Firmness continued on the bourses in afternoon trade after the barometer index, the S&P BSE Sensex, hit fresh record high. The Sensex was up 109.98 points or 0.5%, up close to 110 points from the day's low and off about 20 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap was up more than 1%. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Wednesday, 26 March 2014. Gains in Asian stocks also boosted sentiment on the domestic bourses.
Interest rate sensitive auto stocks rose as the Reserve Bank of India is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review on 1 April 2014 as inflation has eased. Shares of car major Maruti Suzuki India scaled record high. Hero MotoCorp hit 52-week high. L&T edged higher after the company said its Buildings & Factories division has won new housing orders worth Rs 1981 crore in this month. Among PSU OMCs, BPCL scaled record 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.
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.
Asian stocks edged higher in choppy trade on Thursday, 27 March 2014, as utilities advanced.
Indian stocks may remain volatile during the remaining part of the trading session as traders roll 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 expire today, 27 March 2014.
At 13:20 IST, the S&P BSE Sensex was up 109.98 points or 0.5% to 22,205.28. The index jumped 127.35 points at the day's high of 22,222.65 in afternoon 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 40.25 points or 0.61% to 6,641.65. The index hit a high of 6,646.20 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 60.09 points or 0.87% at 6,928.16. The BSE Small-Cap was up 76.68 points or 1.12% at 6,925.07. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,567 shares gained and 1,000 shares fell. A total of 161 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks gained and rest of them declined. Bharti Airtel (up 3.43%), Axis Bank (up 1.87%) and NTPC (up 1.52%) edged higher from the Sensex pack.
Lupin edged lower in choppy trade after the company announced the acquisition of 100% equity stake in Laboratorios Grin, S.A. De C.V. (Grin), Mexico, subject to certain closing conditions. The stock was off 0.6% at Rs 931. The scrip hit high of Rs 946.05 and low of Rs 923.55 so far during the day. The acquisition of Laboratorios Grin marks Lupin's foray into the high growth Mexican and the larger Latin American pharmaceuticals market, Lupin said. Mexico is one of the fastest growing pharmaceutical markets in the world valued at over $13.5 billion and growing at 9?10% annually.
Incorporated in 1955, Grin is a specialty pharmaceutical company engaged in the development, manufacturing & commercialization of branded Ophthalmic products. Grin is a leading Ophthalmic player and a trusted brand in Mexico. Laboratorios Grin recorded revenue of approximately $28 Million in calendar year 2013 and has over 275 employees.
Commenting on the acquisition, Ms. Vinita Gupta, Chief Executive Officer, Lupin said: "We are very pleased with our entry into the Mexican market through Laboratorios Grin. This acquisition is a reflection of Lupin's commitment to expand into the Latin American market and build its global specialty business. We see a lot of synergies in this acquisition and plan to bring our Ophthalmic pipeline to build the Grin business as well as leverage their commercial presence to enter other promising therapy segments".
Mr. Victor Fregoso, President of Grin commented: "I am delighted with Grin's association with Lupin. Having nurtured and built Grin for so long, I firmly believe that the future and growth of Grin would be best handled by the management and technology expertise that Lupin brings to table. I wish Grin and Lupin the very best in their future endeavors".
State Bank of India (SBI) rose 4.22%, with the stock extending intraday gains.
Interest rate sensitive auto stocks rose as the Reserve Bank of India is widely expected to keep its main lending rate viz. the repo rate unchanged after a monetary policy review on 1 April 2014 as inflation has eased. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. Ashok Leyland (up 0.67%), Mahindra & Mahindra (M&M) (up 1.49%), and Tata Motors (up 0.56%) edged higher.
Maruti Suzuki India gained 0.83% to Rs 1,953.70. The stock was volatile. The scrip hit record high of Rs 1,967.60 in intraday trade. The stock hit low of Rs 1,921.55 so far during the day.
Shares of two wheeler makers also gained. TVS Motor Company (up 0.74%) and Bajaj Auto (up 1.15%) gained.
Hero MotoCorp gained 2.45% to Rs 2,230 after hitting a 52-week high of Rs 2,230.05 in intraday trade.
Capital goods stocks edged higher. Bharat Heavy Electricals (Bhel) (up 1.46%), ABB India (up 0.73%), BEML (up 1.39%), Siemens (up 1.3%) and Praj Industries (up 0.85%) gained.
L&T edged higher after the company said its Buildings & Factories division has won new housing orders worth Rs 1981 crore in this month. The stock was up 0.61% to Rs 1,283. The stock hit a 52-week high of Rs 1,285 in intraday trade. The stock hit a low of Rs 1,269.25 so far during the day.
BPCL rose 3.25% to Rs 458.60 after hitting record high of Rs 464.50 in intraday trade.
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 be 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.
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 0.42% to 1.01%. Key benchmark indices in China and Hong Kong shed 0.3% 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.
Trading in US index futures indicated that the Dow could advance 31 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. Obama, speaking in Brussels, warned of consequences of complacency in Ukraine and said Russia's actions must be met with condemnation. Ukraine and the International Monetary Fund are nearing the end of bailout talks today, 27 March 2014, as the US and its European allies warned they'll further penalize Russia if it intensifies the crisis after annexing 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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