After seeing a bout of initial volatility, key benchmark indices extended gains in morning trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their highest level in almost four weeks. The Sensex was currently trading above the psychological 28,000 level. The barometer index had alternately moved above and below that psychological level after surpassing that mark earlier during the day. The Sensex was currently up 133.68 points or 0.48% at 28,021.58. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. Global crude oil futures extended losses from the lowest level in five and a half years. Fall in crude oil prices augur well for India as the country imports about 80% of its crude oil requirements.
Deregulation of diesel price announced by the Indian government in October 2014 and a sharp decline in global crude oil prices over the past few months will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The steep slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. India imports 80% of its crude oil requirement. 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.
Shares of public sector oil marketing companies (PSU OMCs) advanced on decline in global crude oil prices. Shares of state-run upstream oil exploration companies rose on hopes of lower subsidy burden as crude oil prices declined. IT stocks advanced on a weak rupee.
Foreign portfolio investors bought shares worth a net Rs 259.82 crore during the previous trading session on Friday, 2 January 2015, as per provisional data.
In overseas markets, Asian stocks edged lower amid concern Greece will exit the European currency union. Key equity benchmark indices in the US closed flat for the day on Friday, 2 January 2015, after giving back intraday gains following disappointing reports on US manufacturing and construction.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength for the dollar.
Brent crude futures extended losses from the lowest level in five and a half years amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China.
At 10:15 IST, the S&P BSE Sensex was up 133.68 points or 0.48% at 28,021.58. The index jumped 142.54 points at the day's high of 28,030.44 in morning trade, its highest level since 9 December 2014. The index rose 31.14 points at the day's low of 27,919.04 in early trade.
The CNX Nifty was up 33.45 points or 0.4% at 8,428.90. The index hit a high of 8,435.85 in intraday trade, its highest level since 9 December 2014. The index hit a low of 8,401.25 in intraday trade.
The BSE Mid-Cap index was up 81.57 points or 0.77% at 10,611.77. The BSE Small-Cap index was up 100.51 points or 0.89% at 11,408.66. 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. 1,563 shares gained and 640 shares fell. A total of 83 shares were unchanged.
Shares of public sector oil marketing companies (PSU OMCs) rose on decline in international crude oil prices. BPCL (up 0.19%), HPCL (up 0.77%) and Indian Oil Corporation (up 0.99%) edged higher. Lower crude oil prices could reduce under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. 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. The government has already freed pricing of petrol and diesel.
Shares of state-run upstream oil exploration companies rose on hopes of lower subsidy burden as crude oil prices declined. ONGC (up 0.69%), GAIL (India) (up 0.25%) and Oil India (up 0.15%) edged higher.
ONGC, GAIL (India) and Oil India share a part of the under recoveries of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Cairn India lost 0.54% at Rs 240.10 on decline in crude oil prices. Lower crude oil prices could reduce realizations from crude sales for oil exploration firms like Cairn India.
IT stocks were higher on weak rupee. Wipro (up 1.21%), TCS (up 0.9%), Oracle Financial Services Software (up 0.65%), Tech Mahindra (up 0.42%), Infosys (up 0.31%), CMC (up 0.62%), and MphasiS (up 0.15%) edged higher. MindTree (down 0.21%) edged lower.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
MOIL fell 0.88% at Rs 311.30. The company before market hours today, 5 January 2015, said that the company has reduced price of all ferro grades of ore (expect fines) by 5% for Q4 March 2015. The prices of manganese ore fines have been reduced by 7.5%. The price of the electrolytic manganese dioxide (EMD) has been cut by 5%. MOIL undertakes revision of prices of its product prices at the beginning of each quarter.
In the foreign exchange market, the rupee edged lower against the dollar on broad strength for the dollar. The partially convertible rupee was hovering at 63.3675, compared with its close of 63.29 during the previous trading session on Friday, 2 January 2015.
Brent crude futures extended losses from the lowest level in five and a half years amid growing supply from Russia and Iraq and signs of manufacturing weakness in Europe and China. Brent for February settlement was off 91 cents at $55.51 a barrel. The contract had declined 91 cents or 1.6% to settle at $56.42 a barrel during the previous trading session on Friday, 2 January 2015, its lowest settlement since 30 April 2009.
Asian stocks edged lower today, 5 January 2015, amid concern Greece will exit the European currency union. Key indices in Taiwan, Singapore, South Korea, and Indonesia were off 0.55% to 0.98%. Key indices in China, Japan and Hong Kong were up 0.11% to 2.42%.
In Japan, the final Markit/JMMA Japan Manufacturing Purchasing Managers Index (PMI) came at 52 in December, slightly less than a preliminary reading of 52.1 and unchanged from the final reading in November.
Trading in US index futures indicated that the Dow could fall 2 points at the opening bell today, 5 January 2015. US stocks ended near unchanged on Friday, 2 January 2015, with the S&P 500 down for a third session, after economic reports showed manufacturing slowing but still in expansion mode at the end of 2014. Factory activity in the United States grew at the slowest pace in six months in December 2014, weakened by declines in orders and production. The Institute for Supply Management, a trade group of purchasing managers, said on Friday, 2 January 2015, that its manufacturing index fell to 55.5 in December from 58.7 in November, which was just below a three-year high reached in October.
Minneapolis Fed President Narayana Kocherlakota yesterday, 4 January 2015, said that the Federal Reserve should not be forced to adopt any set rules to determine how it makes monetary policy. Discretion is better than any rule, Kocherlakota said in discussing tying policy moves to data or other indicators. The Fed has information about inflation pressures that would be hard to boil down into a rule, Kocherlakota said during a talk at the American Economic Association meeting.
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