All 13 sectoral indices on BSE in green

Key benchmark indices surged to attain their highest closing level in over 6 weeks as stocks rose across the globe on reports central banks of major economies are ready to provide liquidity if needed after crucial elections in Greek on Sunday, 17 June 2012. The vote is expected to determine the Greece's future in the euro zone. The barometer index, BSE Sensex, jumped 271.95 points or 1.63%, up about 250 points from the day's low and off close to 20 points from the day's high. The market breadth was positive. All the 13 sectoral indices on BSE were in the green. The Sensex has risen 731.30 points or 4.5% so far in this month (till 15 June 2012). The barometer index has gained 1,494.91 points or 9.67% in calendar 2012 so far (till 15 June 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,813.97 points or 11.98%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,181.87 points or 11.4%. Coming back to today's trade, auto, realty and banks stocks advanced as the Reserve Bank of India (RBI) is seen cutting its key policy rate viz. the repo rate by 25 basis points at mid-quarter monetary policy review on Monday, 18 June 2012. Tata Motors surged over 5% after Chairman Ratan Tata purchased additional shares of the firm and after the company reported a surge in sales of its Jaguar Land Rover unit in May 2012. Index heavyweight Reliance Industries (RIL) edged higher. FMCG stocks rose after the government on Thursday raised the minimum support prices of various kharif (June-October) crops 2012 in the range of 15.3% to 53.1%, with FMCG giant Hindustan Unilever (HUL) hitting a record high. The market edged higher in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices regained strength in morning trade. The market once again regained strength after trimming intraday gains in mid-morning trade. The market surged to hit fresh intraday high in early afternoon trade. The market extended gains in mid-afternoon trade. The market extended gains to hit its highest level in 6 weeks in late trade. The BSE Sensex was up 271.95 points or 1.63% to 16,949.83, its highest closing level since 3 May 2012. The index jumped 289.88 points at the day's high of 16,967.76 in late trade. The index gained 23.40 points at the day's low of 16,701.28 in opening trade. The S&P CNX Nifty was up 84.30 points or 1.67% to 5,139.05, its highest level since 3 May 2012. The index hit a high of 5,146.20 and a low of 5,069.15 in intraday trade. The BSE Mid-Cap index rose 0.57% and the BSE Small-Cap index gained 0.46%, Both these indices underperformed the Sensex. BSE clocked turnover of Rs 1715 crore, lower than Rs 1766 crore on Thursday, 14 June 2012. The market breadth, indicating the overall health of the market, was positive. On BSE, 1,525 shares rose and 1,165 shares fell. A total of 145 shares were unchanged. From 30-share Sensex pack, 27 stocks rose and rest of them fell. Index heavyweight Reliance Industries (RIL) rose 1.54%. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai last week that the company has cumulatively bought back a total of 2.7 crore shares under the share buyback programme, which is 22.5% of share buyback target. Ambani said the company's buyback programme represents highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future. Ambani said RIL will invest about Rs 1 lakh crore over the five years in expanding its business in India. Ambani said RIL is targeting to double its operating profit in about five years. Realty stocks edged higher as the Reserve Bank of India (RBI) is seen cutting its key policy rate viz. the repo rate by 25 basis points at mid-quarter monetary policy review on Monday, 18 June 2012. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance. Oberoi Realty, Godrej Properties, and HDIL gained by between 0.75% to 2.56%. Unitech was flat. Real estate major DLF rose 2.77%. The company early this week said its wholly-owned subsidiary, DLF Hotel Holdings, has divested its entire shareholding in Adone Hotels and Hospitality (Adone) for Rs 567 crore. DLF said that the transaction is in line with its stated objective of divesting its non-strategic assets. FMCG stocks rose after the government on Thursday raised the minimum support prices of various kharif (June-October) crops 2012 in the range of 15.3% to 53.1%. FMCG firms derive substantial sales from rural India. ITC, United Spirits, Godrej Consumer Products and Dabur India rose by between 0.96% to 4.66%. FMCG major Hindustan Unilever rose 2.12% to Rs 450.10. The stock hit a record high of Rs 451.75 today, 15 June 2012. Auto stocks edged higher as the Reserve Bank of India (RBI) is seen cutting its key policy rate viz. the repo rate by 25 basis points at mid-quarter monetary policy review on Monday, 18 June 2012. