Key benchmark indices edged higher as gains in European and Asian stocks boosted sentiment on the domestic bourses. The barometer index, the S&P BSE Sensex, was provisionally up 98.26 points or 0.44%, up about 70 points from the day's low and off close to 45 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap and BSE Mid-Cap indices were up more than 1.5% each. Both these indices outperformed the Sensex.
Indian stocks edged higher for the sixth day in a row today, 2 April 2014.
IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. PSU banks rose across the board, with Bank of Baroda hitting 52-week high. Among pharma pack, Aurobindo Pharma rose to hit record high after the company announced completion of the previously announced acquisition of certain commercial operations in Western Europe from Actavis plc. Airline stocks surged after state-run oil marketing companies on Tuesday, 1 April 2014, announced reduction in the price of aviation turbine fuel (ATF), reflecting global trends.
Key benchmark indices edged higher and hit fresh record high at the onset of the trading session. The Sensex and the 50-unit CNX Nifty, both, hit fresh record high. Key benchmark indices retained positive zone in morning trade. Key benchmark indices moved in a narrow range in positive terrain in mid-morning trade. Key benchmark indices recovered from lower level soon after trimming intraday gains in early afternoon trade. Key benchmark indices retained positive zone in afternoon trade. Key benchmark indices extended intraday gains in mid-afternoon trade as European stocks reversed initial losses. The Sensex further extended gains in late trade.
The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained net buyers of Indian stocks on Tuesday, 1 April 2014. FIIs bought shares worth a net Rs 385.66 crore on Tuesday, 1 April 2014, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 98.26 points or 0.44% to 22,544.70. The index jumped 145.66 points at the day's high of 22,592.10 in early trade, a record high for the barometer index. The index rose 27.02 points at the day's low of 22,473.46 in mid-afternoon trade.
The CNX Nifty was up 33.75 points or 0.5% to 6,754.80, as per provisional figures. The index hit a high of 6,763.50 in intraday trade, a record high for the index. The index hit a low of 6,723.60 in intraday trade.
The BSE Mid-Cap index was up 112.92 points or 1.59% at 7,198.92. The BSE Small-Cap index was up 113.64 points or 1.6% at 7,220.36. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 3273 crore, higher than Rs 2,522.86 crore on Tuesday, 1 April 2014.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,893 shares gained and 897 shares fell. A total of 131 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined. Bharti Airtel (up 3.22%), Tata Motors (up 2.31%), and L&T (up 2.24%), edged higher from the Sensex pack.
Aurobindo Pharma rose 4.66% to Rs 559.60. The company after market hours on Tuesday, 1 April 2014, announced the completion of the previously announced acquisition of certain commercial operations in Western Europe from Actavis plc. The stock hit record high of Rs 569.60 in intraday trade. The agreement to acquire the Actavis operations was announced in January 2014.
Aurobindo said it acquired personnel, commercial infrastructure, products, marketing authorisations and dossier licence rights in seven European countries. Actavis and Aurobindo have also entered into a long term commercial and supply arrangement.
Following receipt of clearances from competent authorities, Aurobindo now intends to combine the strength of both enterprises (including its vertically integrated platform and existing commercial infrastructure) in these markets and to identify and maximise all opportunities to improve performance.
The acquisition will make Aurobindo one of the leading Indian pharmaceutical companies in Europe, said Mr Muralidharan, SVP of European Operations for Aurobindo. The acquisition will enable Aurobindo to achieve critical mass in Western Europe with a top 10 position in several key markets. He further added I am delighted to welcome relevant Actavis customers, suppliers, partners and employees to Aurobindo. We will continue to collaborate with Actavis to ensure business continuity and a smooth transition. In parallel, we will work closely with the acquired management teams to achieve a rapid and successful integration.
Mr Arvind Vasudeva, CEO of Aurobindo's Formulations Business further stated that: We had carefully reviewed the Actavis European operations and concluded that with our cost competitiveness and group structure we could significantly capitalize Actavis' strong market position in these Western European countries and improve profitability, thereby accelerating our strategy of becoming a significant Gx player in Europe.
IT stocks rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. HCL Technologies (up 0.48%), Infosys (up 0.25%), Tech Mahindra (up 0.27%) and Wipro (up 0.34%) gained.
Tata Consultancy Services (TCS) declined 0.34%.
PSU banks rose across the board. State Bank of India (SBI) (up 2.4%), Canara Bank (up 6.56%), Union Bank of India (up 7.71%), Bank of India (up 5.86%), and Punjab National Bank (up 3.31%) rose.
Bank of Baroda rose 6.28% to Rs 780.50 after hitting 52-week high of Rs 781.80 in intraday trade.
