Key benchmark indices continued to trade firm in early afternoon trade as announcements of various measures taken by the government to spur economy, including psu banks' capitalisation plan to massive road building program boosted sentiment. At 12:20 IST, the barometer index, the S&P BSE Sensex gained 311.54 points or 0.96% at 32,918.88. The Nifty 50 index rose 57.90 points or 0.57% at 10,265.60. Firmness in Asian stocks also supported gains on the bourses.
Market witnessed a gap up opening and scaled fresh record highs in early trade. Indices trimmed gains in morning trade. Stocks regained strength later during the session. The Sensex slipped below the psychologically important 33,000 level after marching past that mark for the first time in its history in early trade.
Side counters were sluggish. The S&P BSE Mid-Cap index rose 0.13%. The S&P BSE Small-Cap index gained 0.05%. Both these indices underperformed the Sensex.
The breadth, indicating the overall health of the market, was negative. On the BSE, 1,323 shares fell and 1,129 shares rose. A total of 124 shares were unchanged.
TCS gained 0.15% after the company announced that it has signed a pact with National University in the Philippines to launch a comprehensive, long term plan to enhance the skills readiness of university graduates for the job market. The announcement was made during market hours today, 25 October 2017.
Most realty stocks extended recent gains. Sobha (up 0.61%), Unitech (up 1.14%), Housing Development Infrastructure (up 1.45%), NBCC (up 3.25%), DLF (up 0.06%), and D B Realty (up 0.68%) gained. Indiabulls Real Estate (down 1%) and Oberoi Realty (down 0.14%) declined.
Shares of power generation and power distribution companies gained for the third straight day. Torrent Power (up 0.81%), NHPC (up 1.82%), NTPC (up 0.74%), Tata Power Company (up 1.34%), Adani Power (up 1.33%), Power Grid Corporation of India (up 1.35%), Reliance Infrastructure (up 0.79%) and Reliance Power (up 1.52%) gained.
Shares of psu coal mining major Coal India declined 0.43%.
Shares of General Insurance Corporation of India were trading at Rs 800 at 11:39 IST on BSE, a discount of 12.23% over the initial public offer price of Rs 912. GIC is the largest reinsurer in India by gross premiums accepted in the fiscal ended March 2017 (FY2017), accounting for nearly 60% of the premiums ceded by Indian insurers to reinsurers in the fiscal year.
On the macro front, government yesterday, 24 October 2017, decided to take a massive step to capitalise pulic sector banks (PSBs) in a front-loaded manner, with a view to support credit growth and job creation. This entails mobilization of capital, with maximum allocation in the current year, to the tune of about Rs 2.11 lakh crore over the next two years, through budgetary provisions of Rs 18139 crore, recapitalisation bonds to the tune of Rs 1.35 lakh crore, and the balance through raising of capital by banks from the market while diluting government equity (estimated potential Rs 58000 crore). There will be a strong push on enabling growth of micro- small and medium enterprises (MSMEs) through enhanced access to financing and markets, and a drive to finance MSMEs in 50 clusters.
Taking forward its commitment to providing more efficient transportation, government has debottlenecked the roads sector and significantly stepped up the Highway development and road building program. In order to further optimise the efficiency of movement of goods and people across the country, government has launched a new umbrella program. This road building program, for 83,677 kilometers of roads involving capex of Rs 6.92 lakhs crore over next 5 years. Out of this, Bharatmala Pariyojana to be implemented with an outlay of Rs 5.35 lakh crore will generate 14.2 crores mandays of jobs.
Ministry of finance secretaries at the press conference held yesterday, 24 October 2017 said that industrial production, core sector, index, automobile, consumer spending etc. pointing out a strong growth pick up and there is expectation of very good economic growth from second quarter of current year itself. The recapitalisation and the initiatives announced on Tuesday, 24 October 2017, are expected to have a noticeable impact in the near-term, contributing to accelerated economic activity, employment and growth of the economy, it added.
Overseas, Asian stocks rose following the overnight gains on Wall Street as upbeat corporate earnings results and optimism about global economic growth boosted investor sentiment. China's Communist Party revealed its new top leadership helmed by President Xi Jinping, breaking with recent precedent by failing to include a clear successor among the seven-man line-up. Apart from Xi, Premier Li Keqiang was the only one to retain his spot amid sweeping changes on the Politburo Standing Committee, the height of power in China.
On Wall Street, stocks continued to surge yesterday, 24 October 2017, touching new record highs after strong earnings from heavy-hitters Caterpillar and 3M.
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