Nifty hits 3-1/2-week high

High volatility in mid-morning trade was followed by a recovery for key benchmark indices. At 12:17 IST, the barometer index, the S&P BSE Sensex, was up 64.83 points or 0.25% at 26,210.50. The gains for the 50-unit Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 28.85 points or 0.36% at 7,964.10. The Nifty hit 3-1/2-week high when it rose 36.90 points or 0.46% at the day's high of 7,972.15 in early afternoon trade. The index dropped 1.10 points or 0.01% at the day's low of 7,934.15 in mid-morning trade. The Sensex also hit 3-1/2-week high when it rose 100.35 points or 0.38% at the day's high of 26,246.02 in early trade. The barometer index fell 24.15 points or 0.09% at the day's low of 26,121.52 in mid-morning trade.

The market breadth indicating the overall health of the market was strong. On BSE, 1,511 shares rose and 970 shares fell. A total of 112 shares were unchanged. The BSE Mid-Cap index was up 0.71%. The BSE Small-Cap index was up 0.49%. Both these indices outperformed the Sensex.

The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.75% after a monetary policy review today, 1 December 2015. The central bank also kept the cash reserve ratio (CRR) for commercial banks unchanged at 4% of net demand and time liability (NDTL). The decision was announced at 11:00 IST. Retaining the easing stance of monetary policy, the RBI said that it will use the space for further accommodation when available.

In overseas stock markets, Asian shares edged higher amid speculation that the European Central Bank will announce a round of fresh measures to boost the eurozone economy at its regular monetary policy review scheduled later this week.

Pharma stocks gained. Sun Pharmaceutical Industries (up 0.05%), Aurobindo Pharma (up 0.99%), Cipla (up 0.3%), Lupin (up 0.56%), Wockhardt (up 1.56%), Dr Reddy's Laboratories (up 2.22%), Glenmark Pharmaceuticals (up 1.26%) and Cadila Healthcare (up 0.11%) gained.

Most telecom stocks gained. Tata Teleservices (Maharashtra) (up 1.48%) Reliance Communications (up 0.33%) and Idea Cellular (up 0.64%) gained. Bharti Airtel fell 2.96%.

Unitech rose 1.98% after Citigroup Global Markets Mauritius bought 1.45 crore shares of the company at an average price of Rs 6.99 per share in a bulk deal on the NSE yesterday, 30 November 2015.

Allahabad Bank gained 0.13% after the bank indicated that it may divest its stake in insurance joint venture Universal Sompo General Insurance. Allahabad Bank announced after market hours yesterday, 30 November 2015, that a meeting of its board of directors will be held on 4 December 2015, to consider floating request for proposal for appointment of consultant for advising and undertaking redrafting of existing shareholders agreement forming insurance the joint venture of bank namely Universal Sompo General Insurance Company so as to align the same with amended Indian Insurance Laws. Presently, the shareholding of Allahabad Bank in Universal Sompo General Insurance Company is 30%. The board of directors may also consider partial/complete disinvestment of the bank's stake in the insurance joint venture in compliance with the applicable laws, rules and regulations as amended.

On macro front, India's gross domestic product (GDP) rose 7.4% in Q2 September 2015 over Q2 September 2014, with growth mainly driven by pick-up in the manufacturing sector, which has grown by 9.3% in Q2. The GDP growth has shown a pick up from 7% growth recorded in Q1 June 2015. Meanwhile, the GDP growth remained below 8.4% rise recorded in the corresponding quarter of the last year. The Q2 GDP data was announced after market hours yesterday, 30 November 2015. The finance ministry is expecting the economy to grow in the vicinity of 7.5% in the year ending 31 March 2016 (FY 2016).

The index of eight core industries comprising nearly 38% of the weight of items included in the index of industrial production (IIP) rose 3.2% in October 2015 over October 2014. The data was announced after market hours yesterday, 30 November 2015.

Data during market hours today, 1 December 2015, showed that seasonally adjusted Nikkei India Manufacturing Purchasing Managers' Index (PMI) fell to a 25-month low of 50.3 in November.

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