Sensex reclaims 27,000

A sustained uptrend continued as key benchmark indices hit fresh intraday high in afternoon trade. The barometer index, the S&P BSE Sensex, regained the psychological 27,000 level. The Sensex hit its highest level in almost a week. The 50-unit CNX Nifty also hit its highest level in almost a week after moving past the psychological 8,000 level earlier during the day. The Sensex was currently up 413.69 points or 1.55% at 27,044.98. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Mid-Cap index was up 1.74%. The BSE Small-Cap index was up 2.61%. Both these indices outperformed the Sensex. Indian stocks surged after the US Federal Reserve at the end of a two-day policy meeting on Wednesday, 17 September 2014, maintained a commitment to keep US interest rates near zero for a "considerable time". Meanwhile, Chinese President Xi Jinping who is on a three-day visit to India is expected to pledge billions of dollars for upgrading India's infrastructure. In pharma pack, Dr Reddy's Laboratories scaled record high. In auto pack, Hero MotoCorp advanced to a record after Chief Executive Officer Pawan Munjal was quoted as saying that the motorcycle maker will enter the US and Europe by 2016. Shares of car major Maruti Suzuki India scaled record high.

Among side counters, Credit Analysis and Research (CARE), Blue Dart Express, Hexaware Technologies, Cyient, JK Lakshmi Cement, JK Tyre & Industries and Hatsun Agro Product scaled record high. Manappuram Finance hit 52-week high.

The US Federal Reserve at the end of a two-day policy meeting on Wednesday, 17 September 2014, maintained a commitment to keep US interest rates near zero for a "considerable time" after the bond-buying program ends even as its rate projections suggested some officials might have in mind a slightly more aggressive path of rate increases next year and in 2016 than previously thought. Low interest rates in the US have triggered large inflow of dollars into emerging markets as investors seek higher yields and India has been one of the major beneficiaries. The Fed has kept its short-term interest rate near-zero since December 2008.

In overseas markets, European stocks edged higher as US Federal Reserve Chair Janet Yellen indicated that interest rates won't increase anytime soon. Asian stocks extended previous day's gains triggered by reports that China's central bank is providing liquidity to support the economy and after the US Federal Reserve after a two-day policy meet on Wednesday, 17 September 2014, renewed a pledge to keep interest rates near zero for a considerable time. Overnight, US markets closed slightly higher after the Fed statement and Fed Chairwoman Janet Yellen's news conference, with the Dow Jones Industrial Average reaching a record high.

Key indices have seen a sustained rise in intraday trade after an initial slide.

In the foreign exchange market, the rupee fell against the dollar on dollar's broad strength after the Fed statement.

Brent crude oil prices extended overnight losses.

At 13:15 IST, the S&P BSE Sensex was up 413.69 points or 1.55% at 27,044.98. The index jumped 418.43 points at the day's high of 27,049.72 in afternoon trade, its highest level since 12 September 2014. The index dropped 128.21 points at the day's low of 26,503.08 in early trade.

The CNX Nifty was up 122.40 points or 1.53% at 8,097.90. The index hit a high of 8,099.50 in intraday trade, its highest level since 12 September 2014. The index hit a low of 7,939.70 in intraday trade.

The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. 2,067 shares gained and 769 shares fell. A total of 92 shares were unchanged.

The BSE Mid-Cap index was up 168.60 points or 1.74% at 9,852.52. The BSE Small-Cap index was up 282.19 points or 2.61% at 11,112.03. Both these indices outperformed the Sensex.

Dr Reddy's Laboratories rose 2.02% to Rs 3,147.15 after scaling record high of Rs 3,164.25 in intraday trade.

Shares of two-wheeler makers gained. Bajaj Auto (up 1.55%) and TVS Motor Company (up 1.01%) gained.

Hero MotoCorp advanced to a record after Chief Executive Officer Pawan Munjal was quoted as saying that the motorcycle maker will enter the US and Europe by 2016. The stock was up 3.05% to Rs 2,926.65 after scaling record high of Rs 2,928.60 in intraday trade. The company early this week said that it has entered into a Memorandum of Understanding (MOU) with the state government of Andhra Pradesh to set-up a manufacturing plant in Chittoor district of the state of Andhra Pradesh. The plant with an investment of about Rs 1600 crore will have a production capacity of around 1.8 million per annum.

Maruti Suzuki India rose 1.87% to Rs 3,027.80 after scaling record high of Rs 3,029 in intraday trade. The company early this week said that its Manesar facility has crossed the 25 lakh production milestone this month. The company's twin facilities at Gurgaon and Manesar have together rolled out over 1.4 crore vehicles cumulatively, it added.

Tata Motors gained 2.28%. Ashok Leyland jumped 6.06%

Mahindra & Mahindra (M&M) shed 0.12%.

