Gains in metal and banking stocks led rally as key benchmark indices extended gains in afternoon trade. At 13:15 IST, the barometer index, the S&P BSE Sensex, was up 341.05 points or 1.37% at 25,241.51. The Nifty 50 index was up currently up 110.70 points or 1.46% at 7,707.70. The Sensex retained the psychologically important 25,000 mark after surpassing that mark after opening with upward gap. Strong global cues boosted investors' sentiment. World stocks rose as investors welcomed the latest signal from the US Federal Reserve that it would move slowly to raise interest rates in the US.
The Sensex jumped 355.61 points, or 1.42% at the day's high of 25,256.07 in afternoon trade, its highest level since 28 March 2016. The barometer index rose 154.96 points, or 0.62% at the day's low of 25,055.42 in morning trade. The Nifty rose 112.25 points, or 1.47% at the day's high of 7,709.25 in afternoon trade, its highest level since 28 March 2016. The index rose 46.45 points, or 0.61% at the day's low of 7,643.45 in morning trade.
The broad market depicted strength. There were more than two gainers against every loser on BSE. 1,718 shares rose and 657 shares fell. A total of 148 shares were unchanged. The BSE Mid-Cap index was currently up 1.49%. The BSE Small-Cap index was currently up 1.64%. Both these indices outperformed the Sensex.
In overseas stock markets, Asian and European stocks edged higher tracking overnight gains in US shares as investors welcomed the latest signal from the US Federal Reserve that it would move slowly to raise interest rates in the US. US stocks edged higher yesterday, 29 March 2016, after Federal Reserve chairwoman Janet Yellen in a speech in New York reiterated a need to proceed cautiously in lifting interest rates in the backdrop of weaker-than-expected growth overseas and a cloudy US inflation outlook.
Index heavyweight Reliance Industries (RIL) gained 1.19% to Rs 1,047.70. The stock hit a high of Rs 1,050.90 and low of Rs 1,040.25 so far during the day.
Bharat Heavy Electricals (Bhel) rose 2.93% after the company announced successful commissioning of a 250 megawatts (MW) coal-based thermal power plant (TPP) in Bihar. The 250 MW unit has been commissioned at the upcoming greenfield 1,000 MW Nabinagar Thermal Power Project which is being set up by Bhartiya Rail Bijlee Company (BRBCL), a joint venture of NTPC and the Indian Railways, Bhel said.
Cement stocks edged higher on renewed buying. Ambuja Cements (up 1.37%), ACC (up 1.41%), UltraTech Cement (up 2.23%) and Shree Cement (up 2.42%) gained.
Grasim Industries was up 1.73% at Rs 3,834. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Metal and mining stocks gained on renewed buying. Vedanta (up 5.48%), National Aluminium Company (up 1.74%), Hindustan Zinc (up 2.62%), Hindalco Industries (up 5.21%), NMDC (up 0.76%) and Hindustan Copper (up 2.82%) edged higher.
Copper edged lower in the global commodities market. High Grade Copper for May 2016 delivery was currently off 0.63% at $2.2 per pound on the COMEX.
Steel stocks gained on reports that the government has extended safeguard import taxes on some steel products until March 2018 to curb imports of cheap Chinese steel and shield domestic mills. Jindal Steel & Power (up 3.85%), JSW Steel (up 1.91%) and Steel Authority of India (Sail) (up 3.94%) gained. The extended import duty will apply to hot-rolled flat products of non-alloy and other alloy steel in coils of 600 mm width. It would start at 20%, minus any existing anti-dumping duty, and be lowered to 10% by March 2018 depending on the value of the goods, reports indicated. The safeguard tax will not be imposed on steel products imported at or above the floor price, reports added.
Tata Steel jumped 5.92% to Rs 321.85 after the company announced that it has decided to explore all options for portfolio restructuring including the potential divestment of its UK subsidiary Tata Steel UK, in whole or in parts. Tata Steel said that its board of directors after reviewing the recent performance of the European business of the company noted with deep concern the deteriorating financial performance of the UK subsidiary in the last twelve months. The management has advised the board of its European holding company Tata Steel Europe to explore all options for portfolio restructuring including the potential divestment of Tata Steel UK, in whole or in parts. Given the severity of the funding requirement in the foreseeable future, the Tata Steel Europe board will be advised to evaluate and implement the most feasible option in a time bound manner, Tata Steel said in a statement.
While global steel demand, especially in developed markets like Europe has remained muted following the financial crisis of 2008, trading conditions in the UK and Europe have rapidly deteriorated more recently, due to structural factors including global oversupply of steel, significant increase in third country exports into Europe, high manufacturing costs, continued weakness in domestic market demand in steel and a volatile currency. These factors are likely to continue into the future and have significantly impacted the long-term competitive position of the UK operations in spite of several initiatives undertaken by the management and the workers of the business in recent years.
Further, the Tata Steel board also reviewed the proposed restructuring and transformation plan for Strip Products UK, prepared by the European subsidiary in consultation with an independent and internationally reputed consultancy firm. Based on the review conducted, the Tata Steel board came to a unanimous conclusion that the plan is unaffordable, requires material funding support in the next two years in addition to significant capital commitments over the long term, the assumptions behind it are inherently very risky, and its likelihood of delivery is highly uncertain. Therefore, the board concluded that it would not be able to support the investment necessary to proceed with the proposed transformation plan for strip products UK.
Tata Steel further said that the company's discussions with Greybull in relation to a sale of the UK Long Products business would continue.
Gloster surged 7.72% after the company said its board of directors approved 1:1 bonus issue of shares. The announcement was made after market hours yesterday, 29 March 2016.
Meanwhile, in the government securities (Gsec) market, bond prices rose after the Reserve Bank of India (RBI) increased the limits for investment by foreign portfolio investors (FPI) in both Central Government Securities and State Development Loans (SDL) for the half year ending September 2016 in two tranches. The yield on 10-year benchmark federal paper 7.59% GS 2026 was currently hovering at 7.4926%, lower than 7.5144% at close in the previous trading session. Bond yields and price are inversely related.
As per the Medium Term Framework (MTF) announced in October 2015, the limit for investment by FPIs in Central Government Securities for the half year ending September 2016 will be increased in two tranches, i.e., by Rs 10500 crore from 4 April 2016 and by Rs 10000 crore from 5 July 2016. The limit for SDL will be raised in two tranches of Rs 3500 crore each from 4 April 2016 and 5 July 2016.
Powered by Capital Market - Live News
