Key benchmark indices hovered in a narrow range in positive zone in early afternoon trade. At 12:16 IST, the barometer index, the S&P BSE Sensex, was up 135.73 points or 0.48% at 28,141.10. The gains for the Nifty 50 index were higher in percentage terms than those for the Sensex. The Nifty was currently up 49.75 points or 0.58% at 8,673.80. The market sentiment was positive after the minutes of the latest US Federal Reserve meeting showed policymakers were in no rush to raise interest rates.
The Sensex rose 208.80 points, or 0.75% at the day's high of 28,214.17 in mid-morning trade, its highest level since 9 August 2016. The index rose 71.63 points, or 0.26% at the day's low of 28,077 in early trade. The Nifty rose 66.65 points, or 0.77% at the day's high of 8,690.70 in mid-morning trade, its highest level since 9 August 2016. The index rose 21 points, or 0.24% at the day's low of 8,645.05 in early trade.
The broad market depicted strength. There were nearly two gainers against every loser on BSE. 1,550 shares rose and 795 shares fell. A total of 155 shares were unchanged. The BSE Mid-Cap index was currently up 0.46%, underperforming the Sensex. The BSE Small-Cap index was currently up 0.89%, outperforming the Sensex.
In overseas stock markets, Asian stocks were mixed after minutes of the US Federal Reserve's latest meeting showed policymakers were in no rush to raise interest rates. US stocks closed slightly higher yesterday, 17 August 2016, sharply paring earlier losses, as minutes from the Federal Reserve's July meeting showed policy makers remain divided on prospects for a near-term rate increase. Stocks bounced off session lows after St. Louis Federal Reserve President James Bullard said that with US growth trending below 2%, interest rates can stay low.
Most FMCG shares edged higher. Procter & Gamble Hygiene & Health Care (up 1.47%), Tata Global Beverages (up 0.80%), Dabur India (up 0.51%), Colgate Palmolive (India) (up 0.29%), Nestle India (up 0.27%), Bajaj Corp (up 0.19%), Godrej Consumer Products (up 0.11%) and Marico (up 0.08%), edged higher. Jyothy Laboratories (down 0.04%), GlaxoSmithKline Consumer Healthcare (down 0.42%), Hindustan Unilever (down 0.51%) and Britannia Industries (down 0.69%), edged lower.
Most power generation stocks edged higher. NTPC (up 1.30%), JSW Energy (up 1.27%), Reliance Power (up 1.17%), Reliance Infrastructure (up 0.85%), CESC (up 0.58%), GMR Infrastructure (up 0.39%), Adani Power (up 0.36%) and Tata Power Company (up 0.06%), edged higher. NHPC (down 0.73%), Torrent Power (down 0.73%) and Jaiprakash Power Ventures (down 2.74%), edged lower.
Shares of state-run power transmission major Power Grid Corporation of India were up 3.04% at Rs 179.85. The company said in an investor presentation on the first quarter results submitted to the stock exchanges that it is implementing projects worth about Rs 1.13 lakh crore (as of July 2016). It has identified new projects worth about Rs 15000 crore. The total works in hand is about Rs 1.44 lakh crore.
Reliance Industries (RIL) was up 0.4% at Rs 1,018.05. With reference to news item suggesting that the oil ministry slapped $250 million profit petroleum penalty on RIL, the company clarified during market hours today, 18 August 2016, that the issue is an ongoing dispute on disallowance of cost recovery by the Ministry of Petroleum and Natural Gas (MoPNG). The dispute started in 2011 and is currently under arbitration in accordance with provisions of the Production Sharing Contract (PSC). The parties to arbitration are Contractor Group (RIL, BP and NIKO) and Government of India (through MoPNG).
Every year, based on its own interpretations of the PSC and assumptions (with which the Contractor Group does not agree), MoPNG revises the total cost it proposes to disallow and consequently aggregates the figure with the figures of the previous years. It also demands additional profit petroleum (in total including previous year claims as well) as GoI share.
Upto financial year 2013-2014, the cost recovery proposed to be disallowed was $2.376 billion and consequent demand of Government of India (GoI) share of additional profit petroleum of $195.3 million on cumulative basis. On 3 June 2016, the company received a revised claim upto year 2014-2015 with a disallowance of $2.756 billion on cumulative basis and consequent demand of GoI share of additional profit petroleum of $246.90 million, also on cumulative basis. The number mentioned in the headline of the news item is a cumulative figure since commencement of the dispute.
RIL also clarified that GoI has already collected gross $81.7 million in Gas Pool Account, towards the aforesaid claim. RIL reiterated that all claims made by GoI are denied by the Contractor Group and currently part of an ongoing arbitration.
Maruti Suzuki India rose 0.94% to Rs 4,936.65 on reports that a domestic brokerage has upgraded its rating on the stock to buy from add with target price of Rs 5,800 per share. The brokerage reportedly said that Maruti Suzuki India (Maruti) is miles ahead of competition amongst peers. The brokerage sees early signs of improvement in pricing for Maruti. It further added that Maruti is well placed to gain market share and recovery in demand will result in pricing power.
Indian Bank jumped 5.37% to Rs 228.65 after a bulk deal of 10.18 lakh shares was executed on the scrip at Rs 225.50 per share at 09:41 IST on BSE.
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