Indian Bank rose 2.47%. The bank after trading hours on Tuesday, 1 April 2014, said that the bank has decided to increase its base rate by 0.05% from the existing 10.2% to 10.25% per annum with effect from 1 April 2014.
Airline stocks rallied after state-run oil marketing companies on Tuesday, 1 April 2014, announced reduction in the price of aviation turbine fuel (ATF), reflecting global trends. ATF price at Delhi was cut by Rs 3,025.34 per kl, or four per cent, to Rs 71,800.21 per kl, according to reports. In Mumbai, jet fuel costs Rs 74,105.16 per kl as against Rs 77,322.6 per kl previously. Rates at different airports vary because of difference in local Sales Tax or VAT. Jet Airways India (up 13.22%) and SpiceJet (up 19.94%) gained.
Jet fuel constitutes over 40% of an airline's operating costs and the price cut will reduce the fuel cost of the cash-strapped carriers.
Shares of state-run Neyveli Lignite Corporation edged higher after the company said it attained record physical performance in the year ended 31 March 2014 (FY 2014) with respect to overburden removal, lignite mining and power generation from the existing mines and power plants in operation. The stock rose 2.3% to Rs 62.90. The company said that total overburden removal from all its mines put together rose 0.41% to a record 1681.72 lakh cubic metre in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). The company said its total lignite production rose 1.47% to a record 266.09 lakh tonnes in FY 2014 over FY 2013. Neyveli Lignite Corporation said its total power generation from all the thermal stations rose 0.43% to a record 19988.73 million unit in FY 2014 over FY 2013.
In the foreign exchange market, the rupee edged higher against the dollar as bunched-up dollar inflows and record high domestic shares aided sentiment. The partially convertible rupee was hovering at 59.775, compared with its close of 59.91/92 on Friday, 28 March 2014. Trading in the rupee resumed after a two-day break due to a local holiday and annual closing of bank accounts.
Indian government bond prices dropped on concern demand for existing securities will fall as the government starts its annual borrowing program this week. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.9525%, higher than its close of 8.8035% on Friday, 28 March 2014. Bond yield and bond prices move in opposite direction. Trading in the government bond market resumed after a two-day break due to a local holiday and annual closing of bank accounts.
Reserve Bank of India Governor Raghuram Rajan said in an interview with a TV channel today, 2 April 2014, that a substantial strengthening of the rupee to 45 or 50 per dollar could hit exports, although he added the Reserve Bank of India was fine with "a certain amount of leeway" in the currency. Rajan also said that the RBI does not want to declare victory on inflation yet, despite keeping interest rates on hold on Tuesday, 1 April 2014, as widely expected. The RBI would rethink its stance if there is a "substantial" change of inflation, up or down, he said.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on Tuesday, 1 April 2014.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
European stocks edged higher in choppy trade on Wednesday, 2 April 2014, as investors awaited reports that may signal the US economic recovery is gathering pace. Key benchmark indices in France, UK and Germany were up 0.09% to 0.37%.
A policy meeting of the Governing Council of the European Central Bank (ECB) will be held tomorrow, 3 April 2014, in Frankfurt to decide euro zone interest rates. ECB President Mario Draghi has consistently reassured listeners that the euro zone isn't heading for deflation, but that the central bank stands ready to act if needed.
Asian stocks rose on Wednesday, 2 April 2014, as increase in US manufacturing boosted optimism about growth in the world's biggest economy. Key benchmark indices in Hong Kong, South Korea, China, Japan and Taiwan were up 0.26% to 1.04%. However key benchmark indices in Singapore and Indonesia were down 0.08% to 0.18%.
Trading in US index futures indicated that the Dow could advance 32 points at the opening bell on Wednesday, 2 April 2014. US stocks rose on Tuesday, 1 April 2014, as consumer and technology shares pushed the Standard & Poor's 500 Index to an all-time high, after an increase in a manufacturing index boosted optimism the economy withstood severe winter weather.
US manufacturing companies expanded in March at a slightly faster pace compared to the prior month, a survey of executives found. The Institute for Supply Management manufacturing index edged up to 53.7%, slightly below the consensus forecasts. Any number over 50% means more companies are seeing an expansion of business instead of a contraction. Separately, the final Markit PMI for the US in March was unchanged at 55.5, down from 57.1 in February. Any reading over 50 in the purchasing managers index indicates growth.
US car sales surged to an annualized rate of 16.4 million in March the highest rate since November.
Payroll-processing firm ADP is due to release US private-sector employment numbers for March 2014 today, 2 April 2014.
The influential US non-farms payroll data for March 2014 will be released this Friday, 4 April 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
Lawmakers in the US on Tuesday, 1 April 2014, endorsed an aid package for Ukraine.
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