Indian stocks edged higher on the first trading day of the week after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that reforms will be undertaken to enhance the ease of doing business, the tax regime will be made non-adversarial, conducive to investment, enterprise and growth and that the government will follow a policy of encouraging investments, including through foreign direct investment (FDI). Firmness in global stocks also boosted sentiment on the domestic bourses. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, scaled lifetime high on intraday basis as well as on closing basis. The Sensex garnered 183.75 points or 0.72%, up 83.37 points from the day's low and off 64.56 points from the day's high. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index rose almost 1.5%. The BSE Small-Cap index gained more than 2%.
Indian stocks gained for the third day in a row today, 9 June 2014. The Sensex has risen 774.38 points or 3.12% in three trading days from recent low of 24,805.83 on 4 June 2014. The Sensex has risen 1,362.87 points or 5.62% in June so far (till 9 June 2014). The Sensex has gained 4,409.53 points or 20.82% in calendar year 2014 so far (till 9 June 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 8,131.50 points or 46.6%.
Auto stocks rose after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that the government will initiate a fast, time-bound and well monitored programme for execution of the National Highways programme to overcome the stagnancy of the past few years. Realty stocks extended recent gains with DLF, Sobha Developers, Housing Development and Infrastructure (HDIL) and Unitech scaling 52-week high. Shares of port operators edged higher after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that the government will evolve a model of port-led development.
Shares of power generation firms rose after the President of India said that the aim of the government is to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. Tata Power Company hit 52-week high. Shares of companies whose fortunes are linked to orders from Indian Railways rose after the President of India said that modernization and revamping of Railways is on top of the government's infrastructure agenda. Shares of defence equipment manufacturers rose after the President of India said that the government will carry out reforms in defence procurement to increase efficiency and economy.
Shares of engineering & construction major L&T hit record high. Coal India jumped after President of India said in his address to the joint sitting of Parliament that the government will formulate clear rules for allocation of coal, minerals and telecoms spectrum. Fertiliser shares rose on reports that the government plans to raise the price of urea, the fertiliser most used by its farmers, by at least 10% in order to contain subsidy costs that are straining the budget.
The market edged higher in early trade. A bout of volatility was witnessed as key benchmark indices pared gains once again after regaining strength in morning trade. Key benchmark indices extended gains and hit fresh record high in mid-morning trade after President Pranab Mukherjee started addressing a joint sitting of Parliament. A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh record high in early afternoon trade. Firmness continued on the bourses in mid-afternoon trade. Key benchmark indices hovered in positive terrain in late trade.
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The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 6 June 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1283.04 crore on Friday, 6 June 2014, as per provisional data from the stock exchanges.
The S&P BSE Sensex garnered 183.75 points or 0.72% to settle at 25,580.21, a record closing high for the index. The index surged 248.31 points at the day's high of 25,644.77 in early afternoon trade, a lifetime high for the index. The index rose 100.38 points at the day's low of 25,496.84 in morning trade.
The CNX Nifty garnered 71.20 points or 0.94% to 7,654.60 to settle at, a record closing high for the index. The index hit a high of 7,673.70 in intraday trade, a lifetime high for the index. The index hit a low of 7,580.25 in intraday trade.
The BSE Mid-Cap index garnered 133.98 points or 1.47% to settle at 9,232.52. The BSE Small-Cap index garnered 208.28 points or 2.13% to settle at 9,982.32. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 4860 crore, lower than Rs 5177.14 crore on Friday, 6 June 2014.
The market breadth indicating the overall health of the market was strong, with almost three gainers for every loser on BSE. On BSE, 2,307 shares rose and 778 shares fell. A total of 82 shares were unchanged.
The S&P BSE Realty index (up 5.61%), the S&P BSE Capital Goods index (up 2.33%), the S&P BSE Power index (up 2.15%), the S&P BSE Consumer Durables index (up 1.82%), the S&P BSE Metal index (up 1.73%), the S&P BSE Auto index (up 1.51%), the S&P BSE Teck index (up 0.94%) outperformed the Sensex.
