A rally in European stocks helped trigger gains for Indian stocks which rose for the second day in a row. The barometer index, the S&P BSE Sensex rose 170.09 points or 0.68% to settle at 25,320.44. The 50-unit Nifty 50 index rose 50.85 points or 0.66% to settle at 7,700.90. The Sensex hit its highest closing level in more than a week. The Nifty hit its highest closing level in a week. Gains in auto stocks, private sector bank stocks and oil exploration and production stocks aided upmove for the key benchmark indices.
Index heavyweights HDFC, ITC and Infosys edged higher. Sun Pharmaceutical Industries edged higher after the company announced selling its manufacturing unit in Ohio to Nostrum Laboratories Inc.
The Sensex rose 170.09 points or 0.68% to settle at 25,320.44, its highest closing level since 7 December 2015. The index rose 192.43 points or 0.76% at the day's high of 25,342.78 in late trade. The index fell 74.81 points or 0.29% at the day's low of 25,075.54 in morning trade.
The Nifty rose 50.85 points or 0.66% to settle at 7,700.90, its highest closing level since 8 December 2015. The index rose 54.95 points or 0.71% at the day's high of 7,705 in late trade. The index fell 24.95 points or 0.32% at the day's low of 7,625.10 in morning trade.
The BSE Mid-Cap index rose 0.56%, underperforming the Sensex. The BSE Small-Cap index rose 0.69%, outperforming the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,584 shares rose and 1,062 shares declined. A total of 203 shares were unchanged.
Among the sectoral indices on BSE, the S&P BSE Consumer Discretionary Goods & Services (up 0.99%), BSE Energy index (up 1.24%), BSE FMCG index (up 1.05%), BSE Industrials index (up 0.87%), BSE Auto index (up 1.31%), BSE Consumer Durables index (up 1.5%), BSE Oil & Gas index (up 0.73%) and BSE Realty index (up 0.93%) outperformed the Sensex. The S&P BSE Basic Materials index (up 0.55%), BSE Finance index (up 0.45%), BSE Healthcare index (up 0.43%), BSE Telecom index (down 0.22%), BSE Bankex index (up 0.22%) and BSE Metal index (down 0.22%) underperformed the Sensex.
Shares of public sector banks edged lower. Punjab National Bank (down 2.21%), Canara Bank (down 1.09%), Syndicate Bank (down 0.76%), IDBI Bank (down 0.66%), Indian Overseas Bank (down 0.97%), UCO Bank (down 0.69%), Central Bank of India (down 0.5%) and State Bank of India (down 0.18%) edged lower. Bank of Baroda (up 0.89%), Indian Bank (up 0.18%), Union Bank of India (up 0.42%), Vijaya Bank (up 0.89%) and Bank of India (up 0.09%) edged higher.
United Bank of India rose 3.75% at Rs 22.15 after the bank said that a meeting of its board of directors will be held on 18 December 2015 to consider the proposal to raise equity capital by way of preferential allotment of up to Rs 1500 crore to the Government of India (GoI) or Life Insurance Corporation of India or funds thereof or such other investors as may be decided provided that the government's holding at any time shall not fall below 51% of the equity capital of the bank. The bank made the announcement during market hours today, 15 December 2015.
The Government of India (GoI) and LIC respectively held 82% and 12.12% stake in United Bank of India as per the shareholding pattern as on 30 September 2015.
Private sector banks gained. Kotak Mahindra Bank (up 1.52%), Yes Bank (up 1.22%), Axis Bank (up 1.03%), IndusInd Bank (up 0.71%) and HDFC Bank (up 0.18%) gained. ICICI Bank (down 1.04%) edged lower.
Meanwhile, the Reserve Bank of India (RBI) Governor Raghuram Rajan held discussion with Chairmen and MD & CEOs of some public and private sector banks in Mumbai yesterday, 14 December 2015, regarding the asset quality of banks and the way forward on improving the quality of bank balance sheets. The discussions will continue, the RBI said in a statement.
