BS: Nifty hit highest closing level in almost 1-1/2 weeks
Key benchmark indices registered strong gains taking cue from positive global markets on bets the US Federal Reserve would raise interest rates as early as next month. The barometer index, the S&P BSE Sensex rose 359.40 points or 1.41% to settle at 25,841.92. The 50-unit Nifty 50 index rose 110.95 points or 1.43% to settle at 7,842.75. Nifty hit its highest closing level in almost 1-1/2 weeks. Gains in banking, auto and IT stocks and index heavyweights HDFC, ITC, Reliance Industries and L&T helped key benchmark indices register strong gains.
Overseas cues were positive. European and Asian stocks edged higher on bets the US Federal Reserve would raise interest rates as early as next month. US stocks rallied yesterday, 18 November 2015, after minutes from last month's Federal Reserve meeting showed most officials anticipated economic conditions could be strong enough for a December interest-rate increase. The Fed has kept its benchmark for short-term rates near zero since late 2008.
The Sensex rose 359.40 points or 1.41% to settle at 25,841.92, its highest closing level since 17 November 2015. The index jumped 402 points or 1.57% at the day's high of 25,884.52 in late trade. The index rose 120.58 points or 0.47% at the day's low of 25,603.10 in early trade.
The Nifty rose 110.95 points or 1.43% to settle at 7,842.75, its highest closing level since 9 November 2015. The index rose 123.10 points or 1.59% at the day's high of 7,854.90 in late trade. The index rose 33.65 points or 0.43% at the day's low of 7,765.45 in early trade.
The BSE Mid-Cap index rose 1.2%. The BSE Small-Cap index rose 1.3%. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,785 shares rose and 919 shares fell. A total of 187 shares were unchanged.
The total turnover on BSE amounted to Rs 2542 crore, lower than turnover of Rs 2930.83 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE IT index (up 1.84%), BSE Auto index (up 1.46%), BSE Bankex index (up 1.45%), BSE Consumer Durables index (up 1.93%), BSE Oil & Gas index (up 1.74%) and BSE Teck index (up 1.78%) outperformed the Sensex. The S&P BSE FMCG index (up 1.16%), BSE Healthcare index (down 0.08%), BSE Capital Goods index (up 1.1%), BSE Metal index (up 0.91%), BSE Power index (up 0.69%) and BSE Realty index (up 0.05%) underperformed the Sensex.
Index heavyweight and housing finance major HDFC rose 2.78% at Rs 1,212.55. The stock hit a high of Rs 1,214.90 and a low of Rs 1,184.45 in intraday trade.
Another index heavyweight and cigarette major ITC rose 1.29% at Rs 352.05. The stock hit a high of Rs 353 and a low of Rs 348 in intraday trade.
Index heavyweight L&T rose 1.16% at Rs 1,358.95. The stock hit a high of Rs 1,365 and a low of Rs 1,351.50 in intraday trade.
Bank stocks gained. Among PSU banks, Punjab National Bank (up 2.09%), Central Bank of India (up 1.32%), IDBI Bank (up 1.57%), Corporation Bank (up 0.84%), State Bank of India (up 1.16%), Oriental Bank of Commerce (up 0.93%) and Union Bank of India (up 0.84%) edged higher. Bank of Baroda (down 0.36%) and United Bank of India (down 0.23%) edged lower.
Canara Bank rose 0.22% at Rs 270.10. The bank's board of directors at its meeting held today, 19 November 2015, permitted the bank to raise additional capital of Rs 2400 crore through issue of Basel III compliant tier II bonds by way of private placement. The bank made the announcement during market hours today, 19 November 2015. Canara Bank said that the bonds will have a coupon rate as decided by the Bond Committee of the bank to support the asset growth during the current financial year & also to maintain healthy level of CRAR.
Among private sector banks, HDFC Bank (up 1.92%), ICICI Bank (up 2.27%), IndusInd Bank (up 1.58%), Yes Bank (up 1.4%) and Kotak Mahindra Bank (up 1.18%) edged higher. Axis Bank (down 0.13%) edged lower.
Auto stocks advanced. Bajaj Auto (up 3.16%), TVS Motor Company (up 2.83%), Maruti Suzuki India (up 2.6%), Eicher Motors (up 1.83%), Ashok Leyland (up 1.47%), Mahindra & Mahindra (up 1.12%) and Tata Motors (up 0.42%) edged higher.
