Key benchmark indices trimmed gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 179.74 points or 0.74%, off 143.46 points from the day's high and up 83.36 points from the day's low. The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. The BSE Small-Cap index was up more than 1.5%. The BSE Mid-Cap index was up more than 1%. Both these indices outperformed the Sensex.
Sesa Sterlite hit 52-week high. Bank stocks were mixed. HDFC Bank fell on reports the government has turned down the bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49%. India's biggest commercial bank in terms of branch network, State Bank of India edged lower in volatile trade ahead of its Q4 March 2014 result today, 23 May 2014. Power generation stocks rose on renewed buying, with NTPC and Tata Company hitting 52-week high. Power Grid Corporation of India scaled 52-week high.
Key benchmark indices edged higher in early trade on firm Asian stocks. Key benchmark indices extended initial gains in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week high. Key benchmark indices trimmed gains in mid-morning trade.
At 11:15 IST, the S&P BSE Sensex was up 179.74 points or 0.74% to 24,554.14. The index jumped 323.20 points at the day's high of 24,697.60 in mid-morning trade, its highest level since 16 May 2014. The index rose 96.38 points at the day's low of 24,470.78 in early trade.
The CNX Nifty was up 49.60 points or 0.68% to 7,326. The index hit a high of 7,365.35 in intraday trade, its highest level since 16 May 2014. The index hit a low of 7,293.90 in intraday trade.
The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. On BSE, 1,912 shares gained and 715 shares fell. A total of 92 shares were unchanged.
The BSE Mid-Cap index was up 97.20 points or 1.14% at 8,615.42. The BSE Small-Cap index was up 146.06 points or 1.63% at 9,106.76. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2009 crore by 11:15 IST on BSE, compared with Rs 1369 crore by 10:15 IST.
Sesa Sterlite advanced 2.86% to Rs 266.50 after hitting a 52-week high of Rs 269.95 in intraday trade.
Bank stocks were mixed. ICICI Bank (up 0.49%), Axis Bank (up 0.43%) and Kotak Mahindra Bank (up 0.09%) gained. Yes Bank (down 0.49%) and IndusInd Bank (down 0.42%) fell.
HDFC Bank fell 1.21% on reports the government has turned down the bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49%.
According to reports, the government has turned down HDFC Bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49% after a prolonged debate. This implies that foreign investors will not be able to invest further in HDFC Bank. The Reserve Bank of India (RBI) had stopped further purchases by foreign institutional investors (FIIs) in the bank after the 49% ceiling was breached last December. The law ministry, which was asked to give its opinion on the proposal, had wanted both the Department of Industrial Policy and Promotion (DIPP) and the Department of Economic Affairs (DEA) to take a call on the matter. DIPP and RBI had earlier said the HDFC Bank's proposal was not in line with the foreign direct investment (FDI) policy, reports added.
Among PSU bank stocks, Canara Bank (up 0.98%), Union Bank of India (up 0.44%), Punjab National Bank (up 0.38%), Bank of India (up 0.37%) and Bank of Baroda (up 0.97%) gained.
India's biggest commercial bank in terms of branch network, State Bank of India fell 0.15% to Rs 2,508 in volatile trade ahead of its Q4 March 2014 result today, 23 May 2014. The stock hit high of Rs 2,533.80 and low of Rs 2,497.35 so far during the day.
Power generation stocks rose on renewed buying. Reliance Power (up 1.13%), Reliance Infrastructure (up 1.43%), JSW Energy (up 1.07%), and Adani Power (up 1.32%) edged higher.
India's largest power generation firm by capacity NTPC rose 1.56% to Rs 156 after hitting a 52-week high of Rs 159.40 in intraday trade.
Tata Power Company rose 1.76% to Rs 101.20 after hitting a 52-week high of Rs 102.35 in intraday trade.
Power Grid Corporation of India advanced 3.19% to Rs 129.50 after hitting a 52-week high of Rs 130.40 in intraday trade.
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 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. With Modi at the helm of affairs, 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.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
Modi will be sworn in as India's next Prime Minister on Monday, 26 May 2014, evening at the Rashtrapati Bhawan.
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.
Asian stocks edged higher on Friday, 23 May 2014, on signs of growth in the world's largest economies. Key benchmark indices in China, Hong Kong, Taiwan, Singapore, Japan and Indonesia were up 0.09% to 0.96%. South Korea's Seoul Composite index shed 0.08%.
Thailand's army staged its 12th coup in eight decades on Thursday, 22 May 2014, as the army chief said he was seizing control to restore peace. Thailand's military seized control following a six-month political stalemate that has sapped economic growth.
Trading in US index futures indicated that the Dow could advance 12 points at the opening bell on Friday, 23 May 2014. US stocks built on advances from the previous session and closed modestly higher on Thursday, 22 May 2014, as data showing strength in manufacturing boosted confidence in the global economy.
The Markit Economics preliminary index of US manufacturing increased to 56.2 in May from 55.4 a month earlier as output accelerated, the London-based group said on Thursday, 22 May 2014. Readings above 50 for the purchasing managers' measure indicate expansion and the May figure was the highest in three months.
In other economic news, new applications for unemployment benefits rose sharply in mid-May, reversing a big drop earlier in the month that put initial claims at a seven-year low. Sales of existing homes rose 1.3% in April to a seasonally adjusted annual rate of 4.65 million, the National Association of Realtors reported Thursday.
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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