Key benchmark indices regained some strength in early afternoon trade after paring gains from higher level to hit fresh intraday low in mid-morning trade. The barometer index, the S&P BSE Sensex, was currently below the psychological 27,000 mark, having alternately moved above and below that mark so far during the trading session. Earlier, a firm opening had taken the Sensex above that psychological level. The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. A number of side counters witnessed decent to strong gains. The Sensex was currently up 259.87 points or 0.97% at 26,970.. The BSE Mid-Cap index was up 2.19%. The BSE Small-Cap index was up 2.49%. Both these indices outperformed the Sensex.
World stocks rose after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. Closer home, India's Union Cabinet yesterday, 17 December 2014, reportedly approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST).
Sugar stocks rallied after the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, on Wednesday, 17 December 2014, has given its approval to ratify the methodology adopted to recalculate the incentive rate for bi-monthly periods of April-May, 2014, June-July, 2014 and August-September, 2014, towards marketing and promotion services for raw sugar production. Tobacco makers gained on reports inclusion of tobacco in GST's realm will most likely keep tax rates lower for tobacco based products.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014.
Brent crude futures extended gains registered during the previous trading session.
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 after a Federal Reserve pledge to be patient on interest-rate increases sent US stocks surging yesterday, 17 December 2014.
At 12:17 IST, the S&P BSE Sensex was up 259.87 points or 0.97% at 26,970. The index jumped 395.67 points at the day's high of 27,105.80 in early trade, its highest level since 16 December 2014. The index gained 190.44 points at the day's low of 26,900.57 in mid-morning trade.
The CNX Nifty was up 76.65 points or 0.95% at 8,106.45. The index hit a high of 8,151.50 in intraday trade, its highest level since 16 December 2014. The index hit a low of 8,084.90 in intraday trade.
The BSE Mid-Cap index was up 212.24 points or 2.19% at 9,918.69. The BSE Small-Cap index was up 262.19 points or 2.49% at 10,778.31. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was quite strong, with more than three gainers for every loser on BSE. 1,875 shares rose and 541 shares fell. A total of 73 shares were unchanged
Tobacco makers gained on reports inclusion of tobacco in GST's realm will most likely keep tax rates lower for tobacco based products. ITC (up 0.43%), Godfrey Phillips India (up 1.76%), Golden Tobacco (up 0.41%) and VST Industries (up 0.82%) gained.
The cabinet cleared amended GST bill yesterday, 17 Decemebr 2014.
Maruti Suzuki India gained 1.43%. With respect to news article titled "Maruti, Hyundai to hike prices in Jan",Maruti Suzuki India clarified during market hours today, 18 December 2014, that it is correct, as stated in the media report, that the company is contemplating increase in prices of its products owing to various reasons including increase in cost of inputs. After taking into consideration various factors, the prices of the company's products are increased /decreased from time to time in the ordinary course of business. However, as evident from the media report, the company has not taken a final decision in this direction.
As the modificationsin prices takes place in the ordinary course of business, hence, in the best interest of the investors in general, the company does not specifically report such information to the exchanges, Maruti added.
Sugar stocks rallied after the Cabinet Committee on Economic Affairs (CCEA), chaired by the Prime Minister Narendra Modi, on Wednesday, 17 December 2014, has given its approval to ratify the methodology adopted to recalculate the incentive rate for bi-monthly periods of April-May, 2014, June-July, 2014 and August-September, 2014, towards marketing and promotion services for raw sugar production. Bajaj Hindusthan (up 5.14%), Balrampur Chini Mills (up 3.64%), Shree Renuka Sugars (up 4.53%), Sakthi Sugars (up 3.79%), Rana Sugars (up 4.97%), Simbhaoli Sugars (up 5.66%), Triveni Engineering & Industries (up 1.31%) and Dwarikesh Sugar Industries (up 7.08%) surged.
The incentive rate for bi-monthly periods of April - May, 2014, June-July, 2014 and August-September, 2014 have been finalised respectively at Rs 2277, Rs 3300 & Rs 3371 per MT. Total financial help is expected to be around Rs 200 crore.
In sugar year 2013-14, sugar industry had been saddled with surplus stocks on account of surplus production which has consistently exceeded domestic consumption over the past several years. Due to subdued prices of sugar, both in the domestic and international markets, the industry faced a liquidity crisis on account of surplus stocks. This further resulted in mounting up of cane arrears causing distress among cane farmers.
As a result of the policy initiative, about 7.5 lakh metric tonne (MT) of raw sugar was exported which resulted in significant improvements in liquidity of the sugar industry and clearing up of sugarcane arrears benefitting the cane farmers.
In the foreign exchange market, the rupee edged higher against the dollar after the US Federal Reserve pledged patience on interest-rate increases after the conclusion of its two-day monetary policy meeting yesterday, 17 December 2014. The partially convertible rupee was hovering at 63.315, compared with its close of 63.62 during the previous trading session.
Brent crude futures extended gains registered during the previous trading session as weeks of nearly non-stop selling abruptly halted. Brent for February settlement was up 9 cents at $61.27 a barrel. The contract had risen $1.17 a barrel or 2% to settle at $61.18 a barrel during the previous session.
Closer home, the Union Cabinet yesterday, 17 December 2014, reportedly approved a constitutional amendment bill to provide the legal framework for rolling out a nationwide goods and services tax (GST). The constitutional amendment Bill provides 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 Bill is likely to be introduced in parliament during the ongoing winter session.
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.
Investors are closely monitoring if the Indian government's key legislative reform bills are passed during the ongoing winter session of the parliament. 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 China, Indonesia, Singapore, Japan, Hong Kong, and Taiwan were up 0.23% to 2.32%. South Korea's Kospi fell 0.14%.
Trading in US index futures indicated that the Dow could gain 2 points at the opening bell today, 18 December 2014. 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 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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