Key benchmark indices snapped four-day losing streak as concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased after decline in global crude oil prices. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, settled at one week high. A recent hike in railway passenger fare and railway freight rate has fuelled expectations that the government may take pro-reform measures to bring the economy back on growth path. Amid such expectations, the S&P BSE Sensex, jumped 337.58 points or 1.35%, up 253.07 points from the day's low and off 34.77 points from the day's high. The BSE Mid-Cap index rose 1.59%. The BSE Small-Cap index rose 1.64%. Both these indices outperformed the Sensex. The market breadth indicating the overall health of the market was strong. The government on 20 June 2014 announced 6.5% hike in railway freight rate and 14.2% increase in railway passenger fare to boost revenue of the railways to meet its annual expenditure.
Media reports that the government may soon announce hike in natural gas prices lifted shares of gas production firms ONGC and Reliance Industries (RIL). Gas utility stocks surged. PSU OMCs jumped as crude oil prices declined and as the government's recent announcement of increase in railway passenger fare and freight rates raised expectations that the government may take pro-reform measures such as deregulation of diesel prices.
Shares of companies operating in the capital goods sector were in demand. Realty stocks gained. Metal and mining stocks extended Monday's gains triggered by data showing improvement in China's manufacturing sector in June. Bank stocks gained as concerns of fuel price led inflation eased along with decline in crude oil prices. Two Sensex components -- Bajaj Auto and HDFC -- hit record high.
The S&P BSE Sensex garnered 337.58 points or 1.35% to settle at 25,368.90, its highest closing level since 17 June 2014. The index jumped 383.37 points at the day's high of 25,414.69 in mid-afternoon trade. The index gained 84.51 points at the day's low of 25,115.83 in early trade.
The CNX Nifty garnered 86.85 points or 1.16% to settle at 7,580.20, its highest closing level since 17 June 2014. The index hit a high of 7,593.35 and low of 7,515.20 in intraday trade.
The total turnover on BSE amounted to Rs 3586 crore, higher than Rs 3022.95 crore on Monday, 23 June 2014.
The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 2,041 shares gained and 985 shares fell. A total of 123 shares were unchanged.
The BSE Mid-Cap index garnered 143.11 points or 1.59% to settle at 9,161.18. The BSE Small-Cap index garnered 161.36 points or 1.64% to settle at 9,977.71. Both these indices outperformed the Sensex.
The S&P BSE Realty index (up 3.46%), the S&P BSE Consumer Durables index (up 2.44%), the S&P BSE Oil & Gas index (up 2.17%), the S&P BSE Power index (up 2.03%) and the S&P BSE Bankex (up 1.51%) outperformed the Sensex.
The S&P BSE Capital Goods index (up 1.25%), the S&P BSE FMCG index (up 1.2%), the S&P BSE Metal index (up 1.1%), the S&P BSE Auto index (up 1.06%), the S&P BSE Teck index (up 0.35%), the S&P BSE IT index (up 0.31%) and the S&P BSE Healthcare index (down 0.09%) underperformed the Sensex.
Among the 30 Sensex shares, 26 rose and the remaining shares fell.
Bajaj Auto rose 1% to Rs 2,216 after hitting record high of Rs 2,235 in intraday trade.
HDFC gained 2.73% to Rs 993 after hitting record high of Rs 998 in intraday trade.
PSU OMCs jumped as crude oil prices declined and as the government's recent announcement of increase in railway passenger fare and freight rates raised expectations that the government may take pro-reform measures such as deregulation of diesel prices. HPCL (up 7.12% to Rs 418.80), Indian Oil Corporation (IOCL) (up 4.82% to Rs 342) and BPCL (up 4.62% to Rs 582) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs (public sector oil marketing companies) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
The under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective 16 June 2014 fell to Rs 1.62 per litre. This was Rs 2.80 per litre during first fortnight of June 2014 with effect from 1 June 2014. In the case of PDS kerosene and domestic LPG, the under-recoveries for the second fortnight of June 2014 continued to be Rs 32.87 per litre and Rs 432.71 per cylinder respectively, unchanged from the rates prevailing in the first fortnight of the month.
PSU OMCs, effective 16 June 2014, are incurring combined daily under-recovery of about Rs 249 crore on the sale of diesel, PDS kerosene and domestic LPG. This is less than Rs 262 crore daily under-recoveries during the first fortnight of June 2014. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in the 2013-14.
