Firmness continued on the bourses in afternoon trade. The barometer index, the S&P BSE Sensex, was up 429.38 points or 1.87%, up 414.96 points from the day's low and off 29.68 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Indian stocks surged today, 12 May 2014, 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. 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 funds 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.
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.
Index heavyweight and cigarette major ITC edged higher. 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. Capital goods stocks gained on renewed buying, with shares of ABB (India) hitting 52-week high. Among power finance companies, Rural Electrification Corporation (REC) and Power Finance Corporation (PFC), both, hit 52-week high.
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.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Friday, 9 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1268.78 crore on Friday, 9 May 2014, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was up 429.38 points or 1.87% to 23,423.61. The index jumped 459.06 points at the day's high of 23,453.29 in early afternoon 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 119.95 points or 1.75% to 6,978.75. The index hit a high of 6,988.25 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 57.98 points or 0.78% at 7,514.07. The BSE Small-Cap index was up 40.91 points or 0.54% at 7,634.59. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,354 shares gained and 1,306 shares fell. A total of 145 shares were unchanged.
The total turnover on BSE amounted to Rs 2321 crore by 13:15 IST.
Among the 30-share Sensex pack, 25 stocks gained and rest of them fell. HDFC Bank (up 3.88%), Coal India (up 3.61%) and State Bank of India (up 3.22%) edged higher from the Sensex pack.
Index heavyweight and cigarette major ITC gained 2.04% to Rs 352.55. The stock hit high of Rs 354.50 and low of Rs 346 so far during the day.
Cipla was off 1.63% at Rs 386.15. The stock was volatile. The stock hit high of Rs 394.50 and low Rs 384.60 so far during the day. Cipla today, 12 May 2014, announced its investment in Chase Pharmaceuticals Corporation Inc., US (Chase), through its wholly owned subsidiary, Cipla (EU), UK. Chase is an early stage drug development company, based in Washington DC. Chase is focused on developing novel approaches to improve treatments for Alzheimer's disease. Chase has a unique patented approach and is focused on improving the efficacy, safety and tolerability of existing Alzheimer medications, Cipla said in a statement.
Cipla through its impact investment unit -- Cipla New Ventures -- is investing in the Series B round of financing as part of a syndicate, which also consists of Edmond de Rothschild Investment Partners and New Rhein Healthcare LLC. Cipla New Ventures was set up to chart a trajectory in innovation around biologicals, repurposing existing safe drugs and leveraging Cipla's enviable suite of delivery technologies through disruptive innovation around access and affordability. It is managed by Mr. Chandru Chawla. The $21 million two-phase financing will support Phase 2a and Phase 2b clinical trials for Chase's lead drug CPC 201. The original venture funding for Chase was provided by the Brain Trust Accelerator Fund in 2010.
Commenting on the investment, Mr. Subhanu Saxena, MD & Global CEO, Cipla Ltd said: "This investment is consistent with Cipla New Ventures' mission to build more innovation-led business streams for Cipla in the future. We want to bring affordable medicines, where we identify an unmet patient need, in a way that leverages Cipla's formidable technology, device and development capabilities."
In India, over 5 million patients suffer from dementia, most of whom are afflicted with Alzheimer's. These numbers are expected to double by 2030. In India, the caregiver is the family and the economic and social impact is far reaching. In North America, Alzheimer's disease affects more than over 7 million patients and its impact is growing as the population ages. The disease costs the US alone $203 billion annually with projections to reach $1.2 trillion by 2050.
In addition to financing Chase, Cipla will collaborate with the company to develop the drug. If successful, Cipla may provide low cost access to Chase's lead drug in India and South Africa where Cipla has championed affordable access to essential and life-saving medications for decades, the company said in a statement.
Auto stocks rose on renewed buying. Tata Motors advanced 2.57% to Rs 438.50 after scaling a record high of Rs 440 in intraday trade.
Ashok Leyland jumped 9.43% to Rs 26.10 after hitting a 52-week high of Rs 25.25 in intraday trade.
Mahindra & Mahindra (M&M) rose 0.92% at Rs 1,114.45. The stock hit record high of Rs 1,126.45 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 2.31% at Rs 2,018.10. The stock hit record high of Rs 2,035.80 in intraday trade.
Bajaj Auto (up 0.82%) and Hero MotoCorp (up 2.93%) gained.
TVS Motor Company surged 5.75% to Rs 117.75 after scaling record high of Rs 120.05 in intraday trade.
Capital goods stocks gained on renewed buying. Bharat Heavy Electricals (Bhel) (up 3.02%), BEML (up 2.7%), Bharat Electronics (up 3.25%), Crompton Greaves (up 2.09%), L&T (up 2.25%), Siemens (up 3.97%) gained.
ABB (India) jumped 6.4% to Rs 885.60 after hitting 52-week high of Rs 922.70 in intraday trade.
Rural Electrification Corporation rose 2.52% to Rs 256.10 after hitting 52-week high of Rs 257.10 in intraday trade.
Power Finance Corporation advanced 3.94% to Rs 209.50 after hitting 52-week high of Rs 210.65 in intraday trade.
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 59.74, 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 8.7366%, 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 as copper and base metal prices rose. Key benchmark indices in UK and Germany were up 0.14% to 0.19%. In France, the CAC 40 index was off 0.25%.
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 0.43% 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 23 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.
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