Volatility ruled the roost in afternoon trade as the key benchmark indices regained positive zone after reversing intraday gain. The barometer index, the S&P BSE Sensex, was up 26.70 points or 0.11%, off 92.74 points from the day's high and up 92.91 points from the day's low. The market breadth, indicating the overall health of the market was positive. FMCG stocks were in demand on renewed buying. Bank stocks edged lower. Shares of defence equipment manufacturers rose on media reports of potential increase in foreign direct investment limit in the sector to 100% from current 26%.
The Sensex slipped into the red in early trade after opening higher. The Sensex hit its lowest level in more than a low. The 50-unit CNX Nifty hit its lowest level in more than two weeks. Key benchmark indices regained positive terrain in morning trade. Volatility continued as key benchmark indices trimmed intraday gains in mid-morning trade. The Sensex further trimmed intraday gains in early afternoon trade. Volatility ruled the roost in afternoon trade as the key benchmark indices regained positive zone after reversing intraday gain.
Foreign institutional investors (FIIs) sold shares worth a net Rs 522.90 crore on Thursday, 29 May 2014, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was up 26.70 points or 0.11% to 24,260.85. The index jumped 119.44 points at the day's high of 24,353.59 in early trade. The index fell 66.21 points at the day's low of 24,167.94 in early trade, its lowest level since 21 May 2014.
The CNX Nifty was up 9.05 points or 0.13% to 7,244.70. The index hit a high of 7,272.50 in intraday trade. The index hit a low of 7,118.45 in intraday trade, its lowest level since 15 May 2014.
The BSE Mid-Cap index was up 34.51 points or 0.41% to 8,468.91. The BSE Small-Cap index was up 49.12 points or 0.55% to 9,034.49. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market was positive. On BSE, 1,615 shares rose and 1,251 shares fell. A total of 127 shares were unchanged.
The total turnover on BSE amounted to Rs 5478 crore by 13:15 IST.
Among the 30-share Sensex pack, 19 stocks rose and rest of them fell. ONGC (up 2.87%), Cipla (up 2.45%) and NTPC (up 2.27%) edged higher from the Sensex pack.
FMCG stocks were in demand on renewed buying. Hindustan Unilever (up 3.73%), Britannia Industries (up 1.05%), Colgate-Palmolive (India) (up 1.15%), Dabur India (up 4.11%), ITC (up 0.56%), Marico (up 2.97%), and Tata Global Beverages (up 0.59%) gained. Godrej Consumer Products (down 0.36%) and Nestle India (down 0.26%) slipped.
Shares of private sector banks edged lower. Axis Bank (down 1.21%), ICICI Bank (down 0.54%), HDFC Bank (down 1.67%) and IndusInd Bank (down 1.33%) declined.
Kotak Mahindra Bank rose 0.31%. The private sector bank during market hours today, 30 May 2014, said that Kotak Trustee Company, a promoter group entity of Kotak Mahindra Bank, has today, 30 May 2014, sold 2.49 crore shares of the bank. After the sale of the shares, the shareholding of promoters in the bank has declined to 40.33%. The sale of shares by the promoters was undertaken pursuant to RBI's requirement to reduce promoter shareholding in the bank as communicated on 26 May 2014, Kotak Mahindra Bank said.
PSU bank stocks also declined. State Bank of India (SBI) (down 1.99%), Punjab National Bank (down 1.26%), Canara Bank (down 2.28%), Union Bank of India (down 1.18%), Bank of India (down 3.51%) and Bank of Baroda (down 0.29%) declined.
Shares of defence equipment manufacturers rose on media reports of potential increase in foreign direct investment limit in the sector to 100% from current 26%.
Astra Microwave (up 14.26%), Walchandnagar Industries (up 9.97%), BEML (up 7.67%), Dynamatic Technologies (up 5%), Pipavav Defence and Offshore Engineering Company (up 4.97%) and Bharat Electronics (up 2.58%) edged higher.
According to media reports, the department of industrial policy & promotion (DIPP) has prepared a draft Cabinet note that proposes to allow up to 100% foreign direct investment (FDI) in defence as part of its plan to boost domestic manufacturing.
The draft note has been circulated for inter-ministerial comments and can be seen as the first and the most significant move by the government to revive manufacturing, where output fell 0.2% in the fiscal year ended on 31 March 2014. The new government is giving top priority to reviving manufacturing, reports added.
DIPP has proposed three different caps for FDI in defence - 49%, 75% and 100% - which propose to incentivise technology transfer. It has proposed allowing 49% FDI in case of no technology transfer and 74% where there is a technology transfer. The no-cap policy should be reserved strictly for cases which bring in state-of-the-art technology, reports suggested.
Currently, only 26% FDI is allowed in defence manufacturing, though the government can clear more foreign investments on a case-to-case basis.