The S&P BSE IT index rose 0.72%, matching the Sensex's gain. The S&P BSE Healthcare index (up 0.51%), the S&P BSE FMCG index (up 0.04%), the S&P BSE Bankex (down 0.16%) and the S&P BSE Oil & Gas index (down 0.36%) underperformed the Sensex.
Coal India jumped after President Pranab Mukherjee said in his address to the joint sitting of Parliament that the government will formulate clear rules for allocation of coal, minerals and telecoms spectrum. The stock was up 5.35% at Rs 411.90. Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner, the President said.
Metal and mining stocks rose on good Chinese economic data. China is the world's largest consumer of copper and aluminum. Sesa Sterlite (up 0.1%), Hindustan Copper (up 2.68%), National Aluminium Company (up 1.35%) edged higher. Hindalco Industries shed 0.41%.
JSW Steel was up 0.87% at Rs 1,297. The stock hit 52-week high of Rs 1,315 in intraday trade. JSW Steel said on Saturday, 7 June 2014, that its crude steel production rose 6% to 10.68 lakh tonnes in May 2014 over May 2013. Production of flat rolled products rose 2% to 8.25 lakh tonnes in May 2014 over May 2013. Production of long rolled products rose 7% to 1.81 lakh tonnes in May 2014 over May 2013.
Jindal Steel & Power shed 0.5% to Rs 338, with the stock reversing direction after hitting 52-week high of Rs 350 in intraday trade. Hindustan Zinc gained 4.51% to Rs 180.90 after scaling a record high of Rs 184 in intraday trade.
Shares of Tata Steel and Steel Authority of India (Sail) extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making.
Steel Authority of India (Sail) was up 0.97% to Rs 109.55. The stock hit 52-week high of Rs 112.90 in intraday trade.
Tata Steel was up 2.49% to Rs 574.20 after hitting 52-week high of Rs 578.60 in intraday trade.
NMDC rose 0.39%. The company said during market hours that production rose 0.81% to 4.94 million tonnes during April-May 2014 over the corresponding previous year period. Despatches rose 11.22% to 5.65 million tonnes during April-May 2014 over the corresponding previous year period.
Shares of defence equipment manufacturers rose after President Pranab Mukherjee today, 9 June 2014, in his address to the joint sitting of Parliament said that the government will carry out reforms in defence procurement to increase efficiency and economy.
Astra Microwave Products (up 2.33%), Walchandnagar Industries (up 5%), Dynamatic Technologies (up 5%) and Bharat Electronics (up 2.42%) edged higher. Pipavav Defence and Offshore Engineering Company lost 5%.
The President said that the government will encourage domestic industry, including the private sector, to have a larger share in design and production of defence equipment. The government will introduce policies to strengthen technology transfer, including through liberalised foreign direct investments (FDI) in defence production, the President said. With readily available skilled human resource, India can emerge as a global platform for defence manufacturing including software.
Auto stocks rose after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that the government will initiate a fast, time-bound and well monitored programme for execution of the National Highways programme to overcome the stagnancy of the past few years. Maruti Suzuki India (up 1.58%), Tata Motors (up 2.05%), Ashok Leyland (up 1.18%), Hero MotoCorp (up 1.69%), TVS Motor Company (up 0.5%) and Bajaj Auto (up 5.58%), gained. But, Mahindra & Mahindra (M&M) slipped 0.39%.
Cement stocks rose after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years.
ACC rose 4.26% to Rs 1,500 after hitting record high of Rs 1,524.45 in intraday trade.
Ambuja Cements gained 3.37
UltraTech Cement jumped 4.84% to Rs 2,790.50 after hitting record high of Rs 2,846 in intraday trade.
Grasim Industries jumped 11.5% to Rs 3,699.90. The stock hit 52-week high of Rs 3,755 in intraday trade. UltraTech Cement is a subsidiary of Grasim.
