Key benchmark indices provisionally settled slightly higher on bargain hunting after a rangebound trade and amid volatility. The barometer index, the S&P BSE Sensex rose 59.71 points or 0.21% at 27,887.24, as per the provisional closing data. The Nifty 50 index gained 26.45 points or 0.31% at 8,617.70, as per the provisional closing data. Except BSE FMCG index all the other sectoral indices on BSE were in the green. Heavy buying was witnessed in small-cap and mid-cap stocks after these stocks witnessed a sell-off in previous session.
Key indices rose on bargain hunting after suffering steep losses yesterday, 29 September 2016 triggered by flare up in India-Pakistan tension after Indian Army in a press conference yesterday, 29 September 2016 revealed that it conducted surgical strikes against terror launchpads inside Pakistan occupied Kashmir. However, gains were capped by weakness in global stocks.
The broad market depicted strength. There were more than three gainers against every loser on BSE, 2,052 shares rose and 634 shares fell. A total of 190 shares were unchanged. The BSE Mid-Cap index provisionally rose 1.95%. The BSE Small-Cap index provisionally gained 2.13%. Both these indices outperformed the Sensex.
In overseas stock markets, European stocks were sharply lower as shares of Deutsche Bank AG traded at the weakest level on record, triggering losses across the financial sector. Asian stocks fell tracking lower finish for US stocks yesterday, 29 September 2016 as Deutsche Bank shares slumped to a record low after a report that trading clients had withdrawn excess cash and positions held in the largest German lender. The cause of Deutsche's crisis is a fine, disputed by Deutsche, of up to $14 billion by the US Department of Justice over its sale of mortgage-backed securities.
Meanwhile, revised data suggest that the US economy's performance in the spring was slightly better than expected, as business investment wasn't nearly as weak as previously reported. The gross domestic product grew a 1.4% pace in the second quarter. Philadelphia Federal Reserve President Patrick Harker said he backs a December rate increase if the economy continues to grow as expected, while Atlanta Fed President Dennis Lockhart said he expects the Fed to be in a position to raise rates soon. Fed Gov. Jerome Powell on the other hand said the Fed can afford to be patient in gradually raising rates as the economy slowly improves.
The total turnover on BSE amounted to Rs 3583.39 crore, lower than turnover of Rs 5428.13 crore registered during the previous trading session.
Realty stocks rose on bargain hunting after witnessing a sharp drop yesterday, 29 September 2016 in a sharp fall in indices. DLF (up 4.35%), Sobha (up 1.19%), Indiabulls Real Estate (up 8.41%), Unitech (up 2.78%), Godrej Properties (up 2.92%), Housing Development & Infrastructure (HDIL) (up 3.04%), and Oberoi Realty (up 0.64%) edged higher.
Auto stocks also gained. Mahindra & Mahindra (M&M) (up 2.77%), Ashok Leyland (up 4.17%), Maruti Suzuki India (up 1.27%), Eicher Motors (up 0.52%), Bajaj Auto (up 0.1%), Tata Motors (up 1.67%) and TVS Motor Company (up 5.41%) gained. Hero MotoCorp fell 0.37%.
Jubilant Life Sciences rose 4.94% after the company said its wholly-owned subsidiary successfully raised $300 million through a sale of unsecured bonds. The announcement was made after market hours yesterday, 29 September 2016. Jubilant Life Sciences said that its wholly-owned subsidiary, Jubilant Pharma (JPL), has successfully completed the pricing of its rated unsecured high yield bonds (the notes) at a yield of 4.875% per annum, issued at par for $300 million and maturing in September 2021. The net proceeds of the notes shall be used to prepay the existing debts of JPL and its subsidiaries; for upstreaming upto $50 million to Jubilant Life Sciences for prepayment of its existing debts; and for general corporate purposes, the company said in a statement.
Meanwhile, the Reserve Bank of India Act, 1934 (RBI Act) has been amended by the Finance Act, 2016, to provide for a statutory and institutionalized framework for a Monetary Policy Committee, for maintaining price stability, while keeping in mind the objective of growth and notified yesterday, 29 September 2016. The Monetary Policy Committee would be entrusted with the task of fixing the benchmark policy rate (repo rate) required to contain inflation within the specified target level. A Committee-based approach for determining the Monetary Policy will add lot of value and transparency to monetary policy decisions. The meetings of the Monetary Policy Committee shall be held at least 4 times a year and it shall publish its decisions after each such meeting. The factors constituting failure to meet inflation target under the Monetary Policy Committee Framework have also been notified. The Government, in consultation with RBI, has notified the inflation target in the Gazette of India Extraordinary dated 5 August 2016 for the period beginning from the date of publication of this notification and ending on the 31 March 2021, with inflation target of 4% with upper and lower tolerance level of 2%.
As per the provisions of the RBI Act, out of the six members of Monetary Policy Committee, three members will be from the RBI and the other three members of MPC will be appointed by the Central Government. The members of the Monetary Policy Committee appointed by the Central Government shall hold office for a period of four years, with immediate effect or until further orders, whichever is earlier.
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