Key benchmark indices strengthened further and hit fresh intraday high in early afternoon trade. The market breadth indicating the overall health of the market was strong, with nearly three gainers for every loser on BSE. The barometer index, the S&P BSE Sensex, was currently up 354.59 points or 1.33% at 26,985.88. The BSE Mid-Cap index was up 1.73%. The BSE Small-Cap index was up 2.48%. 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.
Realty stocks surged. Capital goods stocks also gained. L&T rose after the company said that its Buildings & Factories business of L&T Oman LLC, a subsidiary of L&T, has won a prestigious order from the Ministry of Defense, Sultanate of Oman against stiff international competition for the construction of Adam Air base. Bharat Heavy Electricals (Bhel) rose after the company won an order worth Rs 3536 crore from Gujarat State Electricity Corporation for setting up a coal-fired supercritical thermal unit at Wanakbori in Kheda district of Gujarat.
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, 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.
Earlier, key indices had surged after an initial slide. The 50-unit CNX Nifty moved past the psychological 8,000 mark.
In the foreign exchange market, the rupee fell below 61 against the dollar on dollar's broad strength after the Fed statement.
Brent crude oil prices extended overnight losses.
At 12:15 IST, the S&P BSE Sensex was up 354.59 points or 1.33% at 26,985.88. The index jumped 356.62 points at the day's high of 26,987.91 in early afternoon trade, its highest level since 15 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 105.55 points or 1.32% at 8.081.05. The index hit a high of 8,081.20 in intraday trade, its highest level since 15 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. On BSE, 1,997 shares gained and 688 shares fell. A total of 85 shares were unchanged.
The BSE Mid-Cap index was up 167.42 points or 1.73% at 9,851.34. The BSE Small-Cap index was up 268.54 points or 2.48% at 11,098.38. Both these indices outperformed the Sensex.
Capital goods stocks gained. ABB (India) (up 0.6%), BEML (up 3.19%), Bharat Electronics (up 1.54%), Crompton Greaves (up 1.51%), Punj Lloyd (up 2.81%) and Siemens (up 0.97%) gained.
Bharat Heavy Electricals (Bhel) rose after the company won an order worth Rs 3536 crore from Gujarat State Electricity Corporation for setting up a coal-fired supercritical thermal unit at Wanakbori in Kheda district of Gujarat. The stock was up almost 3% at Rs 227.30. Significantly, this is the first ever project of 800 megawatts (MW) unit rating ordered in the country on EPC basis and is also the highest valued order placed by GSECL, Bhel said in a statement today, 18 September 2014.
L&T rose 2.03% after the company said that its Buildings & Factories business of L&T Oman LLC, a subsidiary of L&T, has won a prestigious order from the Ministry of Defense, Sultanate of Oman against stiff international competition for the construction of Adam Air base. The contract is for the construction of the Adam Airbase in Al Dakhiliya Governorate, Sultanate of Oman.
Realty stocks surged. DLF (up 3.25%), Housing Development & Infrastructure (HDIL) (up 6.96%), D B Realty (up 4.17%), Sobha (up 1.37%) and Unitech (up 9.59%) jumped.
Parsvnath Developers rose 2.64% after the company said it has entered into a transaction with Supertech in terms of which the company has transferred the development rights held by it in the township project at Sohna Road, Gurgaon. The company has also transferred its shareholding in Honey Builders, with whom the company has held joint development rights in the said project, to Supertech.
In the foreign exchange market, the rupee fell below 61 against the dollar on dollar's broad strength after the Fed statement. The partially convertible rupee was hovering at 61.0325, 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 59 cents at $98.38 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.
Most 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, Taiwan and Japan were up 0.01% to 1.13%. Key benchmark indices in Hong Kong, Singapore and South Korea were off 0.02% to 0.96%.
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 that the Dow could gain 11 points at the opening bell 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.
In UK, a crucial vote on Scottish independence will be held today, 18 September 2014. Scotland is currently a part of United Kingdom.
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