IT stocks and index heavyweights HDFC, HDFC Bank and Reliance Industries (RIL) led modest gains for key benchmark indices. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, was provisionally up 152.90 points or 0.55% at 27,798.43. Key benchmark indices hovered in positive zone throughout the trading session today, 20 May 2015, after a higher opening.
IT stocks rose as the rupee edged lower against the dollar. Telecom stocks fell. Shares of pharmaceuticals companies were mixed.
In the global commodities markets, Brent crude oil prices dropped overnight. The decline in global crude oil prices augur well for India as the country imports about 80% of its crude oil requirements.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said yesterday, 19 May 2015, that inflation has come down tremendously in India.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it.
Foreign portfolio investors bought shares worth a net Rs 48.06 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 451.02 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges.
In the overseas markets, European stocks edged lower after Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then. Asian indices were mixed. In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record.
As per provisional closing, the S&P BSE Sensex was up 152.90 points or 0.55% to 27,798.43. The index jumped 257.48 points at the day's high of 27,903.01 in morning trade, its highest level since 23 April 2015. The index gained 98.46 points at the day's low of 27,743.99 at the onset of trading session.
The Nifty was up 57.60 points or 0.69% at 8,423.25, as per provisional closing. The index hit a high of 8,440.35 in intraday trade, its highest level since 23 April 2015. The index hit a low of 8,391.45 in intraday trade.
The BSE Mid-Cap index was down 0.24 points at 10,650.78. The BSE Small-Cap index was up 19.12 points or 0.17% at 11,206.85. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,372 shares rose and 1,327 shares fell. A total of 136 shares were unchanged.
The total turnover on BSE amounted to Rs 2748 crore, lower than turnover of Rs 3444.17 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC advanced 1.86% to Rs 1,264.15. The stock hit high of Rs 1,270.90 and low of Rs 1,244.
Telecom stocks fell. Idea Cellular (down 2.07%), Reliance Communications (down 4.30%), MTNL (down 0.84%) and Tata Teleservices (Maharashtra) (down 4.30%) declined. Bharti Airtel rose 0.64%.
Shares of pharmaceuticals companies were mixed. IPCA Laboratories (up 1.88%), Wockhardt (up 1.62%), Cadila Healthcare (up 1.33%), Sun Pharmaceutical Industries (up .88%), Cipla (up 0.85%) and Aurobindo Pharma (up 0.09%), edged higher. Lupin (down 0.26%), Piramal Enterprises (down 0.67%), Dr. Reddy's Laboratories (down 0.73%), Divi's Laboratories (down 0.74%), Strides Arcolab (down 1.29%) and GlaxoSmithKline Pharmaceuticals (down 1.64%) edged lower.
Glenmark Pharmaceuticals rose 0.85% to Rs 907 after the Reserve Bank of India (RBI) after trading hours yesterday, 19 May 2015, notified increase the limit for the purchase of equity shares of the company by foreign institutional investors (FIIs) under the portfolio investment scheme to 49% of the company's paid up capital from earlier 40%. The total FII holding in Glenmark Pharmaceuticals stood at 34.71% as per the shareholding pattern as on 31 March 2015.
IT stocks rose as the rupee edged lower against the dollar. Persistent Systems (up 2.94%), HCL Technologies (up 2.48%), Oracle Financial Services Software (up 2.15%), CMC (up 2.07%), Wipro (up 1.84%), Infosys (up 1.18%), Hexaware Technologies (up 0.96%), MindTree (up 0.35%) and MphasiS (up 0.31%), edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
TCS rose 1.99% to Rs 2,561.90. The company announced during trading hours that its client -- Euroclear Finland -- the central securities depository (CSD) for the Finnish capital markets, has launched a new transaction processing platform known as 'Infinity'. Infinity is a multi-year program powered by TCS BaNCS for market infrastructure and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017.
Infinity's processing capabilities for fixed-income was recently unveiled, following a 22 month implementation of this first phase, TCS said. The next phases will be rolled out in the course of 2016 and the processing environment will also feature a new central register as well as equity processing capabilities, TCS said.
Infinity is a multi-year program powered by TCS BaNCS for Market infrastructure, and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017. Through Infinity, TCS BaNCS has provided Euroclear with a single, consolidated platform for depository, registry and corporate actions functions, thereby, enabling simplified business operations.
Tech Mahindra rose 3.37% to Rs 640.10 after the company after market hours yesterday, 19 May 2015, announced that the company will build an Intelligent Electric Vehicle Charging System (IEVCS) designed to help build Ontario's clean energy future. The project, sponsored by Ontario Ministry of Energy and funded in part through the Ontario Smart Grid Fund initiative, will analyze the effects of electric vehicle charging on transformers by creating a real time transformer monitoring and analytics solution. The key benefit of the solution is the real time monitoring of the transformers and the ability to automatically manage the charging between vehicles to ensure the transformers do not overload as a result of EV charging.
In February 2015, Tech Mahindra announced plans to invest $150 million over the next three to four years to create innovative solutions and develop next-generation technologies.
In the global commodities market, Brent crude oil prices edged higher. Brent for July settlement was up 77 cents at $64.79 a barrel. The contract had lost $2.25 a barrel or 3.39% to settle at $64.02 a barrel during the previous trading session. The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In the foreign exchange market the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.7925, compared with its close of 63.68 during the previous trading session.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said in New York yesterday, 19 May 2015, that inflation has come down tremendously in India. Rajan also reportedly called the government's spending cuts significant. Rajan said that the depreciation of the rupee is due in part to the US dollar's strength and that the rupee has fallen less and in a less volatile fashion than other currencies. While the rupee has slid against the strengthening dollar, he said that it has actually strengthened against other currencies.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry reportedly said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams so that even small depositors are encouraged. The government has sought feedback on the scheme by 2 June 2015.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
Meanwhile, credit rating agency CRISIL yesterday, 19 May 2015, said that it believes that India's growth is on a slow grind up in the short term and will touch 7.9% in 2015-16 if monsoon is normal; else it would flat-line at 7.4%. According to the rating agency, a meaningful recovery in capex is not expected until fiscal 2017. On the legislative side, consensus is necessary to push through legislations on Goods & Services Tax and land without much dilution. This will test the government's resolve and statecraft, but they are critical building blocks that will raise India's 'potential-growth' rate, CRISIL said.
In overseas markets, European stocks edged lower today, 20 May 2015, after Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then. Key benchmark indices in France and Germany were off 0.33% to 0.38%. UK's FTSE 100 was up 0.02%.
The minutes from the Bank of England's meeting earlier this month showed a 9-0 vote on keeping the UK benchmark interest rate steady at 0.5%.
Asian indices were mixed today, 20 May 2015. Key benchmark indices in China, Indonesia, Japan and South Korea were up by 0.57% to 0.88%. Key benchmark indices in Taiwan, Singapore and Hong Kong were off 0.26% to 0.39%.
The latest data showed that Japan's economy grew an annualized 2.4% during the first quarter, much stronger than a revised 1.1% expansion in the previous quarter.
In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record. Falling oil prices weighed on energy stocks, with the sector selling off sharply. Meanwhile, investors digested a report showing a sharp increase in housing starts last month, pondering the effect it might have in determining the course of the Federal Reserve's interest rate policy.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released in the global day today, 20 May 2015.
Chicago Federal Reserve President Charles Evans reportedly said in Munich today, 20 May 2015, that a hike in US interest rates is not likely to be appropriate until early 2016. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said that the US central bank should not move on rates until there was greater confidence that its inflation goal could be hit within one or two years, according to reports. Evans is a voting member this year on Fed policy and among the most dovish of US central bankers.
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