Hero MotoCorp (HMCL) rose 0.76% at Rs 2,591.35. The company after market hours yesterday, 18 November 2015, said it has clocked over 10 lakh units in retail sales during the festive season this year. The 10-lakh units sales landmark was achieved during the 35-day festive period starting with the Navratras, a 11% growth over the corresponding period last year, HMCL said in a statement.
Shares of index heavyweight Reliance Industries (RIL) rose 2.39% at Rs 934.20. The stock hit a high of Rs 937.50 and a low of Rs 918 in intraday trade. The Union Cabinet yesterday, 18 November 2015, given its approval for determination of marketing margin for supply of domestic gas to urea and LPG producers. Marketing margin is the charge levied by gas marketing company on its consumers over and above the cost or basic price of gas for taking on the additional risk and cost associated with marketing gas. Currently, different transporters are charging different marketing margins for supply of natural gas. With this decision, there would be uniformity in the marketing margin on domestic gas charged by gas marketers for the regulated sectors, namely, urea and LPG, a statement released by the government after market hours yesterday, 18 November 2015 said. There would be a reduction in marketing margin paid by urea and LPG producers as a result of this decision, the statement said.
Coal India (CIL) declined 0.36% at Rs 333.75. The stock hit a high of Rs 336.80 and a low of Rs 330.25 in intraday trade. The Cabinet Committee on Economic Affairs (CCEA) yesterday, 18 November 2015, has approved the disinvestment of 10% paid up equity capital of CIL. This implies divesting of 63.16 crore shares out of the Government of India (GoI) shareholding of 78.65% (after adjusting one percent equity to be offered for sale to the employees of CIL as per CCEA decision in September 2014, which is under process of implementation) through public offering in the domestic market. After the disinvestment of 10% equity, the GoI's shareholding in CIL would come down to 68.65% (with slight variation based on outcome of sale of one percent equity shares to employees of CIL). The disinvestment transaction will be an offer for sale (OFS) of shares by the promoters through the stock exchange mechanism.
Dr Reddy's Laboratories dropped 2.63% at Rs 3,286.80 after reports that Los Angeles-based law firm Lundin Law has filed a class action law suit, alleging that the company possibly violated federal securities laws. The investigation reportedly is related to allegations that certain statements issued by Dr Reddy's Laboratories were false and misleading concerning its financial performance. Meanwhile, Dr Reddy's Lab during market hours today, 19 November 2015, clarified that the company has always adhered to all disclosure requirements both of the Securities and Exchange Commission (SECs) and Indian stock exchanges including accounting practices as per the Indian Financial Reporting Standards (IFRS) and the Indian Accounting Standards.
Sugar stocks had been on a roll recently on hopes shortage in sugar supplies globally will aid domestic sugar prices and help clock modest increase in realisations. Investors were also expecting measures from the government to help offset cane price arrears.
Meanwhile, to further ensure timely payment of cane dues in the current sugar season, the Cabinet Committee on Economic Affairs (CCEA) yesterday, 18 November 2015, decided to provide a production subsidy of Rs 4.50 per quintal of cane crushed to offset cane cost. The subsidy shall be paid directly to the farmers on behalf of the mills and be adjusted against the cane price payable to the farmers towards FRP including arrears relating to previous years. Subsequent balance, if any, shall be credited into the mill's account. Priority will be given to settling cane dues arrears of the previous years.
The Government has notified mill-wise Minimum Indicative Export Quota (MIEQ) for export of sugar. A national grid allocating ethanol supplies to Oil Marketing Companies (OMCs) by distilleries attached to sugar mills under Ethanol Blending Program (EBP) has been notified. The production subsidy is a performance incentive and will be provided to those mills which have exported at least 80% of the targets notified under the MIEQ and in case of mills having distillation capacities to produce ethanol have achieved 80% of the targets notified by the Department under the EBP.
The decision was taken by the CCEA as sustained surpluses of production over domestic consumption in the last five years has led to subdued sugar prices, which has stressed the liquidity position of the industry leading to a build up of cane price arrears. During sugar season 2014-15, the peak cane price arrears were Rs 21000 crore as on 15 April 2015. The Central Government had in the last one year, taken several steps to mitigate the situation and protect livelihoods of cane farmers.
The Sensex has declined 814.91 points or 3.05% in this month so far (till 19 November 2015). The Sensex has fallen 1,657.50 points or 6.02% in this calendar year so far (till 19 November 2015). From a 52-week low of 24,833.54 hit on 8 September 2015, the Sensex has risen 1,008.38 points or 4.06%. The Sensex is off 4,182.82 points or 13.93% from a record high of 30,024.74 hit on 4 March 2015.