Auto stocks were in demand. Eicher Motors (up 2.79%), Escorts (up 2.39%), Ashok Leyland (up 1.51%), Maruti Suzuki India (up 1.11%), TVS Motor Company (up 3.64%), Bajaj Auto (up 1.07%) and Hero MotoCorp (up 1.04%) gained.
Tata Motors edged higher in volatile trade. The stock rose 2.04% at Rs 379.30. The stock hit a high of Rs 380.65 and a low of Rs 365.10 in intraday trade.
Mahindra & Mahindra (M&M) fell 0.21% at Rs 1,284.30. The stock hit a high of Rs 1,304 and a low of Rs 1,280.05 in intraday trade. Tech Mahindra fell 4.18% at Rs 520. The stock hit a high of Rs 550.50 and a low of Rs 517.05 in intraday trade. Tech Mahindra and Mahindra & Mahindra (M&M) have jointly entered into an agreement with Pincar S.r.l., to purchase a controlling stake in Pininfarina S.p.A., an iconic Italian brand in automotive and industrial design. The announcement was made after market hours yesterday, 14 December 2015. Pininfarina is an automotive design and engineering services company providing services to global automotive OEMs. Pininfarina clocked revenue of about euro 86.60 million in year ended 31 December 2014. The acquisition will broaden Tech Mahindra's engineering service offering to its customers.
As part of the agreement, Tech Mahindra and M&M shall purchase 76.06% of Pininfarina shares from the current controlling shareholder Pincar S.r.l. at a price of euro 1.1 per share. This investment by Tech Mahindra and M&M shall be done via a special purpose vehicle (SPV) whose ownership shall be held 60% by Tech Mahindra and 40% by M&M. This will be followed by an open offer for all the remaining ordinary shares of Pininfarina at the same purchase price paid for the shares held by Pincar. The SPV will infuse funds to the tune of euro 20 million into Pininfarina by way of a rights issue before the end of 2016. Tech Mahindra and M&M have also signed definitive agreement with the lenders, creditors and lessors of Pininfarina to restructure the existing debt of Pininfarina. Tech Mahindra and M&M have also decided to provide on a joint and several basis corporate guarantee not exceeding euro 114.50 million to the lenders, creditors and lessors of Pininfarina.
Pininfarina will continue to remain an independent company, listed on the Milan Stock Exchange, with Paolo Pininfarina continuing as the Chairman of its board.
Stocks of oil production and exploration companies edged higher as global crude oil futures clawed back from multi-year lows. Cairn India (up 1.4%) and ONGC (up 2.06%) edged higher. Oil India (down 0.76%) edged lower.
In the global commodities markets, Brent for January settlement was currently up 78 cents at $38.70 a barrel. The contract had ended almost unchanged at $37.92 a barrel during the previous trading session. Brent for February settlement was currently up 74 cents at $38.90 a barrel. The Brent January contract expires tomorrow, 16 December 2015.
Index heavyweight Reliance Industries rose 2.14% at Rs 975.90. The stock hit a high of Rs 977.90 and a low of Rs 953 in intraday trade.
Bharat Heavy Electricals (Bhel) fell 0.57% at Rs 166.10. The stock hit a high of Rs 167.90 and a low of Rs 164.25 in intraday trade. Bhel after market hours today, 15 December 2015, announced that it has added one more coal-based power plant to the grid by successfully commissioning a 500 megawatts (MW) thermal generating unit in West Bengal. The 500 MW (unit 3) was commissioned at the upcoming Sagardighi thermal power extension project of West Bengal Power Development Corporation (WBPDCL), located at Murshidabad district of West Bengal. This is the first unit of phase II (2x500 MW) of the power plant and the second unit is also in advance stage of completion, Bhel said. The company said it has already commissioned 3,750 MW of power plants in the utility sector in the current financial year and is on track to achieve the target set by the government for the year.
Index heavyweight and housing finance major HDFC rose 1.61% at Rs 1,206.75. The stock hit a high of Rs 1,209.50 and a low of Rs 1,180 in intraday trade.
