A bout of volatility was witnessed as the key benchmark indices recovered from lower level after trimming intraday gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 172.60 points or 0.62% at 27,818.13. The market breadth indicating the overall health of the market was positive.
Index heavyweight and housing finance major HDFC advanced. Banks stocks edged higher on renewed buying. Telecom stocks fell.
In the global commodities markets, Brent crude oil prices dropped overnight. The decline in global crude oil prices augur well for India as the country imports about 80% of its crude oil requirements.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said yesterday, 19 May 2015, that inflation has come down tremendously in India.
Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their highest levels in almost four weeks in morning trade as these two key benchmark indices extended initial gains.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it.
Foreign portfolio investors bought shares worth a net Rs 48.06 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 451.02 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges.
In the overseas markets, European stocks edged lower. Asian indices were mixed. In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record.
At 13:15 IST, the S&P BSE Sensex was up 172.60 points or 0.62% at 27,818.13. The index jumped 257.48 points at the day's high of 27,903.01 in morning trade, its highest level since 23 April 2015. The index gained 98.46 points at the day's low of 27,743.99 at the onset of trading session.
The Nifty was up 50.85 points or 0.61% at 8,416.50. The index hit a high of 8,440.35 in intraday trade, its highest level since 23 April 2015. The index hit a low of 8,391.45 in intraday trade.
The BSE Mid-Cap index was up 24.16 points or 0.23% at 10,675.18. The BSE Small-Cap index was up 47.59 points or 0.43% at 11,235.32. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,296 shares rose and 1,157 shares fell. A total of 117 shares were unchanged.
The total turnover on BSE amounted to Rs 1598 crore by 13:15 IST.
Index heavyweight and housing finance major HDFC advanced 1.2% to Rs 1,256. The stock hit high of Rs 1,259 and low of Rs 1,244 so far during the day.
Banks stocks edged higher on renewed buying. Among private bank stocks, HDFC Bank (up 1.72%), IndusInd Bank (up 1.02%), Kotak Mahindra Bank (up 1.28%), Yes Bank (up 1%), and ICICI Bank (up 1.33%) gained. Axis Bank shed 0.36%.
Among PSU bank stocks, State Bank of India (SBI) (up 2.05%), Andhra Bank (up 0.95%), Oriental Bank of Commerce (up 0.88%), Canara Bank (up 0.06%), Bank of India (up 0.05%) and Union Bank of India (up 0.52%) rose. Punjab National Bank (down 0.13%) and Bank of Baroda (down 0.9%) fell.
The finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
Telecom stocks fell. Idea Cellular (down 1.18%), Reliance Communications (down 3.28%), MTNL (down 1.11%) and Tata Teleservices (Maharashtra) (down 0.4%) declined. Bharti Airtel rose 0.6%.
Bharat Forge fell 2.13%. The company during market hours today reported 70.76% rise in net profit to Rs 203.18 crore on 29.15% rise in total income to Rs 1243.92 crore in Q4 March 2015 over Q4 March 2014.
In the global commodities market, Brent crude oil prices edged higher. Brent for July settlement was up 58 cents at $64.60 a barrel. The contract had lost $2.25 a barrel or 3.39% to settle at $64.02 a barrel during the previous trading session. The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In the foreign exchange market the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.75, compared with its close of 63.68 during the previous trading session.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said in New York yesterday, 19 May 2015, that inflation has come down tremendously in India. Rajan also reportedly called the government's spending cuts significant. Rajan said that the depreciation of the rupee is due in part to the US dollar's strength and that the rupee has fallen less and in a less volatile fashion than other currencies. While the rupee has slid against the strengthening dollar, he said that it has actually strengthened against other currencies.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account, the proposal said. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams so that even small depositors are encouraged. The government has sought feedback on the scheme by 2 June 2015.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
Meanwhile, credit rating agency CRISIL yesterday, 19 May 2015, said that it believes that India's growth is on a slow grind up in the short term and will touch 7.9% in 2015-16 if monsoon is normal; else it would flat-line at 7.4%. According to the rating agency, a meaningful recovery in capex is not expected until fiscal 2017. On the legislative side, consensus is necessary to push through legislations on Goods & Services Tax and land without much dilution. This will test the government's resolve and statecraft, but they are critical building blocks that will raise India's 'potential-growth' rate, CRISIL said.
In overseas markets, European stocks edged lower today, 20 May 2015. Key benchmark indices in UK, France and Germany were off 0.15% to 0.27%.
Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then.
Asian indices were mixed today, 20 May 2015. Key benchmark indices in China, Indonesia, Japan and South Korea were up by 0.65% to 0.88%. Key benchmark indices in Taiwan, Singapore and Hong Kong were off 0.32% to 0.35%.
The latest data showed that Japan's economy grew an annualized 2.4% during the first quarter, much stronger than a revised 1.1% expansion in the previous quarter.
In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record. Falling oil prices weighed on energy stocks, with the sector selling off sharply. Meanwhile, investors digested a report showing a sharp increase in housing starts last month, pondering the effect it might have in determining the course of the Federal Reserve's interest rate policy.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released in the global day today, 20 May 2015.
Chicago Federal Reserve President Charles Evans reportedly said in Munich today, 20 May 2015, that a hike in US interest rates is not likely to be appropriate until early 2016. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said that the US central bank should not move on rates until there was greater confidence that its inflation goal could be hit within one or two years, according to reports. Evans is a voting member this year on Fed policy and among the most dovish of US central bankers.
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