Realty stocks slide

Key benchmark indices saw divergent trend on first trading day of the week after seeing immense intraday volatility. With small gains, the barometer index, the S&P BSE Sensex, attained record closing high. The 50-unit Nifty ended slightly lower. The Sensex garnered 23.53 points or 0.1%, off 458.34 points from the day's high and up 282.98 points from the day's low. The barometer index jumped as much 481.87 points or 1.95% at the day's high of 25,175.22 in early afternoon trade. The Sensex lost as much as 259.45 points or 1.05% at the day's low of 24,433.90 in late trade. The market breadth indicating the overall health of the market turned negative from positive in late trade. The BSE Mid-Cap and Small-Cap indices, both, slumped over 2% each.

The Sensex has risen 2,299.08 points or 10.25% in this month so far (till 26 May 2014). The Sensex has gained 3,546.20 points or 16.75% in calendar year 2014 so far (till 26 May 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,268.17 points or 41.65%. From a record high of 25,375.63 on 16 May 2014, the Sensex has fallen 658.75 points or 2.59%.

Coming back to today's trade, realty stocks slumped. Shares of IT companies rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms.

Today's high intraday volatility on the bourses came ahead of Narendra Modi taking oath as India's next Prime Minister in the evening, with investors awaiting the composition of the Modi-led government and key ministerial portfolios. The Sensex surged in early trade. Firmness continued on the bourses in morning trade. Key benchmark indcies extended gains and hit fresh intraday high in mid-morning trade. The Sensex hit over one-week high above the psychological 25,000 level. The 50-unit CNX-Nifty also hit its highest level in more than a week. Key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade. Key benchmark indices further trimmed intraday gains in mid-afternoon trade. Immense volatility was during the second half of the trading session as key benchmark indices trimmed strong intraday gains.

The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month May 2014 series to June 2014 series. The near month May 2014 derivatives contract expire on Thursday, 29 May 2014.

The S&P BSE Sensex garnered 23.53 points or 0.1% to settle at 24,716.88, a record closing high for the barometer index. The index jumped 481.87 points at the day's high of 25,175.22 in early afternoon trade. The index fell 259.45 points at the day's low of 24,433.90 in late trade, its lowest level since 22 May 2014.

The CNX Nifty shed 8.05 points or 0.11% to settle at 7,359.05, its lowest closing level since 22 May 2014. The index hit a high of 7,504 in intraday trade, its highest level since 16 May 2014. The index hit a low of 7,269.05 in intraday trade.

The BSE Mid-Cap index lost 183.26 points or 2.11% to settle at 8,485.06. The BSE Small-Cap index was off 204.39 points or 2.24% to settle at 8,923.65. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 6100 crore, higher than Rs 5,449.88 crore on Friday, 23 May 2014.

The market breadth indicating the overall health of the market turned negative from positive in late trade. On BSE, 1703 shares declined and 1,323 shares rose. A total of 104 shares were unchanged.

The S&P BSE Auto index (up 1.47%), the S&P BSE IT index (up 1.46%), the S&P BSE Teck index (up 0.81%), the S&P BSE Capital Goods index (up 0.56%) and the S&P BSE FMCG index (up 0.23%) outperformed the Sensex.

The S&P BSE Metal index (up 0.06%), the S&P BSE Healthcare index (down 0.51%), the S&P BSE Bankex (down 0.74%), the S&P BSE Oil & Gas index (down 1.55%), the S&P BSE Consumer Durables index (down 2%), the S&P BSE Power index (down 2.94%) and the S&P BSE Realty index (down 5.22%) underperformed the Sensex.

Among the 30-share Sensex pack, 18 stocks declined and rest of them rose.

Realty stocks declined. D B Realty (down 10.19%), Sobha Developers (down 1.31%), Unitech (down 4.9%) and Housing Development & Infrastructure (down 9.16%) declined.

DLF shed 5.63% to Rs 204.35. The company said after market hours on Friday, 23 May 2014 that DLF Emporio, a subsidiary of DLF, has successfully placed India's first Commercial Mortgage Backed Security (CMBS) issuance of Rs 525 crore, with a coupon rate of 10.90% per annum (p.a.) and legal maturity of 7.5 years. DLF Emporio owns and operates approximately 3 lakh square feet (sq. ft) of a Luxury Mall in New Delhi, India. The CMBS issue is rated CRISIL AA (SO). This is a landmark issuance, being the first of its kind in the country at a competitive pricing. This shall pave way for more such issuances in future, DLF said in a statement.

