Market gains on hopes of delay in rate increases from the Fed
The Reserve Bank of India's (RBI) indication after a policy review that interest rate cut may be announced if macroeconomic and financial developments favour rate cut and firmness in European stocks aided the upmove on the domestic bourses. The barometer index, the S&P BSE Sensex, rose 232.22 points or 0.87% to settle at 27,009.67. The gains for the Sensex were higher in percentage terms than those for the Nifty 50 index. The Nifty rose 65.40 points or 0.8% to settle at 8,266.45. The Sensex reclaimed the psychologically important 27,000 mark. The Sensex and the Nifty, both, attained their highest closing level in more than 7 months.
Asian and European stocks edged higher after US Federal Reserve Chairwoman Janet Yellen said in a speech overnight that short-term interest rates wouldn't be raised until there was more clarity about the US economic outlook. Yellen's remarks followed monthly job report for May 2016 that raised concerns over the ability of the economy to absorb a rate hike as early as June. The Fed chief said last month's jobs report was disappointing and bears watching, though she gave a largely upbeat assessment of the US economic outlook, warning against attaching too much significance to the payrolls data in isolation.
A delay in interest rate increases from the Fed would slow capital flight from emerging markets. Investors in emerging markets have been worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Bank stocks edged higher after the Reserve Bank of India kept key policy rates unchanged after a monetary policy review. State Bank of India surged on reports that the bank is considering a proposal to hive off its stressed-loan portfolio into a separate company. ICICI Bank moved higher on reports that a foreign brokerage has issued a tactical short term buy call on the stock, citing attractive price to book value on a 1 year forward basis of ICICI Bank vis-à-vis Axis Bank. Shares of public sector oil marketing companies slipped after a rise in global crude oil prices. Aviation stocks fell as global crude oil prices rose.
The Sensex rose 232.22 points or 0.87% to settle at 27,009.67, its highest closing level since 28 October 2015. The index rose 305.18 points or 1.13% at the day's high of 27,082.63. The index gained 52.08 points or 0.19% at the day's low of 26,829.53.
The Nifty 50 index rose 65.40 points or 0.80% to settle at 8,266.45, its highest closing level since 23 October 2015. The index rose 93.90 points or 1.14% at the day's high of 8,294.95. The index rose 15.35 points or 0.18% at the day's low of 8,216.40.
The market breadth indicating the overall health of the market was positive. On BSE, 1,482 shares rose and 1,123 shares declined. A total of 170 shares were unchanged. The BSE Mid-Cap index rose 0.29%, underperforming the Sensex. The BSE Small-Cap index rose 0.96%, outperforming the Sensex
Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.70%), the S&P BSE Bankex (up 1.63%), the S&P BSE Consumer Durables index (up 1.57%), the S&P BSE FMCG index (up 1.35%), the S&P BSE Metal index (up 1.30%), the S&P BSE Basic Materials index (up 1.27%), the S&P BSE Capital Goods index (up 1.23%), the S&P BSE Finance index (up 1.08%) and the S&P BSE Industrials index (up 0.98%), outperformed the Sensex. The S&P BSE Power index (up 0.61%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.57%), the S&P BSE Auto index (up 0.47%), the S&P BSE Healthcare index (up 0.45%), the S&P BSE Utilities index (up 0.44%), the S&P BSE Energy index (up 0.02%), the S&P BSE Telecom index (down 0.03%), the S&P BSE IT index (down 0.04%), the S&P BSE Teck index (down 0.05%) and the S&P BSE Oil & Gas index (down 0.14%), underperformed the Senex.
Index heavyweight and IT major Infosys fell 0.78% to Rs 1,257.20. The stock hit a high of Rs 1,272 and a low of Rs 1,255.35 in intraday trade.
Aviation stocks fell as global crude oil prices rose. SpiceJet (down 3.86%), Jet Airways (India) (down 2.27%) and InterGlobe Aviation (down 1.20%) edged lower. Higher crude oil prices hurt aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
Shares of oil exploration and production companies were mixed. ONGC (up 0.90%) and Cairn India (up 0.93%) edged higher. Oil India (down 0.77%) and Reliance Industries (down 0.13%), edged lower.
Shares of public sector oil marketing companies slipped after a rise in global crude oil prices. HPCL (down 1.73%) and BPCL (down 1.62%) edged lower. Indian Oil Corporation rose 0.28%. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. On the flip side, a recovery in the rupee against the dollar has eased concerns about higher crude import costs. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
In global commodities markets, Brent for August settlement was currently up 26 cents at $50.81 a barrel. The contract had risen 91 cents or 1.83% to settle at $50.55 a barrel during the previous trading session amid ongoing supply disruptions in Canada and Nigeria.
