Key benchmark indices edged higher amid initial volatility after the government after trading hours on Friday, 20 June 2014, announced steep 14.2% increase in railway passenger fare and 6.5% hike in railway freight rate to boost revenue of the railways to meet its annual expenditure. The announcement of rail fare hike coming just a few days ahead of the Railway Budget and Union Budget for 2014-15 indicates that the government has started taking tough decisions which are required to bring the economy on growth path. The hike in freight rate and firm global crude oil prices, however, stoked inflation worries. The barometer index, the S&P BSE Sensex, was up 40.39 points or 0.16%, off close to 50 points from the day's high and up about 40 points from the day's low. The market breadth indicating the overall health of the market was strong.
Essar Oil hit 5% upper circuit on BSE after the board of directors of Essar Oil on Sunday, 22 June 2014, agreed to its promoters' proposal to delist the company from Indian bourses. Divi's Laboratories gained after the company said that it has had a successful inspection by the USFDA from 16th to 20th June, 2014, without any observations, for a unit near Hyderabad during this month. Bharti Airtel gained after the company announced before market hours signing the definitive agreement with Loop Mobile (India).
At 9:35 IST, the S&P BSE Sensex was up 40.39 points or 0.16% to 25,145.90. The index jumped 91.99 points at the day's high of 25,197.50 in early trade. The index gained 1.76 points at the day's low of 25,107.27 in early trade.
The CNX Nifty was up 4.85 points or 0.06% to 7,516.30. The index hit a high of 7,534.80 in intraday trade. The index hit a low of 7,512.60 in intraday trade.
The market breadth, indicating the overall health of the market was strong. On BSE, 1,049 shares gained and 379 shares fell. A total of 58 shares were unchanged.
The BSE Mid-Cap index was up 66.63 points or 0.74% to 9,028.59. The BSE Small-Cap index was up 83.30 points or 0.85% to 9,844.52. Both these indices outperformed the Sensex
Bharti Airtel gained 0.99% to Rs 341.65 after the company announced the signing the definitive agreement with Loop Mobile (India). In February this year, Bharti Airtel and Loop Mobile announced a strategic agreement for combining their operations in Mumbai (India) service area. Bharti Airtel, however, did not disclose how much it was paying for acquiring the assets of Loop Mobile (erstwhile BPL Mobile), which currently only operates in Mumbai, with 3 million subscribers.
Essar Oil hit 5% upper circuit at Rs 113.80 on BSE after the board of directors of Essar Oil on Sunday, 22 June 2014, agreed to its promoters' proposal to delist the company from Indian bourses. After de-listing Essar Energy plc from London Stock Exchange (LSE), the Ruia-brothers controlled Essar Group on 20 June 2014 had announced their intention to delist Essar Oil from Indian bourses. The board agreed to seek the consent of the shareholders of the company for the delisting proposal by way of postal ballot and e-voting. In a notice to the Bombay Stock Exchange, Essar Oil said it had received a letter from its promoter, Essar Energy Holdings (EEHL) for voluntarily delisting of the equity shares of the company from BSE and NSE by purchasing shares held by public. Mumbai-based Essar Group wants to buy all the shares it does not already own in Essar Oil.
Divi's Laboratories gained 1.05% to Rs 1,340.20 after the company said after market hours on Friday, 20 June 2014, that it has had a successful inspection by the USFDA from 16th to 20th June, 2014, without any observations, for its unit near Hyderabad during this month. The purpose of this inspection was for general cGMP (Current Good Manufacturing Practices) for the facility.
Motherson Sumi Systems rose 0.97% to Rs 316 after the company said before market hours that Samvardhana Motherson Automotive Systems Group B.V., Netherlands (SMRP, BV), company's subsidiary and joint venture with Samvardhana Motherson International for Samvardhana Motherson Reflectec (SMR) and Samvardhana Motherson Peguform (SMP) has announced an offering of 500 million new Senior Secured Notes, proceeds of which shall be utilized for prepayment of existing borrowings as well for general corporate purposes including financing of capital expenditure. The proposed offering does not involve any corporate guarantee from the parent.
Indian stocks may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month June 2014 series to July 2014 series. The near-month June 2014 F&O contract expire on Thursday, 26 June 2014.
The government on Friday, 20 June 2014, raised passenger fare and freight rates. A flat 10% increase in passenger fare was announced in all classes. In addition there will be an increase of 4.2% in fares on account of FAC (Fuel adjustment Component) which is due from April 2014. The overall increase in passenger fare is 14.2%.
There has been a flat 5% increase in freight rates. In addition there will be an increase of 1.4% in fares on account of FAC (Fuel adjustment Component) which is due from April 2014. The overall increase in freight rates will be about 6.5% for major commodities. The revised passenger fare and freight rates and freight structure rationalization will come into effect from 25 June 2014.
Asian stocks rose on Monday, 23 June 2014, as upbeat news from China's factory sector and fresh highs on Wall Street on Friday, 20 June 2014 fueled appetite for riskier assets. Key benchmark indices in Japan, Indonesia, China, Hong Kong, Singapore, and South Korea were up 0.03% to 0.4%. Taiwan's Taiwan Weighted index was off 0.27%.
Activity in China's factory sector expanded in June for the first time in six months as new orders surged, a preliminary HSBC survey showed on Monday, offering new signs the economy is stabilising thanks to Beijing's measures to shore up growth. The HSBC/Markit Flash China Manufacturing Purchasing Managers' Index rose to 50.8 in June from May's final reading of 49.4. It was the first time since December that the PMI was in growth territory, and the highest reading since November, when it was also 50.8.
The Dow Jones Industrial Average and the S&P 500 index closed at record highs on Friday, helped by the prospect of the Federal Reserve keeping interest rates low for a long period of time.
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