Key benchmark indices edged higher ahead of gross domestic product (GDP) data that is widely expected to show a recovery in economic growth in the first quarter of the current fiscal year. Benchmark indices witnessed intraday volatility in late trade as traders rolled over positions the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The Sensex recovered from lower level after giving away almost entire intraday gains in late trade. The August 2014 derivatives contracts expired today, 28 August 2014. The barometer index, the S&P BSE Sensex, hit record high on closing basis as well as on intraday basis. The 50-unit CNX Nifty scaled record closing high. The Sensex rose 77.96 points or 0.29% to settle at 26,638.11, a record closing high. The market breadth indicating the overall health of the market was negative. The BSE Mid-Cap index dropped and the BSE Small-Cap index eked out small gains. 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. Provisional data showed that foreign funds remained net buyers of Indian equities during the previous trading session.
Shares of PSU OMCs and upstream oil and gas stocks rose. Index heavyweight Reliance Industries (RIL) edged higher. Capital goods stocks gained. Most IT stocks declined. Realty stocks edged lower. Shares of most power generation and power distribution companies dropped as the next Supreme Court hearing on coal blocks case is scheduled on 1 September 2014. Shares of road and highway construction companies fell 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.
In overseas markets, European shares edged lower as the first country-specific reports on August consumer prices fueled fears that the euro zone is heading toward deflation. Asian stocks declined as a rising yen dragged Japanese shares lower. Brent crude oil futures fell as expectations of ample supply weighed on prices.
The Sensex garnered 77.96 points or 0.29% to settle at 26,638.11, a record closing high for the index. The index jumped 114.23 points at the day's high of 26,674.38 in early trade, a lifetime high for the index. The index rose 13.54 points at the day's low of 26,573.69 in late trade.
The CNX Nifty was up 18.30 points or 0.23% to settle at 7,954.35, a record closing high for the index. The index hit a high of 7,967.80 in intraday trade. The index hit a low of 7,939.20 in intraday trade.
The total turnover on BSE amounted to Rs 2852 crore, lower than Rs 2926.85 crore on Wednesday, 27 August 2014.
The market breadth indicating the overall health of the market was negative. On BSE, 1,553 shares fell and 1,376 shares rose. A total of 117 shares were unchanged.
The BSE Mid-Cap index shed 27.69 points or 0.3% to settle at 9,298.90. The BSE Small-Cap index rose 10.58 points or 0.1% to settle at 10,264.45. Both these indices underperformed the Sensex.
Sun Pharmaceutical Industries shed 0.84% and Ranbaxy Laboratories dropped 1.26% after both the companies in their statements said before market hours said that they have received direction under Section 29(2) of the Competition Act, 2002 from Competition Commission of India (CCI), directing Sun Pharma to publish the details of the proposed combination of Sun Pharma and Ranbaxy Laboratories within 10 working days from 27 August 2014 in Form IV contained in Schedule II to the Combination Regulations. In April 2014, Sun Pharma acquired Ranbaxy in $ 4 billion landmark transaction.
Most IT stocks declined. TCS (down 0.82%), and Infosys (down 1.07%) declined. Wipro (up 1.39%) and Tech Mahindra (up 0.65%) gained.
HCL Technologies declined 0.91%. The company at the fag end of the trading session announced a strategic partnership with AppDynamics to enable Digital IT operations for Enterprises. This is a significant step in HCL's Digital System Integration offering, the company said. The HCL and AppDynamics partnership aims to radically improve applications performance, reduce costs and risk while increasing customer satisfaction, HCL Tech said.
Realty stocks edged lower. Housing Development & Infrastructure (HDIL) (down 1.85%), Godrej Properties (down 0.09%), Oberoi Realty (down 0.75%), Sobha (down 0.55%) and Unitech (down 1.36%) dropped.
DLF fell 2.95%. The company after market hours on Wednesday, 27 August 2014 said that the appeal filed by DLF against the Order of the Competition Appellate Tribunal (COMPAT) has been admitted on Wednesday, 27 August 2014, by the Supreme Court of India. The Supreme Court directed DLF to deposit Rs 630 crore in an interest-bearing fixed deposit with the court for the duration of the appeal proceedings. The amount is to be deposited within a period of three months, of which Rs 50 crore is to be deposited within three weeks, DLF said. The entire deposit is subject to the final decision of the Supreme Court, DLF added. DLF will take all steps to comply with the directions of the Supreme Court and remains confident of the merits of its case, DLF added.
Shares of some power generation and power distribution companies dropped as the next Supreme Court hearing on coal blocks case is scheduled on 1 September 2014. NTPC (down 1.18%), Adani Power (down 2.87%), Reliance Power (down 2.74%), Torrent Power (down 2.18%) and Power Grid Corporation of India (down 0.15%) declined. The Supreme Court on 25 August 2014 deemed all coal block allocations made since 1993 as illegal. The allocations had no objective criteria and no fair and transparent procedure was followed, the court had said.
