Nifty hits highest level in almost 7 weeks

After range bound movement in mid-morning trade, key benchmark indices extended gains in early afternoon trade. The barometer index, the S&P BSE Sensex, hit its highest level in more than six weeks and the 50-unit CNX Nifty hit its highest level in almost 7 weeks. The Sensex was currently up 178.66 points or 0.63% at 28,440.67. The market breadth indicating the overall health of the market was positive.

Kotak Mahindra Bank edged higher in volatile trade after the private sector bank reported strong Q3 results. Shares of pharmaceuticals and capital goods companies were mixed.

Foreign portfolio investors (FPIs) bought shares worth a net Rs 433.72 crore yesterday, 19 January 2015, as per provisional data.

In the foreign exchange market, the rupee edged lower against the dollar.

Brent crude futures edged lower after the International Monetary Fund lowered its global economic growth outlook and China's growth expanded at its slowest pace in decades. Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. 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.

The Indian government has used the steep fall in global crude oil prices to raise excise duty on petrol and diesel four times since November last year which will help increase the government's indirect tax revenue mobilization.

In overseas markets, Asian stocks rose after the latest data showed China's GDP grew 7.3% in Q4 December 2014, a tad higher than market expectations.

At 12:17 IST, the S&P BSE Sensex was up 178.66 points or 0.63% at 28,440.67. The index jumped 197.78 points at the day's high of 28,459.79 in early afternoon trade, its highest level since 8 December 2014. The index rose 62.84 points at the day's low of 28,324.85 in opening trade.

The CNX Nifty was up 52 points or 0.61% at 8,602.70. The index hit a high of 8,608.50 in intraday trade, its highest level since 4 December 2014. The index hit a low of 8,574.50 in intraday trade.

The BSE Mid-Cap index was up 74.87 points or 0.7% at 10,755.89. The BSE Small-Cap index was up 85.89 points or 0.75% at 11,485.75. Both these indices outperformed the Sensex.

The market breadth indicating the overall health of the market was positive. On BSE, 1,537 shares advanced and 1,100 shares declined. A total of 128 shares were unchanged.

Kotak Mahindra Bank edged higher in volatile trade after the private sector bank reported strong Q3 results. The stock was up 0.03% at Rs 1,389.45. The stock hit a high of Rs 1,400.65 and a low of Rs 1,384 so far during the day. The bank's net profit rose 36.63% to Rs 464.52 crore on 20.15% growth in total income to Rs 2994.20 crore in Q3 December 2014 over Q3 December 2013. The Q3 result was announced during market hours today, 20 January 2015.

The bank's net interest income (NII) rose 16% to Rs 1060 crore in Q3 December 2014 over Q3 December 2013. Advances as on 31 December 2014 were up 22% to Rs 64641 crore.

The provision coverage ratio on non-performing assets as on 31 December 2014 was 56.82%.

ABB India was up 0.75%. The company announced during trading hours that its foreign parent ABB and Solar Impulse have formed an alliance ahead of the plane's historic round-the-world journey championing the role of innovation and technology in reducing resource consumption. Solar Impulse, based in Switzerland, announced today, 20 January 2015, that it will begin its historic flight between late February and early March in Abu Dhabi.

Shares of pharmaceutical companies were mixed. Wockhardt (up 2.83%), Cadila Healthcare (up 1.96%), Strides Arcolab (up 1.72%), Cipla (up 0.94%), Aurobindo Pharma (up 0.55%), Sun Pharmaceutical Industries (up 0.52%), Ranbaxy Laboratories (up 0.44%), IPCA Laboratories (up 0.29%), GlaxoSmithKline Pharmaceuticals (up 0.14%) and Glenmark Pharmaceuticals (up 0.12%), edged higher. Divi's Laboratories (down 0.21%), Dr. Reddy's Laboratories (down 0.48%), Lupin (down 0.5%) and Piramal Healthcare (down 0.58%), edged lower.

Shares of capital goods companies were mixed. Lakshmi Machine Works (up 2.38%), AIA Engineering (up 2.30%), Crompton Greaves (up 2.01%), Praj Industries (up 1.43%), Jindal Saw (up 1.18%), ABB (up 1.12%), Thermax (up 1.04%), Punj Lloyd (up 0.93%), Suzlon Energy (up 0.74%), ALSTOM India (up 0.70%), SKF India (up 0.63%) and Havells India (up 0.53%), edged higher.

Siemens (down 0.21%), Bharat Heavy Electricals (down 0.3%), Alstom T&D India (down 0.34%), Larsen & Toubro (down 0.63%), BEML (down 1.11%), Pipavav Defence & Offshore Engineering Company (down 1.44%) and Bharat Electronics (down 2.38%) edged lower.

Shares of Dhunseri Tea & Industries were tradng at Rs 213.15 on BSE as the stock made a debut after a scheme of demerger for tea division of Dhunseri Petrochem & Tea. Dhunseri Petrochem had on 13 September 2014 announced that the scheme of arrangement between the company, Dhunseri Tea & Industries (DTIL), Dhunseri Infrastructure (DIL) and their respective shareholders for demerger of tea division of Dhunseri Petrochem to DTIL and re-organisation of IT SEZ Division of Dhunseri Petrochem to DIL, had become effective on 1 September 2014. In accordance with the scheme, shares of DTIL were today, 20 January 2015 listed on Bombay Stock Exchange as well as the National Stock Exchange.

Suven Life Sciences surged 5.95% after the company said it has secured a total of four product patents one each in Australia & Hong Kong and two product patents from Japan.

Kesoram Industries was locked in 20% upper circuit at Rs 137.30 on BSE on reports that tyre major MRF is in advanced talks to buy the company's tyre unit in Uttrakhand.

Tata Sponge Iron lost 2.38% after net profit declined 32.08% to Rs 16.51 crore on 8.42% increase in total income from operations (net) to Rs 215.14 crore in Q3 December 2014 over Q3 December 2013. The company announced the result after trading hours yesterday, 19 January 2015.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 61.84, compared with its close of 61.705 during the previous trading session.

Brent crude futures edged lower after the International Monetary Fund lowered its global economic growth outlook and China's growth expanded at its slowest pace in decades. Brent for March settlement was off 8 cents cent at $48.76 a barrel. The contract declined $1.33 a barrel or 2.65% to settle at $48.84 a barrel in the previous trading session.

The International Monetary Fund (IMF) has downgraded global growth outlook for this year and the next as it downgraded its outlook for more than a dozen of the world's largest economies. The IMF said global growth would be 0.3 percentage point lower this year and next than it had previously expected. It now expects the world economy to expand 3.5% this year and 3.7% in 2016. Sliding oil prices will give global growth a brief jolt, but the benefits won't be strong enough to keep the world economy out of a deepening long-term rut, the IMF said.

Asian markets rose today, 20 January 2015, after China reported its economy had not slowed as far as many had feared, a rare glint of brightness amid gloom over the global outlook. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan were up by 0.64% to 2.07%. Indonesia's Jakarta Composite was off 0.33%.

China's National Bureau of Statistics said the economy grew 7.4% last year and 7.3% in the October-December 2014 quarter. Beijing had targeted 7.5% growth for last year.

Trading in US index futures indicated that the Dow could advance 53 points at the opening bell today, 20 January 2015. The US stock market was closed yesterday, 19 January 2015, for Martin Luther King, Jr. Day holiday.

In Europe, the governing council of the European Central Bank (ECB) is scheduled to undertake monetary policy review on Thursday, 22 January 2015. The ECB may introduce a large-scale bond-buying program on 22 January 2015.

Meanwhile, uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country on 25 January 2015. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.

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