Key benchmark indices surged in early trade tracking firmness in Asian stocks. The barometer index, the S&P BSE Sensex regained psychological 27,000 mark. The Sensex was currently up 321.09 points or 1.2% at 27,031.22. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 2.07%. The BSE Small-Cap index was up 2.2%. Both these indices outperformed the Sensex.
L&T gained after the company announced that L&T and Canada Pension Pan Investment Board (CPPIB) have completed the definitive investment agreement entered into in June 2014.
Foreign portfolio investors sold shares worth a net Rs 1636.36 crore yesterday, 17 December 2014, as per provisional data.
In overseas markets, Asian stocks surged today, 18 December 2014, rebounding from an almost nine-month low, after a Federal Reserve pledge to be patient on interest-rate increases sent US equities up the most since 2013 yesterday, 17 December 2014.
At 9:22 IST, the S&P BSE Sensex was up 321.09 points or 1.2% at 27,031.22. The index jumped 395.67 points at the day's high of 27,105.80 in early trade. The index gained 271.52 points at the day's low of 26,705.67in early trade.
The CNX Nifty was up 102.70 points or 1.28% at 8,132.50. The index hit a high of 8,151.50 in intraday trade. The index hit a low of 8,110.50 in intraday trade.
The BSE Mid-Cap index was up 200.83 points or 2.07% at 9,907.28. The BSE Small-Cap index was up 231.78 points or 2.2% at 10,747.90. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,074 shares rose and 135 shares fell. A total of 20 shares were unchanged
ICICI Bank gained 2.83%. Bank of Baroda rose 2.03%. The Reserve Bank of India has on Wednesday, 17 December 2014, imposed monetary penalty of Rs 50 lakhs on ICICI Bank and Rs 25 lakhs on Bank of Baroda for violation of its instructions, among other things, on know your customer/anti money laundering Know Your Customer(KYC)/Anti Money Laundering (AML). The penalties have been imposed in exercise of powers vested in the Reserve Bank under the provisions of Section 47(A)(1)( c ) read with Section 46(4)(i) of the Banking Regulation Act, 1949.
L&T gained 2.29% after the company announced after market hours yesterday, 17 December 2014, that L&T and Canada Pension Pan Investment Board (CPPIB) have completed the definitive investment agreement entered into in June 2014. The agreement was made between L&T and a wholly owned subsidiary of CPPIB, for investment into L&T's subsidiary-L&T Infrastructure Development Projects (L&T IDPL).
CPPIB, through its subsidiary, has made an initial investment of Rs 1000 crore in L&T IDPL on 16 December 2014, by way of subscription to compulsorily convertible preference shares. The second tranche of Rs 1000 crore, or such higher amount as may be agreed between L&T IDPL and CPPIB's subsidiary, will be invested after twelve months from the date of the initial investment, subject to any required regulatory approvals at such time.
Cpla rose 1.16%. With respect to news titled "Novartis drags Cipla to court, " Cipla clarified after market hours yesterday, 17 December 2014, that Novartis has approached Delhi Court to restrain the company from marketing Unibrez product launched recently. The revenue/profits from the product is not expected to be material in the financial year ending 31 March 2015 (FY 2015), Cipla said.
Punjab National Bank was trading at Rs 222.30 after turning ex-split today, 18 December 2014, for 5 for 1 stock split.
Closer home, the cabinet reportedly approved a constitutional amendment bill on Wednesday, 17 December 2014, to rationalise state and central indirect taxes into a harmonised goods and services tax (GST). Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. The government may table the constitutional amendment bill to facilitate the levy of goods & services tax (GST) during the ongoing winter session of the parliament. The constitutional amendment Bill will provide 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.
Meanwhile, the Indian government intends 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.
It also remains to be seen if the government will be to find support for the Coal Mines (Special Provisions) Bill, 2014 in the Rajya Sabha where it's in a minority. 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.
Asian stocks surged today, 18 December 2014, rebounding from an almost nine-month low, after a Federal Reserve pledge to be patient on interest-rate increases sent US equities up the most since 2013 yesterday, 17 December 2014. Key indices in Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.24% to 2.55%. Key indices in China and South Korea shed 0.32% to 0.33%.
US stocks surged the most since 2013 yesterday, 17 December 2014, with the Standard & Poor's 500 Index erasing about half of its December drop, after the Federal Reserve pledged patience on its first interest-rate increase since 2006.
The Federal Reserve after two-day policy meet yesterday, 17 December 2014, said it will be patient when it comes to the timing of rate increases, replacing a pledge in its statement to keep borrowing costs near zero for a considerable time, and raising its assessment of the job market.
Federal Reserve Chair Janet Yellen restored clarity to the central bank's monetary policy plans, saying it was on course to raise interest rates, though not right away. Yellen told reporters following a two-day meeting that the Fed is likely to hold rates near zero at least through the first quarter. She also laid out the economic parameters that would need to be met for liftoff to begin later in the year and said that rates probably would be raised gradually thereafter. They may not return to more normal levels until 2017, she added.
Among economic data in the US, the US consumer-price index dropped 0.3% in November from the previous month, the most since December 2008, after being little changed the prior month, a Labor Department report showed yesterday, 17 December 2014.
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