Shares of engineering & construction major L&T rose 3.99% to Rs 1,756, with the stock extending recent gains. The stock hit record high of Rs 1,774.70 in intraday trade. The company's net profit surged 69% to Rs 2723.48 crore on 11% growth in gross revenue to Rs 20229 crore in Q4 March 2014 over Q4 March 2013. The strong growth in bottom-line can be explained by strong operating performance and higher extraordinary income. The result was announced after market hours on 30 May 2014.
Shares of power generation firms rose after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament the aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. GVK Power & Infrastructure (up 9.04%), Adani Power (up 0.78%), CESC (up 0.37%), JSW Energy (up 0.3%), and Reliance Power (up 2.58%) gained.
Tata Power Company rose 2.53% to Rs 113.60 after hitting 52-week high of Rs 115.25 in intraday trade.
NHPC rose 5.24%. The company said before market hours that in accordance with Ministry of Power's letter dated 6 June 2014, Shri R. S. T. Sai, CMD, THDC India has taken over the additional charge of the post of Chairman & Managing Director, NHPC.
Reliance Infrastructure rose 2.99%. The company said during market hours that the company through its special purpose vehicle -- Mumbai Metro One (MMOPL) -- successfully commenced operations of Mumbai Metro on 8 June 2014. A concessional and promotional fare of Rs 10 is being charged for the first 30 days, irrespective of the distance travelled on the Versova-Andheri-Ghatkopar corridor, for a single one way trip between any two stations. The initial fare has been fixed and notified as Rs 10, Rs 20, Rs 30 and Rs 40. The busy corridor is estimated to cater to over 7 lakh commuters per day in its very first year of operation, Reliance Infrastructure said. As per a Central government directive, the MMOPL is the Metro Railway Administration (MRA) and the fare for the Mumbai metro is to be fixed afresh by MMOPL for the initial opening of the line.
The government will come out with a comprehensive National Energy Policy and focus on development of energy related infrastructure, human resource and technology. The aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. The government will expand the national solar mission and connect households and industries with gas-grids. Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner. The international civil nuclear agreements will be operationalized and nuclear power projects for civilian purposes will be developed, the President of India said in his speech.
IT stocks rose after strong US job data for May 2014. US is the biggest outsourcing market for the Indian IT firms. Tech Mahindra (up 2.32%), Wipro (up 0.86%) and HCL Technologies (up 2.42%) gained.
TCS rose 1.63%. Tata Consultancy Services (TCS) announced today, 9 June 2014 at Insurance industry's event IASA 2014 that TCS BaNCS for Insurance will enable Carriers to leapfrog the digital divide through Analytics and by leveraging ISO Electronic Rating ContentTM (ERC) information. TCS BaNCS' superior, holistic suite of insurance solutions encompasses a transformational digital strategy that builds on Data Analytics, Mobility, Portal and Social Media.
Infosys dropped 0.66%, with the stock extending Friday's losses triggered by reports one more top executive quit the company. Prasad Thrikutam who was in charge of strategic sales, marketing and alliances quit on Thursday, 5 June 2014. President Pravin Rao will take up his portfolio, reports suggest.
President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that the backbone of government's new ways of working will be a Digital India. Information Technology will be used to drive re-engineering of government processes to improve service delivery and programme implementation. The government will strive to provide Wi-Fi zones in critical public areas in the next five years. The National e-governance plan will be expanded to cover every government office from the centre to the Panchayat; to provide a wide variety of services to citizens.
Realty stocks extended recent gains. DLF gained 3.18% to Rs 240.45 after hitting 52-week high of Rs 242.80 in intraday trade.
Sobha Developers surged 9.06% to Rs 554.50 after hitting 52-week high of Rs 581 in intraday trade.
Housing Development and Infrastructure (HDIL) gained 4.89% to Rs 111.55 after hitting 52-week high of Rs 113.85 in intraday trade.
Unitech surged 16.69% to Rs 37.75 after hitting 52-week high of Rs 38.60 in intraday trade.