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. India's largest utility vehicles maker Mahindra & Mahindra (M&M) gained 2.54%. The company early this week said it has received an overwhelming 7,200 plus bookings for its cheetah-inspired XUV500 from customers within just 2 days of opening all India bookings for the vehicle. All India bookings for the XUV500 were opened from 8th June 2012. The XUV500 is now available at more than 100 dealerships across India, including those cities where it had been launched earlier. Small-car major Maruti Suzuki India rose 2.7%. The company early this week said that the board of directors of the company has approved a proposal to merge Suzuki Powertrain India (SPIL) with the company. SPIL, which supplies diesel engines as well as transmissions for vehicles to Maruti Suzuki, is a subsidiary of Suzuki Motor Corporation (SMC), Japan. SMC holds 70% share in SPIL and remaining 30% is held by Maruti Suzuki. As per the terms of the proposed merger, SMC will receive one share of MSIL of Rs 5 each for every 70 shares of Rs 10 each it holds in SPIL. There will be no cash outflow from MSIL due to the merger. MSIL proposes to make a fresh issue of about 1.31 crore equity shares to SMC in lieu of SMC's 70% holding in SPIL. Consequent to the merger, SMC's holding in MSIL will go up from 54.2% to 56.2%. With the merger, MSIL will be able to bring its entire diesel engine capacity under a single management control. All key initiatives to strengthen the business, including sourcing, localization, production planning, manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management, MSIL said in a statement. The proposed merger also promises benefits for the combined entity through synergies in areas like finance, capital structuring, and administration and consequent reduction of transaction costs, MSIL said. Maruti early this month said total sales declined 5% to 98,884 units in May 2012 over May 2011. Tata Motors jumped 5.75% after the company said during trading hours today, 15 June 2012, sales of its luxury vehicles -- Jaguar Land Rover -- jumped 35% to 30,094 in May 2012 over May 2011. Tata Motors derives almost two-third of its revenue from its British unit Jaguar Land Rover. Tata Motors' global vehicle sales rose 12% to 96,089 units in May 2012 over May 2011. The company's overall global passenger vehicles sales rose 21% to 51,064 units in May 2012 over May 2011. Commercial vehicle sales rose 3% to 45,025 in May 2012 over May 2011. Meanwhile, Tata Motors today, 15 June 2012, intimated to the Bombay Stock Exchange (BSE) that Chairman Ratan N Tata purchased additional 4.25 lakh equity shares of Tata Motors from open market purchases on Thursday, 14 June 2012, for about Rs 9.94 crore. After the latest acquisition, Ratan N Tata now holds a total of 13.61 lakh ordinary equity shares of Tata Motors and 1.09 lakh 'A' Ordinary shares of Tata Motors, aggregating to 0.05% of voting rights of Tata Motors. Shares of two-wheeler makers were mixed. India's second largest motorcycle maker by sales Bajaj Auto fell 1.41%. The company early this month said its total sales fell 2% to 3,52,219 units in May 2012 over May 2011, as exports to Sri Lanka were nil in May 2012 against a typical monthly average of 10,000 motorcycles and 3-wheelers each per month. The company expects recovery in Sri Lankan exports from July 2012 onwards. The company's exports rose 3% to 1,30,573 units in May 2012 over May 2011. Hero MotoCorp (HMCL) gained 2.37%. The board of directors of the company recently approved a proposal to merge Hero Investments (HIPL), the investment arm of the Hero Group, into HMCL. The shareholders of HIPL include the partnership firm Brijmohan Lall Om Prakash (BMOP) which holds 71.63%, and private equity (PE) investors BC India Private Investors (19.81%) and Lathe Investment (8.56%). BC India Private Investors is an affiliate of Bain Capital LLC, while Lathe Investment is a wholly-owned subsidiary of Government of Singapore Investment Corporation (GIC). Hero MotoCorp reported its best-ever monthly sales in May 2012, thus underlining the robust momentum the company has sustained since embarking on its solo journey. Marking its 10th consecutive month of over five lakh sales, Hero MotoCorp total sales rose 11.3% to 5,56,644 two-wheelers in May 2012 over May 2011. The company's sales in May this year surpassed its previous highest of 5,51,557, recorded only last month (April 2012). State-run oil marketing companies may reportedly cut petrol prices by up to Rs 2 per litre at their scheduled review meeting on Friday, with the rates of crude declining in the international market. The oil companies had on May 24 hiked petrol prices by Rs.7.54 a litre. Later, the rate was reduced by Rs 2.02 a litre. Shares of diesel vehicles makers had dropped recently on reports the government is planning to compensate the subsidy on diesel by taxing cars running on diesel. As per reports, Oil Minister S Jaipal Reddy has recommended a steep Rs 2.55 lakh