Mirroring gains in world stocks, key equity benchmark indices in India extended initial gains in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit one-week high. The Sensex was currently up 323.01 points or 1.19% at 27,449.58. The market breadth indicating the overall health of the market was quite strong, with more than three gains for every loser on BSE. The BSE Mid-Cap index was up 1.26%. The BSE Small-Cap index was up 1.53%. Both these indices outperformed the Sensex. Global crude oil prices tumbled yesterday, 18 December 2014. Fall in crude oil prices augur well for India as the country imports 80% of its oil requirement.
Auto stocks gained across the board. Shares of public sector oil marketing companies rose as global crude oil prices fell yesterday, 18 December 2014.
Meanwhile, the fate of several crucial bills hangs in a limbo due to several disruptions by the Opposition over the alleged forced conversion row in the Rajya Sabha. With just three days left for the winter session of Parliament to end, the chance of the passage of the key reform bills in Parliament looks bleak.
Foreign portfolio investors sold shares worth a net Rs 874.89 crore yesterday, 18 December 2014, as per provisional data.
In the foreign exchange market, the rupee edged higher against the dollar on global risk on sentiment.
In overseas markets, Asian stocks rose after a solid overnight rally in US stocks. US stocks surged yesterday, 18 December 2014, a day after Federal Reserve Chairwoman Janet Yellen assured the markets after the conclusion of Fed's two-day monetary policy review that the US central bank would be patient about lifting interest rate in the world's biggest economy.
In Russia, Russian President Vladimir Putin said during his annual public news conference yesterday, 18 December 2014, that the ruble will stabilize amid current economic headwinds. Putin also stressed that external conditions referring to sanctions imposed by the West were pushing Russia into reforms that would make the economy more efficient.
Brent crude futures were aslightly higher after losses in the previous session when oil fell to near five and a half year lows.
At 10:17 IST, the S&P BSE Sensex was up 323.01 points or 1.19% at 27,449.58. The index jumped 346.16 points at the day's high of 27,472.73 in morning trade, its highest level since 12 December 2014. The index gained 165.57 points at the day's low of 27,292.14 in early trade.
The CNX Nifty was up 86 points or 1.05% at 8,245.30. The index hit a high of 8,255.80 in intraday trade, its highest level since 12 December 2014. The index hit a low of 8,208.60 in intraday trade.
The BSE Mid-Cap index was up 125.78 points or 1.26% at 10,090.45. The BSE Small-Cap index was up 166.28 points or 1.53% at 11,027.04. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was quite strong, with more than three gains for every loser on BSE. On BSE, 1,458 shares rose and 471 shares fell. A total of 63 shares were unchanged.
Auto stocks gained across the board. Mahindra & Mahindra (M&M) (up 2.98%), Ashok Leyland (up 3.08%), Tata Motors (up 1.22%), Maruti Suzuki India (up 2.19%), Eicher Motors (up 1.72%), Hero MotoCorp (up 2.02%), Bajaj Auto (up 0.21%) and TVS Motor Company (up 0.31 %) gained.
Shares of public sector oil marketing companies rose as global crude oil prices fell yesterday, 18 December 2014. BPCL (up 0.4%), Indian Oil Corporation (up 0.07%) and HPCL (up 0.91%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already freed pricing of petrol and diesel.
UltraTech Cement rose 0.96%. Grasim Industries gained 1.29%. Grasim has exposure to the cement sector through its subsidiary UltraTech Cement. Jaiprakash Associates gained 0.6%.
UltraTech Cement is reportedly in talks to acquire Jaiprakash Associates' cement plants in central and southern India. The company is discussing the purchase of Jaiprakash's cement plants in the states of Uttar Pradesh, Madhya Pradesh and Andhra Pradesh. Jaiprakash has at least five facilities in those states with 18.25 million tonnes of production capacity, report said.
