A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh intraday high in early afternoon trade after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that reforms will be undertaken to enhance the ease of doing business, the tax regime will be made non-adversarial, conducive to investment, enterprise and growth and that the government will follow a policy of encouraging investments, including through FDI. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, pared gains after scaling record high. The Sensex was up 158.81 points or 0.63%, off about 90 points from the day's high and up close to 60 points from the day's low. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up nearly 1%. The BSE Small-Cap index was up more than 1.2%.
Capital goods and cement stocks rose after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. Tata Power Company hit 52-week high. Coal India jumped after President Pranab Mukherjee said in his address to the joint sitting of Parliament that the government will formulate clear rules for allocation of coal, minerals and telecoms spectrum.
The market edged higher in early trade. A bout of volatility was witnessed as key benchmark indices pared gains once again after regaining strength in morning trade. Key benchmark indices extended gains and hit fresh record high in mid-morning trade after President Pranab Mukherjee started addressing a joint sitting of Parliament. A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh record high in early afternoon trade.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 6 June 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1283.04 crore on Friday, 6 June 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 158.81 points or 0.63% to 25,555.27. The index surged 248.31 points at the day's high of 25,644.77 in early afternoon trade, a lifetime high for the index. The index rose 100.38 points at the day's low of 25,496.84 in morning trade.
The CNX Nifty was up 54.45 points or 0.72% to 7,637.85. The index hit a high of 7,669.75 in intraday trade, a lifetime high for the index. The index hit a low of 7,580.25 in intraday trade.
The BSE Mid-Cap index was up 78.44 points or 0.86% at 9,176.98. The BSE Small-Cap index was up 121.60 points or 1.24% at 9,895.64. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong, with over three gainers for every loser on BSE. On BSE, 2,060 shares rose and 678 shares fell. A total of 81 shares were unchanged.
Coal India jumped after President Pranab Mukherjee said in his address to the joint sitting of Parliament that the government will formulate clear rules for allocation of coal, minerals and telecoms spectrum. The stock was up 4.6% at Rs 409.60. Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner, the President said.
NMDC was flat at Rs 190.85. The company said during market hours production rose 0.81% to 4.94 million tonnes during April-May 2014 over the correponding previous year period. Despatches rose 11.22% to 5.65 million tonnes during April-May 2014 over the correponding previous year period.
Tata Power Company rose 1.53% to Rs 112.15 after hitting 52-week high of Rs 115.10 in intraday trade.
Capital goods and cement stocks rose after President Pranab Mukherjee said his speech addressing a joint sitting of Parliament that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. Among capital goods shares, Bharat Heavy Electricals (Bhel) (up 0.93%), BEML (up 3.49%), ABB (India) (up 0.6%), Crompton Greaves (up 1.5%) and Thermax (up 0.88%) gained.
L&T rose 3.3% to Rs 1,744.35, with the stock extending recent gains. The stock hit record high of Rs 1,774.70 in intraday trade. The company's net profit surged 69% to Rs 2723.48 crore on 11% growth in gross revenue to Rs 20229 crore in Q4 March 2014 over Q4 March 2013. The strong growth in bottom-line can be explained by strong operating performance and higher extraordinary income. The result was announced after market hours on 30 May 2014.
Cement stocks gained on renewed buying. ACC rose 4.96% to Rs 1,510 after hitting record high of Rs 1,516.85 in intraday trade.
UltraTech Cement jumped 5.92% to Rs 2,819.20 after hitting record high of Rs 2,846 in intraday trade.
Ambuja Cements gained 4.82%.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.05, compared with its close of 59.17/18 on Friday, 6 June 2014.
President Pranab Mukherjee today, 9 June 2014, in his address to the joint sitting of Parliament said that containing food inflation will be new government's top priority. The government is preparing contingency plans for sub-normal monsoons, he said. There would be an emphasis on improving the supply side of various agro and agro-based products.
