Market spurts on broad based buying support

Key equity indices ended with sharp gains led by firmness in index heavyweights Reliance Industries, Infosys and TCS. Gains were triggered on hopes of interest rate cut by RBI after latest data revealed that retail inflation dropped sharply in December. Positive global stocks also boosted sentiment.

The Sensex rose 464.77 points or 1.30% to settle at 36,318.33, its highest closing level since 20 December 2018. The index rose 495.75 points, or 1.38% at the day's high of 36,349.31. The index rose 96.52 points, or 0.27% at the day's low of 35,950.08.

The Nifty 50 index rose 149.20 points or 1.39% to settle at 10,886.80, its highest closing level since 20 December 2018. The index rose 159.35 points, or 1.48% at the day's high of 10,896.95. The index rose 39.95 points, or 0.37% at the day's low of 10,777.55.

 

The Sensex settled above the psychological 36,000 level after regaining that level in early trade. Domestic stocks opened on a firm note on positive Asian stocks. Key indices were trading firm in morning trade. Strong buying demand in index pivotals pushed the key benchmark indices higher in early afternoon trade. Key indices extended gains in mid-afternoon trade.

Buying was broad based. The S&P BSE Mid-Cap index rose 0.58%. The S&P BSE Small-Cap index rose 0.70%.

The market breadth, indicating the overall health of the market, was strong. On the BSE, 1552 shares rose and 1013 shares fell. A total of 170 shares were unchanged.

Among the sectoral indices on BSE, the S&P BSE IT index (up 3.02%), the S&P BSE Energy index (up 2.54%) and the S&P BSE Realty index (up 1.72%), outperformed the Sensex. The S&P BSE Power index (up 0.31%), the S&P BSE Consumer Durables index (up 0.3%) and the S&P BSE Capital Goods index (up 0.29%), underperformed the Sensex.

Vedanta (up 3.03%), Bajaj Finance (up 2.30%), Tata Motors (up 1.70%), Hindustan Unilever (up 1.37%) and Hero MotoCorp (up 1.35%), were the major Sensex gainers.

Index heavyweight Reliance Industries gained 3.02% to Rs 1,129.55.

Index heavyweight and IT major Infosys advanced 3.66% to Rs 726.55.

Wipro surged 5.62% after the company announced that its board will consider bonus issue of shares in its meeting on 17-18 January 2019. The decision of the board of directors will be informed to the stock exchanges on the evening of 18 January 2019. The company is also slated to announce its third-quarter earnings on 18 January 2019. The announcement was made after market hours yesterday, 14 January 2019.

Tata Consultancy Services (TCS) advanced 2.74%. TCS has launched the TCS Connected lntelligence Data Lake for Business on AWS Marketplace. The newly launched software captures and manages all types of data in a central Hadoop repository from where business users can pull elements using a simple drag and drop interface to quickly generate analytics and gain insights to solve business challenges. The announcement was made during trading hours today, 15 January 2019.

Yes Bank rose 3.86% on reports Deutsche Bank's India CEO Ravneet Singh Gill is the frontrunner in a race for the chief executive's post at Yes Bank. Gill and Yes Bank CFO Rajat Monga were the two recommended by the board of the bank for the position to the Reserve Bank of India (RBI) last week, reports added. Yes Bank has been on the hunt for a new CEO since founder Rana Kapoor was denied another three-year term in September last year by the RBI. The bank has until 31 January 2019 to find a replacement.

Larsen & Toubro (L&T) rose 0.53%. L&T Hydrocarbon Engineering (LTHE), a wholly-owned subsidiary of L&T, in consortium with Subsea 7 has won award for two projects from Saudi Aramco. The award consists of engineering, procurement, construction and installation (EPCI) of three oil production deck manifolds and subsea pipelines in Zuluf and Berri Fields of Saudi Aramco. The announcement was made during trading hours today, 15 January 2019.

ICICI Bank fell 0.23%. ICICI Bank announced that its board appointed B. Sriram and Rama Bijapurkar as additional (independent) directors of the bank with effect from 14 January 2019 for a period of 5 years, subject to the approval of shareholders. The announcement was made after market hours yesterday, 14 January 2019.

Bharti Airtel rose 1.73%. With reference to news item captioned, "Bharti Airtel releases payment to Aircel to meet staff salaries, maintain assets," Bharti Airtel clarified after market hours yesterday, 14 January 2019, that it had, on behalf of Aircel and Dishnet Wireless (Aircel Entities), procured and submitted certain bank guarantees amounting to approximately Rs 453 crore to the Department of Telecommunications (DoT). The amount of the bank guarantees were deducted from the consideration to be paid to the Aircel entities for the spectrum being traded with Aircel entities in the year 2016. These were business transactions, the information of which was provided to the stock exchange on 8 April 2016. The bank guarantees were procured by Airtel against its credit lines with Axis Bank and Airtel was exposed to the extent of the bank guarantees' amounts towards Axis Bank, until the bank guarantees were to be returned in original or were to be irrevocably cancelled. The said bank guarantees were to be returned by the DoT as per the order of the Telecom Disputes Settlement and Appellate Tribunal (TDSAT) dated 9 January 2018 in a matter between the Aircel entities and the DoT, which was not being done by the DoT.

Based on an appeal by the Aircel entities, the Supreme Court on 8 January 2019, passed orders to the effect that the said bank guarantees shall stand cancelled and shall no longer be used for any purpose whatsoever. Basis the cancellation of the bank guarantees and the consequent release of the credit lines of Bharti Airtel by Axis Bank, Airtel paid the amounts owed by it to the Aircel entities on 10 January 2019. These are routine transactions and Airtel has acted in accordance with the orders of the Supreme Court and the TDSAT, Bharti Airtel said.

On the macro front, the all-India general CPI inflation eased to 2.19% in December 2018 (new base 2012=100), compared with 2.33% in November 2018. The corresponding provisional inflation rate for rural area was 1.65% and urban area 2.91% in December 2018 as against 1.71% and 3.12% in November 2018. The core CPI inflation was flat at 5.73% in December 2018 compared with 5.70% in November 2018. The data was announced after market hours yesterday, 14 January 2019.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 71.095, compared with its close of 70.9275 during the previous trading session.

In the global commodities markets, Brent for March 2019 settlement was up 45 cents at $59.44 a barrel. The contract fell $1.49 a barrel or 2.46% to settle at $58.99 a barrel during the previous trading session.

Overseas, European stocks traded higher Tuesday, with market participants braced for a showdown in Westminster over the UK government's Brexit plan.

Market focus is largely attuned to an all-important vote on Prime Minister Theresa May's much-maligned Brexit deal on Tuesday. UK opposition leader Jeremy Corbyn said Sunday the Labor Party would push for a general election if Parliament rejects May's deal, and that he might force a vote of no-confidence soon.

Asian stocks rose after China signalled more stimulus measures to soften the blow from an ongoing tariff war with the United States.

US stocks closed lower Monday as weaker-than-expected China trade data sparked fresh fears of a global economic slowdown. Corporate results were also in the spotlight as fourth-quarter earnings season got under way.

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