Shares of port operators edged higher after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that the government will evolve a model of port-led development. Essar Ports rose 3.1% to Rs 82.10. Gujarat Pipavav Port rose 1.05% to Rs 120.85. Adani Ports & Special Economic Zone shed 1.5% to Rs 253.50.
India's long coastline will become the gateway for the nation's prosperity, the President of India said. The government will facilitate modernization of existing ports on one hand, and development of new world class ports on the other. Stringing together the Sagar Mala project, the government will connect the ports with the hinterland through road and rail. Inland and coastal waterways will be developed as major transport routes.
Shares of companies whose fortunes are linked to orders from Indian Railways surged after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that modernization and revamping of Railways is on top of the government's infrastructure agenda. Texmaco Rail & Engineering (up 10% at Rs 113.20), BEML (up 6.4% at Rs 783.20), Titagarh Wagons (up 5% at Rs 297.70), Kernex Microsystems (India) (up 5% at Rs 76.05), Stone India (up 5% at Rs 33.80) surged. The government will launch a Diamond Quadrilateral project of high speed trains, the President said. The country will have a network of freight corridors with specialised Agri-Rail networks for perishable agricultural products. Investment in railways will be increased using innovative financing methods, the President said. Expansion of railways in hilly states and Northeast region and modernization of rail safety systems will be prime focus areas. The government will encourage R&D and high level local manufacturing for railway systems, the President said.
Fertiliser shares rose on reports that the government plans to raise the price of urea, the fertiliser most used by its farmers, by at least 10% in order to contain subsidy costs that are straining the budget. The hike in urea price could help cut wasteful use of urea. Chambal Fertilisers & Chemicals (up 10.03%), Rashtriya Chemicals & Fertilizers (up 5.57%), National Fertilizer (up 5.56%) and Coromandel International (up 2.85%) edged higher.
Reliance Communications (RCom) rose 1.16% after the company today, 9 June 2014, announced the launch of One India, One Rate Plans, a first of its kind free national roaming offer for post paid and pre paid GSM customers. Under this innovative offer, there will be no difference between, local, STD and roaming charges and customers will be charged only their home-plan tariffs, even while roaming anywhere in India.
RCom said it is targeting a disproportionate share of corporate, SME and high-value customers through the One India, One Rate plans.
Cadila Healthcare rose 3.74%. The company said during market hours today, 9 June 2014, that the Zydus Group will be presenting data on its molecule ZYDPLA 1, a novel compound in the Gliptin class of anti-diabetic agents during the joint meeting of the International Society of Endocrinology and the Endocrine Society to be held from June 21-24, 2014 in Chicago, Illinois.
Divi's Laboratories gained 1.94% after the company after market hours on Friday, 6 June 2014 said it has had an inspection by the USFDA, with no major observations, for its Unit-II at Bheemunipatnam Mandal, near Visakhapatnam during June 2014. The audit concluded with one observation primarily about further improvement of existing procedure, Divi's said. The purpose of this inspection was for custom manufactured product, Divi's said.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.13, compared with its close of 59.17/18 on Friday, 6 June 2014.
President Pranab Mukherjee today, 9 June 2014, in his address to the joint sitting of Parliament said that containing food inflation will be new government's top priority. The government is preparing contingency plans for sub-normal monsoons, he said. There would be an emphasis on improving the supply side of various agro and agro-based products.
The customary speech by the president is delivered at the first session of parliament every year and aims to highlight the broader policies the government intends to pursue.
The President said that economic revival is of paramount importance for the government after two consecutive years of below 5% GDP growth. The government will work towards reigniting the investment cycle, accelerate job creation and restore the confidence of the domestic as well as international community in India's economy. The government will create a policy environment which is predictable, transparent and fair. The government will embark on rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth, the President said.
The government will make every effort to introduce the GST while addressing the concerns of States. Reforms will be undertaken to enhance the ease of doing business, the President said. For rapid creation of jobs in the manufacturing sector, the government will strategically promote labour-intensive manufacturing. Employment opportunities will also be expanded by promoting tourism and agro-based industries.
