Gains in auto, banking stocks and index heavyweights Infosys and HDFC triggered strong gains on key benchmark indices on the first trading session of the week today, 6 September 2016 after resuming trade due to holiday yesterday, 5 September 2016. The barometer index, the S&P BSE Sensex jumped 445.91 points or 1.56% to settle at 28,978.02. The Nifty 50 index surged 133.35 points or 1.51% to settle at 8,943. The Sensex settled below the psychologically important 29,000 mark after hitting an intraday high above that level in late trade. The Sensex hit its highest closing level in almost 17 months. The Nifty hit more than 18-month closing high. The Sensex has gained for the second day in a row today, 6 September 2016. All the nineteen sectoral indices on BSE were in the green.
Domestic stocks saw a gap-up opening, as trading resumed after a local holiday yesterday, 5 September 2016. Positive global stocks underpinned sentiment. The latest rally on the bourses was also triggered by outcome of a monthly survey showing that August saw a solid rebound in the rate of expansion in Indian service sector business activity.
The Sensex jumped 445.91 points or 1.56% to settle at 28,978.02, its highest closing level since 13 April 2015. The index jumped 481.29 points or 1.69% at the day's high of 29,013.40. The index rose 99.16 points or 0.35% at the day's low of 28,631.27.
The Nifty surged 133.35 points or 1.51% to settle at 8,943, its highest closing level since 3 March 2015. The index jumped 141.20 points or 1.6% at the day's high of 8,950.85. The index rose 38.80 points or 0.44% at the day's low of 8,848.45.
In overseas stock markets, European stock markets rose following gains in Asian equities. Asian shares gained as prospects for a US interest-rate increase this month remained subdued. Low US interest rates could support demand for emerging-market assets. Data on Friday, 2 September 2016 showed US employment growth slowed more than expected in August after two straight months of robust gains. US markets were closed yesterday, 5 September 2016 for Labour Day holiday. Meanwhile, the Group of 20 major economies (G20) wrapped up their annual summit, held in Hangzhou, China, yesterday, 5 September 2016 with a stronger commitment to coordinate policies to support growth and promote trade liberalization.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,627 shares rose and 1,125 shares declined. A total of 204 shares were unchanged. The BSE Mid-Cap index gained 1.84%, outperforming the Sensex. The BSE Small-Cap index rose 0.95%, underperforming the Sensex.
The total turnover on BSE amounted to Rs 3792.27 crore, higher than turnover of Rs 3735.02 crore registered during the previous trading session on Friday, 2 September 2016. The stock markets had remained closed yesterday, 5 September 2016 on account of Ganesh Chaturthi holiday.
All the nineteen sectoral indices on BSE were in the green. The S&P BSE Industrials index (up 2.22%), the S&P BSE Auto index (up 2.83%), the S&P BSE Finance index (up 2.17%), the S&P BSE Consumer Discretionary Goods & Services index (up 1.68%), the S&P BSE Bankex (up 2.96%), and the S&P BSE Consumer Durables index (up 2.94%), outperformed the Sensex. The S&P BSE Realty index (up 1.23%), the S&P BSE Capital Goods index (up 0.97%), the S&P BSE Power index (up 1.39%), the S&P BSE Healthcare index (up 0.65%), the S&P BSE Energy index (up 0.66%), the S&P BSE Utilities index (up 1.38%), the S&P BSE Oil & Gas index (up 1.04%), the S&P BSE Telecom index (up 0.78%), the S&P BSE Metal index (up 1.21%), the S&P BSE Teck index (up 0.42%), the S&P BSE IT index (up 0.33%), the S&P BSE Basic Materials index (up 1.42%) and the S&P BSE FMCG index (up 0.97%) underperformed the Sensex.
TCS declined 1.17%. The company announced that it has unveiled new unemployment insurance system for the State of Mississippi. The announcement was made after market hours today, 6 September 2016. TCS announced that the Mississippi, Rhode Island and Maine (MRM) Consortium has gone live with the TCS developed Unemployment Insurance (UI) Application for Benefits.
Mississippi began implementation of the UI solution prior to the formation of the consortium, while the states of Maine and Rhode Island plan to adopt the solution in the near future. Mississippi's Unemployment Insurance program helps unemployed individuals throughout the state by providing monetary benefits to those who have involuntarily lost their jobs, while they look for new employment opportunities.
TCS has been helping several US states to modernize their systems that support unemployment insurance programs. TCS developed solution is a robust and highly scalable platform with the ability to easily control multiple functional requirements, such as support for online claims processing, adjudication, appeals and extensive tracking of all claims and payments.
Bank stocks saw across the board gains. Among private bank stocks, HDFC Bank (up 1.14%), RBL Bank (up 2.01%), Kotak Mahindra Bank (up 0.62%), ICICI Bank (up 4.25%), IndusInd Bank (up 3.21%) and Yes Bank (up 3.85%) gained.
