Key benchmark indices surged on speculation the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre and that Narendra Modi will become the next Prime Minister of India after the final phase of Lok Sabha elections which conclude today, 12 May 2014. The 50-unit CNX Nifty hit record high above 7,000 level. The barometer index, the S&P BSE Sensex, also hit record high. Speculation is rife that exit-poll results will show a victory by the NDA in Lok Sabha elections. Exit poll results can be telecast after 18:30 IST today, 12 May 2014, according to the Election Commission. The counting of votes will take place on Friday, 16 May 2014, and the results are expected on the same day. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Friday, 9 May 2014. Gains in Asian and European stocks also aided the rally on the domestic bourses. The Sensex was provisionally up 556.77 points or 2.42%, up close to 540 points from the day's low and off about 20 points from the day's high. Today's rally came on the top of a near 3% surge in the key benchmark indices during the previous trading session on Friday, 9 May 2014.
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. 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.
Indian stocks gained for the third day in a row today, 12 May 2014.
Auto stocks rose, with shares of Tata Motors, Mahindra & Mahindra, Maruti Suzuki India and TVS Motor Company scaling record high. Ashok Leyland hit 52-week high. L&T, JSW Steel and Coal India scaled 52-week high.
The market breadth, indicating the overall health of the market was negative.
The market surged in early trade on speculation exit-poll results will show a victory by the NDA in Lok Sabha elections. The Sensex and the 50-unit CNX Nifty, both, scaled record high. Firmness continued on the bourses in mid-morning trade. Key benchmark indices extended intraday gains and scaled fresh lifetime high in early afternoon trade. Firmness continued on the bourses in afternoon trade. Key benchmark indices extended intraday gains and scaled fresh lifetime high in mid-afternoon trade. The Nifty hit record high above the 7,000 mark. Firmness continued on the bourses in late trade.
The market sentiment was boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Friday, 9 May 2014. FIIs bought shares worth a net Rs 1260.60 crore from the secondary equity markets on Friday, 9 May 2014, as per data from Securities & Exchange Board of India (Sebi).
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As per provisional figures, the S&P BSE Sensex was up 556.77 points or 2.42% to 23,551. The index jumped 578.65 points at the day's high of 23,572.88 in late trade, a lifetime high for the index. The index rose 14.42 points at the day's low of 23,008.65 in early trade.
The CNX Nifty was up 160.20 points or 2.34% to 7,019, as per provisional figures. The index hit a high of 7,020.05 in intraday trade, a lifetime high for the index. The index hit a low of 6,862.90 in intraday trade.
The BSE Mid-Cap index was up 54.64 points or 0.73% at 7,510.73. The BSE Small-Cap index was up 38.61 points or 0.51% at 7,632.29. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3581.52 crore, higher than Rs 3238.55 crore on Friday, 9 May 2014.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,438 shares declined and 1,409 shares rose. A total of 166 shares were unchanged.
Among the 30-share Sensex pack, 27 stocks gained and rest of them fell. HDFC Bank (up 4.46%), Sesa Sterlite (up 3.55%) and ITC (up 4.02%) edged higher from the Sensex pack.
Auto stocks rose on renewed buying. Tata Motors advanced 3.98% to Rs 444.50 after scaling a record high of Rs 446 in intraday trade.
Ashok Leyland rose 4.82% to Rs 25 after hitting a 52-week high of Rs 26.25 in intraday trade.
Mahindra & Mahindra (M&M) rose 2.69% at Rs 1,134.05. The stock hit record high of Rs 1,139 in intraday trade. M&M during trading hours on Friday, 9 May 2014, said that a section of employees who were not reporting to duties at the company's tractor manufacturing plants situated at Mohali, Punjab, have resumed their work with effect from 8 May 2014 as the matter was resolved amicably through mutual dialogues and the matter has also been withdrawn from the Conciliation Officer, Mohali. M&M also said that that there has been no production loss during the period when these employees had stopped reporting to duties and that all operations continued without any interruptions during this period. Earlier, M&M had on 28 April 2014 announced that a section of employees were not reporting to duties in a concerted manner at the tractor manufacturing unit in Mohali.
India's largest car maker by sales Maruti Suzuki India rose 4.24% at Rs 2,056.30. The stock hit record high of Rs 2,064.70 in intraday trade.
Bajaj Auto (up 1.63%) and Hero MotoCorp (up 3.67%) gained.
TVS Motor Company surged 6.96% to Rs 119.10 after scaling record high of Rs 123.65 in intraday trade.
Bharti Airtel rose 2.44%. The company today, 12 May 2014, said its that subsidiary -- Bharti Airtel International (Netherlands) BV -- has approached investors for issuance of debt instruments in the form of dollar and euro denominated senior unsecured guaranteed notes. The proceeds of the issue will be used for repayment and refinancing of existing foreign currency indebtedness with the rest for general corporate purposes, Bharti Airtel said.
L&T rose 3.66% to Rs 1,392.30 after hitting 52-week high of Rs 1,394 in intraday trade.
Coal India surged 6.03% to Rs 327.70 after hitting 52-week high of Rs 336.20 in intraday trade.
