Indices extend initial gains

Key benchmark indices extended initial gains after hit fresh record highs in morning trade. At 10:20 IST, the barometer index, the S&P BSE Sensex, rose 280.65 points or 0.81% at 34,864.32. The Nifty 50 index advanced 77.75 points or 0.73% at 10,759. Nifty crossed 10,700-mark for the first time in history. Firmness in Asian stocks supported gains on the bourses. India's industrial production surging at 25-month high pace of 8.4% in November also boosted sentiment.

The Sensex gained 283.62 points or 0.82% at the day's high of 34,876.01 in morning trade, its record high. The index rose 94.82 points or 0.27% at the day's low of 34,687.21 in early trade. The Nifty gained 78 points or 0.73% at the day's high of 10,759.25 in morning trade, its record high. The index advanced 32.55 points or 0.3% at the day's low of 10,713.80 in early trade.

Among the secondary indices, the S&P BSE Mid-Cap index rose 0.61%, underperforming the Sensex. The S&P BSE Small-Cap index advanced 0.88%, outperforming the Sensex.

The broad market depicted strength. There were more than two gainers for every loser on BSE. 1,810 shares advanced and 678 shares declined. A total of 110 shares were unchanged.

Most realty stocks rose. DLF (up 1.12%), Sobha (up 0.96%), Indiabulls Real Estate (up 2.46%), NBCC (up 0.54%), Godrej Properties (up 0.41%), and Housing Development & Infrastructure (HDIL) (up 7.68%) edged higher. D B Realty (down 1.92%), Unitech (down 0.21%) and Oberoi Realty (down 1.18%) declined.

Telecom stocks were mixed. Bharti Airtel (down 0.58%) and Idea Cellular (down 2.3%) declined. Tata Teleservices (Maharashtra) (up 4.95%) and Reliance Communications (up 0.48%) gained.

Shares of Bharti Infratel gained 1.15%. Bharti Infratel is a provider of tower and related infrastructure and is a unit of Bharti Airtel.

Capital First surged 5.46% after the boards of Capital First and IDFC Bank at their respective board meetings held on Saturday, 13 January 2018, approved a merger of the former with the latter. IDFC Bank declined 1.48%. The announcement was made on Saturday, 13 January 2018.

Pursuant to the merger which is subject to regulatory and shareholder approvals, IDFC Bank will issue 139 shares for every 10 shares of Capital First. Post merger, the combined entity of IDFC Bank and Capital First will have an assets under management (AUM) of Rs 88000 crore; PAT of Rs 1268 crores (FY 2017); and a distribution network comprising 194 branches (as per branch count of December 2017 of both entities), 353 dedicated BC outlets and over 9,100 micro ATM points, serving more than five million customers across the country.

On the macroeconomic data front, industrial production surged at 25-month high pace of 8.4% in November 2017 over November 2016, while showing a sharp acceleration in growth from the 2% increase in October 2017.

The inflation based on consumer price index (CPI) surged to 17-month high of 5.21% in December 2017 compared with 4.88% in November 2017. The corresponding provisional inflation rate for rural area was 5.27% and urban area 5.09% in December 2017 as against 4.79% and 4.9% in November 2017. The core CPI inflation increased to 4.96% in December 2017 compared with 4.75% in November 2017. The cumulative CPI inflation was lower at 3.25% in April-December FY2018 compared with 4.85% in April-December FY2017. Both IIP and CPI data was announced after market hours on Friday, 12 January 2018.

The government will announce inflation data based on wholesale price index (WPI) for December today, 15 January 2018. The WPI-based inflation accelerated further higher to eight-month high 3.9% in November 2017 from 3.6% in October 2017.

Overseas, Asian stocks gained and built on the strong start to this year and headed for a fresh record high amid optimism in global growth.

US markets will remain shut today, 15 January 2018, for the Martin Luther King Jr. holiday. Better-than-expected quarterly earnings from some financial majors and robust economic data boosted the benchmark US indices to fresh closing highs on Friday, 12 January 2018. Among macro data, US Commerce Department said retail sales increased by 0.4% in December, in-line with estimates.

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