Amid a divergent trend among various index constituents, key benchmark indices registered small losses. Benchmark indices trimmed losses in late trade after languishing in negative zone almost throughout the trading session. The barometer index, the S&P BSE Sensex, settled above the psychological 27,000 mark. Earlier, the Sensex had fallen below that level at the onset of the trading session. The Sensex had settled above the psychological 27,000 mark after yesterday's rally. The Sensex shed 45.04 points or 0.17% to settle at 27,206.06. The market breadth indicating the overall health of the market was positive.
Small-cap stocks were in demand. Quite a few stocks which are a part of the BSE Small-Cap index rose 2% to 20% for the day.
Index heavyweight and housing finance major HDFC fell. Index heavyweight and software major Infosys declined. Shares of private sector banks edged lower in volatile trade. PSU bank stocks edged higher. Shares of public sector oil marketing companies rose. Auto stocks were in demand on renewed buying.
On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month.
Foreign portfolio investors sold shares worth a net Rs 86.58 crore into the secondary equity market yesterday, 13 May 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 254 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower in choppy trade. Earlier during the global day, Asian stocks also edged higher. US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session.
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The S&P BSE Sensex fell 45.04 points or 0.17% to settle at 27,206.06, its lowest closing level since 12 May 2015. The index lost 302.48 points at the day's low of 26,948.62 in early trade. The index rose 42.89 points at the day's high of 27,293.99 at onset of day's trading session.
The 50-unit CNX Nifty declined 11.25 points or 0.14% to settle at 8,224.20, its lowest closing level since 12 May 2015. The index hit a high of 8,236.25 in intraday trade. The index hit a low of 8,137.30 in intraday trade.
The BSE Mid-Cap index rose 93.07 points or 0.89% to settle at 10,526.94. The BSE Small-Cap index gained 99.49 points or 0.92% to settle at 10,972.34. Both these indices outperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE IT index (down 0.71%), BSE Consumer Durables index (down 0.41%), and BSE Teck index (down 0.34%) underperformed the Sensex. The S&P BSE FMCG index (up 0.24%), BSE Healthcare index (down 0.15%), BSE Auto index (up 0.85%), BSE Bankex index (up 0.26%), BSE Metal index (up 0.76%), BSE Oil & Gas index (up 1.02%), BSE Power index (up 0.69%) and BSE Realty index (up 1.07%) outperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,474 shares gained and 1,220 shares declined. A total of 112 shares were unchanged.
The total turnover on BSE amounted to Rs 2873 crore, lower than turnover of Rs 3545.28 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC fell 1.1% to Rs 1,206.10. The stock hit high of Rs 1,223.05 and low of Rs 1,192.15.
Index heavyweight and software major Infosys slipped 1.12% to Rs 1,934. The stock hit high of Rs 1,960 and low of Rs 1,910. Infosys announced after market hours today, 14 May 2015, that the company has joined the Industrial Internet Consortium (IIC), an open membership group established to improve the integration between the physical and the digital worlds and accelerate the adoption of Internet of Things. The goal of the consortium is to amplify the development and availability of connected, intelligent industrial automation.
Shares of private sector banks edged lower in volatile trade. HDFC Bank (down 0.32%), Kotak Mahindra Bank (down 0.65%), Axis Bank (down 0.43%), Yes Bank (down 0.43%), and ICICI Bank (down 0.65%) declined. IndusInd Bank rose 0.04%.
PSU bank stocks edged higher. State Bank of India (SBI) (up 2.59%), Canara Bank (up 2.99%), Bank of India (up 4.31%), Union Bank of India (up 5.42%), Vijaya Bank (up 0.88%), Punjab National Bank (up 2.96%) and Bank of Baroda (up 1.75%) gained.
Oriental Bank of Commerce jumped 10.77%. OBC reported a net loss of Rs 178.44 crore in Q4 March 2015 compared with net profit of Rs 310.32 crore in Q4 March 2014. Total income rose 1.13% to Rs 5719.39 crore in Q4 March 2015 over Q4 March 2014.
The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.18% as on 31 March 2015 as against 5.43% as on 31 December 2014 and 3.99% as on 31 March 2014. The ratio of net NPAs to net advances stood at 3.34% as on 31 March 2015 as against 3.68% as on 31 December 2014 and 2.82% as on 31 March 2014.
Shares of public sector oil marketing companies edged higher. BPCL (up 2.8%) and HPCL (up 2.46%) edged higher. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. However, gains in rupee against the dollar will mitigate the negative impact of higher crude oil price. A firm rupee will reduce cost of crude oil imports. The government has already freed pricing of petrol and diesel.
Brent crude oil futures edged higher today, 14 May 2015. Brent for June settlement which expires today, 14 May 2015, was up 40 cents at $67.21 a barrel. The contract had dropped 5 cents a barrel or 0.07% to settle at $66.81 a barrel during previous trading session. Brent for July settlement was up 50 cents at $67.77 a barrel.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 63.775, compared with closing of 64.01 during the previous trading session.
Indian Oil Corporation (IOC) fell 0.22% to Rs 333.70. The stock had gained 0.5% yesterday, 13 May 2015.
NTPC rose 0.72% to Rs 139. The stock hit high of Rs 143.55 and low of Rs 137.70. The stock had declined 2.47% yesterday, 13 May 2015.
Reports during market hours yesterday, 13 May 2015, indicated that the Cabinet Committee on Economic Affairs at a meeting held yesterday, 13 May 2015, approved divestment of 5% stake in NTPC and 10% stake in IOC.
