Expectations of a bigger rate cut of 50 basis points from the Reserve Bank of India (RBI) at its monetary policy review early next month triggered the latest upmove on the domestic bourses, with barometer index, the S&P BSE Sensex, moving past the psychologically important 25,000 mark. The Sensex rose 332.63 points or 1.33% to settle at 25,285.37. The 50-unit Nifty 50 index rose 99.90 points or 1.31% to settle at 7,704.25. After hovering in green throughout the trading session, the two key benchmark indices surged in late trade as European stocks reversed initial losses. All the nineteen sectoral indices on BSE registered gains.
The Sensex and the Nifty, both, hit their highest closing level in almost 11 weeks. The Sensex gained for the second day in a row and the Nifty clocked gains for the fourth trading session in a row.
Bank stocks edged higher on expectations of a bigger rate cut of 50 basis points from the RBI at its monetary policy review early next month after the government announced reduction in interest rates on various small savings schemes for Q1 June 2016 based on the prevailing G-Sec (government securities) yields. Ambuja Cements edged higher on media reports that a foreign brokerage has maintained its buy rating on the stock, stating that it remains a play on cement upcycle and should be a beneficiary of better pricing in the North India. Index heavyweight and cigarette major ITC edged higher after a foreign brokerage reportedly maintained its 'outperform' rating on the stock saying that most states have not hiked value added tax (VAT) on cigarettes in their Budget for the year ending 31 March 2017 (FY 2017). Asian Paints edged lower on reports that a domestic brokerage has reiterated its 'reduce' rating on the stock citing expensive valuations.
Aurobindo Pharma edged higher after the company said it has received final approval from the United States Food and Drug Administration to manufacture and market Naproxen Sodium Tablets USP, 220 mg (OTC). Lupin extended previous session's sharp losses triggered by speculation that widely followed investor Rakesh Jhunjhunwala is selling some of his stake.
The market sentiment was upbeat after the latest data showed that foreign portfolio investors (FPIs) made heavy purchases of Indian stocks during the previous trading session. FPIs bought shares worth a net Rs 1712.62 crore on Friday, 18 March 2016, as per provisional data released by the stock exchanges. The Sensex had risen 275.37 points or 1.12% to settle at 24,952.74 on that day.
Adding to those gains, the Sensex today, 21 March 2016, gained 332.63 points or 1.33% to settle at 25,285.37, its highest closing level since 6 January 2016. The index jumped 374.71 points or 1.5% at the day's high of 25,327.45. The barometer index rose 35.53 points or 0.14% at the day's low of 24,988.27.
The Nifty rose 99.90 points or 1.31% to settle at 7,704.25, its highest closing level since 6 January 2016. The index rose 109.20 points or 1.43% at the day's high of 7,713. 55. The index rose 13.35 points or 0.17% at the day's low of 7,617.70.
The market breadth indicating the overall health of the market was positive. On BSE, 1,499 shares rose and 1,163 shares fell. A total of 188 shares were unchanged. The BSE Mid-Cap index gained 1.4%. The BSE Small-Cap index rose 1.36%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2848 crore, higher than turnover of Rs 2755.22 crore registered during the previous trading session.
All the nineteen sectoral indices on BSE registered gains. The S&P BSE Oil & Gas index (up 1.18%), the S&P BSE IT index (up 0.47%), the S&P BSE Teck index (up 0.6%), the S&P BSE Energy index (up 1.04%), the S&P BSE Utilities index (up 0.7%), the S&P BSE Metal index (up 0.3%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.57%), the S&P BSE Auto index (up 1.19%), the S&P BSE Power index (up 0.63%), and the S&P BSE Healthcare index (up 1.13%) underperformed the Sensex. The S&P BSE Basic Materials index (up 1.94%), the S&P BSE Capital Goods index (up 2.01%), the S&P BSE Telecom index (up 1.64%), the S&P BSE Industrials index (up 2.17%), the S&P BSE Bankex (up 1.7%), the S&P BSE FMCG index (up 1.65%), the S&P BSE Finance index (up 1.81%), the S&P BSE Realty index (up 1.78%) and the S&P BSE Consumer Durables index (up 1.8%) outperformed the Sensex.
Bank stocks edged higher on expectations of a bigger rate cut of 50 basis points from the Reserve Bank of India (RBI) at its monetary policy review early next month after the government announced reduction in interest rates on various small savings schemes for Q1 June 2016 based on the prevailing G-Sec (government securities) yields. Among PSU bank stocks, State Bank of India (SBI) (up 3.11%), Punjab National Bank (up 2.25%), Canara Bank (up 1.18%), IDBI Bank (up 4.62%), Bank of India (up 1.92%) and Union Bank of India (up 1.87%) rose.
Bank of Baroda (BoB) rose 2.08%. The bank said on Saturday, 19 March 2016, that credit rating agency Brickwork Ratings India has cut the outlook on its ratings on the bank's upper Tier II bonds of Rs 1000 crore issued in two tranches of Rs 500 crore each to negative from stable.
Among private bank stocks, HDFC Bank (up 1.4%), ICICI Bank (up 2%), IndusInd Bank (up 0.15%), Axis Bank (up 1.78%), Federal Bank (up 0.9%) and Yes Bank (up 2.3%) declined.
Before the government's announcement of reduction in interest rates on small savings schemes, market participants were expecting a 25 basis points cut in policy rate from the RBI at its monetary policy review on 5 April 2016. After trading hours on Friday, 18 March 2016, the government announced that the interest rate on Public Provident Fund (PPF) has been slashed to 8.1% from 8.7%. The interest rate on Sukanya Samriddhi Account Scheme has been reduced to 8.6% from 9.2%. The interest rate on 5 Year Senior Citizens Savings Scheme has been cut to 8.6% from 9.3%. The quarterly revision of interest rates will ensure that interest rates under small savings schemes are more dynamically related to the current market rates, thereby enabling commercial banks to move their interest rates in line with current money market rates, the finance ministry said in a statement. The government had recently announced that it would revise interest rates on small saving schemes on quarterly basis against the earlier practice of annual revision.
