Strong market breadth

Key benchmark indices alternately moved between positive and negative zone near the flat line in early afternoon trade. The barometer index, the S&P BSE Sensex, was currently up 4 points or 0.02%, up close to 65 points from the day's low and off about 90 points from the day's high. The market breadth, indicating the overall health of the market was strong. The BSE Small-Cap index was up almost 1.5%.

Most pharma stocks gained. Sun Pharmaceutical Industries declined after its unit Taro Pharmaceutical Industries reported Q4 results. Realty stocks rose.

The Sensex edged higher amid initial volatility on firm Asian stocks. Volatility continued as key benchmark indices trimmed initial gains in morning trade. The Sensex regained positive terrain after slipping into the red from green in mid-morning trade. Key benchmark indices alternately moved between positive and negative zone near the flat line in early afternoon trade.

Foreign institutional investors (FIIs) sold shares worth a net Rs 202.61 crore on Tuesday, 27 May 2014, as per provisional data from the stock exchanges.

The market may remain volatile in the near future 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 tomorrow, 29 May 2014.

At 12:20 IST, the S&P BSE Sensex was up 4 points or 0.02% to 24,553.51. The index rose 93.82 points at the day's high of 24,643.33 in early trade. The index fell 60.70 points at the day's low of 24,488.81 in mid-morning trade.

The CNX Nifty was up 6.45 points or 0.09% at 7,324.75. The index hit a high of 7,344.75 in intraday trade. The index hit a low of 7,302.60 in intraday trade.

The BSE Mid-Cap index was up 45.63 points or 0.54% at 8,474.83. The BSE Small-Cap index was up 129.33 points or 1.46% at 9,012.98. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,656 shares rose and 974 shares fell. A total of 85 shares were unchanged.

Among the 30-share Sensex pack, 16 stocks fell and rest of them rose. Tata Power Company (up 3.55%), HDFC Bank (up 2.59%) and Bharat Heavy Electricals (Bhel) (up 3.07%) edged higher from the Sensex pack.

Realty stocks gained. DLF (up 1.74%), D B Realty (up 0.31%), Housing Development & Infrastructure (up 4.2%) and Unitech (up 0.57%) gained.

Most pharma stocks gained. Cipla (up 0.57%), Dr Reddy's Laboratories (up 1.14%) and Lupin (up 1.35%) rose.

Sun Pharmaceutical Industries declined after its unit Taro Pharmaceutical Industries reported Q4 results. The stock was off 0.85%. Israel based Taro Pharmaceutical Industries on Tuesday, 27 May 2014, said its net profit jumped 82.11% to $89.60 million on 13.3% rise in net sales to $187.20 million in Q4 March 2014 over Q4 March 2013.

Sun Pharma reports its Q4 results tomorrow, 29 May 2014.

Ranbaxy Laboratories dropped 1.26%. In response to the news articles which appeared on 25 May 2014 regarding Andhra Pradesh High Court vacating the stay on the Sun Pharma Ranbaxy merger, Sun Pharmaceutical Industries after market hours on Tuesday, 27 May 2014, said that there was no material impact of the earlier court order on the process of completion of merger of Ranbaxy Laboratories with the company and therefore the vacation of the said order will also not have any material impact on the process of completion of merger of Ranbaxy Laboratories with Sun Pharma.

Triveni Turbine lost 3.5% after net profit fell 37% to Rs 19.27 crore on 31.09% decline in net sales to Rs 131.32 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Tuesday, 27 May 2014. Triveni Turbine's net profit fell 35.85% to Rs 68.40 crore on 23.01% decline in net sales to Rs 505.69 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).

In the foreign exchange market, the rupee reversed intraday losses against the dollar. The partially convertible rupee was hovering at 59, compared with its close of 59.04/05 on Tuesday, 27 May 2014.

