Key benchmark indices snapped three-day losing streak on positive cues from European and Asian markets and as trading in US index futures indicated a firm opening of US stocks later in the global day. The barometer index, the S&P BSE Sensex settled well above the psychological 27,000 level which it had attained in early trade. The Sensex was provisionally up 372.34 points or 1.38% to 27,281.16. Today's rally on the bourses was broad based. Quite a few side counters rose 5% to 20% on BSE. The market breadth indicating the overall health of the market was strong with more than two gainers for every loser on BSE. European and Asian markets were higher.
IT stocks advanced after positive jobs data in United States. Infosys advanced ahead of its Q3 December 2014 results tomorrow, 9 January 2015. Telecom stocks advanced. Coal India rose on media reports that five worker unions called off their strike, after reaching a consensus with the government. HDFC Bank advanced on reports that it has appointed a foreign investment bank as the lead banker for its sale of shares to raise as much as Rs 10000 crore from domestic and foreign investors.
Foreign portfolio investors sold shares worth a net Rs 1073.18 crore yesterday, 7 January 2015, as per provisional data.
In overseas markets, European shares edged higher today, 8 January 2015 on expectations that pessimistic euro zone data could prompt the European Central Bank (ECB) to implement more aggressive stimulus measures. Asian equity markets were higher today, 8 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar.
Brent crude futures edged lower in choppy trade today, 8 January 2015.
As per provisional closing, the S&P BSE Sensex was up 372.34 points or 1.38% to 27,281.16. The index surged 407.59 points at the day's high of 27,316.41 in mid-afternoon trade, its highest level since 6 January 2015. The index rose 193.12 points at the day's low of 27,101.94 in morning trade.
The CNX Nifty was up 132.50 points or 1.64% at 8,234.60, as per provisional closing. The index hit a high of 8,243.50 in intraday trade, its highest level since 6 January 2015. The index hit a low of 8,167.30 in intraday trade.
The BSE Mid-Cap index was up 186.08 points or 1.82% at 10,420.63. The BSE Small-Cap index was up 196.89 points or 1.79% at 11,185.88. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong with more than two gainers for every loser. On BSE, 2,029 shares advanced and 844 shares declined. A total of 101 shares were unchanged.
The total turnover on BSE amounted to Rs 3215 crore, higher than Rs 3210.35 crore on yesterday, 7 January 2015.
IT stocks advanced on positive jobs data in United States. Tech Mahindra (up 1.56%), Oracle Financial Services Software (up 0.51%), CMC (up 0.57%), TCS (up 1.37%), MindTree (up 1.46%), Wipro (up 0.56%), and HCL Technologies (up 2.13%) edged higher. MphasiS (down 0.45%) edged lower.
United States is the world's biggest outsourcing market for Indian IT firms.
Infosys rose 0.74% at Rs 1,979.25. Due to cross currency headwinds, analysts expects Infosys' management to prune the company's revenue growth guidance in dollar terms for the year ending 31 March 2015 (FY 2015) when the company announces its Q3 December 2014 results tomorrow, 9 January 2015. The IT major is widely expected to prune its FY 2015 dollar revenue growth to 7%-8%, from 7%-9%.
At the time of announcement of Q2 September 2014 results, Infosys had on 10 October 2014 retained its earlier guidance of 7% to 9% growth in revenue in dollar terms for FY 2015. At that time, the company had raised its revenue growth guidance in rupee terms due to rupee depreciation. The company had raised the revenue growth guidance for FY 2015 in rupee terms to 6.7%-8.7% from earlier 5.6%-7.6% at that time. The revised guidance was based on rupee dollar conversion rate of 61.
Telecom stocks advanced. Bharti Airtel (up 1.91%), Idea Cellular (up 1.1%), Mahanagar Telephone Nigam (up 2.77%), and Reliance Communications (up 0.45%) edged higher. Tata Teleservices (Maharashtra) (down 1.81%) edged lower.
Kotak Mahindra Bank rose 5.77% at Rs 1,344. The company before market hours today, 8 January 2015 said that at its shareholders approved the proposal for merger of ING Vysya Bank with itself at its extraordinary general meeting (EGM) held yesterday, 7 January 2015.
ING Vysya Bank rose 5.55% at Rs 927. The bank before market hours today, 8 January 2015 said that its shareholders at a EGM held yesterday, 7 January 2015 approved the proposed merger with Kotak Mahindra Bank.