Axis Bank gained 6.14% to Rs 635.95. The stock hit a high of Rs 637.60 in intraday trade, which is 52-week high for the counter. The stock hit a low of Rs 600 in intraday trade.
Among PSU bank stocks, Indian Bank (up 7%), State Bank of India (SBI) (up 2.01%), Punjab National Bank (up 5.19%), Bank of Baroda (up 1.83%), Canara Bank (up 2.04%), IDBI Bank (up 0.89%), Bank of India (up 2.01%) and Union Bank of India (up 3.96%) rose.
Index heavyweight and software major Infosys rose 1.45% after the company announced that it has entered into a joint venture (JV) agreement with Saudi Prerogative Company (SPC) in the Kingdom of Saudi Arabia to conduct IT services for customers located in the Kingdom of Saudi Arabia. Infosys holds 70% while the rest 30% will he held by SPC in this JV. Infosys' 70% in this JV is at a cash investment of $312,671 (SAR 1,172,501) by the company in the equity share capital of the proposed JV company. The agreement is subject to the approval of Saudi Arabian General Investment Authority (SAGIA). The announcement was made after market hours on Friday, 2 September 2016.
Index heavyweight and housing finance major HDFC rose 1.29% after the company announced that it has closed the third issue of rupee denominated bonds to overseas investors, aggregating up to Rs 1000 crore. The yield to investor from the bonds is 7.5% per annum payable semi-annually. Maturity date for these bonds is 9 January 2020. The announcement was made after market hours on Friday, 2 September 2016.
Auto stocks gained on renewed buying. Tata Motors (up 7.19%), Mahindra & Mahindra (M&M) (up 1.43%), Eicher Motors (up 0.74%), Ashok Leyland (up 3%), Bajaj Auto (up 0.23%), Hero MotoCorp (up 0.99%) and TVS Motor Company (up 0.35%) gained.
Maruti Suzuki India (Maruti) gained 3.04% after the company announced that its total production rose 3.25% to 1.27 lakh units in August 2016 over August 2015. The announcement was made yesterday, 5 September 2016.
Lupin rose 1.28% after the company announced that its US subsidiary, Gavis Pharmaceuticals LLC, USA has received tentative approval for its Moxifloxacin Hydrochloride Tablets, 400 mg from the United States Food & Drug Administration (USFDA) to market a generic version of Bayer Healthcare Pharmaceuticals Inc's Avelox Tablets, 400 mg (base). It is a fluoroquinolone antibacterial indicated for the infections in adults 18 years of age and older caused by designated susceptible bacteria in certain conditions. Avelox has annual US sales of $30.1 million as per IMS MAT June 2016 data. The announcement was made during market hours today, 6 September 2016.
Separately, Lupin announced at the fag end of the session today, 6 September 2016 that it received tentative approval for its Silodosin Capsules, 4 mg and 8 mg from the United States Food and Drug Administration (FDA) to market a generic version of Allergan Sales, LLC's Rapaflo Capsules, 4 mg and 8 mg. Lupin's Silodosin Capsules, 4 mg and 8 mg are the AB rated generic equivalent of Allergan Sales, LLC's Rapaflo Capsules, 4 mg and 8 mg. It is indicated for the treatment of the signs and symptoms of benign prostatic hyperplasia. Rapaflo had US annual sales of $228.7 million as per IMS MAT June 2016 data.
The Sensex has risen 554.54 points or 1.95% in two sessions from its close of 28,423.48 on 1 September 2016. The Sensex has risen 525.85 points or 1.84% in this month so far (till 6 September 2016). The Sensex has risen 2,860.48 points or 10.95% in calendar year 2016 so far (till 6 September 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 6,483.41 points or 28.82%. The Sensex is off 1,046.72 points or 3.48% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, Urjit Patel assumed charge as the 24th governor of Reserve Bank of India (RBI), succeeding Raghuram Rajan whose three-year controversy-ridden tenure ended on Sunday, 4 September 2016. Patel has assumed charge effective from Sunday after serving as deputy governor since January 2013, RBI said.
On the macro front, the outcome of a monthly survey showed that August saw a solid rebound in the rate of expansion in Indian service sector business activity. Data released yesterday, 5 September 2016 showed that the seasonally adjusted Nikkei India Services Business Activity Index rose to 54.7 in August, up from 51.9 in July, posting its highest level for over three-and-a-half years. The headline index has now signalled expansion in each of the past 14 months. With growth of manufacturing production also ticking higher, the seasonally adjusted Nikkei India Composite PMI Output Index climbed to a 42-month high of 54.6 in August, from 52.4 in July highlighting a stronger improvement in private sector economic activity.
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