The Reserve Bank of India (RBI) on Tuesday, 27 May 2014, doubled the amount of forward contracts importers can book to 50% of their average three years import turnover, or previous year's actual import turnover, whichever is higher. The earlier limit for such contracts was 25%. "Importers who have already booked contracts up to previous limit of 25% in the current financial year, shall be eligible for difference arising out of the enhanced limits," RBI said.

Reserve Bank of India Governor Raghuram Rajan reiterated on Wednesday what he said is the need for global central banks to be mindful of the impact of their unconventional monetary policy measures on other economies. Rajan proposed that central banks of advanced nations "internalise" the spillover effects from such policies to minimise volatility and disruptions in financial markets elsewhere. "The current non-system in international monetary policy is, in my view, a source of substantial risk, both to sustainable growth as well as to the financial sector," Rajan said in the text of a speech to be delivered at the Bank of Japan in Tokyo. "It is not an industrial country problem, nor an emerging market problem, it is a problem of collective action. The sooner we recognize that, the more sustainable world growth we will have," he said, reiterating comments he made earlier this month.

The Union Cabinet on Tuesday approved constitution of Special Investigating Team (SIT) to implement the decision of the Supreme Court on large amounts of money stashed abroad by evading taxes or generated through unlawful activities.

The SIT will be headed by Mr. Justice M.B. Shah, former Judge of the Supreme Court as Chairman and Mr. Justice Arijit Pasayat, former Judge as Vice Chairman. The SIT has been charged with the responsibility and duties of investigation, initiation of proceedings and prosecution in cases of Hasan Ali and other matters involving unaccounted money. SIT shall have jurisdiction in the cases where investigations have already commenced or are pending or awaiting to be initiated or have been completed. SIT will prepare a comprehensive action plan including creation of necessary institutional structure that could enable the country to fight the battle against unaccounted money. The SIT should report to the court the status of work from time to time.

Meanwhile, Prime Minister Narendra Modi delivered a blunt warning to old adversary Pakistan on his first day in the job on Tuesday, telling his counterpart in a rare meeting that Islamabad must prevent militants on its territory from attacking India. Despite the directness of his message, both sides said Modi's meeting with Pakistani Prime Minister Nawaz Sharif in New Delhi was cordial and they agreed to try to restart peace talks between the nuclear-armed rivals. They also agreed to pursue normalising trade ties, which have been held hostage to distrust between their countries after fighting three wars since independence from Britain in 1947. Modi, 63, invited Sharif and several other South Asian leaders for his swearing-in ceremony on Monday.

Modi was sworn in India's 15th Prime Minister on Monday, 26 May 2014.

Finance Minister Arun Jaitely is expected to table Union Budget for 2014-15 in Lok Sabha 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.

Asian stocks edged higher on Wednesday, 28 May 2014. Key benchmark indices in Hong Kong, Indonesia, South Korea, Taiwan, China, Singapore and Japan were up 0.06% to 0.97%.

Chinese industrial profit increased 10% this year through April from the same period in 2013, a report showed today, compared with 10.1% growth in the three months through March.

Bank of Japan Governor Haruhiko Kuroda said in a speech today, 28 May 2014, that it is possible to implement monetary policy even under situations where the policy rate is around zero.

Trading in US index futures indicated that the Dow could gain 25 points at the opening bell on Wednesday, 28 May 2014. US stocks rose on Tuesday as the S&P 500 index scored a second straight record close, buoyed by the latest round of merger activity and as expectations for rate cuts by the European Central Bank stoked investors' appetite for equities.

US data showed bookings for goods meant to last at least three years rose 0.8% in April after a 3.6% gain in the previous month that was revised up by one percentage point. The Conference Board's index of US consumer confidence increased to 83 in May from 81.7 a month earlier, the New York-based private research group said, while a Markit Economics preliminary index for services unexpectedly rose to 58.4 this month from 55.

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.

Ukrainian aircraft and paratroopers killed more than 50 pro-Russian rebels in an assault that raged into a second day on Tuesday after a newly elected president vowed to crush the revolt in the east once and for all.

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