Media reports that the government may soon announce hike in natural gas prices lifted shares of gas production firms ONGC and Reliance Industries (RIL). Reliance Industries (RIL) gained 2.1% to Rs 1,060.50. ONGC rose 1.23% to Rs 442.
The discussions between the oil ministry and Prime Minister's Office over the weekend suggest that gas price may be jacked up from $4.2 a unit to $5.5-6.8 per unit, report said. This increase will be lower than the price of $8.4 per unit that was expected based on the formula adopted by the UPA government. The UPA government had approved a new formula for pricing all domestic gas from 1 April 2014. However, gas price revision could not be implemented because of the electoral code of conduct due to Lok Sabha elections in April-May 2014.
Shares of state-run gas transmission major GAIL (India) rose 4.56% to Rs 459.65.
Gas utility stocks surged. Gujarat Gas Company (up 8.59% to Rs 433), Gujarat State Petronet (up 7.18% to Rs 82.05) and Indraprastha Gas (up 3.87% to Rs 346.50) surged.
Bank stocks gained as concerns of fuel price led inflation eased along with decline in crude oil prices. Among PSU bank stocks, Canara Bank (up 3.35%), Bank of Baroda (up 3.13%), Union Bank of India (up 2.14%), Bank of India (up 2.44%), State Bank of India (SBI) (up 2.06%), and Punjab National Bank (up 1.39%) gained.
Among private sector banks, Federal Bank (up 4.65%), Axis Bank (up 2.37%), ICICI Bank (up 1.96%), Yes Bank (up 1.33%), HDFC Bank (up 0.91%), IndusInd Bank (up 0.42%) gained. Kotak Mahindra Bank shed 1.82%.
Metal and mining stocks extended Monday's gains triggered by data showing improvement in China's manufacturing sector in June. China is the world's largest consumer of copper and aluminum.
National Aluminum Company (up 6.28%), NMDC (up 3.17%), Steel Authority of India (Sail) (up 2.63%), Jindal Steel & Power (up 1.91%), Hindustan Zinc (up 0.85%), JSW Steel (up 0.8%), Hindalco Industries (up 0.79%), Sesa Sterlite (up 0.64%) gained. Hindustan Copper shed 0.22%.
Tata Steel rose 1.15%. Tata Steel said after market hours on Monday, 23 June 2014, that further to the share purchase agreement dated 16 May 2014 executed by Adani Ports and Special Economic Zone with L&T Infrastructure Development Projects and Tata Steel, Adani Ports and Special Economic Zone has completed the acquisition of 100% stake in the Dhamra Port Company from L&T Infrastructure Development Projects and Tata Steel.
L&T gained 1.05%
Adani Ports and Special Economic Zone rose 0.93%
Power Grid Corporation of India rose 0.38% after the company after trading hours on Monday, 23 June 2014, said that the board of directors of the company at its meeting held on 21 June 2014 approved two projects involving a total outlay of Rs 5551.84 crore.
Shares of companies operating in the capital goods sector were in demand. BEML (up 5.8%), Crompton Greaves (up 4.99%), Bharat Heavy Electricals (up 2.99%), Alstom T&D India (up 2.25%) ABB India (up 1.95%), Pipavav Defence and Offshore Engineering Company (up 1.86%), Thermax (up 1.44%), Havells India (up 1.15%), ALSTOM India (up 0.94%), Siemens (up 0.56%) edged higher.
National Buildings Construction Corporation spurted 4.15% after the company announced during trading hours today, 24 June 2014, that the company has been granted Navratna Status with effect from Monday, 23 June 2014 on the basis of its performance upon fulfilling the criteria prescribed by Department of Public Enterprises.
Realty stocks gained. Housing Development & Infrastructure (HDIL) (up 5.14%), DLF (up 4.92%), Parsvnath Developers (up 4.86%), D B Realty (up 3.91%), Indiabulls Real Estate (up 2.83%), Godrej Properties (up 1.94%), Unitech (up 1.77%) and Oberoi Realty (up 1.25%) gained.
Aviation stocks rose as crude oil prices fell. SpiceJet (up 9.75% at Rs 19.70) and Jet Airways (India) (up 6.6% at Rs 260.95) edged higher. The price of aviation turbine fuel (ATF) or jet fuel is directly linked to international crude oil prices. Jet fuel constitutes about 40% of airlines' operating cost.
Jubilant FoodWorks jumped 7.34% to Rs 1,308.40 after a foreign brokerage upgraded the stock to buy with a target price of Rs 1,500 per share.