Shares of road and highway construction companies fell 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 (down 1.69%), Gammon India (down 0.68%), IVRCL (down 0.28%), NCC (down 0.87%), Valecha Engineering (down 1.43%), Unity Infraprojects (down 1.72%), IRB Infrastructure Developers (down 1.14%) and Jaiprakash Associates (down 3.91%) declined. But, L&T rose 0.98%. Hindustan Construction Company was flat.
Cairn India rose 0.76% 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.
PSU OMCs and GAIL (India) rose after the government on Wednesday, 27 August 2014, removed the restriction of one subsidized LPG cylinder per month for each consumer. HPCL (up 1.56%), Indian Oil Corporation (IOCL) (up 1.39%) and BPCL (up 2.41%), edged higher. The restriction of 12 subsidized cylinders per consumer per annum continues.
Shares of state run gas distribution firm GAIL (India) rose 1.8%.
ONGC gained 1.93%. Oil India rose 1.31%.
Public sector oil marketing companies (PSU OMCs) suffer under-recoveries on domestic sale of diesel, LPG and kerosene at a controlled price. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
State run upstream companies share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Index heavyweight Reliance Industries (RIL) rose 0.57% to Rs 1,000. The stock hit high of Rs 1,002.95 and low of Rs 994.50. The company after market hours on Wednesday, 27 August 2014, said it has scheduled a planned turnaround at its Hazira manufacturing site. The cracker unit will be shut for a period of about 4 week, starting from the last week of September 2014, RIL said. This opportunity will be utilized to carry out other routine maintenance and turnaround activities to enhance productivity, the company added. RIL's crackers at other locations will continue at normal levels of operations, the company said. With advance planning and inventory management, impact on external sales is likely to be minimal, RIL added.
Capital goods stocks gained. ABB (India) (up 0.37%), Bharat Heavy Electricals (Bhel) (up 5.04%), and Siemens (up 0.14%) gained.
Shares of companies in the railway infrastructure sector rose after the government on Wednesday, 27 August 2014, issued a notification allowing 100% FDI through the automatic route in railway infrastructure. Texmaco Rail and Engineering (up 4.8%), Kernex Microsystems (India) (up 5%), Titagarh Wagons (up 2.37%), BEML (up 4.99%), Kalindee Rail Nirman (Engineers) (up 4.84%), Zicom Security Systems (up 1.05%), Stone India (up 4.99%), Simplex Casting (up 6.56%) and Hind Rectifiers (up 0.87%) edged higher. Container Corporation of India (down 0.75%) and NELCO (down 4.57%) declined.
The Department of Industrial Policy and Promotion (DIPP) on Wednesday, 27 August 2014, issued a notification allowing 100% foreign direction investment (FDI) through the automatic route in railway infrastructure viz. suburban corridor projects, high speed train projects, dedicated freight lines, rolling stock, locomotives manufacturing, railway electrification, signaling systems, freight terminals, passenger terminals, infrastructure in industrial park pertaining to railway line/sidings and mass rapid transport systems.
The Sensex gained for the sixth day in a row today, 28 August 2014. The barometer index has risen 323.82 points or 1.23% in six trading sessions from a recent low of 26,314.29 on 20 August 2014. The Sensex gained 743.14 points or 2.86% in August. The Sensex has gained 5,467.43 points or 25.82% in calendar year 2014 so far (till 28 August 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 9,189.40 points or 52.66%.
Provisional data released by the stock exchanges showed 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.
Brent crude oil futures reversed intraday losses. Brent for October settlement was up 2 cents at $102.74 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.
The US Energy Information Administration (EIA) in its weekly inventory report on Wednesday, 27 August 2014, said US crude oil stocks fell by a greater-than-expected 2.07 million barrels in the week ended 22 August 2014, but inventories at Cushing, the delivery point for US crude futures, rose 508,000 barrels.
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.
Meanwhile, the 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.
In the foreign exchange market, the rupee edged lower against the dollar on month-end dollar demand from oil importers. The partially convertible rupee was hovering at 60.645, 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 Indian government will release Q1 June 2014 gross domestic product (GDP) data tomorrow, 29 August 2014, when the financial markets are closed for a holiday. The data is widely expected to show a recovery in economic growth. India's 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).
European shares edged down from one-month highs today, 28 August 2014, as the first country-specific reports on August consumer prices fueled fears that the euro zone is heading toward deflation. Key indices in Germany, France and UK were off 0.45% to 1.3%.
Euro-area economic confidence declined more than forecast in August, backing President Mario Draghi's warning that more stimulus may be needed. An index of executive and consumer sentiment fell to 100.6 from a revised 102.1 in July, the European Commission in Brussels said today.
Asian stocks declined today, 28 August 2014, as a rising yen dragged Japanese shares lower. Key benchmark indices in China, Hong Kong, Singapore, Japan and Taiwan were down 0.08% to 0.71%. Key benchmark indices in Indonesia and South Korea were up 0.04% to 0.37%.
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 64 points 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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