Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 168.57 points or 0.69%, up 118.81 points from the day's low and off 26.88 points from the day's high. The market breadth indicating the overall health of the market was quite strong, with almost four gainers for every loser on BSE. The BSE Small-Cap and Mid-Cap indices were up more than 2% each. Both these indices outperformed the Sensex. Gains in Asian stocks and upmove in US stocks on Wednesday, 21 May 2014, underpinned sentiment on the domestic bourses.
Shares of state-run coal miner, Coal India, jumped. Metal and mining stocks gained after a China manufacturing gauge rose to a five-month high in May. Sesa Sterlite hit 52-week high.
Key benchmark indices edged higher amid initial volatility. The Sensex extended initial gains in morning trade. Key benchmark indices extended gains and hit fresh intraday high in mid-morning trade.
Asian stocks edged higher on Thursday, 22 May 2014, after Federal Reserve meeting minutes showed policy makers see a muted risk of inflation from continued US stimulus and as a China manufacturing gauge rose to a five-month high this month.
At 11:15 IST, the S&P BSE Sensex was up 168.57 points or 0.69% to 24,466.59. The index jumped 195.45 points at the day's high of 24,493.47 in mid-morning trade, its highest level since 20 May 2014. The index rose 49.76 points at the day's low of 24,347.78 in early trade.
The CNX Nifty was up 46 points or 0.63% to 7,298.90. The index hit a high of 7,306.50 in intraday trade, its highest level since 20 May 2014. The index hit a low of 7,258.15 in intraday trade.
The market breadth indicating the overall health of the market was quite strong, with almost four gainers for every loser on BSE. On BSE, 2,038 shares gained and 522 shares fell. A total of 84 shares were unchanged.
The BSE Mid-Cap index was up 180.68 points or 2.17% at 8,523.04. The BSE Small-Cap index was up 200.27 points or 2.29% at 8,958.55. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2203 crore by 11:15 IST, compared with Rs 1330 crore by 10:15 IST.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Infosys (down 1.51%), Bharti Airtel (down 1.44%) and HDFC Bank (down 1.23%) edged lower from the Sensex pack.
Coal India jumped 7.21% to Rs 399 after hitting a 52-week high of Rs 401 in intraday trade.
Metal and mining stocks gained after a China manufacturing gauge rose to a five-month high in May. China is the world's largest consumer of copper and aluminum.
JSW Steel (up 1.12%), Tata Steel (up 2.74%), Steel Authority of India (Sail) (up 2.36%), NMDC (up 2.56%), Hindustan Copper (up 5.16%), National Aluminium Company (up 8.9%), Hindustan Zinc (up 4.39%), edged higher.
Sesa Sterlite rose 3.63% to Rs 258.40. The stock hit a 52-week high of Rs 260.85 in intraday trade.
Hindalco Industries fell 1.07% to Rs 157.90 on profit booking. The stock had gained 15.31% in four trading days to settle at Rs 159.60 on Wednesday, 21 May 2014, from recent low of Rs 138.40 on 15 May 2014.
Mahindra Ugine Steel Company (MUSCO) lost 1.62% after the company reported a net loss of Rs 3.42 crore in Q4 March 2014 as against net profit of Rs 0.42 crore in Q4 March 2013. The company's total income from operations declined 1.5% to Rs 184.80 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced before market hours today, 22 May 2014.
MUSCO reported a net profit of Rs 188.14 crore in the year ended 31 March 2014 (FY 2014) as against net loss of Rs 33.71 crore in the year ended 31 March 2013 (FY 2013). Total income from operations declined 27.02% to Rs 723.01 crore in FY 2014 over FY 2013.
In the foreign exchange market, the rupee edged higher against the dollar as equities rose. The partially convertible rupee was hovering at 58.57, compared with its close of 58.775/785 on Wednesday, 21 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.
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.
Asian stocks edged higher on Thursday, 22 May 2014, after Federal Reserve meeting minutes showed policy makers see a muted risk of inflation from continued US stimulus and a China manufacturing gauge rose to a five-month high in May. Key benchmark indices in Taiwan, Hong Kong, China, Singapore, Japan, Indonesia and South Korea were up 0.17% to 2.1%.
The China manufacturing purchasing managers' index released today by HSBC Holdings Plc and Markit Economics delivered a provisional reading of 49.7 for May, rising from 48.1 in April. Readings below 50 indicate contraction.
Trading in US index futures indicated that the Dow could advance 50 points at the opening bell on Thursday, 22 May 2014. US stocks rebounded on Wednesday from the previous day's losses and ended the session with solid gains, led by advances in the consumer discretionary and energy sectors. The main benchmarks extended gains after the release of the minutes from the Federal Open Market Committee meeting, which showed officials considering options on exiting from ultra-loose monetary policy and a decision to remain flexible.
Minutes from the April 29-30 meeting showed that Fed officials are monitoring progress toward the goal of full employment in the US as they consider the timing of the first interest-rate increase since 2006. The minutes also showed policy makers agreed that early communication of their exit strategy on stimulus and interest rates would enhance the clarity and credibility of monetary policy. The Fed reiterated in the minutes that it will keep the key interest rate target near zero for a "considerable time" once it concludes the bond program.
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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