Volatility ruled the roost as the key benchmark indices trimmed gains after a rally took them to fresh record high in late trade. The barometer index, the S&P BSE Sensex, hit record high above 22,300. The 50-unit CNX Nifty hit record high above 6,650. Stocks turned volatile during the latter part of the trading session as traders rolled over positions in the futures & options (F&O) segment from the near-month March 2014 series to April 2014 series. The near-month March 2014 F&O contracts expired today, 27 March 2014. The Sensex was provisionally up 109.91 points or 0.5%, off 102.53 points from the day's high and up 110.92 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Wednesday, 26 March 2014.
Reliance Industries (RIL) gained in volatile trade after the company after market hours on Wednesday, 26 March 2014, announced that the Ministry of Energy (MOE) of the Republic of the Union of Myanmar has selected RIL for two offshore blocks in Myanmar Offshore Block Bidding Round - 2013. PSU banks stocks rose across the board on renewed buying. Among cement stocks, UltraTech Cement hit 52-week high.
Key benchmark indices edged higher amid initial volatility. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade as Asian stocks rose. Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade. The Sensex and the 50-unit CNX Nifty, both, hit record high. Firmness continued on the bourses in afternoon trade. Key benchmark indices trimmed gains in mid-afternoon trade as European markets dropped in early trade there. Volatility ruled the roost as the key benchmark indices trimmed gains after a rally took them to fresh record high in late trade.
The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Wednesday, 26 March 2014. FIIs bought shares worth a net Rs 1004.52 crore on Wednesday, 26 March 2014, as per provisional data from the stock exchanges.
As per provisional closing, the S&P BSE Sensex was up 109.91 points or 0.5% to 22,205.21. The index jumped 212.44 points at the day's high of 22,307.74 in late trade, a record high for the barometer index. The index fell 1.01 points at the day's low of 22,094.29 in early trade.
The CNX Nifty was up 39.25 points or 0.59% to 6,640.65. The index hit a high of 6,673.95 in intraday trade, a record high for the index. The index hit a low of 6,599.50 in intraday trade.
The BSE Mid-Cap index was up 41.60 points or 0.61% at 6,909.67. The BSE Small-Cap was up 68.11 points or 0.99% at 6,916.50. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market, was positive. On BSE, 1,675 shares gained and 1,126 shares fell. A total of 160 shares were unchanged.
The total turnover on BSE amounted to Rs 2562 crore, lower than Rs 4210.86 crore on Wednesday, 26 March 2014.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Bharti Airtel (up 3.46%), Hero MotoCorp (up 3.25%) and Bajaj Auto (up 2.03%) edged higher from the Sensex pack.
Dr. Reddy's Laboratories (down 1.94%), Sesa Sterlite (down 1.62%) and Tata Motors (down 1.31%) edged lower from the Sensex pack.
Reliance Industries (RIL) rose 0.88% to Rs 898 in volatile trade. The stock hit high of Rs 904.45 and low of Rs 892.75. RIL after market hours on Wednesday, 26 March 2014, said that the Ministry of Energy (MOE) of the Republic of the Union of Myanmar has selected RIL for two offshore blocks (M17 and M18) in Myanmar Offshore Block Bidding Round - 2013. Both the blocks are located offshore in the Moattama basin of Myanmar in water depths upto 3,000 ft and together encompass an area of 27,600 sq. kms.
As per the process, RIL or its affiliates will enter into Production Sharing Contracts (PSC) for these offshore blocks. The PSC allows for an initial preparation and study periods before committing into Phase 1 of Exploration period, RIL said. RIL's participation is in line with its strategy of portfolio rationalization by expanding its international asset base by investing in regimes having attractive internationally competitive terms on offer. The company thus hopes to leverage its organizational capabilities and expertise to create value for the E&P segment, RIL said.
In a separate announcement, RIL after market hours on Wednesday, 26 March 2014, said it has taken a planned maintenance shutdown of one of its three Para Xylene units at Jamnagar. The scheduled shut down period is approximately for a period of six weeks. This shut down will also be utilized to improve reliability and performance of the unit, RIL said. The other two Para Xylene units-will continue to operate normally, RIL said. RIL has a total capacity of 1.8 million MT per annum of Para Xylene at Jamnagar.