additional tax on large and medium diesel cars and Rs 1.70 lakh on small diesel cars. Reddy on Friday, 8 June 2012, said his ministry has recommended that the tax on diesel vehicles should be raised. Bank stocks edged higher as the Reserve Bank of India (RBI) is seen cutting the repo rate by 25 basis points at mid-quarter monetary policy review on Monday, 18 June 2012. India's largest commercial bank in terms of branch network State Bank of India rose 1.33% on reports the bank's advance tax payment rose 6.36% to Rs 1170 crore in Q1 June 2012 over Q1 June 2011. The state-run bank has cut its retail term deposit interest rates by 0.25% in tenors up to 240 days with effect from 8 June 2012. India's largest private sector bank by net profit ICICI Bank gained 3.11%. India's second largest private sector bank by net profit HDFC Bank rose 2.52%. Yes Bank rose 0.83% on reports bank's advance tax payment rose 16.66% to Rs 70 crore in Q1 June 2012 over Q1 June 2011. Bank of Baroda gained 1.16% on reports the bank's advance tax payment rose 11.11% to Rs 300 crore in Q1 June 2012 over Q1 June 2011. Bank of India fell 0.13%. The bank's advance tax payment reportedly rose 2.94% to Rs 175 crore in Q1 June 2012 over Q1 June 2011. UCO Bank fell 1.48% after the stock turned ex-dividend today, 15 June 2012, for dividend of Rs 3 per share for the year ended March 2012. Cipla gained 1% on reports company's advance tax payment rose 28.57% to Rs 45 crore in Q1 June 2012 over Q1 June 2011. Among other pharma stocks, Dr Reddy's Laboratories, Sun Pharmaceutical Industries and Ranbaxy Laboratories rose by between 1.19% to 2.05%. Shares of tyre companies rose across the board as lower rubber prices could boost profit margins of tyre makers. Apollo Tyres (up 1.7%), JK Tyre & Industries (up 1.91%), CEAT (up 1.54%), and MRF (up 0.74%), edged higher. Rubber futures have witnessed a steep fall in Tokyo over the past few weeks. Natural rubber is key raw material in the manufacture of tyres. Cement stocks extended recent gains triggered by Prime Minister's thrust on infrastructure sector. India Cements, Jaiprakash Associates, Ambuja Cements and UltraTech Cements rose by between 1.6% to 5.87%. Prime Minister Manmohan Singh early this month laid out ambitious infrastructure development plans for the current fiscal year, in an effort to counter criticism over a perceived policy paralysis that has led India into its worst slowdown in nearly a decade. Shares of power generation firms extended recent gains triggered by Prime Minister Manmohan Singh early this month announcing ambitious infrastructure development plans for the current fiscal year, which includes plans to add a record 18,000 megawatts (MW) of power capacity this year. NTPC, GVK Power & Infrastructure, Tata Power Company, Lanco Infratech, Adani Power, Torrent Power, and JSW Energy rose by between 0.72% to 4.1%. BPCL gained 0.48%. The company's advance tax payment reportedly fell 11.68% to Rs 68 crore in Q1 June 2012 over Q1 June 2011 Engineering and construction major L&T rose 2.27% after the company said during market hours today its construction division has won new orders valued at Rs 1076 crore across various businesses in Q1 June 2012. Among other capital goods stocks, BEML, Siemens, Bhel and Punj Lloyd rose by between 0.58% to 2.07%. IT stocks rose on speculation that the US Federal Reserve may take more steps to stimulate US economy. US is the biggest outsourcing market for the Indian IT firms. India's second-largest software exporter by revenue Infosys gained 0.87%. Infosys on Thursday, 14 June 2012, said it has signed an initial agreement with the Israeli government to work on industrial research and development. The pact will create a framework for industrial cooperation between Infosys and Israeli companies in the technology areas of cloud, information security, sensors, analytics and sustainability, Infosys said. Dansk Supermarked A/S, a leading retailer in the Nordics, has engaged Infosys as its strategic partner to transform its cross-channel commerce program, Infosys said in a release early this week. Through this engagement, Dansk Supermarked A/S which has over 1,300 stores across Denmark, Sweden, Germany and Poland will provide its consumers a seamless and convenient cross-channel shopping experience, Infosys said. Infosys was selected by Dansk Supermarked A/S for its capabilities in delivering end-to-end digital commerce programs for global retailers, Infosys said. This transformation program will start with Bilka.dk, one of Dansk Supermarked's store chains and is expected to help increase Bilka.dk's sales to 2.4 Billion Danish kroner by 2016, Infosys said. India's largest IT company by revenue Tata Consultancy Services (TCS) gained 1.62%. India's third largest software services exporter by revenue, Wipro, rose 0.67%. The company said before market hours on Thursday that Wipro Technologies, the global information technology, consulting and outsourcing business of Wipro, has been chosen by Australia based MMG, a mid-tier global resources company as its strategic partner to define and deliver MMG's integrated business management program over a period of three years. Oil exploration stocks rose along with crude oil prices. Cairn India, and Oil India rose by between 0.52% to 1.48%. But, ONGC fell 0.67%. Crude oil futures for July 2012 delivery were up 0.77% at $84.56 a barrel in Asian electronic trading today, 15 June 2012. The contract had risen $1.29, or 1.56% to settle at $83.91 a barrel on the New York Mercantile Exchange on Thursday, 14 June 2012, its highest closing level since 8 June 2012. