PSU stocks rally

Key benchmark indices retained positive zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 70.95 points or 0.32%, off close to 65 points from the day's high and up about 205 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by data showing that the consumer price inflation eased to a 25-month low in February 2014. The market sentiment was also boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 12 March 2014.

Bank stocks gained after the latest data showed that the consumer price inflation eased to a 25-month low in February 2014. ICICI Bank hit 52-week high. HDFC Bank scaled record high. Shares of a number of state-run companies surged, with BPCL hitting 52-week high.

A sharp initial decline in shares of index heavyweight Infosys triggered a weak opening on the domestic bourses. Key benchmark indices soon moved into positive zone from negative zone. Key benchmark indices retained positive zone in morning trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in mid-morning trade. Key benchmark indices retained positive zone in early afternoon trade.

The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Wednesday, 12 March 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 864.35 crore on Wednesday, 12 March 2014, as per provisional data from the stock exchanges.

At 12:20 IST, the S&P BSE Sensex was up 70.95 points or 0.32% to 21,927.17. The index jumped 135.14 points at the day's high of 21,991.36 in mid-morning trade, its highest level cine 11 March 2014. The index lost 136.09 points at the day's low of 21,720.13 at the onset of the trading session, its lowest level since 7 March 2014.

The CNX Nifty was up 28.20 points or 0.43% to 6,545.10. The index hit a high of 6,561.45 in intraday trade, its highest level cine 11 March 2014. The index hit a low of 6,487.55 in intraday trade.

The BSE Mid-Cap index was up 46.70 points or 0.7% at 6,754.92. The BSE Small-Cap index was up 38.82 points or 0.58% to 6,703.95. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,345 shares rose and 1,083 shares fell. A total of 144 shares were unchanged.

ONGC (up 2.09%), Dr. Reddy's Laboratories (up 2.23%) and M&M (up 2.17%) edged higher from the Sensex pack.

Bank stocks gained after the latest data showed that the consumer price inflation eased to a 25-month low in February 2014. Among private sector banks, Yes Bank (up 2.87%), Federal Bank (up 0.71%), Kotak Mahindra Bank (up 3.08%) and AXIS Bank (up 1.56%), gained.

ICICI Bank rose 1.75% to Rs 1231.90 after hitting 52-week high of Rs 1241.25 in intraday trade.

HDFC Bank rose 2.21% to Rs 741.60 after hitting record high of Rs 744 in intraday trade.

Among PSU bank stocks, State Bank of India (up 2.14%), Canara Bank (up 2.22%), Union Bank of India (up 2.07%), Bank of India (up 2.08%), Bank of Baroda (up 1.81%) and Punjab National Bank (up 2.02%) gained.

The Reserve Bank of India early this week said it will conduct a 21-day term repo variable rate auction for a notified amount of Rs 50000 crore on Friday, 14 March 2014, so as to address the anticipated tightening in liquidity conditions in the banking system on account of advance tax payments by corporates commencing mid-March 2014 and with a view to providing flexibility to the banking system in its liquidity management towards March-end 2014. The reversal will be on 4 April 2014, the central bank said. The auction will be conducted as per the revised guidelines issued on 13 February 2014, the RBI said. There will be no term repo auction on 18 March 2014 when the existing 28-day term repo of Rs 30004 crore matures, the RBI said.

Shares of a number of state-run companies surged. State Trading Corporation of India (up 14.68%), MMTC (up 14.24%), BEML (up 10.15%), Dredging Corporation of India (up 7.72%), Power Finance Corporation (up 7.18%), HPCL (up 6.01%) and Indian Oil Corporation (up 4.9%) surged.

BPCL rose 6.47% to Rs 439.95 after hitting 52-week high of Rs 440.50 in intraday trade.

Transformers and Rectifiers (India) rose 2.02% after the company said the first 3 units of 1500 MVA, 765 kV transformers manufactured by it have been commissioned successfully at Nellore substation of PGCIL in AP. The announcement was made during trading hours today, 13 March 2014. Transformers and Rectifiers (India) (TRIL) said that the company is geared up with all the required facilities to manufacture 765 kV transformers and is ready to cope up with huge demand of 765 kV transformers and 765 kV shunt reactors in 12th and 13th, 5 year plans.

In the foreign exchange market, the rupee edged higher against the dollar after data released by the government after trading hours on Wednesday, 12 March 2014, showed that the consumer price inflation eased to a 25-month low in February 2014. The partially convertible rupee was hovering at 60.9875, compared with its close of 61.215/225 on Wednesday, 12 March 2014.

Inflation based on the consumer price index eased to a 25-month low last month, data released by the government after trading hours on Wednesday, 12 March 2014, showed. The rate of inflation based on the combined consumer price index (CPI) for urban and rural India eased to 8.1% in February 2014, from 8.79% in January 2014. Core CPI inflation, which excludes food and fuel prices fell below the 8% mark for the first time in 7 months. Core CPI inflation stood at 7.9% in February 2014, lower than 8.1% in January 2014. CPI inflation eased for all groups except clothing in February 2014.

