Ahead of the expiry of the near month August 2014 derivatives contracts, key benchmark moved in a narrow range in positive zone in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently 96.70 points or 0.36% at 26,656.85. A day after the government notified increase in foreign direct investment (FDI) ceiling in the defence sector, the government on Wednesday, 27 August 2014, issued a notification allowing 100% FDI through the automatic route in railway infrastructure. The market breadth indicating the overall health of the market was positive. The market sentiment was boosted by provisional data showing that foreign funds remained net buyers of Indian stocks during the previous trading session.
Shares of road and highway construction companies were mixed after government on Wednesday, 27 August 2014, took a decision to allow the Ministry of Road Transport and Highways to decide on mode of delivery and amendments in Model Concession Agreement in respect of national highways projects for expediting of implementation of road infrastructure projects in the country. Cairn India rose on reports the company has been allowed to sell gas from its Rajasthan block at about $8.40 per unit to Gujarat based firms, including a fertilizer plant, since March 2013, much higher than its rivals.
Earlier during the day, the Sensex had surged to a record high after a higher opening.
In overseas markets, Asian stocks were mixed. Brent crude oil futures fell as expectations of ample supply weighed on prices.
At 11:17 IST, the S&P BSE Sensex was up 96.70 points or 0.36% at 26,656.85. The index jumped 114.23 points at the day's high of 26,674.38 in early trade, a record high for the index. The index rose 36.52 points at the day's low of 26,596.67 in early trade.
The CNX Nifty was up 25.20 points or 0.32% to 7,961.25. The index hit a high of 7,967.80 in intraday trade, its highest level since 25 August 2014. The index hit a low of 7,942.25 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,206 shares gained and 1,056 shares fell. A total of 87 shares were unchanged.
The BSE Mid-Cap index was up 10.21 points or 0.11% at 9,336.90, underperforming the Sensex. The BSE Small-Cap index was up 56.31 points or 0.55% at 10,310.18, outperforming the Sensex.
Shares of road and highway construction companies were mixed after government on Wednesday, 27 August 2014, took a decision to allow the Ministry of Road Transport and Highways to decide on mode of delivery and amendments in Model Concession Agreement in respect of national highways projects for expediting of implementation of road infrastructure projects in the country. Patel Engineering (up 0.41%), L&T (up 0.98%) and Gammon India (up 1.37%) rose. Hindustan Construction Company (down 1.32%), IVRCL (down 0.28%), NCC, Valecha Engineering (down 0.79%), Unity Infraprojects (down 1.15%), IRB Infrastructure Developers (down 0.79%) and Jaiprakash Associates (down 0.31%) declined.
Cairn India rose 0.94% on reports the company has been allowed to sell gas from its Rajasthan block at about $8.40 per unit to Gujarat based firms, including a fertilizer plant, since March 2013, much higher than its rivals. Cairn's production sharing contract (PSC), which was signed before the launch of the New Exploration Licensing Policy (NELP) in the late 1990s, allows pricing and marketing freedom to the company. In contrast, the PSCs of Reliance Industries and Gujarat State Petronet (GSPL) applicable to blocks awarded under NELP stipulated a higher level of government involvement. The pricing formula for gas found in the NELP blocks has to be approved by the government. In June this year, the Cabinet deferred implementation of a gas pricing formula approved by the UPA regime that would have doubled the rate of most of the natural gas produced in the country to about $8.40 per unit from April 1 this year.
Nitesh Estates jumped 5.83% after the company said it signed up a joint development agreement for a new residential project which will have 262 residential units. The project will give a total revenue of Rs 170 crore to the company and will contribute to the profitability over the 36 months. The project will be launched shortly.
The sentiment on the stock market was boosted by provisional data showing that foreign funds remained net buyers of Indian stocks during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 290.18 crore on Wednesday, 27 August 2014, as per provisional data from the stock exchanges. FPIs bought shares worth a net Rs 2628.07 crore from the secondary equity market in this month so far till 26 August 2014, as per data from Securities & Exchange Board of India (Sebi). The inflow totaled Rs 70870.60 crore in this calendar year so far.
The market may remain volatile today, 28 August 2014, as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire today, 28 August 2014.
Brent crude oil futures fell as expectations of ample supply weighed on prices. Brent for October settlement was down 13 cents at $102.59 a barrel. The contract rose 22 cents to settle at $102.72 a barrel yesterday, 27 August 2014, after swinging by $1 between $102.05 and $103.07.
Global credit rating agency Moody's Investors Service today, 28 August 2014, reportedly said that India's sovereign ratings are constrained by persistently high inflation. Recurrent inflationary pressures keep domestic capital costs high, erode domestic purchasing power as well as savings and lower India's international competitiveness, the rating agency said. Without a significant increase in food output, the risk from continued inflation could limit India's growth prospects, Moody's said.
In the foreign exchange market, the rupee was almost unchanged against the dollar. The partially convertible rupee was hovering at 60.45, compared with its close of 60.455 during the previous trading session.
The stock market remains closed tomorrow, 29 August 2014, on account of Ganesh Chaturthi.
The government will release Q1 June 2014 GDP data tomorrow, 29 August 2014. India's Gross Domestic Product (GDP) rose at a muted pace of 4.6% in Q4 March 2014. The GDP grew 4.7% in the fiscal year ended 31 March 2014 (FY 2014).
Asian stocks were mixed today, 28 August 2014, after a steady close for US stocks Wednesday, 27 August 2014. Key benchmark indices in Indonesia, Singapore and South Korea were up 0.01% to 0.43%. Key benchmark indices in China, Hong Kong, Japan and Taiwan were off 0.08% to 0.68%.
China's industrial profits rose 13.5% in July after climbing 17.9% in June, the fastest pace since September, according to data released by the National Bureau of Statistics today, 28 August 2014.
Trading in US index futures indicated that the Dow could fall 1 point at the opening bell on Thursday, 28 August 2014. Most US stocks edged higher on Wednesday, 27 August 2014, with the S&P 500 index creeping up to another record closing high in a lethargic session, though a number of retail stocks traded heavily after reporting results.
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