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms. As expected, the Organization of the Petroleum Exporting countries (OPEC), which supplies about 40% of the world's crude, left its collective production ceiling unchanged on Thursday. The OPEC would need to reduce output by 1.6 million barrels a day to comply with its targeted ceiling, Secretary-General Abdalla El-Badri said. Most airline stocks fell as crude oil prices gained. Jet Airways and SpiceJet shed by between 1.34% to 2.45%. Kingfisher Airlines rose 1.48%. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight. Most metal stocks edged higher as global commodity prices rose. Sail, Jindal Steel & Power, Tata Steel, JSW Steel, and Bhushan Steel gained by between 1.11% to 3.35%. But, Sterlite Industries fell 1.57%. Hindalco Industries rose 2.7%. The company will announce its audited consolidated results for the year ended 31 March 2012 on 27 June 2012. HDFC rose 0.29%. The company's advance tax rose 17.64% to Rs 300 crore in Q1 June 2012 over Q1 June 2011. The company on Thursday, 14 June 2012, said its management completely disagrees with the contents of the Macquarie report dated 14 June 2012 as the concerned analyst has not attempted to meet anyone from HDFC before making the aforesaid report and verify the facts and statements made therein. Moreover, it is surprising that Macquarie in its report as recently as May 7, 2012 had put a price target of Rs.775 on HDFC stock with an outperform rating based on the same facts and figures, HDFC said in a statement. "We are therefore unable to understand as to what prompted the analyst to change his recommendation and outlook within a months time", HDFC said. The point that has been raised in the Macquarie report regarding the adjustment for Zero Coupon Bonds is not new and has been clarified on several occasions by HDFC to its investors. HDFC said it is both a housing finance company and is also a financial holding company. As a financial holding company, HDFC has been making investments in its subsidiaries and associates viz. HDFC Bank, HDFC Standard Life Insurance Company, HDFC ERGO General Insurance Company, HDFC Asset Management Company Ltd etc, HDFC said. Under the Indian GAAP, the accounts of HDFC are presented on a standalone basis wherein only the dividend received from subsidiaries and associates are included as part of the income and its true share of profit in its subsidiaries and associates is not considered as part of HDFC's profits. HDFC has made its investments in subsidiaries and associates out of the amounts borrowed by way of Zero Coupon Debentures and therefore the interest cost on such borrowings amounting to Rs 485 crores during the year 2011-12 (net of tax) has been charged to Securities Premium account as per Section 78 of the Companies Act, HDFC said. For the year ended March 31, 2012, if the proportionate share of profits of HDFC in its subsidiaries and associates is considered, the profits of HDFC will be higher by Rs 1340 crores after reducing the dividends received from the subsidiaries and associates. Under these circumstances if the aforesaid interest cost on Zero Coupon Debentures is charged to profit and loss account, HDFCs profits would still be higher by Rs 855 crore, HDFC said. Further as and when IFRS is made applicable under Indian GAAP, the overall profits will go up further as some of the expenses on borrowings and loan sourcing will require to be amortized instead of currently being fully charged to the Profit and Loss account in the year of payment, HDFC said. Further, the one-time provisioning requirements in respect of standard assets is not reflected in profit and loss account as it relates to all the past assets and is transitory in nature, HDFC said. The interest rates on retail home loans are lower on account of lower risk weights, lower NPAs and also diversified risk profile, HDFC said. Cals Refineries clocked highest volume of 1.28 crore shares on BSE. Acil Cotton Industries (75.45 lakh shares), Kingfisher Airlines (43.26 lakh shares), Suzlon Energy (40.66 lakh shares) and SpiceJet (37.95 lakh shares) were the other volume toppers in that order. SBI clocked highest turnover