The barometer index, the S&P BSE Sensex, extended gains and hit fresh record high in mid-morning trade while the 50-unit CNX Nifty held firm and hovered close to its record high hit during morning trade. The Sensex was currently up 169.89 points or 0.64% at 26,589.44. The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. The market breadth indicating the overall health of the market was positive. News reports said that the Reserve Bank of India may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares.
Auto stocks gained. But, shares of two wheeler makers declined. State Bank of India (SBI) gained on reports that a foreign brokerage has upgraded the stock to "buy" from "hold", saying SBI will benefit from improving economy in terms of slippages, credit costs and non-performing loans.
After a higher opening, key indices had extended gains and struck record high.
Brent crude futures fell for the second day in a row amid speculation that Middle East crude supplies will remain safe amid turmoil across the region. Asian stocks were mixed as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. US index futures were in green.
At 11:16 IST, the S&P BSE Sensex was up 169.89 points or 0.64% at 26,589.44. The index jumped 177.06 points at the day's high of 26,596.61 in mid-morning trade, a lifetime high for the index. The index gained 70.76 points at the day's low of 26,490.31 in opening trade.
The CNX Nifty was up 38.65 points or 0.49% to 7,951.85. The index hit a high of 7,957.70 in intraday trade, a lifetime high for the index. The index hit a low of 7,927.75 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,405 shares gained and 983 shares fell. A total of 83 shares were unchanged.
The BSE Mid-Cap index was up 25.30 points or 0.27% at 9,351.11. The BSE Small-Cap index was up 65.05 points or 0.63% at 10,363.57. Both these indices underperformed the Sensex.
State Bank of India (SBI) gained 1.44% on reports that a foreign brokerage has upgraded the stock to "buy" from "hold", saying SBI will benefit from improving economy in terms of slippages, credit costs and non-performing loans. The brokerage has reported said that SBI is addressing concerns about costs and managing liabilities and margins.
Auto stocks gained. Tata Motors (up 1.08%), Ashok Leyland (up 0.14%) and Mahindra & Mahindra (M&M) (up 0.85%) edged higher.
Maruti Suzuki India rose 1.54%. A foreign brokerage has reportedly raised its target price on Maruti citing optimism about the car maker's product launches and margin expansion potential.
Shares of two wheeler makers declined. Hero MotoCorp (down 0.35%), Bajaj Auto (down 0.49%) and TVS Motor Company (down 2.21%) declined.
GAIL (India) declined 1.21%. As per reports, GAIL (India) is set to commence work on the 2,050-kilometer Jagdishpur-Phulpur-Haldia natural gas pipeline, which will serve as the 'Energy Highway' for West Bengal, Bihar, Jharkhand and Uttar Pradesh. GAIL's move follows the recent announcement by Prime Minister Narendra Modi to connect Eastern India with the national gas grid. The estimated investment for the Jagdishpur-Phulpur-Haldia pipeline project is about Rs 10000 crore.
Jet Airways (India) lost 3.58% after ICRA downgraded the company's loan ratings due to delays in debt servicing. ICRA has revised the rating assigned to the Rs 3210 crore, long-term, fund-based bank facilities of Jet Airways (India) to [ICRA] D (pronounced ICRA D) from [ICRA] BB (pronounced ICRA double B). ICRA has also revised the rating assigned to the Rs 4250 crore, short-term, fund-based/non-fund based bank facilities of Jet Airways (India) to [ICRA] D (pronounced ICRA D) from [ICRA] A4 (pronounced ICRA A four).
The market sentiment was boosted by provisional data showing that foreign funds were net buyers of Indian during the previous trading session. Foreign portfolio investors (FPIs) bought shares worth a net Rs 302.06 crore on Friday, 22 August 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month August 2014 series to September 2014 series. The near-month August 2014 F&O contracts expire on Thursday, 28 August 2014.
India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent crude futures fell for the second day in a row amid speculation that Middle East crude supplies will remain safe amid turmoil across the region. Brent for October settlement was off 15 cents at $102.14 a barrel. The contract decreased 34 cents to settle at $102.29 a barrel on Friday, 22 August 2014.
Meanwhile, news reports said that the Reserve Bank of India (RBI) may relax its recently issued norms related to lending against shares to allow non-banking finance companies (NBFCs) to lend against all categories of shares. On 21 August 2014, RBI announced that NBFCs can lend only against Group 1 shares. The latest RBI directive could deprive small businessmen from raising money by pledging their holdings to fund their business. Group 1 shares include a limited set of top-grade shares. As per reports, the list includes 694 stocks traded on the NSE and 817 stocks traded on the BSE.
RBI has mandated loan to value (LTV) ratio of 50% with regard to lending against shares. The RBI had also said that all NBFCs with asset size of Rs 100 crore and above shall report on-line to stock exchanges, information on the shares pledged in their favour by borrowers for availing loans.
The stock market has largely shrugged off Indo-Pak tension. Indian and Pakistani troops reportedly intensified firing across the border over the weekend killing at least four, straining ties between the arch rivals who recently called off top-level diplomatic talks. Last week India said its foreign secretary would not meet with her Pakistani counterpart as scheduled on 25 August 2014 because of plans by Pakistan to consult separatists from the border state of Jammu and Kashmir ahead of the meeting.
In the foreign exchange market, the rupee was slightly higher against the dollar. The partially convertible rupee was hovering at 60.42 compared with its close of 60.47 on Friday, 22 August 2014.
Asian stocks were mixed today, 25 August 2014, as investors weighed comments from central bank leaders for clues to monetary policy ahead of conflict negotiations between Russia and Ukraine. Key benchmark indices in Japan, Taiwan, Singapore and South Korea were up 0.07% to 0.59%. Key benchmark indices in Indonesia, Hong Kong and China were off 0.21% to 0.57%.
Trading in US index futures indicated that the Dow could gain 49 points at the opening bell on Monday, 25 August 2014. US stocks declined on Friday, 22 August 2014, as a widely watched speech by Federal Reserve Chairwoman Janet Yellen failed to enthuse investors.
In her speech at US Federal Reserve's annual symposium in Jackson Hole, Wyo, Yellen on Friday, 22 August 2014, said that the US economy has made considerable progress in recovering from the largest and most sustained loss of employment since the Great Depression. She said that these developments are encouraging, but at the same time it speaks about the depth of the damage that, five years after the end of the recession, the labor market has yet to fully recover. Yellen reiterated that early rate hikes are possible, but it will depend on how the economy evolves in the next few months.
At the same event, European Central Bank President Mario Draghi called on European politicians to pivot away from tight budget policies that have held back euro-zone growth and pledged additional central-bank steps if needed to spur growth. Mr. Draghi said European central bankers and politicians both have a role to play in boosting demand and reducing joblessness. It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, he said. Expectations of future inflation in Europe exhibited significant declines at all horizons in August, he said.
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