Ahluwalia Contracts (India) jumped 3.95% after the company after trading hours on Monday, 23 June 2014, said that a meeting of the board of directors will be held on 1 July 2014 to consider a proposal for issue of further shares to the promoters of the company on preferential allotment basis. Promoters already hold a substantial 72.61% stake in the company (as per the shareholding pattern as on 31 March 2014).
JSW Energy jumped 6.38% to Rs 76.70, with the stock recovering on bargain hunting after recent slide. Shares of JSW Energy had declined 6.9% in four trading sessions to settle at Rs 72.10 on Monday, 23 June 2014, from a recent high of Rs 77.45 on 17 June 2014.
Bajaj Hindusthan jumped 6.44% to Rs 31.40 after the company said it has made repayment of $17.723 million of FCCBs on due date, in connection with FCCBs issued to International Finance Corporation, Washington. The announcement was made after market hours on Monday, 23 June 2014. Bajaj Hindusthan had issued foreign currency convertible bonds (FCCBs) worth $15 million to International Finance Corporation (IFC), Washington. The company has made repayment of $17.723 million, including the redemption premium of $2.723 million on the due date (16 June 2014), in accordance with the terms and conditions of the said FCCBs. With the aforesaid repayment, entire outstanding FCCBs held by IFC, Washington stands redeemed on maturity, Bajaj Hindusthan said.
Decline in crude oil prices triggered a firm opening on the domestic bourses today, 24 June 2014. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices remained firm after moving in a narrow range in early afternoon trade. The Sensex extended gains and hit fresh intraday high in mid-afternoon trade. The Sensex regained strength after paring intraday gains in late trade.
As crude prices dropped, concerns arising from the impact of high crude oil prices on India's macroeconomic situation eased. Brent crude oil futures extended Monday's losses on reports that Iraq's army has regained control of the Baiji refinery in north Iraq from Islamist militants. Brent oil futures for August delivery were off 11 cents at $114.01 a barrel. The contract fell 0.6% to settle at $114.12 on Monday, 23 June 2014, the biggest percentage drop since 16 May 2014.
The recent spike in crude oil prices triggered by violence in Iraq sparked worries about India's macroeconomic situation as India imports majority of its crude oil requirements. Increase in crude oil prices raised concerns of increase in India's current account deficit and fiscal deficit. Firm global crude oil prices and the latest hike in railway freight rate also stoked inflation worries.
Indian stocks snapped four-day losing streak today, 24 June 2014. The Sensex had declined 489.87 points or 1.91% in four trading days to 25,031.32 on 23 June 2014 from recent high of 25,521.19 on 17 June 2014. The Sensex has risen 1,151.56 points or 4.75% in June so far (till 24 June 2014). The Sensex has gained 4,198.22 points or 19.83% in calendar year 2014 so far (till 24 June 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,920.19 points or 45.39%. From a record high of 25,725.12 hit on 11 June 2014, the Sensex is off 356.22 points or 1.38%.
Indian stocks may remain volatile in the near future as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire on Thursday, 26 June 2014.
In the foreign exchange market, the rupee edged higher against the dollar as crude dropped. The partially convertible rupee was hovering at 60.0975, compared with its close of 60.20/21 on Monday, 23 June 2014.
Finance Minister Arun Jaitley reportedly said today, 24 June 2014, that India needs to act now to fix the health of its economy which is facing a challenging time. The comment comes just weeks ahead of the final Union Budget for 2014-15 which is likely to be tabled in parliament by mid July 2014.
European shares edged higher in choppy trade on Tuesday, 24 June 2014. Key benchmark indices in France and Germany were up 0.02% to 0.13%. UK's FTSE 100 was down 0.18%.
German business confidence declined for a second month in June amid signs of slower growth in Europe's largest economy. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 109.7 from 110.4 in May.
Asian stocks edged higher on Tuesday, 24 June 2014, as utilities advanced. Key benchmark indices in Indonesia, Japan, South Korea, China, Singapore, Hong Kong and Taiwan were up by 0.05% to 0.98%.
Trading in US index futures indicated that the Dow could fall 24 points at the opening bell on Tuesday, 24 June 2014. Most US stocks slid on Monday, 23 June 2014, with the Standard & Poor's 500 Index dropping for the first time in seven sessions, as General Electric Co. led industrial shares lower to offset gains among energy producers.
Data on Monday showed US sales of existing homes climbed 4.9% to a 4.89 million annualized rate in May, the most since October. A separate report from Markit Economics showed a measure of US manufacturing growth rose to 57.5 in June from 56.4 in May.
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