Reliance Industries (RIL) fell 2.65%. RIL after market hours on Friday, 23 May 2014, said that it is saddened by the statement attributed to ONGC Chairman and Managing director Mr DK Sarraf by a news agency on Tuesday, 20 May 2014. RIL said it denies the claim of apparent theft of gas from G4 & KG DWN 98/2 Block by RIL and can only attribute it to the likelihood of some elements in ONGC misleading the new CMD, Mr Sarraf, in order to hide their own failure to develop discoveries made over the last 13 years in these blocks.

It was only in August 2013, that ONGC brought the issue of possible connectivity between reservoirs in RIL and ONGC blocks, to the notice of RIL through DGH. Since then, as per international practice, ONGC and RIL have been engaged in the process of appointing an independent agency to investigate the issue of possible reservoir connectivity across the blocks. The two had met on 9 May 2014 and exchanged drafts regarding the scope of work to be assigned to such agency. On 23 May 2014, the parties again met and finalized the enquiry notice to be sent to four agreed international expert agencies. It was decided to issue the Enquiry Notice on 26 May 2014. Since the process for appointing this agency as per international practice was already well underway it is indeed unfortunate that some elements in ONGC forced invocation of the Delhi High Court at this juncture, RIL said in a statement.

Resolution of such complex techno-commercial matters, that are not un-common in the oil and gas industry, is best done through the help of experts rather than public posturing. In any case, ONGC having already filed a petition in the Delhi High Court, RIL would have expected greater restraint in a matter that has been made sub-judice by them, RIL said.

ONGC fell 1.47% to Rs 401.50, with the stock reversing direction after hitting record high of Rs 424.80 in intraday trade. ONGC's wholly owned subsidiary -- ONGC Videsh -- on Saturday, 24 May 2014, signed a Memorandum of Understanding (MoU) for cooperation in exploration, appraisal and hydrocarbon production on the continental shelf of the Russian Federation. The parties will jointly consider forming a consortium led by Rosneft and involving other partners, ONGC said in a statement.

PSU OMCs gained as crude oil prices declined. BPCL rose 0.62%.

HPCL rose 0.67% to Rs 437 after hitting 52-week high of Rs 458.70 in intraday trade.

Indian Oil Corporation (IOCL) rose 3.29% to Rs 375 after hitting 52-week high of Rs 381 in intraday trade.

Crude oil prices eased today, 26 May 2014, amid speculation Ukraine's election of a new president may help ease months of tension with Russia, the world's biggest energy exporter. Brent for July settlement was off 60 cents at $109.94 a barrel on the London-based ICE Futures Europe exchange. Ukraine voted billionaire Petro Poroshenko as president yesterday, 25 May 2014, handing him the task of stemming separatist unrest in the country, a conduit for Russian oil and natural gas supplies to Europe.

Lower crude oil prices could reduce underrecoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has already freed pricing of petrol.

PSU OMCs review fuel prices on 1st and 16th of every month based on the average imported oil price in the previous fortnight.

Coal India gained 1.62% to Rs 404 after hitting 52-week high of Rs 417 in intraday trade.

India's largest power generation firm by capacity NTPC declined 3.62% to Rs 154.55. The stock reversed direction after hitting 52-week high of Rs 167.55 in intraday trade.

Tata Power Company dropped 3.74% to Rs 101.80. The stock reversed direction after hitting a 52-week high of Rs 109.45 in intraday trade.

Reliance Power gained 0.83% to Rs 96.80 after hitting 52-week high of Rs 107.25 in intraday trade.

Sun Pharmaceuticals Industries rose 1.42% and Ranbaxy Laboratories gained 0.46% on reports the Andhra Pradesh High Court on Saturday, 24 May 2014, lifted a temporary stay it imposed on Sun Pharma's acquisition of Ranbaxy, paving the way for the completion of the $3.2 billion deal. Disposing off the writ petition filed against Sun Pharma's acquisition of Ranbaxy by certain retail investors who accused insider trading in the shares of Ranbaxy days before announcement of the deal, the High Court directed market regulator Securities & Exchange Board of India (Sebi) to probe into the allegations. Earlier, during last week of April, the High Court had issued status quo orders on the merger while admitting a writ petition by a group of retail investors. The court had directed stock exchanges not to approve the merger until it decides on the petition.

Auto stocks were mixed. Tata Motors rose 2.83%.

