The BSE Sensex extended intraday gains and hit fresh intraday high, while the Nifty held firm near the day's high in afternoon trade. At 13:18 IST, the barometer index, the S&P BSE Sensex, was up 238.56 points or 0.75% at 32,043.38. The Nifty index was up 62.35 points or 0.64% at 9,878.45. The Sensex was trading a tad above the psychological 32,000 mark after moving above that level at onset of trading session. Data showing record low inflation data stoking hopes of an interest-rate cut bolstered sentiment.
Expectations of an interest rate cut by the Reserve Bank of India (RBI) next month have risen after latest data showed that retail inflation has eased to a record in June and factory output growth slowed sharply in May.
Key benchmark indices saw gap up opening on positive global cues, with the Sensex scaling past the 32,000 mark in early trade. Stocks firmed up further in mid-morning trade. Key indices continued to trade with strength in mid-morning trade with both the Sensex and the Nifty hitting fresh record high in mid-morning trade.
The S&P BSE Mid-Cap index was up 0.39%. The S&P BSE Small-Cap index was up 0.45%. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,358 shares rose and 1,202 shares fell. A total of 146 shares were unchanged.
Most metal shares declined. Bhushan Steel (down 1.96%), Jindal Steel & Power (down 1.57%), Steel Authority of India (down 1.13%), Hindalco Industries (down 1.12%), Vedanta (down 0.94%), NMDC (down 0.88%), JSW Steel (down 0.47%) and Hindustan Copper (down 0.46%), edged lower. Tata Steel (up 0.40%), National Aluminium Company (up 0.74%) and Hindustan Zinc (up 0.82%), edged higher.
Meanwhile, copper price edged higher in the global commodities markets. High Grade Copper for September 2017 delivery was currently up 0.24% at $2.6905 per pound on the COMEX.
Power generation stocks were mixed. Reliance Power (down 1.36%), JSW Energy (down 0.62%), Jaiprakash Power Ventures (down 0.59%), GMR Infrastructure (down 0.56%), CESC (down 0.41%), Tata Power (down 0.06%) and Reliance Infrastructure (down 0.05%), edged lower. Torrent Power (up 0.13%), NTPC (up 0.24%), Adani Power (up 0.34%) and NHPC (up 1.28%), edged higher.
State-run Power Grid Corporation of India was up 0.98%. State-run Coal India was down 0.39%.
On the macro front, government data released after market hours yesterday, 12 July 2017 showed that retail inflation has eased to a record in June and factory output growth slowed sharply in May. Inflation as measured by the Consumer Price Index (CPI) slowed to 1.54% in June from 2.18% in May. The Index of Industrial Production (IIP) rose 1.7% in May compared with 3.1% in April.
Overseas, most European shares declined on profit booking after the previous session's strong rally that came on the back of the relatively dovish tone struck by Fed chair Janet Yellen overnight.
Most Asian stocks were trading higher as dovish comments from US Federal Reserve Chairwoman Janet Yellen improved risk-taking appetite.
China's exports grew for a fourth straight month in June, as external demand for goods from the world's second-largest economy continued to strengthen. Exports rose 11.3% in June from a year earlier, following growth of 8.7% in May. Imports in June rose 17.2% from a year earlier, compared with a 14.8% expansion in May. The trade surplus widened in June to $42.77 billion from $40.81 billion a month earlier.
US stocks closed higher yesterday, 12 July 2017 with the Dow industrials setting its first closing record in nearly a month as Federal Reserve Chairwoman Janet Yellen emphasized the central bank's gradual approach to normalizing monetary policy and expressed optimism about the economy in congressional testimony.
In her testimony on Capitol Hill, Yellen signaled that the Fed would take a cautious approach to tightening policy in the face of an uncertain inflation outlook. She said the Fed would continue to raise interest rates gradually, though it would change plans if inflation weakness persisted.
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