In another separate announcement, RIL after market hours on Wednesday, 26 March 2014, said that one allegation that is making rounds is that the Gujarat state government bought cheap land from farmers and gave it to RIL at concessional rates. However, the facts are completely opposite, RIL said. "We would like to make it absolutely clear that more than 90% of land that we acquired for our plants in Gujarat have been bought directly from farmers. The price that we paid to the farmers was more than the market rates. We have not violated any rules in the process of acquiring land and all rules have been followed," RIL said in a statement.
Thousands of farmers of Gujarat are the company's partners in the process of industrialisation, RIL said. RIL said that thousands of families in Gujarat have benefitted from the process of industrialisation. Some politicians have been making unsubstantiated statements against RIL for grabbing attention and instant mileage, RIL said. They tend to make sweeping statements for instant gratification without corroborative evidence, RIL said. "We would, however like to it clear that all these allegations are baseless and without any substance," RIL said.
PSU bank stocks gained across the board on renewed buying. Canara Bank (up 2.54%), IDBI Bank (up 3.25%), Punjab National Bank (up 3.38%), Bank of Baroda (up 3.39%), Bank of India (up 1.51%) and Union Bank of India (up 2.18%) gained.
State Bank of India jumped 4.46% to Rs 1,847 after a foreign brokerage upgraded the stock to buy from neutral rating. The brokerage also revised its price target on the State Bank of India (SBI) stock to Rs 2,080 from Rs 1,440 per share, citing the bank will benefit from economic recovery and lower slippages. The brokerage expects slippage ratio of the bank to decline to 3.2% in the fiscal year ending March 2016 (FY 2016) and stress loans to fall from 9.1% in Q3 December 2013 to 8.4% by FY 2016.
Dena Bank rose 1.48% to Rs 58.20 after the bank said it has allotted total shares aggregating about 6.90 crore shares at Rs 52.91 per share to Life Insurance Corporation of India and GIC of India on preferential allotment basis. The announcement was made during trading hours today, 27 March 2014.
Dena Bank said that the Issue Committee of the Board of the Bank at its meeting held on Wednesday, 26 March 2014, allotted 5.32 crore and 1.58 crore equity shares at Rs 52.91 per share to Life Insurance Corporation of India (LIC) and GIC of lndia, respectively on preferential basis. Consequent upon this issue, the Government of lndia holding in the bank will be at 58.01%.
The equity shares so allotted shall rank pari-passu with the existing equity shares of the bank including dividend, if any and will be locked in for a period of one year from the date of trading approval received from stock exchanges, as per the SEBI (ICDR) Regulations, 2009, Dena Bank said.
State Bank of Travancore rose 0.62%. State Bank of Travancore announced after market hours on Wednesday, 26 March 2014 that the board of directors of the bank at its meeting held on Wednesday, 26 March 2014, has declared an interim dividend of Rs 2.50 per share to its shareholders for the year ending 31 March 2014. The date of payment of interim dividend is fixed as 22 April 2014.
The board of directors also approved to undertake preferential allotment not exceeding Rs 385 crore to State Bank of India (SBI) for equity shares of face value of Rs 10 each along with share premium subject to receiving the shareholders' approval and any other required statutory approvals. The board has also approved in principle for increasing the equity capital of the bank by way of issue of new shares on rights basis including share premium not exceeding Rs 629 crore.
State Bank of Bikaner & Jaipur lost 2.3% as the stock turned ex-dividend today, 27 March 2014, for interim dividend of Rs 14.30 per share for the year ending 31 March 2014
UltraTech Cement gained 3.27% to Rs 2,051.50 after hitting a 52-week high of Rs 2,072 in intraday trade.
