Key benchmark indices alternately moved between positive and negative zone near the flat line in afternoon trade. The barometer index, the S&P BSE Sensex, was up currently up 14.06 points or 0.06%, up close to 80 points from the day's low and off about 210 points from the day's high. The market breadth, indicating the overall health of the market was strong. The BSE Mid-Cap index was up more than 2%. The BSE Small-Cap index was up more than 2.5%. Both these indices outperformed the Sensex.
Bank stocks were mixed, with Axis Bank hitting a record high. Capital goods stocks gained on renewed buying with Bharat Heavy Electricals hitting a 52-week high.
A bout of volatility was witnessed in early trade as key benchmark indices regained positive zone after reversing gains after a firm opening. Key benchmark indices extended intraday gains in morning trade. Volatility ruled the roost as the key benchmark indices slipped into the red after extending intraday gains in morning trade. Intraday volatility continued as key regained positive zone in early afternoon trade after Prime Minister-designate Narendra Modi was elected as BJP Parliamentary Party leader unanimously. Key benchmark indices alternately moved between positive and negative zone near the flat line in afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1350.04 crore on Monday, 19 May 2014, as per provisional data from the stock exchanges.
At 13:20 IST, the S&P BSE Sensex was up 14.06 points or 0.06% to 24,377.10. The index jumped 224.11 points at the day's high of 24,587.16 in early trade, its highest level since 16 May 2014. The index fell 63.52 points at the day's low of 24,299.53 in mid-morning trade.
The CNX Nifty was up 11.20 points or 0.15% to 7,274.75. The index hit a high of 7,353.65 in intraday trade, its highest level since 16 May 2014. The index hit a low of 7,247.70 in intraday trade.
The BSE Mid-Cap index was up 174.25 points or 2.15% at 8,265.52. The BSE Small-Cap index was up 232.45 points or 2.79% at 8,577.15. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was strong. On BSE, 1,932 shares gained and 767 shares fell. A total of 112 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks declined and rest of them gained. Sesa Sterlite (up 5.93%), Tata Steel (up 4.48%) and Mahindra & Mahindra (M&M) (up 3.95%) edged higher from the Sensex pack.
Capital goods stocks gained on renewed buying. Punj Lloyd (up 5.45%), BEML (up 5.89%), Bharat Electronics (up 5.05%) gained.
India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) jumped 5.93% to Rs 280.70. The stock hit a 52-week high of Rs 280.80 in intraday trade today, 19 May 2014.
Engineering and construction major L&T was off 1.32% at Rs 1,507.50. The stock was volatile. The stock reversed direction after hitting a 52-week high of Rs 1,540 in intraday trade. The scrip hit low of Rs 1,498.15 so far during the day.
Bank stocks were mixed. Among private sector banks, Kotak Mahindra Bank (down 0.19%), Yes Bank (down 2.86%) declined. Federal Bank (up 1.35%) and IndusInd Bank (up 0.13%) gained.
Axis Bank gained 0.32% to Rs 1,860.80 after hitting record high of Rs 1,890 in intraday trade.
HDFC Bank gained 0.85%. HDFC Bank during market hours on Monday, 19 May 2014, said that the Board of Directors of the bank at its meeting held Monday, 19 May 2014, has decided to seek an enabling approval of the shareholders at the ensuing Annual General Meeting to raise the equity share capital up to an aggregate sum of Rs 10000 crore including share premium amount. The proposed issue is to be made by creating, issuing, offering in the course of one or more public or private offerings in domestic or one or more international markets, equity shares and/or equity shares through depository receipts and/or securities convertible into equity shares at the option of the Bank and/or the holders of such securities, and/or securities linked to equity shares and/or any instrument or securities representing equity shares and/or convertible securities linked to equity shares, HDFC Bank said. The issue is proposed to be completed within a period of one year from the date of shareholders approval, the bank added.
ICICI Bank shed 1.32%. ICICI Bank has reportedly cut home loan rates by 10-15 basis points for the salaried and women borrowers in a bid to improve its market share by attracting new customers. One bps is 0.01 percentage point. The new offer is limited till 30 June 2014, and for loans up to Rs 75 lakh. The revised rates will be applicable only for new customers, reports added.
Among PSU bank stocks, Canara Bank (up 0.24%), Union Bank of India (up 1.83%), and Bank of India (up 2.06%), gained.
Bank of Baroda declined 2.99% after index provider MSCI said it will delete the stock from its MSCI global standard indexes, effective 2 June 2014. Morgan Stanley Capital International (MSCI) Barra is a leading provider of benchmark indices and risk management analytics products. Many global mutual funds are linked with MSCI indices. Hence, deletion of a stock from the MSCI index leads to outflow of passive funds that use the MSCI index to benchmark their portfolios.
Punjab National Bank declined 2.48% to Rs 988.65, with the stock reversing direction after hitting 52-week high of Rs 1,028.70 in intraday trade.
State Bank of India (SBI) fell 1.83% to Rs 2522.90, with the stock reversing direction after hitting 52-week high of Rs 2,613.10 in intraday trade.
In the foreign exchange market, the rupee edged lower against the dollar as importers stepped up dollar purchases. The partially convertible rupee was hovering at 58.695, compared with its close of 58.59/60 on Monday, 19 May 2014.
Indian government bond prices rose on optimism global funds will boost holdings of local debt after the elections handed a clear majority to the Bharatiya Janata Party. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.8466%, lower than its close of 8.8627% on Monday, 19 May 2014. Bond yield and bond prices move in opposite direction.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Gujarat chief minister and Prime Minister-designate Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.
Narendra Modi was today, 20 May 2014, elected as BJP Parliamentary Party leader unanimously.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the National Democratic Alliance (NDA) government.
The first budget of the new government is expected 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.
European stocks edged lower on Tuesday, 20 May 2014, as investors weighed corporate earnings. Key benchmark indices in France and UK shed 0.13% to 0.25%. Germany's DAX rose 0.31%.
Asian stocks edged higher on Tuesday, 20 May 2014, tracking overnight gains in US markets. Key benchmark indices in Taiwan, Hong Kong, China and Japan were up 0.11% to 0.49%. Key benchmark indices in Singapore, Indonesia and South Korea were off 0.14% to 2.72%.
Thailand's army today, 20 May 2014, imposed martial law nationwide after months of political turmoil that brought down an elected government and tipped the economy into a contraction.
China plans to have about 100 initial public offerings from June through the end of this year as the government pushes for development in capital markets. The stock sales will be spread out to ensure there are a similar number each month, China Securities Regulatory Commission Chairman Xiao Gang said in a statement posted on the regulators website yesterday, 19 May 2014.
Singapore's gross domestic product expanded an annualized 2.3% in the three months through March from the previous quarter, when it climbed a revised 6.9%, the trade ministry said in a statement today, 20 May 2014.
Trading in US index futures indicated that the Dow could gain 2 points at the opening bell on Tuesday, 20 May 2014. US stocks ended Monday's thinly traded session higher with small-cap and tech companies leading the gains.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee tomorrow, 21 May 2014. 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.
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