The President said that economic revival is of paramount importance for the government after two consecutive years of below 5% GDP growth. The government will work towards reigniting the investment cycle, accelerate job creation and restore the confidence of the domestic as well as international community in India's economy. The government will create a policy environment which is predictable, transparent and fair. The government will embark on rationalisation and simplification of the tax regime to make it non-adversarial and conducive to investment, enterprise and growth, the President said.
The government will make every effort to introduce the GST while addressing the concerns of States. Reforms will be undertaken to enhance the ease of doing business, the President said. For rapid creation of jobs in the manufacturing sector, the government will strategically promote labour-intensive manufacturing. Employment opportunities will also be expanded by promoting tourism and agro-based industries.
Finance Minister Arun Jaitley on Friday, 6 June 2014, said that the economic situation at present is quite challenging but there is enthusiasm among the industry to turn it to its advantage. He said that there is need to give directional thrust to translate the same into better results. The Finance Minister was speaking while interacting with the captains of Indian Trade and Industry as part of his Pre-Budget Consultation meetings. Various suggestions were received from the representatives of different industry and trade groups. Major suggestions include that the government to follow the path of fiscal consolidation, curbing inflation especially food inflation, push GST, deferment of GARR for at least next three years, no retrospective amendments in tax laws henceforth as it hurts business sentiments in general and discourages foreign investment in particular.
Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-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 India Meteorological Department (IMD) will issue an update on the forecast of the South West monsoon rains in this month. IMD in April 2014 predicted below-normal rains this year, saying that there is a 60% possibility of the emergence of the El Ni weather phenomenona warm weather system that starts in the southern Pacific can affect weather around the world. El Ni last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal. Annual rains are important for India as most of its farmlands are dependent on rain for irrigation and more than half of its workforce is employed in agriculture.
On the macro front, the government will unveil industrial production data for April 2014 on Thursday, 12 June 2014. Industrial production shrank for a second straight month in March 2014. Industrial production declined 0.5% in March 2014, compared with a contraction of 1.8% in February 2014.
The government is scheduled to announce data on inflation based on the combined consumer price index (CPI) for rural and urban India for May 2014 on Thursday, 12 June 2014. Inflation based on the CPI accelerated to 8.59% (provisional) in April 2014, from 8.31% (final) in March 2014. Core CPI which excludes food and energy prices eased to 7.8% in April 2014, from 7.81% in March 2014.
The government will announce data on inflation based on the wholesale price index (WPI) for May 2014 on 16 June 2014. The annual rate of inflation based on monthly wholesale price index WPI eased to 5.2% for the month of April 2014 from 5.7% in March 2014, helped by a decline in fuel prices.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 5 August 2014. The RBI kept its main lending rate -- repo rate -- unchanged at 8% after a monetary policy review on 3 June 2014. The central bank at that time signaled it would ease monetary policy if inflation slows faster than targeted.
Asian stocks rose on Monday, 9 June 2014, after US payrolls, Chinese trade and Japanese economic-growth data beat estimates. Key benchmark indices in Taiwan, Japan, Singapore, Hong Kong and China were up 0.1% to 0.59%. Key benchmark indices in Indonesia and South Korea were off 0.27% to 0.57%.
Japan's economy, Asia's second largest, expanded an annualized 6.7% in the first quarter, faster than the preliminary reading of 5.9%.
Chinese exports beat projections, rising 7% last month from a year earlier. Imports dropped 1.6 % from a year earlier after a 0.8% advance in April. The trade surplus swelled to $35.92 billion. Trading in US index futures indicated that the Dow could fall 8 points at the opening bell on Monday, 9 June 2014. US stocks rose on Friday, 6 June 2014, extending records for equity benchmarks, as data showed payrolls pushed past their pre-recession peak for the first time in May.
The 217,000 advance in hiring in May was broad-based and followed a 282,000 gain in April, figures from the Labor Department showed. It marked the fourth consecutive month employment increased by more than 200,000, the first time that's happened since early 2000. The jobless rate unexpectedly held at an almost six-year low of 6.3%.
James Bullard, president of the Federal Reserve Bank of St. Louis, speaks on the US economic outlook in Tennessee today, 9 June 2014, after US nonfarm payrolls topped a pre-recession high in May.
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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