In the foreign exchange market, the rupee strengthened against the dollar. The partially convertible rupee was currently hovering at 66.78, compared with its close of 66.9775 during the previous trading session.
Metal shares edged higher on renewed buying. Vedanta (up 3.29%), Hindalco Industries (up 2.29%), NMDC (up 1.66%), Tata Steel (up 1.53%), Steel Authority of India (up 1.09%), Hindustan Zinc (up 0.85%), National Aluminium Company (up 0.84%), Bhushan Steel (up 0.57%), Hindustan Copper (up 0.54%), JSW Steel (up 0.47%) and Jindal Steel & Power (up 0.32%) edged higher.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for July 2016 delivery was currently down 2.31% at $2.0685 per pound on the COMEX.
Most FMCG shares edged higher. Hindustan Unilever (up 1.59%), GlaxoSmithKline Consumer Healthcare (up 1.49%), Bajaj Corp (up 1.42%), Dabur India (up 1.25%), Jyothy Laboratories (up 1.22%), Godrej Consumer Products (up 0.93%), Britannia Industries (up 0.71%), Tata Global Beverages (up 0.04%) and Colgate Palmolive (India) (up 0.01%), edged higher. Nestle India (down 0.14%), Marico (down 0.16%) and Procter & Gamble Hygiene & Health Care (down 0.26%), edged lower.
Index heavyweight and cigarette major ITC rose 1.97% to Rs 362.80. The stock hit a high of Rs 363.75 and a low of Rs 356.80 in intraday trade.
Bank stocks edged higher after the Reserve Bank of India in its monetary policy meeting today, 7 June 2016, kept key policy rates steady. Among public sector banks, Indian Bank (up 2.05%), Syndicate Bank (up 1.79%), UCO Bank (up 1.76%), Allahabad Bank (up 1.75%), United Bank of India (up 1.71%), Bank of Baroda (up 1.61%), Bank of India (up 1.60%), IDBI Bank (up 1.46%), Union Bank of India (up 1.38%), Central Bank of India (up 1.32%), Andhra Bank (up 0.92%), Punjab National Bank (up 0.91%), Corporation Bank (up 0.87%), Canara Bank (up 0.82%), Vijaya Bank (up 0.65%) and Punjab and Sind Bank (up 0.49%), edged higher. Bank of Maharashtra fell 0.35%.
RBI said in its monetary policy statement that timely capital infusion into constrained public sector banks will aid credit flow to the productive sectors of the economy. The central bank also said it will shortly review the implementation of the Marginal Cost Lending Rate (MCLR) framework by banks.
State Bank of India rose 5.4% to Rs 209.80 on reports that the bank is considering a proposal to hive off its stressed-loan portfolio into a separate company. If non-performing assets (NPAs) are transferred to a separate company, it will help State Bank of India (SBI) concentrate on core banking services. Meanwhile, media reports also suggested that some sovereign wealth funds and private equity players have shown interest in acquiring stake in the so-called bad bank proposed by SBI.
Among private sector banks, Federal Bank (up 5.49%), Kotak Mahindra Bank (up 0.68%), Yes Bank (up 0.34%) and HDFC Bank (up 0.27%), edged higher. City Union Bank (down 0.76%) and IndusInd Bank (down 0.87%), edged lower.
ICICI Bank gained 4.31% to Rs 253.85 on reports that a foreign brokerage has issued a tactical short term buy call on the stock, citing attractive price to book value on a 1 year forward basis of ICICI Bank vis-à-vis Axis Bank.
Meanwhile, ICICI Bank announced that is seeking approval from its shareholders for an enabling resolution to raise up to Rs 25000 crore by way of issue of non-convertible securities within the overall borrowing limits of Rs 2.5 lakh crore. The approval will be valid for a period of one year from the date of passing of the resolution by the shareholders. The Annual General Meeting (AGM) of shareholders is scheduled on 11 July 2016.
Shares of Axis Bank rose 0.06% at Rs 534.40. Axis Bank yesterday, 6 June 2016, announced the commencement of trading of its green bond on the London Stock Exchange. The bank had raised $500 million from the green bond issue. The bank has listed its entire $5 billion Medium Term Note (MTN) programme on the London Stock Exchange. The proceeds of the bond will be invested in green energy, transportation and infrastructure projects, reinforcing India's commitment to produce 175,000 megawatts (MW) of renewable power by 2022.