Inflation based on the wholesale price index (WPI) is seen easing at 4.9% in February 2014, from 5.05% in January 2014, as per the median estimate of a poll of economists carried out by Capital Market. The data on inflation based on the wholesale price index (WPI) for February 2014 is due at 12:00 IST tomorrow, 14 March 2014.

The index of industrial production (IIP) rose 0.1% in January 2014, with the index snapping a decline for last three sequential months, data released by the government after trading hours on Wednesday, 12 March 2014, showed. The moderation in pace of decline in the output of manufacturing sector to 0.7% in January 2014 from 1.2% in December 2013, mainly led to marginal improvement in IIP during January 2014. Meanwhile, the output of mining sector rose at steady pace of 0.7%, while the electricity generation growth eased to 6.5% in February 2014. As per the used based classification, the output of basic goods rose 0.9% in January 2014, with the increase in mining output and healthy growth in electricity generation. The output of intermediate goods rose 3.4%, but that of capital goods and consumer goods declined 4.2% and 0.6%, respectively in January 2014. The decline in the output of consumer goods was driven by 8.3% plunge in consumer durable goods production recording fall for fourteenth straight month. The output of consumer non-durable goods moved up 4.4% in January 2014.

The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

The next major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

Asian stocks edged higher on Thursday, 13 March 2014, after a report signaled Australia's labor market is strengthening. Key benchmark indices in China, Indonesia, South Korea, and Taiwan were up 0.1% to 0.75%. Key benchmark indices in Hong Kong, Japan and Singapore were off 0.1% to 0.51%.

China's industrial-output, investment and retail-sales growth cooled more than estimated in the first two months of the year, signaling a slowdown in the economy as leaders seek to sustain 7.5% expansion. Factory production rose 8.6% in the January-February period from a year earlier, the National Bureau of Statistics said today, 13 March 2014, in Beijing. Retail sales advanced 11.8%, while fixed-asset investment excluding rural households was up 17.9%.

China Premier Li Keqiang signalled that his government will not ride to the rescue of every troubled investment by saying some loan defaults are "hard to avoid" in what he called a challenging economic environment. Speaking at a news conference, Li acknowledged the economy faced difficulties, but said those who are overly pessimistic about the country's prospects have always been wrong in the past. "We believe we have the ability, and all the means, to ensure that economic growth will stay within a reasonable range this year," Li said at the carefully orchestrated conference where media questions were vetted in advance. "We are reluctant to see defaults of financial products, but some cases are hard to avoid," he said. China saw its first default of a domestic bond last week when a loss-making solar equipment firm in Shanghai missed an interest payment of 89 million yuan. Li skillfully dodged a question on how far Beijing would let economic growth slip before it steps in with policy measures to support activity. Instead, he repeated the government's line that job creation takes precedence over growth.

But on government corruption, Li had an unequivocal answer. "We will show zero tolerance for corrupt behaviour and corrupt officials. No matter who it is, or how senior their position, everyone is equal before the law," Li said, without mentioning any names.

The Bank of Korea left its key rate unchanged, supporting a rebound in growth as Kim Choong Soo gets ready to pass the reins to a new governor who will face risks from record household debt to US monetary tapering. Kim and his board held the seven-day repurchase rate at 2.5% for a tenth straight month, the central bank said in a statement in Seoul today, 13 March 2014.

New Zealand's central bank raised its key interest rate, the first developed nation to exit record-low borrowing costs this year, and said it plans to remove stimulus faster than earlier forecast to contain prices. "It is necessary to raise interest rates toward a level at which they are no longer adding to demand," Reserve Bank of New Zealand Governor Graeme Wheeler said in a statement in Wellington after increasing the official cash rate by a quarter percentage point to 2.75%.

Trading in US index futures indicated that the Dow could advance 22 points at the opening bell on Thursday, 13 March 2014. US stocks finished little changed on Wednesday after erasing early losses that followed a selloff in Asian and European equities.

Stanley Fischer, the nominee to be Federal Reserve vice chairman, said the world's largest economy still needs the central bank's unprecedented accommodation as joblessness remains elevated. "At 6.7%, the unemployment rate remains too high," Fischer, a former Bank of Israel governor and Citigroup Inc. vice chairman, said in remarks prepared for his confirmation hearing before the Senate Banking Committee.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.

US President Barack Obama called Russia's incursion into Crimea a violation of international law and told Ukrainian Prime Minister Arseniy Yatsenyuk that the US stands with Ukraine to protect its sovereignty and territory.

Leaders of the Group of Seven nations warned Russia on Wednesday not to annex Ukraine's Crimean region.

Powered by Capital Market - Live News