Mahindra & Mahindra (M&M) jumped 6.23% to Rs 1,230.30 after hitting a record high of Rs 1,252.70 in intraday trade.

Maruti Suzuki India fell 1.25% to Rs 2,355. The stock reversed direction after hitting a record high of Rs 2,505.30 in intraday trade. The company today, 26 May 2014, announced the launch of Celerio Green, the CNG powered Celerio car model with the acclaimed iGPI technology starting at Rs 4.68 lakh (Ex-showroom Delhi). The Celerio Green has only manual transmission option.

Ashok Leyland fell 1.98% to Rs 32.20. The stock reversed direction after hitting 52-week high of Rs 35.75 in intraday trade.

Shares of two-wheeler makers edged lower. TVS Motor Company (down 5.7%), Hero MotoCorp (down 0.16%) and Bajaj Auto (down 1.45%) declined.

Shares of IT companies rose on positive economic data in US, the biggest outsourcing market for the Indian IT firms. TCS (up 1.23%), HCL Technologies (up 4.01%), Wipro (up 3.18%), Infosys (up 0.89%), and Tech Mahindra (up 1.39%) edged higher.

Shares of private sector banks were mixed. Kotak Mahindra Bank (down 2.24%) and ICICI Bank (down 0.89%) declined. HDFC Bank rose 1.2%.

Axis Bank rose 0.38% to Rs 1,872 after hitting record high of Rs 1,927.30 in intraday trade.

Dhanlaxmi Bank lost 6.81% after the bank reported a net loss of Rs 134.26 crore in Q4 March 2014 as against net profit of Rs 28.66 crore in Q4 March 2013. Dhanlaxmi Bank's total income declined 5.7% to Rs 348.02 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Friday, 23 May 2014.

Dhanlaxmi Bank reported a net loss of Rs 251.91 crore in the year ended 31 March 2014 as against net profit of Rs 2.62 crore in the year ended 31 March 2013. Total income fell 4% to Rs 1365.38 crore in the year ended 31 March 2014 over the year ended 31 March 2013.

PSU bank stocks declined. Canara Bank (down 3.8%), Union Bank of India (down 6.3%), Bank of India (down 4.44%) and Bank of Baroda (down 4.67%) declined.

India's biggest commercial bank in terms of branch network, State Bank of India (SBI), fell 2.51% at Rs 2,686.15. The stock reversed direction after hitting 52-week high of Rs 2,833.85 in intraday trade.

Punjab National Bank (PNB) shed 0.29% to Rs 1,032. The stock reversed direction after hitting 52-week high of Rs 1,068 in intraday trade.

Central Bank of India climbed 4.75% to Rs 78.25. The stock hit a 52-week high of Rs 85.60 in intraday today.

Metal stocks reversed intraday gains in volatile trade. Tata Steel fell 1.78% to Rs 469.05. The stock reversed direction after hitting 52-week high of Rs 494.90 in intraday trade.

Jindal Steel & Power declined 1.25% to Rs 297. The stock reversed direction after hitting 52-week high of Rs 315 in intraday trade.

JSW Steel slipped 2.18% to Rs 1,236. The stock reversed direction after hitting 52-week high of Rs 1,295 in intraday trade.

Steel Authority of India (Sail) surged 5.04% to Rs 94.80 after hitting 52-week high of Rs 100.85 in intraday trade.

Among other mining and metal stocks, NMDC (down 0.84%), Hindustan Copper (down 3.67%) and Hindalco Industries (down 3.19%) edged lower.

Sesa Sterlite rose 4.24% to Rs 279.20 after hitting 52-week high of Rs 281.15 in intraday trade.

Hindustan Zinc lost 6.28% to Rs 151.35. The stock reversed direction after hitting record high of Rs 166 in intraday trade.

National Aluminium Company tumbled 9.32% to Rs 53, with the stock reversing direction after hitting 52-week high of Rs 60.30 in intraday trade.

L&T rose 2.11% to Rs 1,543.45 after hitting record high of Rs 1,622.70 in intraday trade. The National Highway Authority of India (NHAI) on Friday, 23 May 2014, gave approval to a total of 9 proposals for deferment of premium payment to NHAI. This includes 2 projects of L&T. The NHAI said that deferment of premium payment to NHAI would give huge comfort to the lenders as debt obligation would now get priority over the premium payable to NHAI. NHAI would be able to recover the deferred premium with interest in the latter period of the concession. The deferment shall be limited to the actual revenue shortfall after meeting the debt obligation and operation expenditure. The concessionaire would not be allowed to declare any dividend until the shortfall in premium is made good. The concessionaire would also be required to share toll collection data with NHAI on real time basis, NHAI said.