The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.5% after the conclusion of a monetary policy review today, 7 June 2016. The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL). The central bank said it continues to provide liquidity as required and will progressively lower the liquidity deficit in the banking system from 1% of NDTL to a position closer to neutrality.
RBI Governor Raghuram Rajan said in his monetary policy statement that the central bank will monitor macroeconomic and financial developments for scope for reduction in the repo rate. RBI has retained its March 2017 inflation projection of 7%. Rajan said that incoming data in the next few months will provide more clarity regarding RBI's March 2017 inflation target of 7%. The expectations of a normal monsoon and a reasonable spatial and temporal distribution of rainfall, along with various supply management measures and the introduction of the electronic national agriculture market (e-NAM) trading portal, should moderate unanticipated flares of food inflation. In addition, capacity utilisation indicators suggest that the available headroom in industry could keep output prices subdued even as demand picks up.
The central bank has simultaneously pointed out some upside risks to inflation such as firming international commodity prices, the implementation of the 7th Central Pay Commission awards, the upturn in inflation expectations of households and of corporates and the stickiness in inflation excluding food and fuel. Rajan said that the stance of monetary policy remains accommodative. The RBI has retained its gross value added growth projection for 2016-17 at 7.6%. It said that the risk to this number is evenly balanced.
Meanwhile, the monthly data released by Association of Mutual Funds In India (AMFI) showed that there was a net inflow Rs 4721 crore into equity mutual funds in May 2016. This was higher than inflow of Rs 4438 crore in April 2016. There was a net inflow of Rs 974 crore into balanced funds in May 2016, which was higher than inflow of Rs 366 crore in April 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
The Sensex has risen 341.71 points or 1.28% in this month so far (till 7 June 2016). The Sensex has risen 892.13 points or 3.42% in calendar year 2016 so far (till 7 June 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,515.06 points or 20.07%. The Sensex is off 1,568.66 points or 5.49% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,015.07 points or 10.04% from a record high of 30,024.74 hit on 4 March 2015.
Asian and European stocks edged higher after US Federal Reserve Chairwoman Janet Yellen said in a speech overnight that short-term interest rates wouldn't be raised until there was more clarity about the US economic outlook. Yellen's remarks followed monthly job report for May 2016 that raised concerns over the ability of the economy to absorb a rate hike as early as June. The Fed chief said last month's jobs report was disappointing and bears watching, though she gave a largely upbeat assessment of the US economic outlook, warning against attaching too much significance to the payrolls data in isolation.
A delay in interest rate increases from the Fed would slow capital flight from emerging markets. Investors in emerging markets have been worried that higher interest rates in the US will drain liquidity from emerging markets and redirect it to developed economies. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 14-15 June 2016. The Fed has kept the benchmark fed funds rate unchanged after raising it for the first time in nearly a decade in December 2015.
Bank stocks edged higher after the Reserve Bank of India kept key policy rates unchanged after a monetary policy review. State Bank of India surged on reports that the bank is considering a proposal to hive off its stressed-loan portfolio into a separate company. ICICI Bank moved higher on reports that a foreign brokerage has issued a tactical short term buy call on the stock, citing attractive price to book value on a 1 year forward basis of ICICI Bank vis-à-vis Axis Bank. Shares of public sector oil marketing companies slipped after a rise in global crude oil prices. Aviation stocks fell as global crude oil prices rose.
The Sensex rose 232.22 points or 0.87% to settle at 27,009.67, its highest closing level since 28 October 2015. The index rose 305.18 points or 1.13% at the day's high of 27,082.63. The index gained 52.08 points or 0.19% at the day's low of 26,829.53.
The Nifty 50 index rose 65.40 points or 0.80% to settle at 8,266.45, its highest closing level since 23 October 2015. The index rose 93.90 points or 1.14% at the day's high of 8,294.95. The index rose 15.35 points or 0.18% at the day's low of 8,216.40.
