Volatility ruled the roost as the key benchmark indices regained positive zone after reversing intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 60.19 points or 0.25%, up 73.94 points from the day's low and off 245.17 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The BSE Mid-Cap index was up over 2%. The BSE Small-Cap index was up more than 3%. Both these indices outperformed the Sensex. The market sentiment was upbeat after a clear mandate given by voters the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) in the recently concluded Lok Sabha elections. The market sentiment was also boosted by Narendra Modi's comments in his victory speeches in his home state of Gujarat on Friday, 16 May 2014, where he stressed on the country's development and good governance. Modi will become India's next Prime Minister. The market sentiment was also boosted by data showing that foreign funds made massive purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections.
Investors expect measures for revival of the economy, business-friendly policies and good governance from Modi-led government after the clear mandate given by voters to the BJP-led NDA. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
Modi is perceived as being business-friendly and a decisive leader by the business community. As chief minister for the fast-growing state of Gujarat, Modi has built a reputation for getting things done.
Index heavyweight and cigarette major ITC extended intraday slide in volatile trade. Metal and mining stocks were in demand on renewed buying. Sesa Sterlite hit 52-week high. Hindalco Industries surged after the company's US subsidiary Novelis reported good Q4 results on Friday, 16 May 2014. Shares of India's biggest power equipment maker by sales Bharat Heavy Electricals (Bhel) hit 52-week high.
Key benchmark indices trimmed gains after a firm opening triggered by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Key benchmark indices further trimmed intraday gains in morning trade. Volatility ruled the roost as the key benchmark indices regained positive zone after reversing intraday gains in mid-morning trade.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 3634.82 crore on Friday, 16 May 2014, as per provisional data from the stock exchanges.
At 11:15 IST, the S&P BSE Sensex was up 60.19 points or 0.25% to 24,181.93. The index jumped 305.36 points at the day's high of 24,427.10 in early trade. The index fell 13.75 points at the day's low of 24,107.99 in mid-morning trade.
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The CNX Nifty was up 7.95 points or 0.11% to 7,210.95. The index hit a high of 7,290.35 in intraday trade. The index hit a low of 7,193.55 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,593 shares gained and 728 shares fell. A total of 93 shares were unchanged.
The BSE Mid-Cap index was up 170.95 points or 2.2% at 7,936.67. The BSE Small-Cap index was up 256.22 points or 3.25% at 8,141.98. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2046 crore by 11:15 IST, compared with Rs 1185 crore by 10:15 IST.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC dropped 4.01% to Rs 343.20. The stock was volatile. The stock hit high of Rs 360.10 and low of Rs 338 so far during the day.
Metal and mining stocks were in demand on renewed buying. JSW Steel (up 3.7%), Tata Steel (up 2.17%), Steel Authority of India (Sail) (up 5.95%), NMDC (up 0.84%), Hindustan Copper (up 9.24%), National Aluminium Company (up 5.73%) and Jindal Steel & Power (up 3.53%) edged higher.
Sesa Sterlite jumped 6.35% to Rs 228.60 after hitting a 52-week high of Rs 229.65 in intraday trade.
Hindalco Industries surged 4.54%. Novelis, Hindalco's US subsidiary, on Friday, 16 May 2014, said its net income attributable to its common shareholder was $54 million in Q4 March 2014, lower than $59 million in Q4 March 2013. Excluding certain tax-effected items, net income was $75 million in Q4 March 2014. Net sales rose to 1.96% to $2.54 billion in Q4 March 2014 over Q4 March 2013.
The company reported shipments of aluminum rolled products of 753 kilotonnes in the fourth quarter of fiscal 2014, up 8% compared to the prior year. Every global operating region reported an increase in shipments year-over-year. Higher global shipments were the primary driver behind the 4% increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) versus the prior year to $250 million in the fourth quarter of fiscal 2014.
Adjusted EBITDA for fiscal 2014 was $885 million compared to $961 million reported for the prior year. The decline was primarily due to pricing pressures experienced in the Asian and North American beverage can markets, a higher fixed cost base due to expansions ahead of revenue generation and higher incentive costs, partially offset by higher shipments and benefits from increasing recycled content.
Shipments of aluminum rolled products totaled 2,895 kilotonnes in fiscal 2014, an increase of 4% compared to 2,786 kilotonnes reported in fiscal 2013. Net sales in fiscal 2014 were $9.8 billion, which is flat compared to the prior year resulting from higher shipments partially offset by a 10% decrease in average aluminum prices and lower conversion premiums.
Novelis reported negative free cash flow of $16 million for the year. "Our excellent cash generation essentially funded the $717 million in capital investments we made last year," said Steve Fisher, Chief Financial Officer for Novelis. "In addition, we drove liquidity levels in excess of $1 billion by fiscal year end, allowing us to return $250 million of capital to our parent company in the first quarter of fiscal 2015."
