Stocks held firm after fresh buying pushed the key benchmark indices to intraday high in mid-afternoon trade. At 14:18 IST, the barometer index, the S&P BSE Sensex, was up 266 points or 0.84% at 32,070.82. The Nifty index was up 76.45 points or 0.78% at 9,892.55. The Sensex was trading above the psychological 32,000 mark after moving above that level at onset of trading session. The Sensex and the Nifty hit fresh record high in mid-afternoon trade. Data showing record low inflation data stoking hopes of an interest-rate cut bolstered sentiment.
Expectations of an interest rate cut by the Reserve Bank of India (RBI) next month have risen after latest data showed that retail inflation has eased to a record in June and factory output growth slowed sharply in May.
Key benchmark indices saw gap up opening on positive global cues, with the Sensex scaling past the 32,000 mark in early trade. Stocks traded with firmness between mid-morning and afternoon trade.
The S&P BSE Mid-Cap index was up 0.45%. The S&P BSE Small-Cap index was up 0.51%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1,329 shares rose and 1,293 shares fell. A total of 166 shares were unchanged.
Auto stocks saw mixed trend. Maruti Suzuki India (up 1.19%), Bajaj Auto (up 0.66%), Hero MotoCorp (up 0.7%) and TVS Motor Company (up 0.83%) rose.
Tata Motors (down 0.33%), Eicher Motors (down 0.53%) and Ashok Leyland (down 0.09%), Escorts (down 1.43%) fell.
Mahindra & Mahindra slipped 0.68% to Rs 1,367.30 as the stock turned ex-dividend today, 13 July 2017, for dividend of Rs 13 per share for the year ended March 2017. Before turning ex-dividend, the stock offered a dividend yield of 0.94% based on the closing price of Rs 1,376.60 on BSE yesterday, 12 July 2017.
Mphasis fell 0.23% to Rs 585.05 as the stock turned ex-dividend today, 13 July 2017, for dividend of Rs 17 per share for the year ended 31 March 2017. Before turning ex-dividend, the stock offered a dividend yield of 2.82% based on the closing price of Rs 603.40 on BSE yesterday, 12 July 2017.
On the macro front, government data released after market hours yesterday, 12 July 2017 showed that retail inflation has eased to a record in June and factory output growth slowed sharply in May. Inflation as measured by the Consumer Price Index (CPI) slowed to 1.54% in June from 2.18% in May. The Index of Industrial Production (IIP) rose 1.7% in May compared with 3.1% in April.
Overseas, most Asian and European shares were trading higher as dovish comments from US Federal Reserve Chairwoman Janet Yellen improved risk-taking appetite.
China's exports grew for a fourth straight month in June, as external demand for goods from the world's second-largest economy continued to strengthen. Exports rose 11.3% in June from a year earlier, following growth of 8.7% in May. Imports in June rose 17.2% from a year earlier, compared with a 14.8% expansion in May. The trade surplus widened in June to $42.77 billion from $40.81 billion a month earlier.
US stocks closed higher yesterday, 12 July 2017 with the Dow industrials setting its first closing record in nearly a month as Federal Reserve Chairwoman Janet Yellen emphasized the central bank's gradual approach to normalizing monetary policy and expressed optimism about the economy in congressional testimony.
In her testimony on Capitol Hill, Yellen signaled that the Fed would take a cautious approach to tightening policy in the face of an uncertain inflation outlook. She said the Fed would continue to raise interest rates gradually, though it would change plans if inflation weakness persisted.
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