Key benchmark indices extended gains and hit fresh intraday high in late trade as European stocks reversed initial losses after the latest data showed that German business confidence brightened for a fourth straight month in February 2014. Germany is Europe's biggest economy. The 50-unit CNX Nifty hit its its highest level in more than four weeks. The barometer index, the S&P BSE Sensex, hit its highest level in more than 3-1/2 weeks. The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 21 February 2014. The Sensex was provisionally up 114.26 points or 0.55%, up 177.71 points from the day's low and off 13.62 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Pharma stocks gained on renewed buying. Dr. Reddy's Laboratories, Lupin and Cadila Healthcare hit record high. Shares of state-run power generation major NTPC tumbled after the Central Electricity Regulatory Commission in its latest order directed power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization.
Key benchmark indices edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed in morning trade as the key benchmark indices trimmed initial losses in morning trade. Intraday volatility continued as key benchmark indices once again slipped into the red after moving into positive zone from negative zone in mid-morning trade. Key benchmark indices once again moved into positive zone from negative zone in early afternoon trade. Key benchmark indices retained positive zone in afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in late trade as European stocks reversed initial losses after the latest data showed that German business confidence brightened for a fourth straight month in February 2014.
The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 21 February 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 603.41 crore on Friday, 21 February 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures and options (F&O) segment from the near-month February 2014 series to March 2014 series. The near month February 2014 F&O contracts expire on Wednesday, 26 February 2014. The stock market remains closed on Thursday, 27 February 2014, on account of Mahashivratri.
As per provisional closing, the S&P BSE Sensex was up 114.26 points or 0.55% to 20,815.01. The index jumped 127.88 points at the day's high of 20,828.63 in late trade, its highest level since 29 January 2014. The index fell 63.45 points at the day's low of 20,637.30 in early trade.
The CNX Nifty was up 31.15 points or 0.51% to 6,186.60. The index hit a high of 6,191.85 in intraday trade, its highest level since 24 January 2014. The index hit a low of 6,130.80 in intraday trade.
The BSE Mid-Cap index was up 19.55 points or 0.3% at 6,441.60. The BSE Small-Cap index was up 22.30 points or 0.35% at 6,415.63. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,408 shares gained and 1,344 shares fell. A total of 156 shares were unchanged.
The total turnover on BSE amounted to Rs 1892 crore, higher than Rs 1715.52 crore on Friday, 21 February 2014.
Shares of India's largest power generation firm by capacity NTPC tumbled on huge volume after the Central Electricity Regulatory Commission in its latest order directed power utilities to charge production incentives based on actual offtake, instead of on their readiness to produce power at above 85% capacity utilization. The stock plunged 11.31% at Rs 117.20. The scrip hit 52-week low of Rs 116.60 in intraday trade. On BSE, 46.55 lakh shares were traded in the counter, compared with an average volume of 5.08 lakh shares in the past one quarter.
Pharma stocks gained on renewed buying. Glenmark Pharmaceuticals (up 2.17%), Ranbaxy Laboratories (up 2.78%) and Sun Pharmaceutical Industries (up 0.91%) gained. Cipla shed 0.56%.
Cadila Healthcare rose 4.89% to Rs 997 after striking a record high of Rs 1,009 in intraday trade.
Lupin rose 2.34% to Rs 956.90 after striking a record high of Rs 958.40 in intraday trade.
Dr. Reddy's Laboratories rose 2.41% to Rs 2,795 after striking a record high of Rs 2,815 in intraday trade.
Punjab National Bank rose 1.02%. The bank has raised Rs 1000 crore capital through Tier II (Basel III Compliant) bonds. The state-run bank made the announcement during market hours today, 24 February 2014.
United Bank of India surged 5.95%. United Bank of India before market hours today, 24 February 2014, said that its board of directors at its meeting held on Saturday, 22 February 2014, has accorded its approval to create, offer, issue and allot by conversion of up to 80000 PNCPS of Rs 100,000 each into such number of equity shares of Rs 10 each at an conversion price as may be determined in accordance with the Regulation 76(1) of SEBI ICDR Regulations on preferential basis to Government of India in one or more tranches.
The Board further approved issuance and allotment by conversion of PNCPS up to 11 crore equity shares of Rs 10 each at such price as may be determined in accordance with the Regulation 76(1) of SEBI ICDR Regulations on preferential basis to the President of India within 31 March 2014.
The approvals of the Board are subject to all applicable approvals/consents from various Regulators and specific approval by the Central Government in this regard.
Union Bank of India edged higher in choppy trade after the state-run bank denied media reports that it is in merger talks with troubled state-run bank United Bank of India. The stock rose 0.05% at Rs 103.20. The scrip hit high of Rs 103.60 and low of Rs 101. "We once again deny the news that United Bank of India may merge with Union Bank of India and no such negotiations are in place. Furthermore, there is no information with us that needs to be submitted to Stock Exchanges in terms of Clause 36 of the Listing Agreement," Union Bank of India said in a statement.
United Bank of India also denied media reports that it is in merger talks with Union Bank of India.
Reliance Infrastructure rose 0.33%. The company today, 24 February 2014, announced completion of the Trichy-Karur road in Tamil Nadu undertaken through its special purpose vehicle TK Toll Road. This is Reliance Infrastructure's tenth road project, which has achieved full commercialization, the company said.
