Key benchmark indices extended gains and hit intraday high in afternoon trade. The barometer index, the S&P BSE Sensex hit intraday high above the psychological 28,000 mark. The Sensex currently up 517.86 points or 1.88% at 28,067.39. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 2.11%, outperforming the Sensex. The market sentiment was boosted by data released today, 14 August 2015 showing that annual wholesale prices continued to decline for the ninth consecutive month in July, raising hopes that the Reserve Bank of India (RBI) may lower key policy rates at its forthcoming Monetary Policy Review meet on 29 September 2015.
Banks stocks gained on renewed buying. Telecom stocks advanced
The government data released today, 14 August 2015 showed wholesale price index (WPI) for July 2015, slipped further into negative terrain and stood at -4.05% (provisional) as compared to -2.4% in June 2015, after data earlier this week showed consumer price inflation tumbled in July 2015, raising hopes for a possible rate cut by the Reserve Bank of India.
Meanwhile, the government is reportedly sounding out political parties over scheduling a two-day session of Parliament in September ahead of the Bihar elections to pass the Goods and Services Tax Bill, seen to be a crucial piece of tax reform linked to the Narendra Modi government's effort to improve ease of business and boost revenues. The monsoon session of Parliament ended yesterday, 13 August 2015, without passage of any major bills amid political tussle between the government and the opposition parties.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 625.90 crore yesterday, 13 August 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 545.86 crore yesterday, 13 August 2015, as per provisional data.
In overseas markets, European stocks edged higher in opening trade. Asian stocks edged lower. US stocks closed mostly lower yesterday, 13 August 2015, following a choppy session marked by narrow gains and losses, as readings on retail sales and jobless claims suggested the US economy is on healthy footing.
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At 13:19 IST, the S&P BSE Sensex was up 517.86 points or 1.88% at 28,067.39. The index surged 520.01 points at the day's high of 28,069.54 in afternoon trade, its highest level since 11 August 2015. The index rose 93.67 points at the day's low of 27,643.20 in early trade.
The CNX Nifty was up 156.30 points or 1.87% at 8,512.15. The index hit a high of 8,512.95 in intraday trade, its highest level since 11 August 2015. The index hit a low of 8,381.20 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,707 shares gained and 916 shares fell. A total of 85 shares were unchanged.
The BSE Mid-Cap index was up 236.31 points or 2.11% at 11,426.37, outperforming the Sensex. The BSE Small-Cap index was up 187.78 points or 1.62% at 11,755.42, underperforming the Sensex.
Banks stocks gained on renewed buying. Among private bank stocks, HDFC Bank (up 2.12%), Kotak Mahindra Bank (up 2.79%), ICICI Bank (up 2.88%), IndusInd Bank (up 3.94%) and Yes Bank (up 3.66%) rose. Axis Bank shed 0.16%.
Among PSU bank stocks, State Bank of India (SBI) (up 2.62%), Punjab National Bank (up 5.76%), Bank of Baroda (up 4.44%), Canara Bank (up 5.01%), IDBI Bank (up 3.67%), Bank of India (up 5.1%) and Union Bank of India (up 4.62%) gained.
Telecom stocks advanced. Bharti Airtel (up 1.36%), Idea Cellular (up 2.54%), MTNL (up 1.12%), Tata Teleservices (Maharashtra) (up 1.27%) and Reliance Communications (up 0.58%) gained.
On macro front, the government said inflation based on the wholesale price index (WPI) for July 2015 slipped further in negative terrain and stood at -4.05% (provisional) as compared to -2.4% (provisional) for the previous month and 5.41% during the corresponding month of the previous year. Build up inflation rate in the financial year so far was 0.8% compared to a build up rate of 2.61% in the corresponding period of the previous year. For the month of May, 2015, the final Wholesale Price Index stood at -2.2% as compared to -2.36% (provisional) respectively as reported on 15 June 2015. Due to a large base effect, inflation based on the consumer price index (CPI) eased sharply last month. CPI inflation eased to 3.78% in July 2015 from 5.4% in June 2015, according to the data released by the Ministry of Statistics & Programme Implementation earlier during the week on 12 August 2015.
Meanwhile, investors continue to watch the progress of the monsoon rains which will have a bearing on food prices and rural income. India's weather office, the India Meteorological Department (IMD), said in a daily report issued yesterday, 13 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 9% below the Long Period Average (LPA) until 13 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 13% below the LPA in East & Northeast India, 8% below the LPA in Central India and 1% above the LPA in Northwest India until 13 August 2015.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
In overseas markets, European stocks edged higher in opening trade today, 14 August 2015. Key benchmark indices in UK, France and Germany were up 0.14% to 0.51%.
Asian stocks edged lower today, 14 August 2015. Key indices in China, Hong Kong, Indonesia, Taiwan and Japan fell by 0.07% to 0.37%. Key indices in South Korea and Singapore were up 0.4% to 0.55%.
Investors awaited today's yuan fixing to see if China's central bank would set its official guidance rate lower for a fourth day. The People's Bank of China (PBOC) set its rate nearly 2% lower on Tuesday, 11 August 2015 a move it said was aimed at making its foreign exchange system more responsive to market forces. The PBOC reassured investors on Thursday, 13 August 2015 saying there was no reason for the yuan to fall further given the country's strong economic fundamentals, helping to calm investors who pared holdings of risk assets for fear of a currency war.
US stocks closed mostly lower yesterday, 13 August 2015, following a choppy session marked by narrow gains and losses, as readings on retail sales and jobless claims suggested the US economy is on healthy footing.
On macro front, US retail sales rose in July and were revised up for June, while the trend of weekly jobless claims pointed to a tightening job market.
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