The additional interest rate spreads ranging from 25 basis points to 100 basis points over the G-Sec yields which the Government allows on PPF, Senior Citizen Savings Scheme, Sukanya Samridhi Scheme, National Savings Certificate, five year time deposit and Monthly Income Scheme have been continued.
Kotak Mahindra Bank rose 0.49% to Rs 661 after a large bulk deal of 24.88 lakh shares was executed on the scrip at Rs 659.75 per share in opening bell on BSE today, 21 March 2016.
Cement stocks extended their recent gains. ACC (up 2.58%), UltraTech Cement (up 3.53%) and Shree Cement (up 2.17%) gained.
Ambuja Cements edged higher on media reports that a foreign brokerage has maintained its buy rating on the stock, stating that it remains a play on cement upcycle and should be a beneficiary of better pricing in the North India. The stock rose 4.53%.
Grasim Industries rose 1.93% at Rs 3,730. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
Most pharma stocks rose. GlaxoSmithKline Pharmaceuticals (up 3.72%), Dr Reddy's Laboratories (up 0.39%), Sun Pharmaceutical Industries (up 2.42%), Cipla (up 1.44%), Glenmark Pharmaceuticals (up 1.48%) and Wockhardt (up 1.46%) rose. Cadila Healthcare was flat. Alkem Laboratories declined 2%.
Aurobindo Pharma rose 3.06% after the company said it has received final approval from the United States Food and Drug Administration to manufacture and market Naproxen Sodium Tablets USP, 220 mg (OTC). Aurobindo Pharma expects to launch the drug in the US in Q1 June 2016. The approved abbreviated new drug application (ANDA) is bioequivalent and therapeutically equivalent to the reference listed drug product (RLD) Aleve Tablets of Bayer Healthcare LLC (Bayer). Naproxen Sodium Tablets are used in the treatment and prevention of osteoporosis in postmenopausal women. According to IMS data, the approved product had an estimated market size of $96 million in the United States for the twelve months ended January 2016.
Lupin extended previous session's sharp losses triggered by speculation that widely followed investor Rakesh Jhunjhunwala is selling some of his stake. The stock was off 1.51% at Rs 1,535.35. The stock hit low of Rs 1,502.20 in intraday trade, which is also a 52-week low for the stock. The stock had lost 6.9% to settle at Rs 1,558.90 during the previous trading session on Friday, 18 March 2016. Jhunjhunwala held 1.65% stake in Lupin as per the shareholding pattern as on 31 December 2015.
Asian Paints edged lower on reports that a domestic brokerage has reiterated its 'reduce' rating on the stock citing expensive valuations. The stock shed 1.75%. The brokerage reportedly said in a latest research note that its channel checks suggest that the company has cut prices across its decorative paints portfolio by around a weighted average of 3%, which could lead to 3% to 5% cut in 2017-18 EPS estimate.
FMCG major Hindustan Unilever (HUL) rose 4.05% to Rs 880.35. The stock hit high of Rs 883.75 and low of Rs 849.30 in intraday trade.
Index heavyweight Reliance Industries (RIL) gained 1.07% to Rs 1,016.20. The stock hit high of Rs 1,039 and low of Rs 1,023.50 in intraday trade.
Index heavyweight and housing finance major HDFC advanced 2.16% to Rs 1,152.05. The stock hit high of Rs 1,157.05 and low of Rs 1,129.55 in intraday trade.
Index heavyweight and cigarette major ITC edged higher after a foreign brokerage reportedly maintained its 'outperform' rating on the stock saying that most states have not hiked value added tax (VAT) on cigarettes in their Budget for the year ending 31 March 2017 (FY 2017). The stock rose 1.66% to Rs 330.40. The stock hit a high of Rs 336.10 and low of Rs 326.10 in intraday trade. According to the brokerage firm, FY 2017 is likely to see one of the lowest VAT hikes on cigarettes in the past five years.
Meanwhile, ITC's executive director Sanjiv Puri was quoted as saying that the sales of the company's instant noodles brand Yippee have been recovering and its market share has risen to between 30% and 40% from 20% in the aftermath of Maggi noodles controversy.
Shares of Vedanta group companies rose. Vedanta (up 2.34%) and Cairn India (up 1.42%) gained. Hindustan Zinc declined 0.23%.
The Sensex edged higher for the second day in a row. The barometer index has risen gained 608 points or 2.46% in two trading sessions from its close of 24,677.37 on 17 March 2016. The Sensex has risen 2,283.37 points or 9.92% in this month so far (till 21 March 2016). The Sensex has fallen 832.17 points or 3.18% in calendar year 2016 so far (till 21 March 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the Sensex has risen 2,790.76 points or 12.4%. The Sensex is off 3,809.24 points or 13.09% from a 52-week high of 29,094.61 hit on 15 April 2015. The Sensex is off 4,739.37 points or 15.78% from a record high of 30,024.74 hit on 4 March 2015.
In overseas stock markets, European stocks reversed initial losses. Earlier during the global day, Chinese stocks edged higher after authorities signaled a loosening stance toward margin trading, the practice of using borrowed money to buy shares. In mainland China, the Shanghai Composite settled 2.15% higher. In Hong Kong, the Hang Seng index closed 0.06% higher. US stocks edged higher during the previous trading session on Friday, 18 March 2016, extending the rally that followed the Federal Reserve's accommodative policy decision during the week.
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