JSW Steel advanced 2.53% to Rs 1,161.25 after hitting 52-week high of Rs 1,167.20 in intraday trade.
Blue Dart Express fell 1.16% after net profit declined 26.6% to Rs 30.65 crore on 12.9% growth in net sales to Rs 502.89 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Friday, 9 May 2014. On a consolidated basis, Blue Dart Express' net profit declined 36.6% to Rs 122.60 crore on 10.6% fall in net sales to Rs 1936.64 crore in the year ended 31 March 2014 over the year ended 31 March 2013.
Taj GVK Hotels & Resorts rose 0.37% after net profit surged 748.28% to Rs 4.92 crore on 1.26% rise in net sales to Rs 65.07 crore in Q4 March 2014 over Q4 March 2013. The company announced the result during trading hours today, 12 May 2014.
In the foreign exchange market, the rupee edged higher against the dollar as equities rose on speculation exit-poll results will show a victory by BJP-led NDA in Lok Sabha elections. The partially convertible rupee was hovering at 59.795, compared with its close of 60.02/03 on Friday, 9 May 2014.
Indian government bond prices rose on speculation exit-poll results will show a victory by BJP-led NDA in Lok Sabha elections. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7335%, lower than its close of 8.7459% on Friday, 9 May 2014. Bond yield and bond prices move in opposite direction.
India's merchandise exports rose 5.26% to $25.63 billion in April 2014 over April 2013, data released by the government after trading hours on Friday, 9 May 2014, showed. Imports dropped 15% at $35.72 billion in April 2014 over April 2013. Oil imports declined 0.6% at $12.98 billion in April 2014 over April 2013. Non-oil imports dropped 21.5% at $22.74 billion in April 2014 over April 2013. The trade deficit for April 2014 was estimated at $10.09 billion, which was sharply lower than the trade deficit of $17.67 billion during April 2013.
A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process which began on 7 April 2014 conclude with the final phase of voting today, 12 May 2014. Results of exit polls predicting the outcome of the election will likely start coming in from today evening. The counting of votes will take place on 16 May 2014 and the results are expected on the same day. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Investors are hoping that a stable government which will complete its full term of five years in office comes to power after the elections. 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.
There are expectations that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections which conclude next week. Various opinion polls have forecast that the NDA with Narendra Modi as its prime ministerial candidate is leading the race to Parliament. Most opinion polls have forecast that the NDA will be unable to form the government on its own and that it will have to rely on support from smaller regional parties to form the government. For the first time in mid-April, an opinion poll for a television news channel showed the NDA winning a narrow majority of 275 seats.
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.
Industrial production is seen remaining in contraction mode in March 2014. Industrial production is expected to shrink 1.4% in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production declined 1.9% in February 2014. The government unveils data on industrial production for March 2014 after trading hours today, 12 May 2014.
The rate of inflation based on the combined consumer price index (CPI) for urban India and rural India is seen accelerating to 8.6% in April 2014, from 8.3% in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government unveils CPI data for April 2014 after trading hours today, 12 May 2014.
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 on Thursday, 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.
European stocks edged higher Monday, 12 May 2014, with mining shares advancing after a brokerage upgrade of the sector. Key benchmark indices in UK and Germany were up 0.17% to 0.27%. In France, the CAC 40 index was off 0.17%.
Asian stocks rose on Monday, 12 May 2014, after Chinese President Xi Jinping said the nation needs to adapt to a "new normal" in the pace of economic growth. Key benchmark indices in Indonesia, South Korea, Hong Kong, China and Indonesia were up 0.3% to 2.08%. Key benchmark indices in Taiwan, Singapore and Japan were off 0.35% to 0.91%.
China's growth fundamentals haven't changed and the country is still in a significant period of strategic opportunity, Xi reportedly said. At the same time, the government must prevent risks and take timely countermeasures to reduce potential negative effects, he said.
Japan's current-account surplus narrowed more than forecast in March as a surge in imports before last month's sales-tax increase trimmed gains from overseas investments. The excess of 116.4 billion yen ($1.14 billion) reported today by the Ministry of Finance in Tokyo. A 782.9 billion yen deficit on a seasonally adjusted basis was the largest in comparable data back to at least 1996.
Trading in US index futures indicated that the Dow could advance 29 points at the opening bell on Monday, 12 May 2014. US stocks rose with the Dow Jones Industrial Average ending at a record high on Friday, boosted by IBM, while a rebound in high-growth momentum names helped the broader market.
Dennis Lockhart, president of the Atlanta Fed, said he expects the central bank will use a reverse-repurchase program when it eventually begins to tighten monetary policy. Lockhart, who doesn't vote on policy this year, told reporters on Sunday, 11 May 2014, after a speech in Dubai that reverse repos may play a role in influencing short-term rates.
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.
Pro-Russian separatists in eastern Ukraine declared victory in a secession referendum Sunday, threatening to escalate tensions between Moscow and Kiev, even as German Chancellor Angela Merkel and French President Franis Hollande warned of further sanctions against Russia.
Russia today, 12 May 2014, said it respected the outcome of the referendum that took place in the Donetsk and Luhansk regions, but Ukrainian officials dismissed the vote as filled with irregularities.
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