Meanwhile, according to an approach paper on proposed e-auction of coal mines released by the Ministry of Coal on 17 December 2014, a floor price of Rs 150 per tonne has been fixed for auction of coal blocks to unregulated sectors such as steel, sponge iron, cement and captive power. For the unregulated sectors, a regular bidding process will be adopted where the highest bidder will be declared the successful bidder. The approach paper put up on the coal ministry website has sought feedback from stakeholders.
In the foreign exchange market, the rupee edged higher against the dollar on global risk on sentiment. The partially convertible rupee was hovering at 63.03, compared with its close of 63.115 during the previous trading session.
Brent crude futures rebounded from the lowest closing price since May 2009 after as Saudi Arabia's oil minister said he's optimistic about global demand in the future. Brent for February settlement was up 3 cents at $59.30 a barrel. The contract had fallen $1.91 a barrel or 1.01% to settle at $59.27 a barrel during the previous session, the lowest closing level since May 2009.
Closer home, the fate of several crucial bills hangs in a limbo due to several disruptions by the Opposition over the alleged forced conversion row in the Rajya Sabha. The government had planned to get key bills like Insurance Bill and the Coal Mines (Special Provisions) Bill, 2014 in parliament during the current winter session which ends on 23 December 2014. The Lok Sabha last week passed the Coal Mines (Special Provisions) Bill, 2014. The bill allows the government to enforce rules and guidelines for auction/allocation of 204 coal blocks cancelled by the Supreme Court in September this year.
The Indian government had planned to get the Insurance Laws (Amendment) Bill, 2008 passed in both the Houses of Parliament in this week. The Union Cabinet, last week, approved the official amendments to the Insurance Laws (Amendment) Bill, 2008. The Parliamentary Select Committee in its report tabled in Rajya Sabha on 10 December 2014 agreed a composite cap of 49% on foreign investment in the insurance sector, which includes all types of foreign investment as opposed to the 26% foreign direct investment (FDI) allowed at present. Finance Minister Arun Jaitley had said in his maiden budget speech in July that the composite cap in the insurance sector should be increased to 49% from the current level of 26%, with full Indian management and control.
With just three days left for the winter session of Parliament to end, the chance of the passage of the reform bills in Parliament looks bleak.
Meanwhile, the Union Cabinet recently approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides the legal framework for rolling out the levy, giving states power to tax both goods and services. As of now only the central government can impose service tax. The amendment Bill will also create a GST council, a body that will have representatives of the states and the Centre that will take decisions on the tax after it is rolled out.
The government's intension is to implement a nationwide GST from 1 April 2016. GST is a major indirect tax reform. GST will subsume central indirect taxes such as excise duty and service tax at the central level and value added tax at the state level besides other local levies such as octroi and entry tax.
Japanese stocks led Asian markets higher today, 19 December 2014, after US stocks boasted its biggest two-day advance since late 2011 yesterday, 18 December 2014, amid relief the Federal Reserve was in no rush to start hiking interest rates. Key indices in South Korea, Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.75% to 1.88%. China's Shanghai Composite fell 0.48%.
The Bank of Japan maintained unprecedented stimulus today, 19 December 2014, as Governor Haruhiko Kuroda's bid to stoke inflation faces increasing challenges from the tumble in oil price. The central bank will boost the monetary base at an annual pace of 80 trillion yen ($672 billion), it said in a statement.
China raised its estimate of its 2013 economic output by 3.4% based on its latest survey of the economy, the National Bureau of Statistics said on Friday. The statistics bureau said China's gross domestic product in 2013 was 58.80 trillion yuan ($9.46 trillion). It also said the revision "basically" wouldn't affect GDP growth for 2014, though it would change the total size of the economy for this year.
Trading in US index futures indicated that the Dow could fall 6 points at the opening bell today, 19 December 2014. US stocks rallied yesterday, 18 December 2014, to its best two-day gains in three years. The rally was kicked off Wednesday, 17 December 2014, after Federal Reserve Chairwoman Janet Yellen assured the markets that the central bank would be patient about lifting interest rate.
In economic news, a weekly jobless claims report came in stronger than expected, confirming the Fed's view that the economy is strengthening. Claims fell by 6,000 to 289,000, a low level typically associated with strong hiring.
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