The broad market continued to depict strength even as the two key benchmark indices the edged lower in choppy trade. The barometer index, the S&P BSE Sensex, was provisionally down 97.71 points or 0.4%, up 122.70 points from the day's low and off 140.37 points from the day's high. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Small-Cap index was up more than 1.8%. The BSE Mid-Cap index was up more than 1%.
Index heavyweight and cigarette major ITC slipped in highly volatile trade. State Bank of India also dropped in volatile trade. Capital goods stocks were mixed. Zee Entertainment Enterprises rose after declaring good Q4 result during market hours.
Key benchmark indices edged lower amid initial volatility on weak Asian stocks. Key benchmark indices cut losses after hitting fresh intraday low in morning trade. Key benchmark indices languished in negative zone in mid-morning trade. Key benchmark indices extended losses and hit fresh intraday low in afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed intraday losses in mid-afternoon trade. Key benchmark indices languished in negative zone in late trade.
As per provisional closing, the S&P BSE Sensex was down 97.71 points or 0.4% to 24,279.17. The index lost 220.41 points at the day's low of 24,156.47 in afternoon trade, its lowest level since 19 May 2014. The index gained 42.66 points at the day's high of 24,419.54 in early trade.
The CNX Nifty was down 26.65 points or 0.37% to 7,248.85. The index hit a low of 7,206.70 in intraday trade, its lowest level since 19 May 2014. The index hit a high of 7,287.15 in intraday trade.
The BSE Mid-Cap index was up 109.96 points or 1.34% at 8,342.36. The BSE Small-Cap index was up 157.95 points or 1.84% at 8,758.28. Both these indices outperformed the Sensex.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 2,085 shares gained and 879 shares fell. A total of 85 shares were unchanged.
The total turnover on BSE amounted to Rs 4658 crore, lower than Rs 5590.40 crore on Tuesday, 20 May 2014.
Among the 30-share Sensex pack, 21 stocks declined and rest of them gained.
Bharti Airtel (down 3.06%), GAIL (India) (down 2%) and Axis Bank (down 2%) edged lower from the Sensex pack.
Hindalco Industries (up 2.96%), NTPC (up 2.38%) and Coal India (up 1.53%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC rose 0.62% to Rs 343.40. The stock was volatile. The stock hit high of Rs 343.50 and low of Rs 329.
State Bank of India lost 2.5% to Rs 2,463. The stock was volatile. The stock hit high of Rs 2,530 and low of Rs 2,451.60.
Capital goods stocks were mixed. L&T fell 2.23% to Rs 1,474.60.
Bharat Heavy Electricals (Bhel) lost 2.84% at Rs 270. The stock had gained 28.36% in four trading days to settle at Rs 277.90 on Tuesday, 20 May 2014, from recent low of Rs 216.50 on 14 May 2014.
ABB India gained 0.34% to Rs 929.10 after hitting 52-week high of Rs 981.60 in intraday trade.
BEML (up 3.06%), Bharat Electronics (up 0.36%), Siemens (up 0.42%) and Thermax (up 1.96%) gained.
Crompton Greaves fell 2.12%. Crompton Greaves today, 21 May 2014, said that the company has bagged an order from CAMEG (Comptoir Algien du Matiel Electrique et Gazier) for the supply and installation of 60kV Instrument Transformers at numerous substations across Algeria. The company will provide indigenously built high-voltage equipment worth euro 4 million, which include 800x60 kV Current Transformers, 800x60 kV Capacitive Voltage Transformers, and 250x60 KV Inductive Voltage Transformers. The project commenced in April 2014 and will be completed by October 2015.
Zee Entertainment Enterprises rose 1.91% to Rs 293.90. The stock saw high intraday volatility. The stock hit an intraday high of Rs 301.90, also its 52-week high. The stock hit an intraday low of Rs 278.95. The company during market hours reported 21.14% rise in consolidated net profit to Rs 217.58 crore on 15.34% rise in total income to Rs 1174.35 crore in Q4 March 2014 over Q4 March 2013.
In the foreign exchange market, the rupee edged lower against the dollar as importers stepped in to buy dollars to pay bills. The partially convertible rupee was hovering at 58.81, compared with its close of 58.63/64 on Tuesday, 20 May 2014.
