IT stocks gain on positive economic data in US

Key benchmark indices held firm after opening higher with 50-unit CNX Nifty scaling record high triggered by firmness in Asian stocks. The barometer index, the S&P BSE Sensex was currently up 88.86 points or 0.34% to 26,446.97. The market breadth indicating the overall health of the market was strong. The market sentiment was also boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. IT stocks gained on positive economic data in US, the biggest outsourcing market for the Indian IT firms. TCS rose after the company said that its TCS BaNCS customer, National Employment Savings Trust (NEST) in the UK, has crossed the 1 million member mark.

At 10:16 IST, the S&P BSE Sensex was up 88.86 points or 0.34% to 26,446.97. The index rose 122.99 points at the day's high of 26,483.10 in early trade, its highest level since 20 August 2014. The index gained 59.42 points at the day's low of 26,419.53 in opening trade.

The CNX Nifty was up 28.10 points or 0.27% to 7,912.45. The index hit a high of 7,924.90 in intraday trade, a record high for the index. The index hit a low of 7,903.60 in intraday trade.

The market breadth indicating the overall health of the market was strong. On BSE, 1,261 shares gained and 691 shares fell. A total of 72 shares were unchanged.

The BSE Mid-Cap index was up 34.84 points or 0.37% at 9,355.39. The BSE Small-Cap index was up 44.60 points or 0.43% at 10,343.10. Both these indices outperformed the Sensex.

Hindalco Industries (up 2.28%), Sesa Sterlite (up 1.97%) and State Bank of India (SBI) (up 1.75%) edged higher from the Sensex pack.

IT stocks gained on positive economic data in US, the biggest outsourcing market for the Indian IT firms. HCL Technologies (up 0.59%), Infosys (up 1.25%), Tech Mahindra (up 0.29%) and Wipro (up 0.01%) gained.

TCS rose 0.54% after the company after market hours on Thursday, 21 August 2014, said that its TCS BaNCS customer, National Employment Savings Trust (NEST) in the UK, has crossed the 1 million member mark. TCS is NEST's IT solutions partner and scheme administrator. NEST was established under UK law as part of the UK government's workplace pension reforms that require all UK employers to enroll their eligible workforce into a qualifying workplace pension scheme and make contributions along with the employee contribution component.

United Spirits fell 2.23% after the National Stock Exchange excluded the stock from its equity derivatives segment.

United Spirits has not submitted financial results for the year ended 31 March 2014 and quarter ended 30 June 2014 as required under the listing agreement. In view of the above the National Stock Exchange (NSE) has decided to exclude the scrip from equity derivatives segment. Thus, fresh month contracts will not be introduced for the expiry month November 2014, on the expiration of August 2014 contracts. All existing contracts i.e. contracts with expiry dates 25 September 2014 and 30 October 2014 will expire on 18 September 2014. Accordingly, no futures and options (F&O) contracts will be available in the underlying United Spirits for trading from 19 September 2014 onwards, NSE said.

On Wednesday, 20 August 2014, United Spirits was removed from the benchmark 50-share Nifty Index, CNX Nifty Junior Index, CNX 100 Index, CNX, 200 Index, CNX 500 Index, CNX FMCG Index, CNX Consumption Index, LIX 15 Index and NI15 Index, as part of a periodic review. These changes shall become effective from 19 September 2014.

Arvind rose 2.13% after the company said its subsidiary, Arvind Lifestyle Brands, has entered into an agreement with Gap Inc., to open Gap stores in India. Gap Inc., which sells brands such as Banana Republic, Old Navy and Piperlime, operates both company-owned stores and franchise stores around the world.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 412.77 crore on Thursday, 21 August 2014, as per provisional data from the stock exchanges.

The Reserve Bank of India in its Annual Report for the year ended 30 June 2014 released after trading hours on Thursday, 21 August 2014, said that the acceleration in consumer price inflation (CPI) in July 2014 driven by vegetable price spike indicate that the upside risks persist to RBI's disinflationary glide path of taking CPI inflation to 8% by January 2015. However, some of the increase in food prices could be temporary and there are early indications that the price corrections are underway in select items like tomato, the RBI said. The central bank also said that the recent decline in oil prices could partly offset the pressure from food prices.

The central bank said that while the disinflationary momentum that set in since December 2013 has taken inflation to a lower trajectory, downside risks to growth and upside risks to inflation arise from the sub-normal monsoon and the geopolitical situation in the Middle East. Though the balance of risks around the medium-term inflation path, and especially the target of 6% CPI inflation by January 2016 are still to the upside, the RBI remains committed to supporting the disinflationary process, the RBI said. To secure a sustainable growth of at least 7% over the medium term, microeconomic policies that improve activity levels and productivity will be needed so that they can work in tandem with a supportive macroeconomic regime with a reasonably positive real interest rate, low inflation, moderate CAD and low fiscal deficit, the RBI said.

According to RBI, an increase in interest rates in the United States may trigger a reversal in carry trade flows to emerging market and developing economies (EMDEs) and trigger higher volatility in the foreign exchange, equity and bond markets in EMDEs.

The Prime Minister, Narendra Modi, on Thursday, 21 August 2014, outlined a vision for solid waste management and waste water management in 500 urban centres across India, through the PPP model. He said this would enable cleanliness in towns and cities, while facilitating ample water supply for agriculture to the nearby rural hinterland.

The Prime Minister said India is urbanizing rapidly, and he sees this not as a challenge but as an opportunity for economic development. The Prime Minister was addressing a gathering in Nagpur after laying the foundation stone for Nagpur metro and Pardi grade separator and flyover on NH-6.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.44 compared with its close of 60.6725 on Thursday, 21 August 2014.

Asian stocks rose today, 22 August 2014, after reports from US housing to manufacturing showed the world's largest economy is strengthening. Key benchmark indices in Taiwan, Hong Kong, China, Singapore and South Korea rose 0.1% to 1.2%. Key benchmark indices in Japan and Indonesia fell 0.13% to 0.27%.

Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Friday, 22 August 2014. US stocks ended higher on Thursday, 21 August 2014, with the S&P 500 index at a record high after a flurry of positive economic data

A report in the US yesterday showed fewer Americans than forecast applied for unemployment benefits last week. Data yesterday also showed existing home sales rose last month to the most since September, while the Conference Board's gauge of the economic outlook for the next three to six months increased 0.9%. Separately, the Markit Economics preliminary index of US manufacturing in August jumped to the highest level since April 2010.

Federal Reserve Chairwoman Janet Yellen will give a speech today, 22 August 2014, at the annual Fed summit in Jackson Hole, Wyo. Fed Chair Janet Yellen is reportedly expected to acknowledge during the conference that while economic data has generally been supportive, she remains concerned about slack in the labor market.

The minutes from the two-day meeting of the Federal Open Market Committee in late July showed on Wednesday, 20 August 2014, that Fed officials came closer to an agreement on how to exit from the most aggressive stimulus. At that meeting, the Fed trimmed its monthly bond-buying program by an additional $10 billion.

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