Meanwhile, L&T during market hours today, 26 May 2014, said that L&T Infotech, a wholly owned subsidiary of L&T, has restructured its organisational structure, and with a view to accelerating profitable growth in the technology space, has appointed Mr. Chandrashekhar Kakal as Is Chief Operating Officer (COO), who will be inducted on the board of L&T Infotech.

Reliance Infrastructure fell 3.3% to Rs 703.85. The stock reversed direction after hitting 52-week high of Rs 763.70 in intraday trade.

The Board of NHAI on Friday, 23 May 2014, considered 9 proposals for deferment of premium and approved the same, the Ministry of Road Transport & Highways said in a statement. In all, these 9 proposals involve deferment of premium for a total value of Rs 5959.93 crore. The period during which such deferment is considered spans the period 2014-15 till 2026-27, with the deferment granted during 2014-15 amounting to Rs 651.30 crores. Projects for which deferment permitted include, Godhra-GUJ/MP border 4 laning (BSCPL), Beawar-Pali-Pindwara 4 laning (L&T), Rohtak-Panipat 4 Laning ( Sadbhav), Hyderabad-Yadgiri 4 laning (Sadbhav), Samakhiyali-Gandihidham 6 laning (L&T), Ahmedabad -Vadodara 6 laning (IRB), Tumkur-Chitradurga 6 laning (IRB), Indore-Dewas 6 laning (Gayatri-DLF), andHosur-Krishangiri 6 laning (Reliance Infra).

This step would give huge comfort to the lenders as debt obligation would now get priority over the premium payable to NHAI. NHAI would be able to recover the deferred premium with interest in the latter period of the concession. The deferment shall be limited to the actual revenue shortfall after meeting the debt obligation and operation expenditure. The concessionaire would not be allowed to declare any dividend until the shortfall in premium is made good. The concessionaire would also be required to share their toll collection data with NHAI on real time basis.

Power Grid Corporation of India fell 2.03% to Rs 128. The stock reversed direction after hitting 52-week high of Rs 135 in intraday trade.

Engineers India fell 4.3% after net profit fell 42.69% to Rs 103.55 crore on 7.61% decline in total income to Rs 571.61 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Friday, 23 May 2014. Engineers India's net profit declined 23.67% to Rs 479.76 crore on 23.48% decline in total income to Rs 2159.59 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). On consolidated basis, Engineers India's net profit fell 23.64% to Rs 482.73 crore on 23.31% decline in total income to Rs 2182.39 crore in FY 2014 over FY 2013.

VA Tech Wabag spurted 7.19% after consolidated net profit rose 18% to Rs 71 crore on 33% increase in total income to Rs 897 crore in Q4 March 2014 over Q4 March 2013. The result was announced on Saturday, 24 May 2014. VA Tech Wabag's earnings before interest, taxes, depreciation and amortization (EBITDA) rose 20% to Rs 107 crore in Q4 March 2014 over Q4 March 2013. The company's consolidated net profit rose 25% to Rs 113 crore on 39% increase in revenue to Rs 2230 crore in the year ended March 2014 (FY 2014) over the year ended March 2013 (FY 2013). EBITDA rose 37% to Rs 209 crore in FY 2014 over FY 2013.

Hindustan Motors fell by maximum permissible limit of 10% to Rs 11.97 after the company declared suspension of work at its Uttarpara Plant. The company made the announcement on Saturday, 24 May 2014. Hindustan Motors has declared suspension of work at its Uttarpara Plant with effect from 6:00 IST of Saturday, 24 May 2014. The company has been transparent in sharing updates about the worsening conditions at its Uttarpara Plant which include very low productivity, growing indiscipline, critical shortage of funds, lack of demand for its core product the Ambassador and large accumulation of liabilities. Given the present circumstances it has no alternative but to declare a suspension of work at its Uttarpara Plant till further notice. The suspension of work will enable the company in restricting mounting liabilities and restructure its organisation and finances and bring in a situation conducive to reopening of the plant, the company said.

Shree Cement jumped 6.38% to Rs 6,930. The stock hit a record high of Rs 7,128.70 in intraday today.