Indian Hotels Company rose 0.64%. Indian Hotels Company today, 27 March 2014, said its board of directors has considered and approved, subject to the approval of the shareholders of the company to the extent applicable, and receipt of relevant approvals from regulatory authorities, as may be required, issue of compulsory convertible debentures by way of a rights issue to the existing shareholders of the company on a record date for an amount not exceeding Rs 1000 crore. The terms and conditions of the rights issue including the rights entitlement ratio, the issue price, record date, timing of the rights issue and other related matters shall be decided subsequently by a duly constituted committee of the board, Indian Hotels Company said.
The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
European stocks edged lower in choppy trade on Thursday, 27 March 2014, on concern that the crisis in Ukraine may escalate. In UK, the FTSE 100 index was off 23.74 points or 0.36%. In France, the CAC 40 Index was off 0.03 points. In Germany, the DAX index was up 0.09%.
US President Barack Obama, in a speech in Brussels, on Wednesday, 26 March 2014, called for further economic sanctions against Russia over its annexation of Crimea. Obama, speaking in Brussels, warned of consequences of complacency in Ukraine and said Russia's actions must be met with condemnation.
The US and European Union have imposed financial sanctions on Russian and Ukrainian officials as well associates of Russian President Vladimir Putin, leaving open the threat of broader sanctions targeting the Russian economy, including its energy and financial sectors.
Italian manufacturing business confidence rose again in March thanks to an improved orders outlook, national statistics institute Istat said Thursday. Confidence among Italy's manufacturers rose to 99.2 in March--its highest level since July 2011--from 99.1 in February, according to Istat's monthly survey.
French consumer confidence rose in March as households grew more optimistic about their financial situation and the overall standard of living in France, according to data released Thursday by the national statistics agency Insee. In March, the consumer confidence index increased to 88 from 85 in February, back to its July 2012 level, Insee said.
Asian stocks edged higher in choppy trade on Thursday, 27 March 2014, as utilities advanced. Key benchmark indices in Taiwan, Japan, Indonesia, Singapore and South Korea were up 0.48% to 1.01%. Key benchmark indices in China and Hong Kong were off 0.24% to 0.83%.
Data today, 27 March 2014, showed mainland China industrial profits increased 9.4% in the two months through February year-on-year, compared with 17% growth a year earlier.
Taiwan's central bank on Thursday left its key interest rates unchanged for the 11th straight quarter as expected, as inflation remains low and growth of its major export markets is still uneven. The Central Bank of the Republic of China (Taiwan) said the discount rate will remain at 1.875%, the secured loan rate at 2.25% and the unsecured loan rate at 4.125%. The bank has stood pat on the three policy interest rates since the third quarter of 2011.
During a news conference, Gov. Perng Fai-nan said a moderately accommodative monetary policy will continue to be in place. "We will have to take into consideration future goods prices, the output gap... and the global economy," he said, when asked about the timing of raising interest rates.
Trading in US index futures indicated that the Dow could advance 44 points at the opening bell on Thursday, 27 March 2014. US stocks edged lower on Wednesday, 26 March 2014, after mid-afternoon selling intensified when US President Barack Obama, in a speech in Brussels, called for further economic sanctions against Russia over its annexation of Crimea.
In US economic news, orders for big-ticket items rose 2.2% in February, powered by higher bookings for autos and aircraft. Stripping out the volatile transportation sector, orders rose a smaller 0.2%.
St. Louis Federal Reserve Bank President James Bullard today, 27 March 2014, said that the key risk for the US economy would be a bubble forming as the central bank removes monetary-policy accommodations, while he also raised concerns about financial stability in the US economy. "I don't see a major bubble right now, but one will form as we are trying to remove the accommodation in the years ahead, because that's what exactly had happened in the 2004-2006 period," Bullard told the Credit Suisse Asian Investment Conference in Hong Kong. "I do think that's a key risk going forward," he said. Bullard related the risk to the situation in 2006, the housing prices had already started to peak at the same time as the central bank was in a tightening cycle. "Just because you are moving away accommodation doesn't mean the risk of bubble forming is going away," he said. Bullard also emphasized that financial stability concerns are "looming large," as policy makers are thinking about how to accommodate those concerns. He said macroprudential tools, which have been strengthened, can be used to address emerging bubbles. Bullard is a non-voting member of Federal Open Market Committee this year.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
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