A rally in global markets sent Indian stocks surging. The barometer index, the S&P BSE Sensex, jumped 516.53 points or 2.01% to settle at 26,231.19. The 50-unit CNX Nifty jumped 157.10 points or 2.02% to settle at 7,948.95. Oil, metal and pharma stocks and index heavyweight HDFC led the rally for key benchmark indices. The Sensex reclaimed the psychological 26,000 level. The Sensex and Nifty, both, hit their highest closing level in nearly a week.
Stocks rose across the global after fresh stimulus for the economy from China's central bank and on hints of a delay in interest rate increase by the US Federal Reserve. Stocks surged in mainland China after the nation's central bank after trading hours yesterday, 26 August 2015, announced that it will inject $21.8 billion into the financial system. The recovery for global equity markets comes after a recent steep slide across markets triggered by worries that China's economy is slowing at a larger pace than anticipated.
The broad market depicted strength. There were nearly three gainers against every loser on BSE. The BSE Mid-Cap index rose 2.49%. The BSE Small-Cap index rose 2.56%. Both these indices outperformed the Sensex.
Shares of oil exploration and production companies were in demand as crude oil prices edged higher. Index heavyweight ITC edged higher. Another Index heavyweight and housing finance lender HDFC surged on media reports that its life insurance joint venture with Standard Life plc intends to launch an initial public offer early next financial year.
Foreign portfolio investors (FPIs) pressed substantial sales of Indian stocks yesterday, 26 August 2015. FPIs sold shares worth a net Rs 2340.93 crore into the secondary equity market yesterday, 26 August 2015, as per data from National Securities Depository (NSDL). Domestic institutional investors (DIIs) bought shares worth a net Rs 1881.08 crore yesterday, 26 August 2015, as per provisional data released by the stock exchanges.
The S&P BSE Sensex garnered 516.53 points or 2.01% to settle at 26,231.19, its highest closing level since 21 August 2015. The index jumped 588.11 points at the day's high of 26,302.77 in late trade. The index gained 298.48 points at the day's low of 25,943.75 in early trade.
The CNX Nifty surged 157.10 points or 2.02% to settle at 7,948.95, its highest closing level since 21 August 2015. The index hit a high of 7,963.60 in intraday trade. The index hit a low of 7,862.30 in intraday trade.
The BSE Mid-Cap index rose 261.22 points or 2.49% to settle at 10,738.38. The BSE Small-Cap index rose 273.81 points or 2.56% to settle at 10,985.54. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was quite strong. There were nearly three gainers against every loser on BSE. 2,000 shares rose and 678 shares fell. A total of 97 shares were unchanged.
The total turnover on BSE amounted to Rs 3003 crore, lower than turnover of Rs 3134.13 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE Healthcare index (up 2.93%), BSE Consumer Durables index (up 5.11%), BSE Metal index (up 2.55%), BSE Oil & Gas index (up 2.83%) and BSE Realty index (up 4.02%) outperformed the Sensex. The S&P FMCG index (up 1.91%), BSE IT index (up 1.19%), BSE Auto index (up 0.82%), BSE Bankex index (up 1.83%), BSE Capital Goods index (up 1.39%), BSE Power index (up 1.31%) and BSE Teck index (up 1.3%) underperformed the Sensex.
Index heavyweight and cigarette major ITC rose 2.6% to Rs 325.90. The stock hit a high of Rs 328.90 and a low of Rs 316.65 in intraday trade.
Another Index heavyweight and housing finance lender HDFC edged higher on media reports that its life insurance joint venture with Standard Life plc intends to launch an initial public offer early next financial year. The stock jumped 8.41% at Rs 1,195.20. The stock hit a high of Rs 1,205.25 and a low of Rs 1,120 in intraday trade. According to media reports, HDFC Standard Life Insurance Company (HDFC Life) proposes to hit the market early next financial year and sell a quarter of the stake for Rs 6000 crore through an initial public offer (IPO). The IPO will value HDFC Life at Rs 25,000 crore, according to reports.
HDFC Life is the life insurance joint venture between HDFC and Standard Life plc. HDFC Life is India's second largest private life insurance company by new business received premium, with a market share of 15.8% for the trailing 12 month period ended 31 March 2015. Standard Life plc is the leading provider of financial services in the United Kingdom.