Another index heavyweight and cigarette major ITC rose 0.92% at Rs 322.60. The stock hit a high of Rs 323.60 and a low of Rs 318.10 in intraday trade.
Index heavyweight and IT major Infosys rose 0.25% at Rs 1,072.15. The stock hit a high of Rs 1,079.80 and a low of Rs 1,058.15 in intraday trade.
Bosch rose 3.09% at Rs 18,805.15. The stock hit a high of Rs 18,885 and a low of Rs 18,161.05 in intraday trade.
Aviation stocks surged. Interglobe Aviation (up 8.66%) and SpiceJet (up 7.2%) edged higher.
Jet Airways (India) surged 5.16% at Rs 599.05 after the company announced the launch of daily non-stop services between India and Amsterdam, its new European gateway which is ideally located for convenient onward connections. With effect from 27 March 2016, Jet Airways will operate two daily non-stop flights to Amsterdam Airport Schiphol, one each from its home hubs in Mumbai and New Delhi. Jet Airways will also operate a daily flight from Toronto to Amsterdam. Schedules of all three flights have been planned to allow quick and convenient connections between India and Toronto over Amsterdam, Jet Airways (India) said in a statement. These flights will be available for sale across all booking channels from 15 December 2015. Jet Airways will deploy its modern Airbus A330-300 aircraft with 34 seats in Premiere and 259 seats in Economy class on these routes. The announcement was made after market hours yesterday, 14 December 2015.
Sun Pharmaceutical Industries (Sun Pharma) rose 0.66% at Rs 773.70 after the company announced selling its manufacturing unit in Ohio to Nostrum Laboratories Inc. The announcement was made after market hours yesterday, 14 December 2015. Sun Pharma said that as part of the company's manufacturing consolidation in the US, one of its wholly owned subsidiaries has entered into an agreement with Nostrum Laboratories Inc. (Nostrum) for the divestment of the Bryan (Ohio) unit in the US. As part of the agreement, Sun Pharma's subsidiary has divested Ohio unit as a going concern along with the employees and related products to Nostrum. The financial impact of this development on Sun Pharma is negligible, the company said in a statement.
NHPC rose 0.53% at Rs 18.90. The stock hit a high of Rs 19.10 and a low of Rs 18.55 in intraday trade. The company announced that Parbati-III power station (4X130 MW) in Himachal Pradesh will be completely shutdown with effect from 15 December 2015 to 15 February 2016 to carry out repair of pressure shaft, sealing of surge shaft gate & MIV seals and annual maintenance of units. The announcement was made after market hours yesterday, 14 December 2015.
Key indices gained for the second straight session. The Sensex has risen 276.01 points or 1.1% in preceding two trading sessions from a recent low of 25,044.43 on 11 December 2015. The Sensex has declined 825.33 points or 3.15% in this month so far (till 15 December 2015). The Sensex has fallen 2,178.98 points or 7.92% in this calendar year so far (till 15 December 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 486.90 points or 1.96%. The Sensex is off 4,704.30 points or 15.66% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, data released by the government after trading hours yesterday, 14 December 2015, showed that inflation based on the consumer price index (CPI) spiked to 5.41% in November 2015 from 5% in October 2015. The acceleration in consumer price inflation was driven by an increase in food prices.
In overseas stock markets, European shares surged led by gains in oil and gas stocks as global crude oil futures clawed back from multi-year lows. Earlier during the global day, Asian stocks ended on a mixed note amid caution ahead of a highly anticipated US Federal Reserve meeting this week. The Fed is widely expected to raise the federal funds rate by 25 basis points after the conclusion of a two-day monetary policy meeting on 16 December 2015. With markets having already priced in a 25 basis points rate hike this week, the focus has shifted to the likely pace and quantum of rate hikes once this first move is done. US stocks ended a volatile session with modest gains yesterday, 14 December 2015, lifted by a rebound in crude-oil prices.
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