A bout of volatility was witnessed in afternoon trade as key benchmark indices regained strength after trimming intraday gains and hitting fresh intraday low as firm opening of European stocks aided positive sentiment. At 13:20 IST, the barometer index, the S&P BSE Sensex was up 155.43 points or 0.59% at 26,680.89. The gains for the Nifty 50 index were lower in percentage terms than those for the Sensex. The Nifty was currently up 33.30 points or 0.41% at 8,174.05. Positive global stocks boosted sentiment on the domestic bourses.
The Sensex gained 205.09 points or 0.77% at the day's high of 26,730.55 at onset of the day's trading session, its highest level since 15 June 2016. The index rose 55.11 points or 0.2% at the day's low of 26,580.57 in afternoon trade. The Nifty gained 54.50 points or 0.66% at the day's high of 8,195.25, its highest level since 15 June 2016. The index rose 7.65 points or 0.09% at the day's low of 8,148.40 in afternoon trade.
In overseas markets, European stocks edged higher in early trade. Meanwhile, the Bank of England yesterday, 16 June 2016 kept its key interest rate at a record low of 0.5% and made no changes to its 375-billion-pound ($530 billion) asset-purchase program. All nine rate-setting policy makers voted to hold rate unchanged. The decision marked the last before the 23 June 2016 referendum in the UK on whether the country should stay or exit the European Union (EU). A vote to leave the EU could materially alter the outlook for output and inflation, and therefore the appropriate setting of monetary policy, the BOE said in a statement. The interest rate decision was announced after close of Indian market hours yesterday, 16 June 2016.
Most Asian stocks edged higher after a rebound on Wall Street overnight ahead of the UK's upcoming 23 June 2016 referendum vote on its future within the European Union. Meanwhile, Japan's government kept its assessment of the economy unchanged this month but warned that consumer prices are rising at a slower pace, casting more doubt on policymakers' three-year effort to shake off deflation. The assessment comes a day after the Bank of Japan cut its view on consumer inflation and refrained from offering additional monetary stimulus despite a weak global economy and anaemic inflation. US stocks closed modestly higher yesterday, 16 June 2016 ending a five-day streak of losses with telecoms leading sector advancers.
Closer home, the market breadth, indicating the overall health of the market was positive on BSE. 1,385 shares advanced and 1,000 shares declined. A total of 165 shares were unchanged. The BSE Mid-Cap index was currently up 0.26%. The BSE Small-Cap index was currently up 0.51%. Both these indices outperformed the Sensex.
Most capital goods stocks gained. Bharat Heavy Electricals (Bhel) (up 0.58%), Havells India (up 0.18%), ABB India (up 1.34%), Bharat Electronics (up 0.08%), Thermax (up 1.4%), and Siemens (up 0.77%) gained.
Index heavyweight and engineering and construction major L&T shed 0.49% to Rs 1,484.50. The stock hit high of Rs 1504.15 and low of Rs 1,480.50 so far during the day. L&T during market hours today, 17 June 2016 announced that its wholly owned subsidiary L&T Hydrocarbon Engineering Limited (LTHE) has won orders worth Rs 1170 crore across its various business segments.
The BSE Capital Goods index had outperformed the market over the past one month till 16 June 2016, rising 10.53% compared with 3.19% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 20.09% as against Sensex's 6.3% rise.
Shares of power generation and power distribution companies were mixed. Torrent Power (down 1.46%), Tata Power Company (down 4.26%), Adani Power (down 0.33%), and Power Grid Corporation of India (down 0.97%) declined. GVK Power & Infrastructure (up 2.32%), NHPC (up 0.8%), Reliance Infrastructure (up 1.14%) and Reliance Power (up 1.25%) gained. NTPC was flat.
Shares of PSU coal mining major Coal India gained 2.18%.
The BSE Power index had outperformed the market over the past one month till 16 June 2016, rising 6.55% compared with 3.19% rise in the Sensex. The index had also outperformed the market in past one quarter, rising 14.54% as against Sensex's 6.3% rise.
On the macro front, India's current account deficit (CAD) narrowed sharply to $0.3 billion (0.1% of GDP) in Q4 of 2015-16, significantly lower than $7.1 billion (1.3% of GDP) in Q3 of 2015-16 and marginally lower than $0.7 billion (0.1% of GDP) in Q4 of 2014-15. The contraction in CAD was primarily on account of a lower trade deficit ($24.8 billion) than in Q4 of last year ($31.6 billion) and $34 billion in the preceding quarter. The government announced the economic data after market hours yesterday, 16 June 2016.
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