The government will announce data on gross domestic product (GDP) for Q4 March 2014 and the year ended 31 March 2014 (FY 2014) today, 30 May 2014. India's GDP grew 4.7% in Q3.
Reserve Bank of India (RBI) Governor Raghuram Rajan today, 30 May 2014, said he expected to join hands with the country's new government to bring down high inflation. Rajan, speaking at a seminar in Tokyo, said the new government's plan to curb food inflation seems sensible and that he expected the public's inflation expectations to fall in the future. "There is a sense of conviction about our plan to bring inflation down to 8% this year and 6% next year," Rajan said. "This information has gotten out to the public. The public's inflation expectations have fallen and I think expectations will fall further in the future," Rajan said.
Rajan said India's current account deficit could fall to 2% to 2.5% of gross domestic product in medium term. Rajan said he was worried about non-performing assets in India's banking sector but wanted to work with the new government to solve this problem quickly.
The Reserve Bank of India (RBI) undertakes a monetary policy review on Tuesday, 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.
At a meeting of his Cabinet on Thursday Prime Minister Narendra Modi reportedly asked his ministers to prepare a list of issues that they will take up in the first 100 days in office, with a focus on efficiency, delivery systems and implementation. The PM also has a list of top 10 priorities, which include among others to remove hurdles in economic growth which includes containing inflation as a priority, to prioritize education, energy and water, to bring in reforms in infrastructure, to revive growth and investor confidence, to provide a people-oriented government and governance, to ensure time-bound implementation of policy, to maintain consistency in policy, to promote e-auctioning in government tenders and other government work, to improve inter-ministerial co-ordination, to build confidence in the bureaucracy and to empower and provide freedom to the bureaucracy.
The inaugural session of the new Lok Sabha will commence on 4 June 2014 and end on 11 June 2014, Parliament affairs minister Venkaiyya Naidu announced on Thursday, 30 May 2014. The seven-day-long session has been convened to enable the newly-elected MPs to be sworn in. This will be followed by the election of the Speaker of the 16th Lok Sabha. The special session will be followed by a full-fledged budget session after a gap.
Finance Minister Arun Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha 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.
European stocks were slightly lower on Friday as investors awaited data on US business activity. Key benchmark indices in UK and France were off 0.12% to 0.59%. In Germany, the DAX rose 0.04%.
UK consumer confidence continued to improve in May, reaching its highest level in more than nine years as Britons became increasingly convinced that the economy is on the mend after a long period of stagnation that followed the sharp contraction in the immediate aftermath of the financial crisis. Adding to indications that the economy's strong recovery since early last year is set to continue, the British Chambers of Commerce raised its growth forecast for this year to 3.1% from 2.8%, and its forecast for 2015 to 2.7% from 2.5%.
In a separate release, the Confederation of British Industry said its measure of economic growth, which is based on surveys of businesses in May, reached its highest level since the series began in 2003. Since April 2013, when the improvement began, GfK's measure of consumer confidence has risen by 27 points, the largest gain over a sustained period since the seven months to December 1977.
German retail sales declined more sharply than expected in April, according to data from the country's statistics office, Destatis. Retail sales in April fell 0.9% in the euro zone's largest economy from the previous month on an adjusted basis. German April sales were up a real 3.4% from the year-earlier month.
Spain's inflation rate eased slightly in May, largely due to drops in the prices of food and beverages, official data showed Friday. The country's European Union-harmonized consumer price index rose 0.2% in May, said the country's national statistics institute, or INE, down from a reading of 0.3% in April. Under Spain's own inflation calculations, prices also rose 0.2%, having increased by 0.4% in the previous month.
Asian stocks edged lower in choppy trade on Friday, 30 May 2014. Key benchmark indices in China, Indonesia, Japan, Singapore, South Korea and Taiwan were off 0.08% to 1.06%. In Hong Kong, the Hang Seng index rose 0.48%
Price growth in Japan excluding fresh food rose to 3.2% in April, up from 1.3% in March.
Trading in US index futures indicated that the Dow could fall 16 points at the opening bell on Friday, 30 May 2014. US stocks rose for the fifth time in six days on Thursday, driving the Standard & Poor's 500 Index to a record, after Tyson Foods Inc. offered to buy Hillshire Brands (HSH) Co. and investors speculated the economy is improving following a contraction in the first quarter.
US economy suffered its first contraction since 2011 last quarter. Gross domestic product fell at a 1% annualized rate revised Commerce Department figures showed in Washington. Stockpiles grew at less than half the pace than in the final three months of 2013, lopping 1.6 percentage points off GDP while businesses cut back on investment. Demand picked up entering the second quarter, giving weight to the Federal Reserve's view that the economy is recovering.
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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