Key benchmark indices extended gains in mid-afternoon trade, with the barometer index, the S&P BSE Sensex, the Nifty 50 index, both, hitting their highest level in almost three weeks. At 14:18 IST, the Sensex was up 256.34 points or 1% at 25,909.57. The Nifty was currently up 77.10 points or 0.98% at 7,937.85. The market sentiment was positive with exit polls predicting a historic win for the BJP led National Democratic Alliance (NDA) in assembly election in Assam. The NDA rules the central government after an emphatic victory in the 2014 Lok Sabha election. Gains in global stocks aided the upmove on the domestic bourses.
The Sensex jumped 274.08 points or 1.06% at the day's high of 25,927.31 in mid-afternoon trade, its highest level since 28 April 2016. The barometer index rose 87.96 points or 0.34% at the day's low of 25,741.19 in morning trade. The Nifty jumped 79.35 points or 1% at the day's high of 7,940.10 in mid-afternoon trade, its highest level since 28 April 2016. The index rose 28.45 points or 0.36% at the day's low of 7,889.20 in mid-morning trade.
On the political front, exit polls for the assembly elections showed the Dravida Munnetra Kazhagam (DMK)-Congress alliance heading to victory in Tamil Nadu, West Bengal Chief Minister Mamata Banerjee retaining power in that state, a victory for Communist Party of India-Marxist (CPM)-led Left Democratic Front government in Kerala and a historic win for the BJP led National Democratic Alliance (NDA) in Assam. The Congress-DMK alliance looks set to form government in the Union territory of Puducherry, the post-poll surveys indicated. The counting of votes for assembly elections held in these four states and the Union territory of Puducherry takes place on Thursday, 19 May 2016.
A win for the BJP led NDA in Assam will put BJP in the right shape for the 2017 assembly election in Uttar Pradesh (UP). The UP assembly has 403 seats. The number of seats in Rajya Sabha, or the upper house of parliament, depends on representation in states. A lack of a majority for the NDA in the Rajya Sabha has delayed passage of a key tax reform bill viz. the Goods and Services Tax (GST) bill in the upper house. Finance Minister Arun Jaitley said in an interview to All India Radio recently that the GST Bill will be put to vote in the monsoon session of Parliament if Congress continues to oppose the Legislation. The GST bill, which has been approved by the Lok Sabha, is pending in the Rajya Sabha because of stiff resistance by the Congress. For the GST bill to become a law, the GST bill also needs to be approved by half the state assemblies.
In overseas stock markets, commodity shares led gains for European stocks on weakness in the US dollar, which tends to help prices for metals and oil for holders of other currencies. Energy stocks led gains in Asian equities after increase in crude oil prices overnight. US stocks edged higher yesterday, 16 May 2016, as a surge in oil prices and a rally in tech stocks overshadowed weaker-than-expected manufacturing data from the New York region. The Empire State general business-conditions index, which measures activity in the New York area, nosedived to a reading of negative 9 in early May, from positive 9.6 in April.
Closer home, the market breadth indicating the overall health of the market was positive. On BSE, 1,376 shares rose and 1,120 shares fell. A total of 178 shares were unchanged. The BSE Mid-Cap index was currently up 0.5%. The BSE Small-Cap index was currently up 0.45%. Both these indices underperformed the Sensex.
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Index heavyweight and housing finance major HDFC advanced 3.39% to Rs 1,227.60. The stock hit high of Rs 1,228.80 and low of Rs 1,193 so far during the day.
Pharma shares rose. Wockhardt (up 2.02%), Cadila Healthcare (up 0.19%), Cipla (up 0.67%), Dr Reddy's Laboratories (up 0.59%), Lupin (up 0.96%), Sun Pharmaceutical Industries (up 0.42%) rose. Glenmark Pharmaceuticals (down 1.86%), GlaxoSmithKline Pharmaceuticals (down 0.01%), Aurobindo Pharma (down 1.08%) and Alkem Laboratories (down 0.1%) fell.
Motherson Sumi Systems jumped 9.2% after consolidated net profit rose 22% to Rs 414 crore on 8% growth in revenue to Rs 10068 crore in Q4 March 2016 over Q4 March 2015. Motherson Sumi Systems' (MSSL) earnings before interest, taxation, depreciation and amortization (EBITDA) rose 14% to Rs 1061 crore in Q4 March 2016 over Q4 March 2015. The result was announced during market hours today, 17 May 2016.
Honeywell Automation India rose 4.73% after net profit surged 293.53% to Rs 27.98 crore on 30.21% increase in net sales to Rs 564.03 crore in Q4 March 2016 over Q4 March 2015. The result was announced during trading hours today, 17 May 2016.
Tata Coffee lost 2.88% after consolidated net profit fell 13% to Rs 34 crore on 1% growth in total income from operations to Rs 457 crore in Q4 March 2016 over Q4 March 2015. The decline in bottom line was due to lower plantation profits during the quarter. Tata Coffee's Managing Director Sanjiv Sarin said that the company continues to grow its instant coffee portfolio in a robust manner focusing on enhanced sales in key geographies and strengthening customer relationships.
Hotel stocks gained on renewed buying. TajGVK Hotels & Resorts (up 18.14%), Kamat Hotels (India) (up 8.23%), EIH (up 4.18%), Indian Hotels Company (up 1.21%) and Hotel Leela Venture (up 3.69%) gained.
Advani Hotels & Resorts (India) was locked in 20% upper circuit at Rs 57.65 after net profit rose 79% to Rs 4.23 crore on 18% rise in operational income to Rs 17.14 crore in Q4 March 2016 over Q4 March 2015. The result was announced after market hours yesterday, 16 May 2016.
Meanwhile, with a view to aid the development of corporate bond market, the Reserve Bank of India in consultation with the Ministry of Finance has decided to allow investment by foreign portfolio investors (FPIs) in unlisted debt securities and securitised debt instruments subject to certain restrictions. In a draft circular issued yesterday, 16 May 2016, the RBI said that FPIs can invest in the primary issues of non-convertible debentures/bonds by a public company issued in demat form, provided that the issuing company does not use the borrowing proceeds for real estate activities, purchase of land, investing in capital market or on-lending to other entities. FPIs can also invest in securitised debt instruments issued by a special purpose vehicle (SPV) set up for securitisation of assets where banks, FIs or NBFCs are originators. FPIs can also invest in securitised debt instruments issued and listed in terms of the Securities and Exchange Board of India Regulations on Public Offer and Listing of Securitised Debt Instruments, 2008. The RBI has invited public comments on draft circular by 25 May 2016.
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