IDFC fell 1.16% to Rs 94.05 in volatile trade. The stock hit a high of Rs 94.85 and low of Rs 93.90. The Reserve Bank of India (RBI) on Friday, 21 February 2014, notified that the foreign share holding by foreign institutional investors (FIIs) in IDFC has crossed the overall limit of its paid-up capital. Therefore, no further purchases of shares of this company would be allowed through stock exchanges in India on behalf of FIIs, RBI said. IDFC has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for decreasing the limit from 54% to 52.5% for FIIs. RBI said that since FIIs had crossed the overall limit to buy stake in IDFC, they will not be allowed to purchase any further number of shares through the Indian stock exchanges.
In the foreign exchange market, the rupee reversed initial losses against the dollar as equities rose. The partially convertible rupee was hovering at 62.02, compared with its close of 62.12/13 on Friday, 21 February 2014.
Government bond prices dropped after Reserve Bank of India Governor Raghuram Rajan on Sunday, 23 February 2014, warned that inflation remains the biggest threat to economic growth. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8604%, higher than its close of 8.7954% on Friday, 21 February 2014. Bond yield and bond prices move in opposite direction.
Rajan said reining in price gains is the Reserve Bank of India's number one challenge and action will be data dependent. "Even at this point our challenge really is to bring inflation down, because inflation is hurting growth. As inflation comes down, we will get much more possibilities for growth," Rajan said in Sydney in an interview to a news agency. Rajan, who last month warned of a breakdown in international monetary policy cooperation, said there was "widespread agreement" that advanced economies should worry about spillover effects of central bank actions.
Finance Minister P. Chidambaram last week said that RBI must strike a balance between price stability and growth, while adding that the elected government must determine the pace of growth and policies that help the economy expand.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
European stocks erased earlier losses and moved higher on Monday, 24 February 2014, after data showed German business confidence brightened for a fourth straight month in February. Key benchmark indices in Germany and France were up 0.09% to 0.18%. In UK, the FTSE 100 fell 0.35%.
German business confidence improved more-than-expected this month to hit the highest level since July 2011, industry data showed on Monday. In a report, the German research institute, Ifo said its Business Climate Index rose to a seasonally adjusted 111.3 in February, up from a reading of 110.6 in January. The Current Assessment Index rose to 114.4 this month, up from 112.4 in January. The Business Expectations Index, which measures attitudes toward business prospects over the next six months, dipped to 108.3 this month from 108.9 in January.
The monthly index is based on a survey of around 7,000 German firms in the manufacturing, construction, wholesale and retail sectors.
Italian Prime Minister Matteo Renzi faces his first confidence vote in parliament today, 24 February 2014, since taking office last week. Renzi will address the Senate in Rome to introduce his 16-member cabinet and outline his strategy for governance.
In Ukraine, lawmakers on Sunday, 23 Febraury 2014, gave presidential powers to parliament speaker Oleksandr Turchynov, after ousting Viktor Yanukovych from the role as violence amid anti-government protests killed at least 82 people last week. The new regime issued an arrest warrant for Yanukovych. The US, Europe and the UK have said they would help with financial aid when a new cabinet is formed.
Asian stocks edged lower on Monday, 24 February 2014, amid speculation that reduced lending to the property industry will curb growth in the world's second-largest economy after a Chinese state-owned newspaper said some Chinese banks curbed loans to property developers. Key benchmark indices in Japan, Indonesia, Taiwan, China, Hong Kong and South Korea fell by 0.19% to 1.75%. In Singapore, the Straits Times index rose 0.19%
Industrial Bank Co. and other unidentified banks have curbed lending to the property sector and related industries such as steel and cement, Shanghai Securities News reported as China said new home prices rose in 69 of 70 cities last month from a year before. But the growth in new-home prices in China's first-tier cities slowed in January, National Bureau of Statistics data today showed.
Trading in US index futures indicated that the Dow could drop 5 points at the opening bell on Monday, 24 February 2014. US stocks edged lower in choppy trade on Friday, 21 February 2014, after the latest data showed existing-home sales in January showed a bigger-than-expected decline. In other economic news on Friday, Dallas Federal Reserve President Richard Fisher said the central bank should continue to taper its bond-buying program that's boosted stocks.
Richmond Fed President Jeffrey Lacker on Friday, 21 February 2014, said the 2008 Federal Open Market Committee transcripts released earlier in the day show "me and several other consumers of economic research grappling with some very difficult policy decisions." In prepared comments at Arizona State, he said there wasn't enough discussion during the crisis about specific models of banking and financial markets that there could have been, and there wasn't enough discussion about long-term consequences. Lacker said he still opposes the Fed's credit market interventions and said he remains "deeply skeptical about the advisability of those actions." Speaking of the market for asset-backed commercial paper, he said markets were responding in a plausibly efficient manner to significant revisions in expectations about the underlying economic fundamentals. Lacker also said the Fed's emergency lending program simply reallocated credit and was not like the "lender of last resort" that Henry Thornton and Walter Bagehot wrote about in the 1800s.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
Finance leaders from the world's biggest economies leaned on central banks and governments to help spur growth, reverting to the global economy's playbook of recent years, in an effort to safeguard a fragile recovery. Group of 20 officials ended their two-day summit on Sunday, 23 February 2014, saying they would look to boost world growth by more than $2 trillion over the next few years under a strategy crafted by the International Monetary Fund.
Under the G-20 plan, advanced economies would continue with their easy-money policies while emerging markets would seek to restructure their economies and tame inflation. In addition, governments everywhere would be expected to channel private-sector finance into new infrastructure projects.
The G-20's final communiquhighlights agreement among central banks to communicate their stimulus-exit strategies clearly and in a timely fashion. The communiquwarned that the global economy faces a period of potential "excessive volatility" harmful to growth as countries adjust their economic policies. "We do not want any surprises," Joe Hockey, Australia's treasurer and G-20 host, said at the conclusion of the summit on Sunday.
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