The market breadth indicating the overall health of the market was positive. On BSE, 1,482 shares rose and 1,123 shares declined. A total of 170 shares were unchanged. The BSE Mid-Cap index rose 0.29%, underperforming the Sensex. The BSE Small-Cap index rose 0.96%, outperforming the Sensex
Among the sectoral indices on BSE, the S&P BSE Realty index (up 1.70%), the S&P BSE Bankex (up 1.63%), the S&P BSE Consumer Durables index (up 1.57%), the S&P BSE FMCG index (up 1.35%), the S&P BSE Metal index (up 1.30%), the S&P BSE Basic Materials index (up 1.27%), the S&P BSE Capital Goods index (up 1.23%), the S&P BSE Finance index (up 1.08%) and the S&P BSE Industrials index (up 0.98%), outperformed the Sensex. The S&P BSE Power index (up 0.61%), the S&P BSE Consumer Discretionary Goods & Services index (up 0.57%), the S&P BSE Auto index (up 0.47%), the S&P BSE Healthcare index (up 0.45%), the S&P BSE Utilities index (up 0.44%), the S&P BSE Energy index (up 0.02%), the S&P BSE Telecom index (down 0.03%), the S&P BSE IT index (down 0.04%), the S&P BSE Teck index (down 0.05%) and the S&P BSE Oil & Gas index (down 0.14%), underperformed the Senex.
Index heavyweight and IT major Infosys fell 0.78% to Rs 1,257.20. The stock hit a high of Rs 1,272 and a low of Rs 1,255.35 in intraday trade.
Aviation stocks fell as global crude oil prices rose. SpiceJet (down 3.86%), Jet Airways (India) (down 2.27%) and InterGlobe Aviation (down 1.20%) edged lower. Higher crude oil prices hurt aviation firms as jet fuel prices, which typically constitute about 50% of airlines' operating costs, are directly linked to international crude oil prices.
Shares of oil exploration and production companies were mixed. ONGC (up 0.90%) and Cairn India (up 0.93%) edged higher. Oil India (down 0.77%) and Reliance Industries (down 0.13%), edged lower.
Shares of public sector oil marketing companies slipped after a rise in global crude oil prices. HPCL (down 1.73%) and BPCL (down 1.62%) edged lower. Indian Oil Corporation rose 0.28%. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. On the flip side, a recovery in the rupee against the dollar has eased concerns about higher crude import costs. A weak rupee raises the cost of imports. The government has already freed pricing of petrol and diesel.
In global commodities markets, Brent for August settlement was currently up 26 cents at $50.81 a barrel. The contract had risen 91 cents or 1.83% to settle at $50.55 a barrel during the previous trading session amid ongoing supply disruptions in Canada and Nigeria.
In the foreign exchange market, the rupee strengthened against the dollar. The partially convertible rupee was currently hovering at 66.78, compared with its close of 66.9775 during the previous trading session.
Metal shares edged higher on renewed buying. Vedanta (up 3.29%), Hindalco Industries (up 2.29%), NMDC (up 1.66%), Tata Steel (up 1.53%), Steel Authority of India (up 1.09%), Hindustan Zinc (up 0.85%), National Aluminium Company (up 0.84%), Bhushan Steel (up 0.57%), Hindustan Copper (up 0.54%), JSW Steel (up 0.47%) and Jindal Steel & Power (up 0.32%) edged higher.
Meanwhile, copper price edged lower in the global commodities markets. High Grade Copper for July 2016 delivery was currently down 2.31% at $2.0685 per pound on the COMEX.
Most FMCG shares edged higher. Hindustan Unilever (up 1.59%), GlaxoSmithKline Consumer Healthcare (up 1.49%), Bajaj Corp (up 1.42%), Dabur India (up 1.25%), Jyothy Laboratories (up 1.22%), Godrej Consumer Products (up 0.93%), Britannia Industries (up 0.71%), Tata Global Beverages (up 0.04%) and Colgate Palmolive (India) (up 0.01%), edged higher. Nestle India (down 0.14%), Marico (down 0.16%) and Procter & Gamble Hygiene & Health Care (down 0.26%), edged lower.
Index heavyweight and cigarette major ITC rose 1.97% to Rs 362.80. The stock hit a high of Rs 363.75 and a low of Rs 356.80 in intraday trade.
Bank stocks edged higher after the Reserve Bank of India in its monetary policy meeting today, 7 June 2016, kept key policy rates steady. Among public sector banks, Indian Bank (up 2.05%), Syndicate Bank (up 1.79%), UCO Bank (up 1.76%), Allahabad Bank (up 1.75%), United Bank of India (up 1.71%), Bank of Baroda (up 1.61%), Bank of India (up 1.60%), IDBI Bank (up 1.46%), Union Bank of India (up 1.38%), Central Bank of India (up 1.32%), Andhra Bank (up 0.92%), Punjab National Bank (up 0.91%), Corporation Bank (up 0.87%), Canara Bank (up 0.82%), Vijaya Bank (up 0.65%) and Punjab and Sind Bank (up 0.49%), edged higher. Bank of Maharashtra fell 0.35%.