Blue Dart Express jumped 10.41% to Rs 5,220 after scaling a record high of Rs 5,351.40 in intraday trade.

Credit Analysis and Research (CARE) gained 2.78% to Rs 1,465 after scaling record high of Rs 1,469.90 in intraday trade.

Hexaware Technologies surged 7.33% to Rs 187.50 after scaling record high of Rs 191.40 in intraday trade.

Cyient advanced 3.83% to Rs 479.50 after scaling record high of Rs 481 in intraday trade.

JK Lakshmi Cement gained 5.24% to Rs 333.40 after scaling record high of Rs 334.40 in intraday trade.

JK Tyre & Industries advanced 6.05% to Rs 438 after scaling record high of Rs 441 in intraday trade.

Hatsun Agro Product galloped 10.18% to Rs 333.95 after scaling record high of Rs 334 in intraday trade.

Manappuram Finance advanced 4.39% to Rs 30.90 after hitting a 52-week high of Rs 31.35 in intraday trade.

In the foreign exchange market, the rupee fell against the dollar on dollar's broad strength after the Fed statement. The partially convertible rupee was hovering at 60.985, compared with its close of 60.9175 during the previous trading session.

Brent crude oil prices dropped, pressured by a stronger dollar on fears about a looming US interest rate increase and a steep spike in US crude stocks. Brent for November settlement was down 55 cents at $98.42 a barrel. The contract had fallen 8 cents a barrel or 0.08% to settle at $98.97 a barrel on Wednesday, 17 September 2014.

Lower crude oil prices will help India in containing its fiscal deficit, current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. However, a weak rupee will offset the benefit of falling crude oil prices to that extent. A weak rupee raises cost of imports.

Meanwhile, the President of the People's Republic of China, Mr. Xi Jinping and the First Lady Ms. Peng Liyuan arrived in Ahmedabad, Gujarat on Wednesday, 17 September 2014. Xi's three-day visit is aimed at ramping up trade and investments, besides having discussions on substantive issues including the contentious border dispute. The Chinese President is expected to pledge billions of dollars for upgrading India's infrastructure. India and China also signed three-Gujarat specific pacts on Wednesday. The three pacts include making Guangzhou city in China and Ahmedabad as sister cities, setting up of industrial parks in this state and an agreement between Guangdong province and the Gujarat government for development of cultural and social ties between the two countries.

European stocks advanced today, 18 September 2014, as US Federal Reserve Chair Janet Yellen indicated that interest rates won't increase anytime soon. Key benchmark indices in UK, France and Germany were up 0.03% to 0.27%.

In UK, a crucial vote on Scottish independence is underway today, 18 September 2014. Scotland is currently a part of United Kingdom.

Asian stocks today, 18 September 2014, extended previous day's gains triggered by reports that China's central bank is providing liquidity to support the economy and after the US Federal Reserve after a two-day policy meet on Wednesday, 17 September 2014, renewed a pledge to keep interest rates near zero for a considerable time. Key benchmark indices in China, Indonesia, Singapore, Taiwan and Japan were up 0.05% to 1.13%. Key benchmark indices in Hong Kong and South Korea were off 0.72% to 0.94%.

China's new-home prices fell in all but two cities monitored by the government last month as tight credit damped demand even as local home-purchase restrictions were eased. Prices dropped in 68 of the 70 cities in August from July, including in Beijing and Shanghai, the National Bureau of Statistics said in a statement today, the most since January 2011 when the government changed the way it compiles the data.

Trading in US index futures indicated a flat opening of US stocks on Thursday, 18 September 2014. US stocks edged higher in volatile trading on Wednesday, 17 September 2014, after the US Federal Reserve renewed its pledge to keep interest rates near zero for a "considerable time" and repeated concerns over slack in the labor market, standing firm against calls to overhaul its policy statement.

In a statement after a two-day meeting, it announced a further $10 billion reduction in its monthly purchases, leaving the program on course to be shuttered next month. While the Fed expects to keep rates low for a considerable time, Yellen in a news conference declined to say how much time that meant. She also repeatedly stressed the timing depends on how the economy performs.

While the Fed's policy statement emphasised rates would stay low for now, its rate projections suggested some officials might have in mind a slightly more aggressive path of rate increases next year and in 2016 than previously thought. In June, the median estimate among Fed officials for the Fed's target interest meaning half of estimates were above and half were below at the end of 2016 was 2.5%. The latest estimate for the end of 2016 was between 2.75% and 3%.

Meanwhile, the latest economic data showed that US consumer prices fell for the first time in nearly 1-1/2 years in August and underlying inflation pressures were muted, giving the Fed more ammunition in its argument to keep rates low.

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