Key benchmark indices extended gains in mid-morning trade after the latest data showed a decent growth in merchandise exports in June 2014. The barometer index, the S&P BSE Sensex, was up 122.02 points or 0.48%, up 66.37 points from the day's low and off 27.32 points from the day's high. The market breadth indicating the overall health of the market was strong, with two gainers for every loser on BSE. The BSE Small-Cap index was up 1.38%
Interest rate sensitive auto stocks extended Tuesday's gains. PSU OMCs edged higher as crude oil prices declined and as under-recovery on High Speed Diesel (HSD) applicable for second fortnight of July, effective 16 July 2014, declined.
At 11:15 IST, the S&P BSE Sensex was up 122.02 points or 0.48% to 25,350.67. The index jumped 149.34 points at the day's high of 25,377.99 in early trade, its highest level since 11 July 2014. The index rose 55.65 points at the day's low of 25,284.30 in morning trade.
The CNX Nifty was up 34.05 points or 0.45% to 7,560.70. The index hit a high of 7,571.35 in intraday trade, its highest level since 11 July 2014. The index hit a low of 7,540.35 in intraday trade.
The market breadth indicating the overall health of the market was strong, with two gainers for every loser. On BSE, 1,552 shares gained and 774 shares fell. A total of 98 shares were unchanged.
The BSE Mid-Cap index was up 89.35 points or 0.99% at 9,134.27. The BSE Small-Cap index was up 136.17 points or 1.38% at 9,992.17. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1205 crore by 10:15 IST compared to Rs 788 crore by 10:15 IST.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined.
ICICI Bank (up 3.02%), Hindalco Industries (up 2.29%) and Reliance Industries (up 1.63%) edged higher from the Sensex pack.
Interest rate sensitive auto stocks extended Tuesday's gains triggered by data showing that retail inflation has eased in June 2014. Easing inflation provides space for the Reserve Bank of India (RBI) to cut policy rates to revive stalled economic growth. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. TVS Motor Company (up 2.14%) and Hero MotoCorp (up 1.28%) gained.
Bajaj Auto shed 0.31%. The company announces its Q1 June 2014 results tomorrow, 17 July 2014.
Maruti Suzuki India rose 0.06%. The company said during market hours on Tuesday, 15 July 2014, that it has introduced Ertiga Limited Edition to mark the milestone of 1.5 lakh unit sales of the Ertiga model in the Indian market. Ertiga Limited Edition petrol version has been priced at Rs 6.76 lakh ex-showroom Delhi. The CNG version has been priced at Rs 7.34 lakh ex-showroom Delhi. The diesel version has been priced at Rs 8.05 lakh ex-showroom Delhi.
Mahindra & Mahindra (M&M) (up 0.41%), Tata Motors (up 0.9%), and Ashok Leyland (up 0.19%) gained. The announcement in the budget on 10 July 2014 of investment in National Highways Authority of India and State Roads of an amount of Rs 37880 crore, which includes Rs 3000 crore for the North East is positive for the auto sector.
Before the Union Budget, the government had on 25 June 2014 extended concessional excise duty on automobiles by six months up to 31 December 2014.
PSU OMCs edged higher as crude oil prices declined. Indian Oil Corporation (IOC) (up 1.45%), HPCL (up 0.99%) and BPCL (up 0.96%) gained.
Brent crude oil futures for August delivery were up 7 cents or 0.07% to $106.09 a barrel in electronic trading today, 16 July 2014. Brent crude oil futures for August delivery fell 96 cents to settle at $106.02 a barrel on Tuesday, 15 July 2014, recovering from a low of $104.39, the weakest point since 2 April 2014. The August contract expires today, 16 July 2014. Brent crude oil futures for September delivery were up 18 cents at $107.06 a barrel.
Lower crude oil prices could decrease under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas reviewed international prices of crude oil and petroleum products during the first fortnight of July 2014. Accordingly, the under-recovery on High Speed Diesel (HSD) applicable for second fortnight of July effective 16 July 2014 will go down to Rs 2.49 per litre. This was Rs 3.40 per litre during first fortnight of July 2014. In the case of PDS Kerosene and Domestic LPG, the under-recoveries for the second fortnight of 2014 continue to be Rs 33.07 per litre and Rs 449.17 per cylinder respectively, as in the last fortnight.
PSU OMCs, effective 16 July 2014, are now incurring combined daily under-recovery of about Rs 261 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 271 crore daily under-recoveries during previous fortnight. The under-recoveries for the financial year 2014-15 are projected to be Rs 91665 crore while the figure was Rs 139869 crore in 2013-14.
Meanwhile, IOC on Tuesday, 15 July 2014, reduced the price of diesel sold in bulk for direct consumers across the country as international prices of diesel dropped and after the rupee appreciated slightly during the last fortnight. The price has been cut by Rs 1.09 a litre to Rs 1.20 a litre in the four metros.
A bout of volatility was seen in early trade as key benchmark indices trimmed initial gains. Volatility continued as the key benchmark indices recovered from lower level after trimming intraday gains in morning trade. Key benchmark indices strengthened in mid-morning trade after the government announced trade data for June 2014. Key benchmark indices extended gains in mid-morning trade after the latest data showed a decent growth in merchandise exports in June 2014.
India's merchandise exports jumped 10.22% to $26.47 billion in June 2014 over June 2013, data released by the government today, 16 July 2014, showed.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 60.20, compared with its close of 60.12/13 on Tuesday, 15 July 2014.
At a summit in Brazil, the five BRICS nations -- Brazil, Russia, India, China and South Africa -- on Tuesday, 15 July 2014, announced the signing of an agreement establishing the New Development Bank (NDB), with the purpose of mobilizing resources for infrastructure and sustainable development projects in BRICS and other emerging and developing economies. The bank will have an initial authorized capital of $100 billion. The initial subscribed capital will be $50 billion, equally shared by the five BRICS nations. The five BRICS nations also announced the signing of the treaty for the establishment of the BRICS Contingent Reserve Arrangement (CRA) with an initial size of $100 billion. This arrangement will have a positive precautionary effect, help countries forestall short-term liquidity pressures, promote further BRICS cooperation, strengthen the global financial safety net and complement existing international arrangements, according to a statement issued on Tuesday. The agreement is a framework for the provision of liquidity through currency swaps in response to actual or potential short-term balance of payments pressures.
Asian stocks edged higher on Wednesday, 16 July 2014, as a slide in oil prices to the lowest in over three months on Tuesday, 15 July 2014, was taken as a potential positive for global growth. Key benchmark indices in Hong Kong, Singapore, Indonesia, Japan and South Korea rose by 0.02% to 1.04%. Key benchmark indices in China and Taiwan fell by 0.04% to 0.82%.
China today, 16 July 2014 reported second-quarter GDP growth of 7.5% compared with 7.4% in the previous three months. Other data showed retail sales gained 12.4% in June from a year earlier and industrial production jumped 9.2%. Fixed asset investment, a mainstay driver of the Chinese economy, climbed 17.3% in the first six months.
Trading in US index futures indicated that the Dow could rise 10 points at the opening bell on Wednesday, 16 July 2014. US markets saw mixed trend on Tuesday, 15 July 2014, after the US Federal Reserve raised concerns about social-media and biotech companies' valuations.
Federal Reserve Chair Janet Yellen reportedly indicated in testimony before US lawmakers on Tuesday, 15 July 2014, that stimulus is still required for the US economy. A high degree of monetary policy accommodation continues to be appropriate, Yellen said in her semi-annual address to the Senate Banking Committee.
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