After holding firm in mid-morning trade, key benchmark indices extended gains in early afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in more than three weeks. The Sensex was currently up 357.76 points or 1.3% at 27,874.64. 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 1.17%. The BSE Small-Cap index was up 1.15%.
Capital goods stocks edged higher on renewed buying. Shares of housing finance major HDFC extended initial gains. Shares of paint makers rallied on renewed buying, with Berger Paints India scaling a record high. Construction stocks rose after the government pledged to build more roads and increase investment in the sector.
The rally for key indices materialised today, 2 January 2015, after the government yesterday, 1 January 2015, evening announced the setting up of NITI Aayog (National Institution for Transforming India) as replacement for the Planning Commission and said that the NITI Aayog will seek to provide a critical directional and strategic input into the development process. The government after trading hours yesterday, 1 January 2015, also announced increase in excise duty on petrol and diesel by Rs 2 a litre each to raise money to build 15,000 kilometers of roads during current and next financial year. Meanwhile, a monthly survey today, 2 January 2015, showed that manufacturing activity momentum in India accelerated to a two-year high in December, led by a healthy increase in new orders from both at home and from abroad.
Meanwhile, foreign portfolio investors (FPIs) bought shares worth a net Rs 18.20 crore yesterday, 1 January 2015, as per provisional data.
In overseas markets, Asian stocks edged higher amid thin volumes following the New Year's Day holiday.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude futures edged higher supported by a larger-than-expected fall in weekly US crude stocks.
At 12:17 IST, the S&P BSE Sensex was up 357.76 points or 1.3% at 27,865.30. The index jumped 367.10 points at the day's high of 27,874.64 in early afternoon trade, its highest level since 10 December 2014. The index rose 11.72 points at the day's low of 27,519.26 in early trade.
The CNX Nifty was up 105.35 points or 1.27% at 8,389.35. The index hit a high of 8,390.15 in intraday trade, its highest level since 9 December 2014. The index hit a low of 8,288.70 in intraday trade.
The market breadth indicating the overall health of the market was strong with over two gainers for every loser on BSE. 1,735 shares gained and 786 shares fell. A total of 88 shares were unchanged.
The BSE Mid-Cap index was up 121.84 points or 1.17% at 10,562.01. The BSE Small-Cap index was up 129.37 points or 1.15% at 11,354.59. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 1379 crore by 12:20 IST, compared with turnover of Rs 1105 crore by 11:20 IST.
Capital goods stocks edged higher on renewed buying. ABB India (up 0.59%), Bharat Heavy Electricals (Bhel) (up 2.31%), BEML (up 0.44%), Crompton Greaves (up 0.72%), L&T (up 1.18%), Siemens (up 0.47%) and Thermax (up 0.2%) gained. Bharat Electronics fell 0.64%
Housing finance major HDFC advanced 3.52% to Rs 1,163. The stock extended initial gains. The stock hit high of Rs 1,165 and low of Rs 1,123 so far during the day.
Shares of paint makers rallied on renewed buying. Asian Paints (up 3.49%), Shalimar Paints (up 10.03%), Akzo Nobel India (up 3.4%) and Kansai Nerolac Paints (up 1.26%) edged higher.
Berger Paints India galloped 12.56% to Rs 456 after scaling a record high of Rs 464.25 in intraday trade.
Construction stocks rose after the government pledged to build more roads and increase investment in the sector. The government after trading hours yesterday, 1 January 2015, announced increase in excise duty on petrol and diesel by Rs 2 a litre each to raise money to build 15,000 kilometers of roads during current and next financial year.
Hindustan Construction Company (up 1.65%), NCC (up 0.85%), Gammon India (up 1.82%), Jaiprakash Associates (up 0.96%), IRB Infrastructure & Developers (up 1.23%), Unity Infraprojects (up 4.02%), Patel Engineering (up 1.64%), Valecha Engineering (up 2.22%) and IL&FS Transportation Networks (up 2.02%) gained.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 63.29, compared with its close of 63.34 during the previous trading session.
Brent crude futures edged higher supported by a larger-than-expected fall in weekly US crude stocks. Brent for February settlement was up 24 cents at $57.57 a barrel.
A monthly survey today, 2 January 2015, showed that manufacturing activity momentum in India accelerated to a two-year high in December, led by a healthy increase in new orders from both at home and from abroad. Adjusted for seasonal factors, the headline HSBC India Purchasing Managers' Index (PMI) climbed to a two-year high of 54.5 in December, up from 53.3 in November. A steep rise in new orders from the consumer sector more than offset a slowdown in new order growth from investment goods. In line with falling commodity prices over the last few months, input price inflation was modest, and this trend was also mirrored in output prices. With the disinflationary trend gaining ground, the Reserve Bank of India (RBI) is expected to find space for some rate cuts in 2015, according to Pranjul Bhandari, Chief India Economist at HSBC. Cost pressures at Indian manufacturers eased to weakest in more than five-and-a-half years, according to the survey.
Meanwhile, the Indian government yesterday, 1 January 2015, announced the setting up of NITI Aayog (National Institution for Transforming India) as replacement for the Planning Commission and said that the NITI Aayog will seek to provide a critical directional and strategic input into the development process. The centre-to-state one-way flow of policy, that was the hallmark of the Planning Commission era, is now sought to be replaced by a genuine and continuing partnership of states, the Prime Minister's Office (PMO) said in a statement. NITI Aayog will emerge as a "think-tank" that will provide governments at the central and state levels with relevant strategic and technical advice across the spectrum of key elements of policy. The NITI Aayog will also seek to put an end to slow and tardy implementation of policy, by fostering better Inter-Ministry coordination and better Centre-State coordination, the PMO said. It will help evolve a shared vision of national development priorities, and foster cooperative federalism, recognizing that strong states make a strong nation. The NITI Aayog will create a knowledge, innovation and entrepreneurial support system through a collaborative community of national and international experts, practitioners and partners. It will offer a platform for resolution of inter-sectoral and inter-departmental issues in order to accelerate the implementation of the development agenda. Among other obectives, the NITI Aayog aims to enable India to better face complex challenges, through policy support to more than 50 million small businesses, which are a major source of employment creation.
The government after trading hours yesterday, 1 January 2015, also announced increase in excise duty on petrol and diesel by Rs 2 a litre each to raise money to build 15,000 kilometers of roads during current and next financial year.
Asian stocks edged higher today, 2 January 2015, amid thin volumes following the New Year's Day holiday. Key benchmark indices in Hong Kong, Singapore, Indonesia and South Korea were up by 0.15% to 0.59%.
Stock markets in China, Japan and Taiwan are closed today, 2 January 2015, for holiday.
Trading in US index futures indicated that the Dow could rise 95 points at the opening bell today, 2 January 2015. US markets had remained shut yesterday, 1 January 2015 for New Year's Day holiday
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