On 14 August 2015, HDFC announced that the company has agreed to sell 17.95 crore equity shares of Rs 10 each of HDFC Life, constituting 9% of the issued and paid-up share capital of HDFC Life, to Standard Life (Mauritius Holdings) 2006 at Rs 95 per share. After the stake sale, HDFC's holding in HDFC Life declined to 61.65% and Standard Life's stake increased to 35%.
Bank stocks were in demand. Among PSU banks, Andhra Bank (up 6.62%), Union Bank of India (up 6.29%), Bank of Baroda (up 5.93%), IDBI Bank (up 4.63%), Canara Bank (up 3.59%), Bank of India (up 2.62%), Punjab National Bank (up 2.56%), Syndicate Bank (up 2.03%), Indian Overseas Bank (up 1.83%), State Bank of India (up 1.48%), United Bank of India (up 0.93%) and Corporation Bank (up 1.17%) edged higher.
Among private sector banks, Kotak Mahindra Bank (up 3.56%), Axis Bank (up 2.64%), ICICI Bank (up 1.85%), HDFC Bank (up 0.7%) and Yes Bank (up 0.84%) edged higher. IndusInd Bank (down 0.24%) edged lower.
Pharmaceutical shares were in demand. Strides Arcolab (up 2.97%), Cipla (up 3.95%), Sun Pharmaceutical Industries (up 3.44%), Wockhardt (up 2.96%), Divi's Laboratories (up 3.01%), Dr Reddy's Laboratories (up 1.81%) and Ipca Laboratories (up 1.38%) edged higher. GlaxoSmithkline Pharmaceuticals (down 0.42%) and Glenmark Pharmaceuticals (down 0.33%) edged lower.
Lupin rose 4.79% at Rs 1,898.50. Lupin after market hours today, 27 August 2015, announced that the company has received final approval from the United States Food and Drug Administration (USFDA) to market a generic version of AstraZeneca Pharmaceuticals LP's (AstraZeneca) Prilosec Delayed-Release capsules 40mg. Lupin's Omeprazole Delayed-Release capsules 40mg are the AB rated generic equivalent of AstraZeneca's Prilosec Delayed-Release capsules 40mg. The drug is indicated for the short-term treatment of Duodenal Ulcer, Gastric Ulcer, treatment of Gastro Esophageal Reflux Disease (GERD), maintenance of healing of Erosive Esophagitis and Pathological Hypersecretory conditions. Prilosec had annual sales of $185 million in the United States, according to IMS MAT June 2015 data.
Aurobindo Pharma edged higher after the company announced that it has received final approval from the United States Food and Drug Administration (USFDA) to manufacture and market a drug for the treatment of chronic hepatitis B virus infection of the liver. The stock rose 2.89% at Rs 743.90. The drug, Entecavir Tablets, 0.5mg and 1mg, is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Baraclude Tablets, 0.5mg and 1mg, of Bristol-Myers Squibb. The product clocked sales of about $294 million in the United States for the twelve months ended June 2015, according to IMS data. The announcement was made during market hours today, 27 August 2015.
Metal shares edged higher. NMDC (up 4.98%), Jindal Steel & Power (up 4.55%), JSW Steel (up 4.73%), Hindustan Zinc (up 2.24%) and Steel Authority of India (up 2.85%) edged higher. National Aluminium Company (down 2.35%) and Hindalco Industries (down 0.12%) edged lower.
Vedanta rose 6.55% at Rs 91.15. With reference to the news item titled, "Vedanta Kicks off process to shut Lanjigarh refinery," Vedanta clarified during trading hours today, 27 August 2015, that aluminium prices the world over have collapsed in the past few months and current indications are that this trend will continue. The company's Lanjigarh operations have additionally been affected by the non-availability of bauxite from Odisha. As a result, the company's cost of production is significantly higher and is impacting the viability of the Lanjigarh operations. The company said it may implement gradual closure of the operations at the Lanjigarh unit.
Tata Steel rose 4.8% at Rs 225.85. Tata Steel announced during trading hours today, 27 August 2015, it has decided to focus on production of hot rolled coils at its hot strip mill in Port Talbot in south Wales in the UK. Tata Steel further said that it will stop production at some coil processing facilities and also at the hot strip mill at Llanwern in south Wales in the UK. Tata Steel said that the decision has been taken because cheap imports and a strong British pound have created a challenging business environment. Employees at the Llanwern mill will be redeployed within the business and the company will discuss possible impact with contracting companies which provide services to this unit, the company said.