The Reserve Bank of India today, 21 May 2014, eased norms on banks' loans to exporters. In a notification, the central bank said that exporters can now get long-term loans from banks for up to 10 years to service export contracts, easing earlier rules that only allowed loans of up to one year. Banks can make such payments to exporters with a "satisfactory" track record of three years and adjust these payments against future exports, the RBI said. The RBI also said banks cannot charge interest rates exceeding 200 basis points above LIBOR. In addition, exporters who receive loans of $100 million or above need to report the transaction immediately to the central bank.
Reserve Bank of India Governor Raghuram Rajan on Tuesday, 20 May 2014, reiterated his call for fiscal discipline, saying it is essential for India to achieve sustainable economic growth. Rajan said India would not always be able to rely on banks to buy a large portion of its government debt as it usually does. "(Bank) deposits will not continue to be cheap, while the government cannot continue to pre-empt financing at the scale it has in the past if we are to have a modern entrepreneurial economy. This is yet another reason why fiscal discipline will be central to sustainable growth going forward," Rajan said at an event in New Delhi. Rajan suggested the need for India to offer more specialised banking licences that would result in smaller banks offering niche services. The RBI on April granted two new commercial banking licences, its first new ones in 10 years.
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.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Gujarat chief minister and Prime Minister-designate Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. 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. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
Modi will be sworn in as India's next Prime Minister on Monday, 26 May 2014, evening at the Rashtrapati Bhawan. India will invite the leaders of Pakistan and other neighbours to Narendra Modi's inauguration as prime minister, a spokeswoman for the Bharatiya Janata Party (BJP) said today, 21 May 2014, in a bold step to embark on a policy of regional engagement. Pakistani Prime Minister Nawaz Sharif will be on the guest list of leaders from the eight-member South Asia Association for Regional Cooperation (SAARC) invited to attend Modi's swearing in next Monday, spokeswoman Nirmala Sitharaman said.
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.
European stocks reversed initial losses on Wednesday, 21 May 2014. Key benchmark indices in France and Germany were up 0.01% to 0.29%. In UK, the FTSE 100 was of 0.11%.
The Bank of England's Monetary Policy Committee at its May 7-8 meeting voted 9-0 in favor of keeping interest rates on hold and making no changes to its 375 billion pound ($632 billion) asset-purchase program, according to minutes released today, 21 May 2014. But, in a sign of emerging divisions, the minutes also record that there was a range of views on the committee over how much slack remains in the labor market to bear down on inflation and what the best strategy is for eventually raising rates. There were "a variety of views on the appropriate path of monetary policy," the minutes record. "The committee would continue to refine its views as the economy evolved, and for some members the monetary policy decision was becoming more balanced," according to the minutes, a sign that some officials are moving closer to reassessing their ultra-low rate stance. The minutes record some officials saw merit in tightening policy sooner in order to meet the central bank's aim of lifting rates gradually.
Asian markets edged lower on Wednesday, 21 May 2014, as US stocks edged lower on Tuesday, 20 May 2014. Key benchmark indices in Taiwan, South Korea, Singapore, Japan and Indonesia were off 0.11% to 0.29%. Key benchmark indices in Hong Kong, China and Indonesia rose 0.01% to 0.84%.
The Bank of Japan refrained from boosting stimulus as the economy shows signs of weathering the impact of the first sales-tax increase since 1997. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, it said in a statement in Tokyo today, 21 May 2014.
Japan posted a trade deficit of 808.9 billion yen ($8 billion) for April, data showed today, 21 May 2014. Exports gained 5.1% year on year, while imports increased 3.4%.
Trading in US index futures indicated that the Dow could advance 49 points at the opening bell on Wednesday, 21 May 2014. US stocks ended Tuesday with broad-based losses after disappointing earnings from TJX Companies, Inc, Staples, Inc. and weak sales numbers from Caterpillar Inc. weighed on investor sentiment. Selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser, who said that Fed may need to act sooner rather than later should the economy accelerate.
New York Fed President William Dudley, who gets a vote at every Federal Open Market Committee meeting and is vice chairman of the interest-rate setting committee, told the New York Association for Business Economics on Tuesday, 20 May 2014, said that there will be a considerable period of time between the end of its asset purchases and the first rate hike.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee today, 21 May 2014. The minutes are expected to contain details of when, and by how much, interest rates will be raised.
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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