Key benchmark indices moved in a narrow range in positive terrain in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 67.49 points or 0.3%, up about 40 points from the day's low and off close to 75 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Gains in Asian stocks and overnight upmove in US stocks underpinned sentiment on the domestic bourses.
PSU OMCs edged higher as the under-recovery on High Speed Diesel (HSD) and PDS Kerosene and Domestic LPG applicable declined. Telecom stocks edged higher on renewed buying.
Key benchmark indices edged higher and hit fresh record high at the onset of the trading session. The Sensex and the 50-unit CNX Nifty, both, hit fresh record high. Key benchmark indices retained positive zone in morning trade. Key benchmark indices moved in a narrow range in positive terrain in mid-morning trade.
The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained net buyers of Indian stocks on Tuesday, 1 April 2014. FIIs bought shares worth a net Rs 385.66 crore on Tuesday, 1 April 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Wednesday, 2 April 2014, as increase in US manufacturing boosted optimism about growth in the world's biggest economy.
At 11:20 IST, the S&P BSE Sensex was up 67.49 points or 0.3% to 22,513.93. The index jumped 145.66 points at the day's high of 22,592.10 in early trade, a record high for the barometer index. The index rose 35.77 points at the day's low of 22,482.21 in morning trade.
The CNX Nifty was up 18.85 points or 0.28% to 6,739.90. The index hit a high of 6,763.50 in intraday trade, a record high for the index. The index hit a low of 6,729.70 in intraday trade.
The BSE Mid-Cap index was up 68.25 points or 0.96% at 7,154.25. The BSE Small-Cap index was up 67.54 points or 0.95% at 7,174.26. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,511 shares gained and 695 shares fell. A total of 99 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks gained and rest of them declined. Tata Motors (up 1.91%), ICICI Bank (up 1.81%) and Reliance Industries (RIL) (up 1.29%) edged higher from the Sensex pack.
Telecom stocks gained. Bharti Airtel (up 3.77%), Idea Cellular (up 4.18%), Tata Teleservices (Maharashtra) (up 1.09%) and Reliance Communications (up 2.47%) gained.
PSU OMCs edged higher as the under-recovery on High Speed Diesel (HSD) and PDS Kerosene and Domestic LPG applicable declined. Lower crude oil prices and higher rupee also aided gains in shares PSU OMCs. BPCL (up 0.91%), HPCL (up 0.82%) and Indian Oil Corporation (up 0.79%) gained.
The under-recovery on High Speed Diesel (HSD) applicable for the first fortnight of April effective 1 April 2014 fell to Rs 5.93 per litre from Rs 7.16 per litre during 2nd fortnight of March 2014 from 16 March 2014. In the case of PDS Kerosene, the under-recovery for April 2014 declined to Rs 34.43 per litre, from Rs 36.34 per litre in March 2014. The under-recovery on LPG declined to Rs 506.06 per cylinder, from Rs 605.80 per cylinder in March 2014. The under-recovery on HSD is calculated on fortnightly basis whereas the under-recovery on PDS Kerosene and LPG is calculated on monthly basis.
Oil marketing companies (PSU OMCs) are currently incurring combined daily under-recovery of about Rs 342 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices.
Brent crude oil futures settled $2.14 lower on Tuesday at $105.62 per barrel, its lowest settlement since Nov. 8 as data showing a slowdown in Chinese manufacturing fed concerns over the outlook for energy demand. Lower crude oil prices will help reduce under-recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.
The strength in rupee against the dollar has also eased concerns of higher cost of crude oil imports. Public sector oil marketing companies (PSU OMCs) import about 70-75% of their crude oil needs.
JSW Steel fell 0.08%. The company's Director-commercial and marketing director, Mr. Jayant Acharya, on Tuesday, 1 April 2014, said that India's steel consumption may rise in the current fiscal by around 5-6% in line with the projected GDP growth of the country. JSW Steel reduced prices for its two steel products -- hot rolled coil and wire rod with effect from 1 April 2014. The quantum of the cut will be Rs 500-750 per tonne for HRC and Rs 500 for Wire rod, the company said after trading hours on Tuesday, 1 April 2014. Mr. Acharya attributed the reduction in prices to decline in international steel prices and the appreciation of the rupee against the dollar.
In the foreign exchange market, the rupee edged higher against the dollar as bunched-up dollar inflows and record high domestic shares aided sentiment. The partially convertible rupee was hovering at 59.68, compared with its close of 59.91/92 on Friday, 28 March 2014. Trading in the rupee resumed after a two-day break due to a local holiday and annual closing of bank accounts.
Indian government bond prices dropped on concern demand for existing securities will fall as the government starts its annual borrowing program this week. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.9367%, higher than its close of 8.8035% on Friday, 28 March 2014. Trading in the government bond market resumed after a two-day break due to a local holiday and annual closing of bank accounts.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on Tuesday, 1 April 2014, to gauge whether the country's high inflation rates are easing back to acceptable levels.
A major near term 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.
Asian stocks rose on Wednesday, 2 April 2014, as increase in US manufacturing boosted optimism about growth in the world's biggest economy. Key benchmark indices in Hong Kong, South Korea, China, Singapore, Indonesia, Japan and Taiwan were up 0.08% to 1.32%.
Trading in US index futures indicated that the Dow could advance 20 points at the opening bell on Wednesday, 2 April 2014. US stocks rose on Tuesday, 1 April 2014, as consumer and technology shares pushed the Standard & Poor's 500 Index to an all-time high, after an increase in a manufacturing index boosted optimism the economy withstood severe winter weather.
US manufacturing companies expanded in March at a slightly faster pace compared to the prior month, a survey of executives found. The Institute for Supply Management manufacturing index edged up to 53.7%, slightly below the consensus forecasts. Any number over 50% means more companies are seeing an expansion of business instead of a contraction. Separately, the final Markit PMI for the US in March was unchanged at 55.5, down from 57.1 in February. Any reading over 50 in the purchasing managers index indicates growth.
US car sales surged to an annualized rate of 16.4 million in March the highest rate since November.
ADP is due to release US private-sector employment numbers for March 2014 today, 2 April 2014.
The influential US non-farms payroll data for March 2014 will be released this Friday, 4 April 2014.
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.
Lawmakers in the US on Tuesday, 1 April 2014, endorsed an aid package for Ukraine.
In Europe, a policy meeting of the Governing Council of the European Central Bank (ECB) will be held tomorrow, 3 April 2014, in Frankfurt to decide euro zone interest rates. ECB President Mario Draghi has consistently reassured listeners that the euro zone isn't heading for deflation, but that the central bank stands ready to act if needed.
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