Investors are betting that the Bhartiya Janata Party (BJP) led National Democratic Alliance (NDA) will form the next government at the centre after Lok Sabha elections in April-May this year. Those expectations sent share prices surging for the second day in a row. The two key benchmark indices -- the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty -- extended initial gains and hit record high in morning trade. The BJP with its prime ministerial candidate Narendra Modi is considered more pro-business friendly and a more pro-reform party than the Congress party. The Sensex was up 174.93 points or 0.81%, up about 150 points from the day's low and off close to 30 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Gains in Asian stocks and provisional data showing foreign funds made heavy purchases of Indian stocks on Thursday, 6 March 2014, boosted sentiment on the domestic bourses.
Bank stocks extended recent gains. Capital goods stocks also extended their recent gains, L&T hitting 52-week high. Among PSU stocks, GAIL (India) hit 52-week high.
Trading for the day started on an upbeat note as the Sensex and the 50-unit CNX Nifty, both, hit record high in early trade. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Thursday, 6 March 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1,272.93 crore on Thursday, 6 March 2014, as per provisional data from the stock exchanges.
Asian shares edged higher on Friday, 7 March 2014, as most US stocks rose on Thursday, 6 March 2014, with the S&P 500 hitting record closing high.
At 10:20 IST, the S&P BSE Sensex was up 174.93 points or 0.81% to 21,688.80. The index jumped 205.76 points at the day's high of 21,719.63 in morning trade, a fresh record high, with the index surpassing its previous record high of 21,525.14 hit on Thursday, 6 March 2014. The index gained 25.57 points at the day's low of 21,539.44 in opening trade.
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The CNX Nifty was up 54.45 points or 0.85% to 6,455.60. The index hit a high of 6,463.90 in intraday trade, a new record high, with the index surpassing its previous record high of 6,415.25 hit on 9 December 2013. The index hit a low of 6,413.55 in intraday trade.
The BSE Mid-Cap index was up 17.34 points or 0.26% at 6,725.34. The BSE Small-Cap index was up 22.19 points or 0.34% at 6,649.25. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,210 shares gained and 742 shares fell. A total of 92 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks rose and rest of them fell. Bharti Airtel (up 3.8%), Reliance Industries (up 2.32%) and Tata Steel (up 2.11%) edged higher from the Sensex pack.
Bank shares extended recent gains. Among private bank stocks, Yes Bank (up 1.72%), Federal Bank (up 2.6%), IndusInd Bank (up 2.36%), ICICI Bank (up 3.04%), AXIS Bank (up 1.02%), Kotak Mahindra Bank (up 0.85%), and HDFC Bank (up 0.37%) gained.
Among PSU bank stocks, Union Bank of India (up 0.18%), Bank of Baroda (up 0.61%), Canara Bank (up 0.24%), Bank of India (up 0.38%), and State Bank of India (up 0.04%) edged higher. Punjab National Bank fell 0.14%.
Central Bank of India rose 1.76% after the bank said it has after due approval sold its entire stake in Credit Information Bureau of India to Transunion International Inc (FII). The announcement was made after market hours on Thursday, 6 March 2014.
Capital goods stocks extended their recent gains. ABB India (up 0.72%), Crompton Greaves (up 2.73%), Bhel (up 1.85%), Punj Lloyd (up 1.66%) and Siemens (up 0.96%) gained.
L&T rose 5.59% to Rs 1205.80 after hitting 52-week high of Rs 1221.80 in intraday trade.
GAIL (India) rose 0.04% to Rs 380.90 after hitting 52-week high of Rs 386 in intraday trade.
In the foreign exchange market, the rupee rose sharply against the dollar as equities rose. The partially convertible rupee was hovering at 61.055, compared with its close of 61.11/12 on Thursday, 6 March 2014.
The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.
On the political front, the BJP-led National Democratic Alliance (NDA) is expected to do well in the upcoming Lok Sabha elections according to CNN-IBN-Lokniti-CSDS national election tracker and seat projections by Chennai Mathematical Institute Director Rajeeva Karandikar. As per the survey, NDA is projected to win 212-232 seats. The Congress-led UPA is projected to get just 119-139. The survey indicates that the BJP alone is expected to get 193-213 seats and the Congress alone can get 94-110 seats. Mamata Banerjee led TMC is expected to emerge as the third largest party with 20-28 seats. The Left Front is expected to win just 15-23 seats. Tamil Nadu CM J Jayalalithaa led AIADMK is likely to win 14-20 seats, YS Jagan Mohan Reddy's YSR Congress Party is projected to get 11-17 seats, Mulayam Singh Yadav led SP is likely to get 11-17 seats, Naveen Patnaik led BJD is expected to win 10-16 seats, The TDP led by N Chandrababu Naidu is expected to win 10-16 seats, M Karunanidhi led DMK is expected to win 10-16 seats, Mayawati's BSP is projected to get 8-14 seats, K Chandrashekhara Rao led TRS is expected get 4-8 seats, former PM HD Deve Gowda's JDS is also expected to get 4-8 seats, the JDU 1-5 seats and the AAP is also projected to get 1-5 seats respectively.
