After holding firm in morning trade, key benchmark indices extended gains in mid-morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty were, both, up more than 1% for the day currently. The market breadth indicating the overall health of the market was strong. The Sensex was currently up 306.27 points or 1.11% at 27,812.98. The BSE Mid-Cap index was up 1.18%, outperforming the Sensex.
Bank stocks edged higher on renewed buying. Cement stocks also edged higher. Shares of public sector oil marketing companies (PSU OMCs) edged higher after better-than-expected Q4 March results from BPCL and HPCL which were announced yesterday, 28 May 2015.
Foreign portfolio investors sold shares worth a net Rs 792.54 crore yesterday, 28 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 683.29 crore yesterday, 28 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, Asian stocks were mixed. US stocks registered small losses in choppy trading yesterday, 28 May 2015, as investors grappled with comments from Federal Reserve officials about the possibility of raising interest rates this year.
At 11:15 IST, the S&P BSE Sensex was up 306.27 points or 1.11% at 27,812.98. The index jumped 315.58 points at the day's high of 27,822.29 in mid-morning trade, its highest level since 25 May 2015. The index fell 39.48 points at the day's low of 27,467.23 in early trade.
The 50-unit CNX Nifty was up 91.80 points or 1.1% at 8,410.80. The index hit a high of 8,416.50 in intraday trade, its highest level since 25 May 2015. The index hit a low of 8,305.70 in intraday trade.
The BSE Mid-Cap index was up 124.91 points or 1.18% at 10,684.95, outperformed the Sensex. The BSE Small-Cap index was up 104.53 points or 0.94% at 11,249.57, underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,308 shares rose and 783 shares fell. A total of 82 shares were unchanged.
Bank stocks edged higher on renewed buying. Among public sector banks, Oriental Bank of Commerce (up 3.44%), Bank of India (up 1.72%), IDBI Bank (up 0.71%), State Bank of India (up 1.15%), Indian Overseas Bank (up 0.58%), Bank of Baroda (up 0.46%), Central Bank of India (up 0.7%), and Union Bank of India (up 0.03%) edged higher. Punjab National Bank (down 0.96%) and UCO Bank (down 0.86%) edged lower.
Among private sector banks, Yes Bank (up 1.59%), HDFC Bank (up 1.13%), IndusInd Bank (up 1.21%), Axis Bank (up 0.9%), ICICI Bank (up 0.56%) and Kotak Mahindra Bank (up 0.25%) edged higher.
The Reserve Bank of India (RBI) yesterday, 28 May 2015, issued draft guidelines on net stable funding ratio (NSFR) under Basel III framework on liquidity standards for banks. The RBI said that the NSFR which is defined as the amount of available stable funding relative to the amount of required stable funding should be greater than equal to 100%. This ratio should be equal to at least 100% on an ongoing basis. However, the NSFR would be supplemented by supervisory assessment of the stable funding and liquidity risk profile of a bank, the RBI said. On the basis of such assessment, the Reserve Bank may require an individual bank to adopt more stringent standards to reflect its funding risk profile and its compliance with the sound principles. The NSFR requirement would be binding on banks from 1 January 2018, the RBI said. Banks are required to meet the NSFR requirement on an ongoing basis and they should have the required systems in place for such calculation and monitoring, RBI said.
Meanwhile, the Reserve Bank of India yesterday, 28 May 2015, advised banks to encourage large agricultural borrowers such as agricultural commodity processors, traders, millers, aggregators etc. to hedge their risks related to agricultural commodity prices. Banks provide a number of credit facilities to customers engaged in activities related to agriculture. Volatility in agricultural commodity prices may negatively impact such borrowers and the banks, according to the central bank. Hence, hedging of agri-commodity price risk will be beneficial to both the borrowers and the banks, the RBI said in a statement. The RBI has advised banks to educate their customers about the suitability and appropriateness of using various hedging tools so that they can take an informed decision. This will also reduce the scope of mis-selling of derivatives. Banks have to keep the sophistication, understanding, scale of operation and requirements of their agri-borrowers in mind while advising them on the availability and use of these instruments, the RBI said.
