Sensex surges as Chinese shares stage strong intraday rebound

Key benchmark indices surged in early afternoon trade as Chinese shares erased most of heavy intraday losses. The barometer index, the S&P BSE Sensex, was up 186.21 points or 1%, up 239.80 points from the day's low and off 18.11 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Reliance Industries and ONGC edged higher as Cabinet Committee on Economic Affairs (CCEA) is likely to consider a proposal this week for a steep hike in natural gas prices.

Index heavyweight and cigarette maker ITC gained in volatile trade. Ranbaxy Laboratories staged a strong intraday rebound after sliding to 52-week low after the Supreme Court of India today, 25 June 2013, dismissed a public interest lawsuit against the company for allegedly manufacturing and selling substandard medicines due to lack of evidence against the company. Telecom stocks were mostly higher on renewed buying.

Key benchmark indices edged higher amid initial volatility. Key benchmark indices alternately moved between positive and negative zone near the flat line in morning trade. Key benchmark indices saw divergent trend in mid-morning trade. Key benchmark indices surged in early afternoon trade as Chinese shares erased most of heavy intraday losses.

The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire on Thursday, 27 June 2013.

At 12:20 IST, the S&P BSE Sensex was up 186.21 points or 1% to 18,727.10. The index gained 204.32 points at the day's high of 18,745.21 in early afternoon trade, its highest level since 21 June 2013. The index fell 53.59 points at the day's low of 18,487.30 in morning trade.

The CNX Nifty was up 49.25 points or 0.88% to 5,639.50. The index hit a high of 5,647.25 in intraday trade, its highest level since 21 June 2013. The index hit a low of 5,570.25 in intraday trade.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,212 shares declined and 780 shares advanced. A total of 129 shares were unchanged.

The total turnover on BSE amounted to Rs 875 crore by 12:20 IST compared to Rs 548 crore by 10:20 IST.

Among the 30-share Sensex pack, 22 stocks gained and rest of them declined.

Index heavyweight and cigarette major ITC rose 1.8% to Rs 320.05. The stock hit a high of Rs 320.95 and low of Rs 311.05 so far during the day.

Reliance Industries and ONGC edged higher as Cabinet Committee on Economic Affairs (CCEA) is likely to consider a proposal this week for a steep hike in natural gas prices.

ONGC was up 3.4% to Rs 309, with the stock extending initial gains.

Reliance Industries (RIL) rose 2.7% to Rs 815.20. The stock hit a high of Rs 816.75 and low of Rs 795 so far during the day.

As per reports, the Cabinet Committee on Economic Affairs (CCEA) will consider a proposal this week for a steep hike in natural gas prices. The CCEA last week deferred a decision on a proposal to hike natural gas prices as Oil Minister M Veerappa Moily was away on an official tour. The oil ministry has proposed an increase in gas prices to $6.775 million British thermal unit (mbtu) from current $4.2 mbtu. The Oil Ministry has proposed raising gas price for state-run firms immediately and that for Reliance Industries (RIL) from April 2014 when it is contractually due.

Ranbaxy Laboratories staged a strong intraday rebound after the Supreme Court of India today, 25 June 2013, dismissed a public interest lawsuit against the company for allegedly manufacturing and selling substandard medicines due to lack of evidence against the company. The stock was up 2.1% to Rs 332.35. Earlier, the stock had fallen as much as 7.29% to 52-week low of Rs 301.75 in intraday trade.

Telecom stocks were mostly higher on renewed buying. Bharti Airtel (up 3.6%), Idea Cellular (up 1.27%) and Reliance Communications (up 3.26%) edged higher. MTNL fell 3.11%. Tata Teleservices (Maharashtra) shed 2.27%.

Tech Mahindra rose 1% and Mahindra Satyam gained 0.96% after the two IT companies announced the formal amalgamation of Mahindra Satyam with Tech Mahindra. The merged entity is amongst the top 5 Indian IT services companies, with revenue of $2.7 billion, a team of 84,000 professionals servicing 540 customers across 46 countries, the two companies said.

Goenka Diamond (down 10.479%), Ess Dee Aluminium (down 10.33%), India Glycols (down 8.39%), Gokul Refoils (down 7.43%), Kirloskar Industries (down 6.32%), IVRCL (down 6.18%), Shriram EPC (down 5.85%) and Shriram EPC (down 5.85%) were among the top losers from the BSE's Small-Cap index.

In Asia, Chinese shares erased most of heavy intraday losses and Hong Kong stocks turned positive on Tuesday, 25 June 2013. The Shanghai Composite index was off just 0.19% after tumbling almost 6% earlier in the day. Hong Kong's Hang Seng was up 0.13%. In Singapore, the Straits Times index was up 0.52%. Most other Asian stocks were in red. Key benchmark indices in Japan, Indonesia, South Korea and Taiwan were off 0.12% to 1.22%.

The Shanghai Composite index had plunged 5.3% on Monday, 24 June 2013, for its worst finish in nearly four years, as concerns that reluctance by China's central bank to ease tight liquidity conditions in the interbank money markets would hurt small and medium-sized banks and borrowers. In a statement on Monday, the People's Bank of China said the liquidity in the financial system was "reasonable" and that lenders must manage their own liquidity risks.

Trading in US index futures indicated that the Dow could rise 12 points at the opening bell on Tuesday, 25 June 2013. US stocks dropped Monday, 24 June 2013, as a 5.3% tumble in the Shanghai stock market overnight spurred by worries over China's economy and banking system.

Some Fed officials on Monday, 24 June 2013, sought to soften worries about the end of monetary stimulus from the central bank. Federal Reserve Chairman Ben Bernanke said last week the central bank may start dialing down its stimulus effort if the economy achieves sustainable growth.

US economic data on durable goods, consumer confidence and housing numbers are due later in the global day today, 25 June 2013.

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