of Rs 148.07 crore on BSE. L&T (Rs 80.57 crore), Tata Motors (Rs 80.25 crore), Reliance Infra (Rs 36.03 crore) and ICICI Bank (Rs 35.94 crore) were the other turnover toppers in that order. Television reports on Friday said Pranab Mukherjee will step down as finance minister on June 24 to contest presidential election. The Congress party on Thursday said Manmohan Singh will continue as the country's Prime Minister until 2014 when next general elections are due. The party said it cannot spare Singh for the President's post. Samjwadi Party and Trinamool Congress had on Wednesday suggested three names for President's post -- former President APJ Abdul Kalam, Prime Minister Manmohan Singh and former Lok Sabha speaker Somnath Chatterjee. Trinamool Congress will skip today's UPA meeting as Trinamool Congress chief Mamata Banerjee is opposed to Congress party's preference for Pranab Mukherjee as UPA's presidential candidate. TMC is one of the leading parties in the Congress led coalition government at the centre. Inflation based on the wholesale price index (WPI) accelerated to 7.55% in May 2012 from a year earlier as prices of manufactured products and fuel increased, adding to concerns of a rise in price pressures. Inflation was at 7.23% in April 2012. The government also raised WPI inflation reading for March 2012 to 7.69% from 6.89% reported earlier. Core inflation, or non-food manufacturing inflation, was below 5% in May 2012, far lower than the headline reading. Inflation in India has moderated from 10% in September 2011, but still remains above the central bank's comfort level. The RBI aims to contain inflation expectations below 4.5%. The government on Thursday, 14 June 2012, raised the minimum support prices of various kharif (June-October) crops 2012 in the range of 15.3% to 53.1%, which is expected to further fuel persistently high food inflation in the coming months. Food inflation has been in double digits for around a year and has been contributing significantly to overall inflation. Easing of core inflation, falling crude oil prices, weak industrial production data for April 2012, sharp deceleration in GDP growth in Q4 March 2012 and latest data showing decline in exports in May 2012 have raised expectations that the central bank will cut interest rates to revive economic growth. Market men expect a 25 basis points reduction in its key policy rate viz. the repo rate by RBI at its mid-quarter policy review on Monday, 18 June 2012. The country's crucial monsoon rains were 50% below average in the week to June 13, the weather office said on Thursday, a second week of scant rain and confirmation the four-month season has got off to a slow start. The India Meteorological Department (IMD) has forecast average rainfall for the whole June to September season -- the third year in a row to avoid a drought. The monsoon rains are important for farm output and economic growth as about 55% of the south Asian nation's arable land is rain-fed, and the farm sector accounts for about 15% of a nearly $2-trillion economy. Global rating agency Standard & Poor's on Monday warned that India could become the first BRIC nation to lose its investment-grade rating if the South Asian country doesn't revive its growth and push the pedal on reforms. Setbacks or reversals in India's path toward a more liberal economy could hurt its long-term growth prospects and therefore its credit quality, Joydeep Mukherji, S&P's credit analyst, stated in a report titled 'Will India Be the first BRIC Fallen Angel?'. S&P currently rates India BBB-minus, just one notch above junk. The other three BRIC group of emerging nations--Brazil, Russia and China--are also rated investment-grade. S&P had in April this year cut the outlook on India's long-term credit rating to negative from stable and warned that the country could lose its investment-grade status if the government fails to bring its fiscal house in order. Data released on 31 May 2012 showed India's economic growth slowed to its weakest pace in nine years in the January-March quarter, when it expanded 5.3% from a year earlier. For the fiscal year ended March 31, the economy grew 6.5%, below the 6.9% expansion the government had projected. US Treasury Secretary Timothy Geithner will meet India's finance minister in Delhi in June to strengthen economic and financial ties between the two countries, the US Treasury Department said early this week. European stocks headed north on Friday, as investors cheered reports that central bankers stand ready to act if the Greek elections over the weekend send financial markets in severe headwind. Key benchmark indices in UK, France and Germany were up by 0.53% to 1.8%. Hong Kong Exchanges & Clearing, operator of the Stock Exchange of Hong Kong, said Friday it has entered into a framework agreement to buy the London Metal Exchange in a deal that values the company at 1.39 billion