Cement stocks edged higher on renewed buying. Ambuja Cements (up 2.55%), UltraTech Cement (up 1.84%), ACC (up 1.95%) and Shree Cement (up 0.92%) edged higher.
Grasim Industries was up 1.25% at Rs 3,562. Grasim has exposure to cement sector through its holding in UltraTech Cement.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after better-than-expected Q4 March results from BPCL and HPCL which were announced yesterday, 28 May 2015.
BPCL was up 3.52%. The stock had risen 2.57% to settle at Rs 817.25 yesterday, 28 May 2015, after the company announced better-than-expected Q4 March results during trading hours. BPCL's net profit fell 29.87% to Rs 2852.89 crore on 30.94% decline in total income to Rs 51928.12 crore in Q4 March 2015 over Q4 March 2014.
HPCL jumped after the company reported better-than-expected Q4 March results after trading hours yesterday, 28 May 2015. The stock was up 5.07% at Rs 669.15. The stock hit a high of Rs 674 and a low of Rs 652.55 so far during the day. HPCL's net profit fell 53.09% to Rs 2162.39 crore on 30.17% decline in total income to Rs 45093.35 crore in Q4 March 2015 over Q4 March 2014. The company's net profit rose 57.65% to Rs 2733.26 crore on 7.37% decline in total income to Rs 207794.60 crore in the year ended March 2015 over the year ended March 2014.
HPCL said that average gross refining margins were reported at $2.84 per barrel in the year ended March 2015 as against $3.43 per barrel during the year ended March 2014. During the current year ended March 2015, subsidy amounting to Rs 636.99 crore (April - March 2014: Rs 635.14 crore) has been accounted at the subsidy rates as approved by the Government.
Based on the approval received from Government of India, the company has accounted for budgetary support amounting to Rs 5057.94 crore for the period April-March 2015 (April-March 2014: Rs 15215.45 crore) against under-recoveries on sale of sensitive petroleum products for the period April-March 2015.
Discount from upstream oil companies in respect of crude oil, PDS Kerosene & Domestic LPG purchased from them, amounted to Rs 10862.21 crore in the year ended March 2015 compared with Rs 16770.77 crore in the year ended March 2014.
Indian Oil Corporation edged higher ahead of its Q4 March 2015 results today, 29 May 2015. The stock was up 2.54% at Rs 370. The stock hit a high of Rs 371.50 and a low of Rs 358 so far during the day.
On the macro front, the government is scheduled to announce the data on gross domestic product (GDP) for Q4 March 2015 at 17:30 IST today, 29 May 2015. India's GDP grew 7.5% in Q3 December 2014.
Meanwhile, economists expects the Reserve Bank of India (RBI) to cut its benchmark lending rate viz. the repo rate by 25 basis points to 7.25% after a monetary policy review early next week. Economists expect rate cut from the central bank in an attempt to kick-start the economy which has been showing signs of decelerating. The RBI is scheduled to announce the outcome of its second bi-monthly monetary policy review for the year 2015-16 at 11:00 IST on Tuesday, 2 June 2015.
In overseas markets, Asian stocks were mixed today, 29 May 2015. Key indices in China, Japan, Hong Kong, and South Korea were up 0.2% to 0.46%. Key indices in Singapore, Taiwan and Indonesia were off 0.06% to 0.57%.
Japan's industrial production rose more-than-expected in May, preliminary data showed yesterday, 28 May 2015. In a report, the Ministry of Economy, Trade and Industry said that industrial production rose to a seasonally adjusted 1% in May, from minus 0.8% in the preceding month.
US stocks registered small losses in choppy trading yesterday, 28 May 2015, as investors grappled with comments from Federal Reserve officials about the possibility of raising interest rates this year.
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