Intraday volatility continued as key benchmark indices slipped into the red once again after moving into positive zone from negative zone for a brief period in mid-morning trade. The barometer index, the S&P BSE Sensex, was down 73.22 points or 0.31%, off close to 165 points from the day's high. The market breadth, indicating the overall health of the market, was positive. The BSE Small-Cap index was up more than 1%.
Capital goods stocks edged lower on profit booking after recent strong gains. PSU OMCs fell as crude oil prices rose.
A bout of volatility was witnessed as key benchmark indices slipped into the red after opening higher. Intraday volatility continued as key benchmark indices slipped into the red once again after moving into positive zone from negative zone for a brief period in mid-morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 2026.23 crore on Tuesday, 13 May 2014, as per provisional data from the stock exchanges.
At 11:25 IST, the S&P BSE Sensex was down 73.22 points or 0.31% to 23,798.01. The index shed 76.07 points at the day's low of 23,795.16 in mid-morning trade. The index rose 93.44 points at the day's high of 23,964.67 in morning trade.
The CNX Nifty was down 10.10 points or 0.14% to 7,098.65. The index hit a low of 7,095.05 in intraday trade. The index hit a high of 7,142.25 in intraday trade.
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The BSE Mid-Cap index was up 63.78 points or 0.84% at 7,682.40. The BSE Small-Cap index was up 91.04 points or 1.17% at 7,853.96. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive.. On BSE, 1,327 shares gained and 1,054 shares fell. A total of 120 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks gained and rest of them fell. Mahindra & Mahindra (M&M) (down 2.66%), Maruti Suzuki India (down 1.33%) and ONGC (down 1.26%) edged lower from the Sensex pack.
Capital goods stocks edged lower on profit booking after recent strong gains. ABB (India) (down 1.89%), Bharat Heavy Electricals (Bhel) (down 2.06%), L&T (down 0.87%), Bharat Electronics (down 0.88%), and Punj Lloyd (down 0.44%) declined.
PSU OMCs fell as crude oil prices rose. Indian Oil Corporation (IOCL) (down 1.48%) and HPCL (down 1.27%) declined. BPCL rose 0.66%.
Crude oil futures rose today, 14 May 2014, after an industry report showed crude stockpiles fell at the biggest US oil-storage hub. Brent for June settlement, which expires tomorrow, 15 May 2015, was up 25 cents at $109.48 a barrel on the London-based ICE Futures Europe exchange. Ongoing tension between Ukraine and Russia also lifted oil prices. Russia is the world's biggest energy exporter.
Higher crude oil prices will increase under recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.
PSU OMCs hiked diesel prices by Rs 1.09 a litre, excluding state levies on Monday, 12 May 2014.
Dr Reddy's Laboratories lost 2.28%, with the stock extending Tuesday's post-result slide. Dr Reddy's Laboratories' consolidated net profit declined 15.6% to Rs 481.60 crore on 4.2% growth in net sales to Rs 3480.90 crore in Q4 March 2014 over Q4 March 2013. The fall in net profit was partly due to base effect. The company had received one-time settlement income of Rs 120 crore from Nordian Inc (formerly MDS Inc) in Q4 March 2013. The company announced Q4 result during trading hours on Tuesday, 13 May 2014, when the stock settled 3.99% lower at Rs 2,610.70 on BSE.
Ashoka Buildcon jumped 7.79% after consolidated net profit jumped 110.89% to Rs 13.56 crore on 6.45% decline in net total income from operations to Rs 608.25 crore in Q4 March 2014 over Q4 March 2013. The result was announced after trading hours on Tuesday, 13 May 2014. On a consolidated basis, Ashoka Buildcon's net profit rose 15.75% to Rs 97.44 crore on 3.12% decline in total income from operations (net) to Rs 1794.87 crore in the year ended March 2014 over the year ended March 2013.
The next major trigger for the market is outcome of Lok Sabha elections. The counting of votes will take place on Friday, 16 May 2014, and the results are expected on the same day. Various exit polls on Monday, 12 May 2014, predicted that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) would win a majority in the Lok Sabha elections which concluded on Monday, 12 May 2014. If exit polls prove correct, NDA's prime ministerial candidate Narendra Modi will become India's next Prime Minister. The term of the current Lok Sabha ends on 1 June and the new House has to be constituted by 31 May.
Modi, the prime ministerial candidate from the NDA, is perceived as being more business-friendly and decisive by the business community. As chief minister for the fast-growing state of Gujarat, Modi has built a reputation for getting things done. While campaigning for the Lok Sabha elections, Modi has pledged to reinvigorate the country's manufacturing sector, create more jobs and overhaul the country's inadequate infrastructure. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government.
Investors are hoping that when the results of the Lok Sabha elections are out on Friday, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are expecting measures for revival of the economy, business-friendly policies and good governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections. The BJP has said that measures for the revival of the economy are its priority if the party comes to power after elections. India's GDP growth has slowed to a decade low of below 5%. The GDP grew 4.7% in Q3 December 2013.
The rate of inflation based on the wholesale price index is expected to remain at 5.7% in April 2014, at the same level it was in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for April 2014 at about 12:00 noon tomorrow, 15 May 2014.
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 rose on Wednesday, 14 May 2014, as US equity gauges held at record highs on Tuesday, 13 May 2014. Key benchmark indices in Indonesia, South Korea, Taiwan, Singapore and Hong Kong were up 0.31% to 1.04%. Key benchmark indices in China and Japan were off 0.16% to 0.24%.
China's central bank called on the nation's biggest lenders to accelerate the granting of mortgages, a sign that developers' price cuts and incentives alone won't boost a slumping housing market and economy. The People's Bank of China told 15 banks yesterday to improve efficiency of service, give timely approval and distribution of mortgages to qualified buyers. It also urged lenders to give priority to families buying their first homes and strengthen their monitoring of credit risks.
Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Wednesday, 14 May 2014. US stocks ended mostly higher Tuesday, with the Dow Jones Industrial Average and the S&P 500 index ending at record highs.
US retail sales increased 0.1% in April following a revised 1.5% jump in March that marked the biggest gain in four years, Commerce Department figures showed in Washington.
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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