Lakshmi Machine Works advanced 3.57% after net profit jumped 88.4% to Rs 53.70 crore on 27.5% growth in total income to Rs 679.34 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Friday, 23 May 2014. On a consolidated basis, Lakshmi Machine Works (LMW)'s net profit surged 45.9% to Rs 189.06 crore on 17% growth in total income to Rs 2448.41 crore in the year ended 31 March 2014 over the year ended 31 March 2013.

Lanco Infratech fell by maximum permissible 10% lower circuit at Rs 13.45 on BSE after the company declared weak result for Q4 and year ended 31 March 2014 after market hours on Friday, 23 May 2014. On consolidated basis, Lanco Infratech reported a net loss of Rs 584.29 crore in Q4 March 2014, higher than net loss of Rs 31.59 crore in Q4 March 2013. Net sales declined 24% to Rs 2803.39 crore in Q4 March 2014 over Q4 March 2013.

Neyveli Lignite Corporation (NLC) jumped 3.29%. The company's net profit declined 19.57% to Rs 494.43 crore on 4.3% growth in total income to Rs 1938.41 crore in Q4 March 2014 over Q4 March 2013.

NLC's net profit rose 2.88% to Rs 1501.88 crore on 13.26% growth in total outcome to Rs 6992 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).

On consolidated basis, NLC's net profit rose 2.95% to Rs 1501.88 crore on 13.26% growth in total income to Rs 6992 crore in FY 2014 over FY 2013.

With regard to the company's future plans, NLC said it is spreading its wings in new projects with fuels other than lignite. NLC forges ahead in all fronts and with its expansion activities the company is poised for substantial growth in the years to come, the company said in a statement.

Vardhman Textiles jumped 4.04% after net profit rose 33.90% to Rs 154.32 crore on 13.85% rise in net sales to Rs 1282.22 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Friday, 23 May 2014. Vardhman Textiles' net profit rose 101.37% to Rs 651.88 crore on 24.32% rise in net sales to Rs 5171.31 crore in the year ended March 2014 over the year ended March 2013.

After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that the BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure.

Modi is favored by business leaders because of his record in Gujarat, which he's led since 2001. With Modi at the helm of affairs, Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole.

Modi has pledged to fight inflation by cracking down on food hoarders, creating a national agriculture market and improving rural infrastructure.

The first budget of the new government is expected by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.

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.

European stocks edged higher on Monday, 26 May 2014. Key benchmark indices in Germany and France were up 0.69% to 1.45%. The stock market in UK was closed for a holiday.

European Central Bank President Mario Draghi signaled policy makers are ready to take action in June should they see low inflation becoming entrenched. "What we need to be particularly watchful for at the moment is, in my view, the potential for a negative spiral to take hold between between low inflation, falling inflation expectations and credit, in particular in stressed countries," Draghi said in a speech at the ECB Forum in Sintra, Portugal. The key issue today, however, is timing, he added. We are not resigned to allowing inflation to remain too low for too long, he said today. There is no debate about our goal, which is to return inflation toward 2% in the medium-term, in line with our mandate.

German consumer confidence is due to stabilize at a high level in June, suggesting that the continuing tension in Ukraine has yet to have a noticeable impact on German consumer sentiment. The Nuremberg-based GfK institute's forward-looking indicator is due to be 8.5 in June, the group reported Monday, matching the previous month.

Asian stocks rose on Monday, 26 May 2014, after China's premier said policy will be fine tuned as needed to support the economy. Key benchmark indices in China, Taiwan, Singapore, Hong Kong and Japan were up 0.15% to 0.97%. Key benchmark indices in Indonesia and South Korea were off 0.01% to 0.34%.

China's Premier Li Keqiang said Asia's largest economy will adjust policy to address problems in the real economy, according to a statement on the government's website May 23.

Bank of Japan policy makers said the economy will probably grow above potential from summer, according to the minutes released today from an April 30 meeting.

Japan and China on Sunday accused each other's air forces of dangerous behaviour over the East China Sea, with Japan saying Chinese aircraft had come within a few dozen metres of its warplanes.

US stock markets remain closed today, 26 May 2014, on account of Memorial Day.

US stocks edged higher on Friday, 26 May 2014, with the S&P 500 index closing at a record high, buoyed by a rally in housing stocks after better-than-expected home sales and a jump in Hewlett-Packard shares a day after the personal computer maker said it would cut more jobs.

Data from the Commerce Department showed sales of new US single-family homes rose more than expected in April and the supply of houses on the market hit a 3-1/2 year high.

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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