A bout of volatility was witnessed as key benchmark indices trimmed intraday losses in mid-afternoon trade. The market breadth indicating the overall health of the market once again turned positive from negative in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was currently trading above the psychological 27,000 mark. Earlier, the Sensex had fallen below that level amid initial volatility. The Sensex had settled above the psychological 27,000 mark after yesterday's rally. The Sensex was currently off 122.38 points or 0.45% at 27,128.72.
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 (FPIs) sold shares worth a net Rs 71.20 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges. 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 declined as the euro surged to its highest level against the dollar in more than two months. Asian stocks were mixed. US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session.
At 14:16 IST, the S&P BSE Sensex was down 122.38 points or 0.45% at 27,128.72. 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 CNX Nifty was down 35.45 points or 0.43% at 8,200. The index hit a high of 8,232.80 in intraday trade. The index hit a low of 8,137.30 in intraday trade.
The market breadth indicating the overall health of the market once again turned positive from negative in mid-afternoon trade. On BSE, 1,298 shares gained and 1,218 shares declined. A total of 113 shares were unchanged. Earlier, the breadth had turned negative from positive in early afternoon trade.
The BSE Mid-Cap index was up 81.86 points or 0.78% at 10,515.73. The BSE Small-Cap index was up 67.46 points or 0.62% at 10,940.31. Both these indices outperformed the Sensex.
Auto stocks were in demand on renewed buying. Maruti Suzuki India (up 0.29%), Mahindra & Mahindra (M&M) (up 0.56%), Eicher Motors (up 1.53%), Ashok Leyland (up 1.44%), Bajaj Auto (up 1.52%), Hero MotoCorp (up 1.04%) and TVS Motor Company (up 1.14%) gained. Tata Motors fell 1.17%.
Telecom stocks rose. Bharti Airtel (up 1.53%), Idea Cellular (up 1.87%), Tata Teleservices (Maharashtra) (up 0.54%) gained. MTNL fell 1.12%. Reliance Communications was unchanged at Rs 64.30.
Kotak Mahindra Bank fell 1.45%. Dhanlaxmi Bank declined 2.51%. With respect to media reports titled "Kotak Mahindra Bank was looking to acquire Dhanlaxmi Bank", Kotak Mahindra Bank in its clarification during market hours today, 14 May 2015, denied the rumour.
Castrol India rose 0.53% after net profit rose 46.4% to Rs 146.70 crore on 1.21% growth in total income to Rs 842.70 crore in Q1 March 2015 over Q1 March 2014. The Q1 result was announced during market hours today, 14 May 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.
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, during which he will hold summit talks with Chinese president Xi Jinping on a range of issues.
In overseas markets, European stocks edged lower today, 14 May 2015, as the euro surged to its highest level against the dollar in more than two months. Key indices in France, Germany and UK were off 0.03% to 0.21%. A stronger euro against the dollar tends to weigh on companies in the eurozone, which generate a substantial proportion of their revenue overseas.
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 were mixed today, 14 May 2015. Key benchmark indices in China, Hong Kong and South Korea were up 0.06% to 0.29%. Key benchmark indices in Singapore, Taiwan and Japan were off 0.13% 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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