The President said that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. A fast-track, investment friendly and predictable PPP mechanism will be put in place. Modernization and revamping of Railways is on top of the infrastructure agenda. Taking urbanization as an opportunity rather than a challenge, the government will build 100 cities focussed on specialized domains and equipped with world class amenities.
India needs to transform itself into a globally competitive manufacturing hub powered by skill, scale and speed. To this end, the government will set up world class investment and industrial regions, particularly along the Dedicated Freight Corridors and Industrial Corridors spanning the country.
Environment and forest clearance systems will be made more predictable, transparent and time-bound. The government will adopt a National Land Use Policy which will facilitate scientific identification of non-cultivable land and its strategic development.
Finance Minister Arun Jaitley on Friday, 6 June 2014, said that the economic situation at present is quite challenging but there is enthusiasm among the industry to turn it to its advantage. He said that there is need to give directional thrust to translate the same into better results. The Finance Minister was speaking while interacting with the captains of Indian Trade and Industry as part of his Pre-Budget Consultation meetings. Various suggestions were received from the representatives of different industry and trade groups. Major suggestions include that the government to follow the path of fiscal consolidation, curbing inflation especially food inflation, push GST, deferment of GARR for at least next three years, no retrospective amendments in tax laws henceforth as it hurts business sentiments in general and discourages foreign investment in particular.
Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-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.
On the macro front, the government will unveil industrial production data for April 2014 on Thursday, 12 June 2014. Industrial production shrank for a second straight month in March 2014. Industrial production declined 0.5% in March 2014, compared with a contraction of 1.8% in February 2014.
The government is scheduled to announce data on inflation based on the combined consumer price index (CPI) for rural and urban India for May 2014 on Thursday, 12 June 2014. Inflation based on the CPI accelerated to 8.59% (provisional) in April 2014, from 8.31% (final) in March 2014. Core CPI which excludes food and energy prices eased to 7.8% in April 2014, from 7.81% in March 2014.
The government will announce data on inflation based on the wholesale price index (WPI) for May 2014 on 16 June 2014. The annual rate of inflation based on monthly wholesale price index WPI eased to 5.2% for the month of April 2014 from 5.7% in March 2014, helped by a decline in fuel prices.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 5 August 2014. The RBI kept its main lending rate -- repo rate -- unchanged at 8% after a monetary policy review on 3 June 2014. The central bank at that time signaled it would ease monetary policy if inflation slows faster than targeted.
European stocks advanced on Monday, 9 June 2014, amid optimism the global economic recovery remains on track. Key benchmark indices in UK and Germany were up 0.08% to 0.21%. France's CAC 40 fell 0.04%.
Asian stocks rose on Monday, 9 June 2014, after US payrolls, Chinese trade and Japanese economic-growth data beat estimates. Key benchmark indices in Taiwan, Japan, Singapore, Hong Kong and China were up 0.03% to 0.73%. Key benchmark indices in Indonesia and South Korea were off 0.27% to 1.06%.
Japan's economy, Asia's second largest, expanded an annualized 6.7% in the first quarter, faster than the preliminary reading of 5.9%.
Chinese exports beat projections, rising 7% last month from a year earlier. Imports dropped 1.6 % from a year earlier after a 0.8% advance in April. The trade surplus swelled to $35.92 billion.
Trading in US index futures indicated that the Dow could fall 9 points at the opening bell on Monday, 9 June 2014. US stocks rose on Friday, 6 June 2014, extending records for equity benchmarks, as data showed payrolls pushed past their pre-recession peak for the first time in May.
The 217,000 advance in hiring in May was broad-based and followed a 282,000 gain in April, figures from the Labor Department showed. It marked the fourth consecutive month employment increased by more than 200,000, the first time that's happened since early 2000. The jobless rate unexpectedly held at an almost six-year low of 6.3%.
James Bullard, president of the Federal Reserve Bank of St. Louis, speaks on the US economic outlook in Tennessee today, 9 June 2014, after US nonfarm payrolls topped a pre-recession high in May.
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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