Hindustan Zinc rose 1.73%. The stock turned ex-dividend today, 19 May 2014, for final dividend of Rs 1.90 per share for the year ended 31 March 2014.
India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) rose 2.57% to Rs 235.30. The stock hit a 52-week high of Rs 240.50 in intraday trade today, 19 May 2014.
SpiceJet lost 2.06% after the company reported net loss of Rs 321.51 crore in Q4 March 2014, higher than net loss of Rs 185.71 crore in Q4 March 2013. SpiceJet's total income from operations rose 8.37% to Rs 1589.61 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Friday, 16 May 2014.
SpiceJet reported net loss of Rs 1003.24 crore in the year ended 31 March 2014, higher than net loss of Rs 191.07 crore in the year ended 31 March 2013. Total income from operations rose 11.51% to Rs 6356.10 crore in the year ended 31 March 2014 over the year ended 31 March 2013.
SpiceJet said that the year ended 31 March 2014 was perhaps the most challenging period in Indian aviation history. The sharp depreciation of the Indian Rupee during the quarter ended 30 September 2013 was unprecedented. Given the fact that over 75% of any Indian airline's cost is influenced by the US Dollar, the effects of the exchange rates on a broad spectrum of cost heads were crippling. The net loss was due to slowing economy and softening demand in a market where capacity continued to be added by the industry, SpiceJet said.
In the foreign exchange market, the rupee edged higher against the dollar on expectations of continued robust foreign buying in domestic shares and debt after the Bharatiya Janata Party (BJPL) swept the country's Lok Sabha elections. The partially convertible rupee was hovering at 58.435, compared with its close of 58.79/80 on Friday, 16 May 2014.
Indian government bond prices rose on speculation the incoming BJP-led NDA government will take steps to revive the economy and curb inflation. Bond prices were also supported by gains in the rupee against the dollar. A stronger currency helps cool inflation as India imports about 80% of its oil. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.828%, lower than its close of 8.8342% on Friday, 16 May 2014. Bond yield and bond prices move in opposite direction.
Global credit rating agency Standard & Poor's Ratings Services on Friday, 16 May 2014, said that the fiscal and economic reforms taken by India's new government in the next two to three months will have significant implications on India's sovereign credit rating. S&P's statement came after Narendra Modi-led Bharatiya Janata Party (BJP) routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Modi is likely to be sworn in as India's Prime Minister on Wednesday, 21 May 2014.
S&P said that the next government would need to regain fiscal prudence in a sustainable way, such as by implementing a goods and services tax to help stabilise government revenues. "What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy. If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election," S&P credit analyst Takahira Ogawa was quoted as saying in the statement.
S&P is the only of the three major credit agencies to have India with a "negative outlook" for its "BBB-minus" rating, meaning any downgrade would send the country to below investment grade.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in Lok Sabha election, focus has shifted to those who will take up key posts in the next cabinet of the NDA government at the Centre.
US President Barack Obama invited Narendra Modi to Washington in a phone call on Friday, 16 May 2014, to congratulate him on his victory in the country's elections, the White House said. "The President noted he looks forward to working closely with Mr. Modi to fulfill the extraordinary promise of the US-India strategic partnership, and they agreed to continue expanding and deepening the wide-ranging cooperation between our two democracies," the White House said in a statement. The White House didn't specify a time frame for Mr. Modi's visit but said it would take place at a mutually agreeable time. US Secretary of State John Kerry also extended his congratulations to Mr. Modi.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
Asian stocks edged lower on Monday, 19 May 2014, after data showed a spreading slowdown in China's housing market. Key benchmark indices in South Korea, Japan, Hong Kong and China were off 0.13% to 1.24%. Key benchmark indices in Singapore, Taiwan and Indonesia were up 0.02% to 0.05%.
China's new-home prices rose in April in the fewest cities in 1-1/2 years as developers offered discounts and the economy slowed, prompting the easing of property curbs in some places. Prices last month climbed in 44 of the 70 cities tracked by the government compared with 56 cities in March. That was the fewest cities with price gains since October 2012, when increases were recorded in only 35 on a monthly basis.
Trading in US index futures indicated that the Dow could fall 13 points at the opening bell on Monday, 19 May 2014. US stocks closed higher on Friday, 16 May 2014, after an abrupt late-day reversal.
In economic data, construction on new US homes surged in April to the fastest pace in five months, with the volatile apartment category leading that jump, according to government data released Friday.
The preliminary May reading of the University of Michigan and Thomson Reuters's gauge of consumer sentiment fell unexpectedly to 81.8 from 84.1 in April.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee on Wednesday, 21 May 2014. The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 17-18 June 2014. The Fed on 30 April 2014 said after a monetary policy review that it will keep the benchmark interest-rate target at almost zero for a "considerable time" after its bond-buying program ends. The FOMC also reduced monthly debt purchases to $45 billion, its fourth straight $10 billion cut, and said further reductions are likely in "measured steps" if the economy continues to improve.
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