HDFC Bank rose 2.08% at Rs 965. According to reports, HDFC Bank has appointed a foreign investment bank as the lead banker for its sale of shares to raise as much as Rs 10000 crore from domestic and foreign investors.
Coal India rose 0.84% at Rs 378.05. According to reports, five Coal India worker unions called off their strike, after reaching a consensus with the government. Coal and power minister Piyush Goyal reportedly said issues faced by the mine workers were discussed and representatives were assured the company's management wouldn't go into private hands, reports suggested. Coal India during market hours yesterday, 7 January 2015, said that four central trade unions of the company observed strike on 6 January 2015, in Coal lndia and its subsidiaries companies. Due to strike the production and despatch were partially affected, Coal India said.
On the macro front, data to be released in near future is expected to show industrial production growth remaining muted in November 2014 and consumer price inflation accelerating in December 2014. Industrial production is seen rising 1.6% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil industrial production data for November 2014 after trading hours on Monday, 12 January 2015. Industrial production had witnessed a surprise contraction of 4.2% in October 2014.
The rate of inflation based on the consumer price index (CPI) is seen accelerating to 5.4% in December 2014 from 4.4% in November 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will release the data on CPI inflation for December 2014 after trading hours on Monday, 12 January 2015.
The Reserve Bank of India (RBI) aims to limit consumer-price gains to 8% by January 2015 and 6% by January 2016. Over the longer term, the RBI aims to limit consumer-price gains to 4%, within a 2% band.
The rate of inflation based the wholesale price index (WPI) is projected at 0.5% for December 2014, as per the median estimate of a poll of economist carried out by Capital Market. WPI inflation stood at zero in November 2014. The government will release data on WPI for December 2014 at 12 noon on 14 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 62.6150, compared with its close of 63.18 during the previous trading session.
Brent crude futures edged lower in choppy trade today, 8 January 2015. Brent for February settlement was off 17 cents at $50.98 a barrel. The contract had advanced 5 cents to settle at $51.15 a barrel during the previous trading session.
European shares edged higher today, 8 January 2015 on expectations that pessimistic euro zone data could prompt the European Central Bank (ECB) to implement more aggressive stimulus measures. Key indices in Germany, UK, and France were up 1.03% to 1.43%.
German manufacturing orders fell sharply in monthly terms in November, data from the country's economy ministry showed today, 8 January 2015 reversing a strong growth pace in the previous month. New orders in November were down 2.4% in adjusted terms. The October growth figure was revised upwards to 2.9% versus the 2.5% growth originally reported.
Meanwhile, the uncertainties over the status of Greece including its possible exit from the eurozone are likely to persist until the early election in the country later this month. Greece is set to hold snap elections on 25 January 2015 after it failed to elect a new president in a third round of voting late last year. The Greek leftist opposition party Syriza leads opinion polls ahead of national elections on 25 January 2015. Syriza has demanded debt relief from the eurozone and promised to roll back the austerity and reform measures that the country has undertaken in exchange for the international bailout that the government negotiated in 2012.
Asian equity markets were higher today, 8 January 2015. Key indices in Hong Kong, Japan, Singapore, Taiwan, South Korea, and Indonesia were up 0.09% to 1.74%. In China, the Shanghai Composite was off 2.36%.
Trading in US index futures indicated that the Dow could gain 125 points at the opening bell today, 8 January 2015. US stocks surged yesterday, 7 January 2015, with the S&P 500 rebounding from a five-session dive, as US crude stopped a four-day skid and Germany left the door open to discussing options with Greece's next government on its debt. Federal Reserve policymakers said they could begin raising interest rates before inflation starts to pick up, according to minutes of their meeting on 17 and 18 December 2014. However, the Fed officials added that "they would want to be reasonably confident that inflation will move back" toward the Fed's annual 2% target "over time".
Federal Reserve Bank of Chicago President Charles Evans said yesterday, 7 January 2015 the U.S. might not hit the Fed's target inflation rate until 2018 and he doesn't advocate raising interest rates until 2016. The Chicago Fed President said he would advocate hewing to "explicit" numerical targets for Fed policy, specifically, ensuring that a target 2% inflation is hit before reining in accommodative policy.
US private sector employment gains accelerated in December as employers added 241,000 jobs, Automatic Data Processing Inc. reported yesterday, 7 January 2015. ADP revised November's gain to 227,000 from a prior estimate of 208,000.
The US Labor Department reports monthly payroll data for December 2014 tomorrow, 9 January 2015.
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