RBI said in its monetary policy statement that timely capital infusion into constrained public sector banks will aid credit flow to the productive sectors of the economy. The central bank also said it will shortly review the implementation of the Marginal Cost Lending Rate (MCLR) framework by banks.
State Bank of India rose 5.4% to Rs 209.80 on reports that the bank is considering a proposal to hive off its stressed-loan portfolio into a separate company. If non-performing assets (NPAs) are transferred to a separate company, it will help State Bank of India (SBI) concentrate on core banking services. Meanwhile, media reports also suggested that some sovereign wealth funds and private equity players have shown interest in acquiring stake in the so-called bad bank proposed by SBI.
Among private sector banks, Federal Bank (up 5.49%), Kotak Mahindra Bank (up 0.68%), Yes Bank (up 0.34%) and HDFC Bank (up 0.27%), edged higher. City Union Bank (down 0.76%) and IndusInd Bank (down 0.87%), edged lower.
ICICI Bank gained 4.31% to Rs 253.85 on reports that a foreign brokerage has issued a tactical short term buy call on the stock, citing attractive price to book value on a 1 year forward basis of ICICI Bank vis-à-vis Axis Bank.
Meanwhile, ICICI Bank announced that is seeking approval from its shareholders for an enabling resolution to raise up to Rs 25000 crore by way of issue of non-convertible securities within the overall borrowing limits of Rs 2.5 lakh crore. The approval will be valid for a period of one year from the date of passing of the resolution by the shareholders. The Annual General Meeting (AGM) of shareholders is scheduled on 11 July 2016.
Shares of Axis Bank rose 0.06% at Rs 534.40. Axis Bank yesterday, 6 June 2016, announced the commencement of trading of its green bond on the London Stock Exchange. The bank had raised $500 million from the green bond issue. The bank has listed its entire $5 billion Medium Term Note (MTN) programme on the London Stock Exchange. The proceeds of the bond will be invested in green energy, transportation and infrastructure projects, reinforcing India's commitment to produce 175,000 megawatts (MW) of renewable power by 2022.
The Reserve Bank of India (RBI) kept its benchmark interest rate viz. the repo rate unchanged at 6.5% after the conclusion of a monetary policy review today, 7 June 2016. The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4% of net demand and time liabilities (NDTL). The central bank said it continues to provide liquidity as required and will progressively lower the liquidity deficit in the banking system from 1% of NDTL to a position closer to neutrality.
RBI Governor Raghuram Rajan said in his monetary policy statement that the central bank will monitor macroeconomic and financial developments for scope for reduction in the repo rate. RBI has retained its March 2017 inflation projection of 7%. Rajan said that incoming data in the next few months will provide more clarity regarding RBI's March 2017 inflation target of 7%. The expectations of a normal monsoon and a reasonable spatial and temporal distribution of rainfall, along with various supply management measures and the introduction of the electronic national agriculture market (e-NAM) trading portal, should moderate unanticipated flares of food inflation. In addition, capacity utilisation indicators suggest that the available headroom in industry could keep output prices subdued even as demand picks up.
The central bank has simultaneously pointed out some upside risks to inflation such as firming international commodity prices, the implementation of the 7th Central Pay Commission awards, the upturn in inflation expectations of households and of corporates and the stickiness in inflation excluding food and fuel. Rajan said that the stance of monetary policy remains accommodative. The RBI has retained its gross value added growth projection for 2016-17 at 7.6%. It said that the risk to this number is evenly balanced.
Meanwhile, the monthly data released by Association of Mutual Funds In India (AMFI) showed that there was a net inflow Rs 4721 crore into equity mutual funds in May 2016. This was higher than inflow of Rs 4438 crore in April 2016. There was a net inflow of Rs 974 crore into balanced funds in May 2016, which was higher than inflow of Rs 366 crore in April 2016. Balanced funds invest the money in a combination of equity and debt, with majority of the investment going into equity. The funds' investments range from 65% to 80% in equity and the rest in debt.
The Sensex has risen 341.71 points or 1.28% in this month so far (till 7 June 2016). The Sensex has risen 892.13 points or 3.42% in calendar year 2016 so far (till 7 June 2016). From a 52-week low of 22,494.61 hit on 29 February 2016, the barometer index has risen 4,515.06 points or 20.07%. The Sensex is off 1,568.66 points or 5.49% from a 52-week high of 28,578.33 hit on 23 July 2015. The Sensex is off 3,015.07 points or 10.04% from a record high of 30,024.74 hit on 4 March 2015.
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