) and Union Bank of India (up 1.87%) rose.
Bank of Baroda (BoB) rose 2.08%. The bank said on Saturday, 19 March 2016, that credit rating agency Brickwork Ratings India has cut the outlook on its ratings on the bank's upper Tier II bonds of Rs 1000 crore issued in two tranches of Rs 500 crore each to negative from stable.
Among private bank stocks, HDFC Bank (up 1.4%), ICICI Bank (up 2%), IndusInd Bank (up 0.15%), Axis Bank (up 1.78%), Federal Bank (up 0.9%) and Yes Bank (up 2.3%) declined.
Before the government's announcement of reduction in interest rates on small savings schemes, market participants were expecting a 25 basis points cut in policy rate from the RBI at its monetary policy review on 5 April 2016. After trading hours on Friday, 18 March 2016, the government announced that the interest rate on Public Provident Fund (PPF) has been slashed to 8.1% from 8.7%. The interest rate on Sukanya Samriddhi Account Scheme has been reduced to 8.6% from 9.2%. The interest rate on 5 Year Senior Citizens Savings Scheme has been cut to 8.6% from 9.3%. The government had recently announced that it would revise interest rates on small saving schemes on quarterly basis against the earlier practice of annual revision. The quarterly revision of interest rates will ensure that interest rates under small savings schemes are more dynamically related to the current market rates, thereby enabling commercial banks to move their interest rates in line with current money market rates, the finance ministry said in a statement.
The additional interest rate spreads ranging from 25 basis points to 100 basis points over the G-Sec yields which the Government allows on PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme, National Savings Certificate, five year time deposit and Monthly Income Scheme have been continued.
Kotak Mahindra Bank rose 0.49% to Rs 661 after a large bulk deal of 24.88 lakh shares was executed on the scrip at Rs 659.75 per share in opening bell on BSE today, 21 March 2016.
Cement stocks extended their recent gains. ACC (up 2.58%), UltraTech Cement (up 3.53%) and Shree Cement (up 2.17%) gained.
Ambuja Cements edged higher on media reports that a foreign brokerage has maintained its buy rating on the stock, stating that it remains a play on cement upcycle and should be a beneficiary of better pricing in the North India. The stock rose 4.53%.
Grasim Industries rose 1.93% at Rs 3,730. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
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