Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 48.18 points or 0.23%, off close to 10 points from the day's high and up about 50 points from the day's low. The market breadth, indicating the overall health of the market was positive.
Pharma stocks rose on renewed buying. Financial Technologies (India) jumped on media report that Tech Mahindra has shown interest in buying a sizeable equity stake in the company. Tyre stocks rose across the board.
The market edged higher amid initial volatility. The Sensex pared gains after hitting fresh intraday high in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit 3-week high. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 292.23 crore on Tuesday, 18 February 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 48.18 points or 0.23% to 20,682.39. The index gained 60.21 points at the day's high of 20,694.42 in morning trade, its highest level since 29 January 2014. The index fell 4.65 points at the day's low of 20,629.56 in early trade.
The CNX Nifty was up 12.60 points or 0.21% to 6,139.70. The index hit a high of 6,143.75 in intraday trade, its highest level since 29 January 2014. The index hit a low of 6,125.75 in intraday trade.
The BSE Mid-Cap index was up 23.14 points or 0.36% at 6,368.60. The BSE Small-Cap index was up 41.54 points or 0.66% at 6,372.26. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was positive. On BSE, 1,249 shares rose and 1,029 shares fell. A total of 110 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and rest fell. Infosys (up 1.28%), GAIL (India) (up 1.37%) and Bhel (up 0.97%) edged higher from the Sensex pack.
Power Grid Corporation of India declined 0.42%. Rural Electrification Corporation gained 0.6%. Rural Electrification Corporation said during market hours that the Ministry of Power (MoP), Government of India, vide its letter dated 8 October 2012 had appointed REC Transmission Projects Company (RECTPCL) -- a wholly owned subsidiary of REC -- as the Bid Process Coordinator for the purpose of selection of bidder as Transmission Service Provider to establish "Transmission System for ATS of Unchahar TPS", through Tariff Based Competitive Bidding Process. Accordingly, RECTPCL formed a project specific Special Purpose Vehicle (SPV) namely Unchahar Transmission (UTL), as its wholly owned subsidiary company, with authorized and paid up capital of Rs 5 lakh, divided into 50,000 equity shares of Rs 10 each. In response to the Request for Proposal (RfP) for this project, RECTPCL received Financial Bids and based on the recommendations of the Bid Evaluation Committee (BEC), the Board of Directors of RECTPCL in its 44th Meeting held on February 12, 2014 approved the name of M/s Power Grid Corporation of India Limited as successful Bidder for issuance of Letter of Intent (Lol) for establishment of "Transmission System for ATS of Unchahar TPS".
Further, in terms of Section 4 (1) (c) of the Companies Act, 1956, UTL being also a subsidiary company of REC, the board of directors of REC in its 401st meeting held on 14 February 2014 has approved the sale and transfer of 50,000 equity shares of Unchahar Transmission, presently held by RECTPCL and its nominees, to Power Grid Corporation of India and their nominees, substantially upon the terms & conditions of the Share Purchase Agreement to be executed between the RECTPCL, UTL and Power Grid Corporation of India for establishment of "Transmission System for ATS of Unchahar TPS", subject to obtaining necessary approval from the Ministry of Power, Government of India.
Pharma stocks rose on renewed buying. Cipla (up 0.34%), Dr. Reddy's Laboratories (up 0.53%), Lupin (up 0.8%), and Sun Pharmaceutical Industries (up 1.72%) gained.
Ranbaxy Laboratories rose 3.56%. The New York Attorney General and the US units of Ranbaxy Laboratories and Teva Pharmaceutical Industries have reportedly settled claims that an agreement between the two drugmakers unlawfully restricted competition. Under the terms of the settlement, the two generic drug makers will end a 2010 agreement of not challenging each other's rights to sell certain drugs exclusively in the United States. Teva and Ranbaxy will pay the New York state $300,000 and have agreed to refrain from similar agreements in the future.
Financial Technologies (India) hit an upper circuit limit of 5% at Rs 326.20 on BSE on a media report that Tech Mahindra has shown interest in buying a sizeable equity stake in the company. According to the media report, Tech Mahindra has hired consultants to carry out a due diligence of Financial Technologies (India) (FTIL). However, the report suggested that it is uncertain whether the ongoing negotiations will translate into a deal. Shares of Tech Mahindra rose 0.81%.