pounds ($2.2 billion). Greek voters return to the polls on 17 June 2012 after the splintered results of a May 6 parliamentary election left no party able to put together a government. The poll could potentially decide whether the nation will remain in the euro zone. Moody's has cut the ratings of 11 European banks and said it would cut again if Greece ditched the euro, kicking off a long-awaited round of downgrades for major European institutions. Moody's Investors Service said on Friday it had taken action against five Dutch banking groups, three French banks and one each from Belgium and Luxembourg. A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis. The European Central Bank stands ready to provide support to the euro-zone system, said its President, Mario Draghi, in prepared statements at a speech on Friday. "The Eurosystem will continue to supply liquidity to solvent banks where needed," he said at the ECB Watcher's conference. His comments come amid reports that central bankers are ready to take measures to keep liquidity flowing in international markets should the results of Sunday's Greek elections trigger a credit crunch. Draghi said the objectives of three-year long-term refinancing operations (LTROs) have "largely been met." However, he said, the full impact of LTROs needs time to unfold. He added that April bank lending data indicates a general improvement in bank lending conditions and drop in net tightening of credit standards. He also said there is no inflation risk presently in any euro-area country. Bank of England (BOE) Governor Mervyn King said on Thursday that the UK central bank will activate a sterling liquidity facility to aid banks, and plans to have a form of credit easing operating to boost lending as the case for looser policy is growing. The BOE will start holding auctions of sterling liquidity with a maturity of six months. King said that the lending plan will provide banks with funds below current market rates. The BOE Governor also said that the UK central bank would not expand its quantitative easing (QE) program into private-sector assets. Asian stocks were mostly higher in choppy trade on Friday, 15 June 2012, after reports central banks of major economies are ready to provide liquidity if needed after crucial elections in Greek on Sunday, 17 June 2012. The vote is expected to determine the Greece's future in the euro zone. Key benchmark indices in China, Hong Kong, Taiwan, Japan, Indonesia and Singapore rose by 0.01% to 2.26%. South Korea's Kospi fell 0.71%. China's recent interest rate cut and the relaxation of controls on rates is a "giant leap" for financial sector reforms, even though the move could hurt domestic banks' profits in the short run, Standard & Poor's Ratings Services said Friday. The People's Bank of China last week announced reforms to the way it sets interest rates, allowing banks to offer rates to depositors of up to 110% of the benchmark deposit rate and provide loans of at least 80% of the benchmark lending rate. S&P said the move to liberalize the country's interest-rate regime would make China's banking system more efficient in allocating credit and lead to a more diversified loan portfolio, which could outweigh the short-term strain on Chinese banks' profitability. The Bank of Japan on Friday left its benchmark interest rate unchanged in a range between 0% and 0.1% and also didn't announce any fresh monetary stimulus, avoiding further policy action ahead of the weekend elections in Greece. The decisions were unanimous at the policy-setting board of the central bank, and in line with market expectations. The BoJ cited nervousness in the global financial markets, mainly over the European debt crisis, and that particular attention should be paid to these developments for the time being. Trading in US index futures indicated that the Dow could gain 39 points at opening bell on Friday, 15 June 2012. US stocks jumped Thursday after media reports signaled possible central-bank action and economic data added to the case for further moves by the Federal Reserve to bolster growth. On Thursday, the government said first-time applications for jobless benefits rose by 6,000 to 386,000 last week and consumer prices in May fell 0.3%, the sharpest drop in roughly three years. The Federal Open Market Committee holds its next policy meeting on June 19-20. It remains to be seen if the Fed extends Operation Twist -- a plan expiring this month that lengthens the average duration of bonds in the Fed's portfolio. The Fed launched Operation Twist in September 2011 to lower long-term borrowing costs. The 7th Group of 20 industrial and developing nations summit is scheduled to be held in Los Cabos, Mexico on 18 and 19 June 2012 to discuss current affairs such as poverty, youth unemployment and environmental issues. The leaders are also likely to discuss the ongoing European debt crisis.