Shares of coal major Coal India rose 0.78% at Rs 361. The stock hit a high of Rs 365.75 and a low of Rs 355 in intraday trade.
Bosch edged higher after the company announced that it has formally inaugurated its new manufacturing facility at Bidadi, Bengaluru in Karnataka. The stock rose 1.58% at Rs 23,085.60. The construction of the Bidadi plant spans over two phases, with the second phase scheduled to be completed by 2018. The new plant in Bidadi will produce common rail pumps and rails in the first phase and the production of conventional fuel injection pumps will start in the second phase, Bosch said. The announcement was made during market hours today, 27 August 2015.
Bharti Airtel rose 2.24% at Rs 347.35. Bharti Airtel has signed a definitive agreement to acquire 100% equity stake in Augere Wireless Broadband India (Augere), which holds 20 MHz of BWA spectrum in the telecom circles of Madhya Pradesh (MP) and Chhattisgarh. The company made the announcement after market hours yesterday, 26 August 2015.
Shares of oil exploration and production companies were in demand as crude oil prices edged higher. ONGC (up 2.58%), Reliance Industries (RIL) (up 1.89%) and Oil India (up 1.52%), edged higher. A recovery in crude oil prices from a steep slide recently has eased concerns of lower realizations from crude sales.
In the global commodities markets, Brent crude oil futures edged higher as global equities rose. Brent for October settlement was currently up $1.97 a barrel at $45.11 a barrel. The contract had fallen 7 cents or 0.16% to settle at $43.14 a barrel during the previous trading session.
Cairn India jumped 7.63% to Rs 139.65 on reports the company is set to expand its crude oil and natural gas carrying capacity by laying a new gas pipeline from its Barmer Rajasthan field with an investment outlay of Rs 1400 crore. The crude oil output would be expanded from 2 lakh bopd (barrels of oil per day) to 3 lakh bopd and natural gas carrying capacity from 6.3 mmscfd (million standard cubic feet per day) to 40 mmscfd, report said.
The Sensex has declined 1,883.37 points or 6.69% in this month so far (till 27 August 2015). The Sensex has fallen 1,268.23 points or 4.61% in this calendar year so far (till 27 August 2015). The Sensex has risen 932.77 points or 3.68% from a 52-week low of 25,298.42 hit on 25 August 2015. The Sensex is off 3,793.55 points or 12.63% from a record high of 30,024.74 hit on 4 March 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, 26 August 2015, that for the country as a whole, cumulative rainfall during this year's monsoon season was 12% below the Long Period Average (LPA) until 26 August 2015. Region wise, the rainfall was 20% below the LPA in South Peninsula, 15% below the LPA in Central India, 6% below the LPA in East & Northeast India and 6% below the LPA in Northwest India, until 26 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 today, 27 August 2015, tracking gains in Asian and US markets overnight. Key indices in Germany, France and UK were up 2.2% to 2.83%.
French business sentiment in manufacturing improved more than expected in August, data showed today, 27 August 2015. The index for confidence in manufacturing rose to 103 in August from 102 in July as business leaders were more upbeat about their order books and recent output, national statistics agency Insee said. A wider measure of business sentiment--including wholesale, construction, retail and services--rose to 100 from 99 in the previous month, Insee said.
Chinese stocks led gains for Asian markets today, 27 August 2015, after China's central bank after trading hours yesterday, 26 August 2015, announced that it will inject $21.8 billion into the financial system. In mainland China, the Shanghai Composite was up 5.4%. In Hong Kong, the Hang Seng index was up 3.6%.
Gains were spread across Asian markets after US stocks witnessed a solid rally overnight. Key benchmark indices in Indonesia, Japan, Singapore, South Korea and Taiwan were up by 0.73% to 4.55%.
Trading in US index futures indicated that the Dow could rise 175 points at the opening bell today, 27 August 2015. US stocks witnessed a solid rally yesterday, 26 August 2015, on expectations that the US central bank will hold off from hiking interest rates next month due to mounting global uncertainties. The rally followed six days of losses for markets that have been shaken by news about China's currency and economy.
Latest economic data showed that orders for durable or long-lasting US goods rose 2% in July, led by demand for automobiles and military hardware.
Meanwhile, New York Fed President William Dudley yesterday, 26 August 2015, said that the case for a rate hike in September is less compelling given recent international developments and volatility in financial markets.
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