According to preliminary discussions, Tech Mahindra will subscribe to preferential shares issued by FTIL as well as buy a part of the equity stake controlled by its promoters, the report added.
As on 31 December 2013, promoters held 45.63% stake in FTIL.
Tyre stocks rose across the board on expectations of pick up in demand from automobile OEMs after the government reduced excise duty on cars, commercial vehicles, sports utility vehicles (SUVs), motorcycles and scooters for a period up to 30 June 2014 in the in the Interim Budget for 2014-15 announced on Monday, 17 February 2014. Apollo Tyres (up 1.37%), JK Tyre & Industries (up 2.76%), MRF (up 0.32%) Goodyear India (up 1.65%), and CEAT (up 1.15%) gained.
The excise duty on small cars, two-wheelers and commercial vehicles has been reduced to 8% from 12%. The excise duty on SUVs has been reduced to 24% from 30%. The excise duty on large cars has been cut to 24% from 27%. The excise duty on mid-segment cars has been cut to 20% from 24%.
Paper Products gained 5.84% after consolidated net profit surged 66.1% to Rs 16.66 crore on 22.61% rise in net sales to Rs 279.02 crore in the quarter ended December 2013 over the quarter ended December 2012. The quarterly result was announced after market hours on Tuesday, 18 February 2014.
Net profit rose 24.68% to Rs 56.21 crore on 20.33% rise in net sales to Rs 1074.80 crore in the year ended 31 December 2013 over the year ended 31 December 2012.
Paper Products' board of directors at its meeting held on 18 February 2014, recommended dividend of Rs 2.80 per share for the financial year ended 31 December 2013.
The Reserve Bank of India on Tuesday, 18 February 2014, said it will conduct term repo auctions of appropriate amount and tenor during March 2014 to address liquidity tightness. In order to address the anticipated tightening in liquidity conditions on account of advance tax payments by corporates commencing mid-March 2014 and with a view to providing flexibility to the banking system in its liquidity management towards March-end 2014, the Reserve Bank of India (RBI) will conduct term repo auctions of appropriate amount and tenor during March 2014, the RBI said in a press release issued on Tuesday. The details of the term repo auctions will be announced in due course, the RBI said.
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.
On political front, the Lok Sabha passed a contentious proposal to split Andhra Pradesh and create the new state of Telangana on Tuesday amid chaotic scenes and uproar in parliament from opponents of the bill. The state capital Hyderabad will remain the common capital for the two states for a period of 10 years if the bill is passed in the upper house.
The decision to break up the state was made ahead of elections due by May 2014. The Bharatiya Janata Party, which is the frontrunner in the national election race, voted in favor of the bill, allowing it to pass. It still needs approval in the upper house by Friday, when parliament's final session before the election ends. The new state would account for 17 seats in parliament.
Asian stocks edged higher on Wednesday, 19 February 2014, after China's overnight money-market rate dropped to a nine-month low as an ample supply of cash offset the impact of the central bank draining funds. Key benchmark indices in Indonesia, Taiwan, Hong Kong, China and Singapore were up 0.24% to 0.9%. Key benchmark indices in Japan and South Korea were off 0.2% to 0.52%.
The People's Bank of China withdrew 48 billion yuan ($7.9 billion) by selling 14-day repurchase contracts at 3.8 percent yesterday, 18 February 2014. That was the first repo auction since June. The central bank said it will sell 50 billion yuan of nine-month treasury deposits on behalf of the Ministry of Finance tomorrow, 20 February 2014.
A preliminary report on China's manufacturing is due tomorrow, 20 February 2014.
Trading in US index futures indicated that the Dow could drop 12 points at the opening bell on Wednesday, 19 February 2014. US stocks settled mostly higher on Tuesday with the Nasdaq Composite recording its eighth consecutive session of gains, the longest since July 2013.
Manufacturing activity in the New York region gave up most of the strong gains made during the prior month although it remained in positive territory, according to data released Tuesday. The report fits a picture of a manufacturing sector struggling with severe winter weather. The ISM index for the US showed manufacturers suffered from the January chill last month.
A gauge of confidence among home builders plunged in February, dropping to the lowest level in nine months, led by weaker views on present sales of single-family homes, according to data released Tuesday. The housing-market index dropped to 46 this month from 56 in January 2014.
Minutes of the Federal Reserve's January meeting will be released later in the global day today, 19 February 2014. Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.
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. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.
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