The BJP and its allies together (NDA) are expected to get 36% votes and the Congress and its allies are projected to get 29% votes nationally. The BJP alone can get 33% votes and the allies can add 3% more. The Congress is projected to get 26% votes on its own and the allies may contribute 3% extra votes. Both the BJP and the Congress have lost 1% votes each since January survey. While the Congress allies have gained 2% votes, the BJP allies have gained 1% votes since last January.
According to election tracker, the BJP is expected do to remarkably well in battleground states of UP and Bihar, where its electoral fortunes have been on a downswing for a long time. However, regional parties are expected to do very well in Andhra Pradesh (including Telangana), Odisha, West Bengal and Tamil Nadu. Smaller regional parties like TRS, JDS etc are also expected to retain their relevance at national level by retaining their strength in their respective states, according to the survey.
According to CNN-IBN-Lokniti-CSDS election tracker, BJP Prime Ministerial candidate Narendra Modi leads the race for the next prime minister in six states of India. Of the six states, five are key battleground states of Uttar Pradesh, Bihar, Maharashtra, Andhra Pradesh and Tamil Nadu. The sixth state is Delhi, the stronghold of the AAP led by Arvind Kejriwal.
Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will be take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.
Asian shares edged higher on Friday, 7 March 2014, as most US stocks rose on Thursday, 6 March 2014, with the S&P 500 hitting record closing high. Key benchmark indices in China, Singapore, Japan, South Korea, Indonesia, and Taiwan were up 0.01% to 0.29%. Hong Kong's Hang Seng was off 0.21%.
According to reports, Shanghai Chaori, Solar Energy Science & Technology Co., a Chinese maker of energy cells to convert sunlight into power, has defaulted on bond interest payments today, 7 March 2014, which is a first case of default in China's domestic corporate-bond market.
Trading in US index futures indicated that the Dow could gain 3 points at the opening bell on Friday, 7 March 2014. US stocks were mostly higher on Thursday, sending the Standard & Poor's 500 Index to an all-time high, as data showed jobless claims fell to the lowest level in three months and investors watched developments in Ukraine.
Fewer Americans than projected filed applications for unemployment benefits last week, an indication companies are holding on to staff even as cold weather threatens to slow the world's largest economy. Separate data indicated factory goods orders in January fell 0.7%, declining more than forecast.
The US Labor Department will release its February jobs report today, 7 March 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.
In Europe, the European Central Bank (ECB) kept interest rates unchanged at a record low of 0.25% on Thursday, as stronger inflation and economic output reduced the need for officials to take action. ECB head Mario Degahi again said that although the bank is not introducing new easing programs, he is still ready to act if need be. The ECB also raised its growth outlook and said that inflation is likely to increase slowly in the medium-term.
The Bank of England on Thursday, 6 March 2014, made no change in policy, holding its key lending rate at a record low of 0.5% and its asset purchases at 375 billion pounds ($627 billion).
Lawmakers in the largely-autonomous Russian-majority peninsula of Crimea on Thursday voted in favour of leaving Ukraine and joining the Russian Federation, even as the US slapped visa restrictions on the separatists and began lining up financial sanctions against Moscow.
The US and Ukraine complained that Crimean legislators were tutored by Russia and they did not recognize the legitimacy of a formal referendum that has been scheduled for March 16 to put a seal of approval on the vote. The Crimean parliament resolved "to enter into the Russian Federation with the rights of a subject of the Russian Federation" It said it had asked Russian President Vladimir Putin "to start the procedure"
US President Barack Obama said the US and its allies will keep raising pressure on Russia to back down in Ukraine and held open the possibility of further sanctions if Vladimir Putin's government doesn't respond. His administration earlier banned visas for Ukrainian officials and others, including Russians, who it says are threatening Ukraine's sovereignty. Obama also authorized the imposition of financial sanctions.
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