GAIL (India) rose 1.11%. Adani Enterprises rose 2.11%. GAIL (India) announced after market hours yesterday, 13 May 2015, that the company and Indian Oil Corporation have signed a Memorandum of Understanding (MoU) with Dhamra LNG Terminal (DLTPL), a company owned by Adani Enterprises. DLTPL's project shall be an onshore LNG regasification terminal having initial capacity of 5 million tonnes per annum (MTPA), at Dhamra Port in Bhadrak district of Odisha. Dhamra is an all-weather deep water port.
As per the terms of MoU, Indian Oil Corporation and GAIL (India) would reserve regasification capacity in the terminal to supply regasified LNG in the emerging gas markets in the eastern part of the country. Indian Oil Corporation and GAIL (India) would also have the option to hold equity in DLTPL at a later date.
Auto stocks were in demand on renewed buying. Maruti Suzuki India (up 1.21%), Mahindra & Mahindra (M&M) (up 1.71%), Eicher Motors (up 0.71%), Ashok Leyland (up 2.51%), Bajaj Auto (up 1.67%), Hero MotoCorp (up 1.11%) and TVS Motor Company (up 1.98%) gained. Tata Motors fell 0.61%.
The Sensex has risen 194.75 points or 0.72% in this month so far (till 14 May 2015). The Sensex has dropped 293.36 points or 1.06% in this calendar year so far (till 14 May 2015). From a 52-week low of 23,729.25 on 13 May 2014, the Sensex has risen 3,476.81 points or 14.65%. The Sensex is off 2,818.68 points or 9.38% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI inflation stood at negative 2.65% in April 2015, data released by the government today, 14 May 2015, showed. WPI inflation was minus 2.33% in March 2015. Build up of inflation in the financial year so far was minus 0.06%, compared to a build up rate of 0.28% in the corresponding period of the previous year.
Meanwhile, WPI inflation for February 2015 was revised downwards to negative 2.17% from negative 2.06% reported earlier.
The India Meteorological Department (IMD) today, 14 May 2015, said that the southwest monsoon is likely to set over Kerala on 30 May, with a model error of plus/minus 4 days. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent and represents beginning of rainy season over the region. The IMD has forecast below normal rains during the June-September southwest monsoon season this year.
The Australian Bureau of Meteorology and Japan Meteorological Agency both announced the emergence of El Ni conditions this week. El Ni has also been linked to a weaker Indian monsoon. The annual monsoon is critical for the country's agriculture. Lower than average rainfall could adversely affect crops including rice, wheat, cotton and sugar.
Meanwhile, global credit raging agency Moody's Investors Service yesterday, 13 May 2015, said that of the non-financial and infrastructure corporates that it rates in India, the vast majority carry either positive or stable outlooks. Twenty-six percent of all corporates that Moody's rates in India carry positive outlooks, seventy percent carry stable outlooks, leaving only four percent with negative outlooks, said Philipp Lotter, a Moody's Managing Director for the Corporate Finance Group. Lotter was speaking at the first Moody's and ICRA Annual Credit Conference in Mumbai.
Over the next 12-18 months, India's economy should grow at around 7.5%, and credit conditions should improve for Moody's-rated non-financial corporates and infrastructure debt issuers in pro-cyclical industries, according to Lotter. He further said that most of the positive outlooks were on ratings of government-related issuers and therefore linked to the recent change in outlook to positive on the Indian sovereign. However, broader improvements in credit conditions for corporates will also be due to an upturn in economic growth, the banks' pass-through of interest rate cuts, weakness in international commodity prices, and the government's pro-growth policy agenda.
Sectors that will benefit the most include industrials, transport infrastructure, metals and automotives. However, issuers in the upstream oil and gas and chemicals sectors will see their earnings and cash flows pressured by weak oil prices globally. Lotter pointed out that the latest economic data in India suggests that a cyclical pick-up in economic activity is underway, as the country's purchasing managers' indices for the manufacturing and services sectors are expanding. In addition, leading investment indicators such as capital goods production and commercial vehicle sales point to a gradual bottoming out in India's capex cycle.
A number of stubborn macroeconomic challenges have also eased significantly. Consumer price inflation has fallen to the mid-single digits, while the country's current account balance is running at a historically mild deficit of 1.1% of GDP. The reduction in both the country's headline inflation rate and current account deficit provides a more stable backdrop for Indian corporates in terms of market borrowing costs and the exchange rate.
As for the weak commodity prices globally, Lotter said that the historically low prices are generally credit positive because operating costs will be lower for sectors such as automotives, manufacturing, infrastructure and power. On leverage, Lotter said that debt levels are in general stabilizing for Moody's-rated Indian corporate and infrastructure issuers. On a weighted average basis, Moody's expects debt-to EBITDA to stabilize at 2.8x in 2015 because an upswing in earnings and improving margins should help shore up key credit metrics for Indian corporates rated by Moody's.
Meanwhile, Prime Minister Narendra Modi arrived on a three-day visit to China today, 14 May 2015.
In overseas markets, European stocks edged lower in choppy trade today, 14 May 2015. Key indices in France and UK were off 0.01% to 0.03%. Germany's DAX was up 0.04%.
Meanwhile, Greek Finance Minister Yanis Varoufakis reportedly said today, 14 May 2015, that Greece's debt repayments to the European Central Bank should be pushed back to the distant future. Greece on 12 May 2015 made a 750-million-euro ($836.7 million) loan repayment to the International Monetary Fund, but did so by raiding an emergency account.
Asian stocks edged higher today, 14 May 2015. Key benchmark indices in China, Singapore, Hong Kong and South Korea were up 0.06% to 0.29%. Key benchmark indices in Taiwan and Japan were off 0.98% to 1.16%. Indonesian markets are closed for a holiday.
US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session. In economic data, US retail sales were unchanged in April as households cut back on purchases of cars and other big-ticket items and import prices fell for a 10th straight month in April and business inventories barely rose in March.
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