A bout of volatility was witnessed as key benchmark indices regained positive zone after reversing intraday gains in afternoon trade. The barometer index, the S&P BSE Sensex, was up 19.76 points or 0.09%, up 38.43 points from the day's low and off 68.44 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Sesa Sterlite dropped after the company during market hours today, 22 April 2014, said that consequent to the Supreme Court order dated Monday, 21 April 2014, all mining leases in the state of Goa, including those of Sesa Sterlite, have expired in 2007 and that no mining operations can be carried out until renewal/execution of mining lease deeds by the state government. Shares of private sector banking giant ICICI Bank edged higher in volatile trade. Novartis India jumped after the company's Swiss parent Novartis AG agreed to fork out $16 billion to buy GlaxoSmithKline Plc's cancer drug business.
Key benchmark indices edged higher amid initial volatility. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. Key benchmark indices trimmed intraday gains in mid-morning trade. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. Key benchmark indices trimmed intraday gains in early afternoon trade. A bout of volatility was witnessed as key benchmark indices regained positive zone after reversing intraday gains in afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 212.85 crore on Monday, 21 April 2014, as per provisional data from the stock exchanges.
Indian stocks may remain volatile in the immediate future as traders roll over positions in the futures & options (F&O) segment from the near month April 2014 series to May 2014 series. The April 2014 F&O contracts expire tomorrow, 23 April 2014. The stock market remains closed on Thursday, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
At 14:15 IST, the S&P BSE Sensex was up 19.76 points or 0.09% to 22,784.59. The index gained 88.20 points at the day's high of 22,853.03 in morning trade, a lifetime high for the barometer index. The index fell 18.67 points at the day's low of 22,746.16 in afternoon trade.
The CNX Nifty was up 5.15 points or 0.08% to 6,822.80. The index hit a high of 6,838 in intraday trade, a lifetime high for the index. The index hit a low of 6,808.80 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,444 shares gained and 1,253 shares fell. A total of 121 shares were unchanged.
The BSE Mid-Cap index was up 17.06 points or 0.23% at 7,414.47. The BSE Small-Cap index was up 21.85 points or 0.29% at 7,649.82. Both these indices outperformed the Sensex.
Sesa Sterlite lost 3.25%. Sesa Sterlite during market hours today, 22 April 2014, said that the Supreme Court vide its order dated Monday, 21 April 2014, has lifted the ban on mining in the state of Goa, subject to certain conditions. The Supreme Court has imposed an interim restriction on the maximum annual excavation from the mining leases in Goa at 20 million tonnes subject to determination of final capacity by Expert Committee appointed by the Supreme Court. Further, in its order, the Supreme Court has held that all mining leases in the State of Goa, including those of Sesa Sterlite, have expired in 2007. Consequently, no mining operations can be carried out until renewal/execution of mining lease deeds by the state government. Sesa Sterlite said that the company is working towards securing the necessary permissions for commencement of mining operations in Goa at the earliest.
Bank stocks were mixed. Among private sector banks, Yes Bank (up 0.2%) and Axis Bank (up 0.33%) gained.
ICICI Bank was up 0.98% at Rs 1,294.10. The stock was volatile. The stock hit 52-week high of Rs 1,295.90 in intraday trade. The stock hit a low of Rs 1,270.30 so far during the day.
HDFC Bank rose 1.31%. HDFC Bank announces its audited financial results for the quarter and year ended 31 March 2014 today, 22 April 2014.
Kotak Mahindra Bank was unchanged at Rs 802.35.
IndusInd Bank fell 1.14%, with the stock sliding on profit taking after recent gains. Shares of IndusInd Bank had risen 4.46% in three trading sessions to settle at Rs 505.75 on Monday, 21 April 2014, from a recent low of Rs 484.15 on 15 April 2014.
IndusInd Bank's net profit rose 28.83% to Rs 396.05 crore on 23.35% rise in total income to Rs 2702.19 crore in Q4 March 2014 over Q4 March 2013. The result was announced on 16 April 2014. IndusInd Bank said that the bank is targeting 25% to 30% annual loan growth during 2014-17. IndusInd Bank announced Q4 result on 16 April 2014.
South Indian Bank rose 2.24% after the central bank allowed foreign investors to buy shares in South Indian Bank as the foreign shareholding in the bank has gone below caution limit stipulated under the extant FDI policy. The Reserve Bank of India (RBI) on Monday, 21 April 2014, notified that the aggregate share holding by foreign institutional investors (FIIs)/non-resident indians (NRIs)/persons of Indian origin (PIOs)/foreign direct investment (FDI)/American depository receipt (ADR)/global depository receipts (GDRs) under the portfolio investment scheme (PIS) in South Indian Bank have gone below the prescribed threshold caution limit stipulated under the extant FDI policy. Hence the restrictions placed on the purchase of shares of the above company are withdrawn with immediate effect.
Equity shares of South Indian Bank can now be purchased through primary market and stock exchanges, RBI said in a statement.
Currently, FIIs are allowed to invest upto 49% of the paid-up capital of South Indian Bank under the portfolio investment scheme (PIS). As on 31 March 2014, FIIs held 41.69% stake in South Indian Bank.
Among PSU bank stocks, State Bank of India (SBI) (down 0.51%), Union Bank of India (down 2.55%), Bank of Baroda (down 0.33%) and Punjab National Bank (down 1.49%) declined.
Canara Bank (up 0.11%), Bank of India (up 0.33%) gained.
Novartis India jumped 7.56% after the company's Swiss parent Novartis AG agreed to fork out $16 billion to buy GlaxoSmithKline Plc's cancer drug business.
Switzerland-based Novartis announced on Tuesday, 22 April 2014, that it has reached a definitive agreement with GlaxoSmithKline plc (GSK) to exchange certain assets, building global leadership in key segments and focusing the company's portfolio. Under the agreement, Novartis would strengthen the company's innovative pharmaceuticals business by acquiring GSK oncology products, and would divest Vaccines (excluding flu) to them. The two companies would also create a joint venture, combining their consumer divisions to create a world-leading consumer healthcare business. Separately, the company announced a definitive agreement with Eli Lilly and Company (Lilly) to divest the animal health division, further focusing its portfolio on the leading businesses of innovative pharmaceuticals, eye care and generics.
As per the deal, Novartis has agreed to acquire GSK oncology products for a $14.5 billion payment and up to $1.5 billion contingent on a development milestone. Under the terms of the transaction, Novartis would have opt-in rights to GSK's current and future oncology R&D pipeline.
Novartis said it has also agreed to divest its Vaccines business to GSK, currently excluding its flu business, for $7.1 billion plus royalties. The $7.1 billion consists of $5.25 billion upfront and up to $1.8 billion in milestones. As a part of a value-maximization strategy in the context of the portfolio review, Novartis has initiated a separate sales process for its flu business.
Novartis and GSK have agreed to create a world-leading consumer healthcare business through a joint venture between Novartis OTC and GSK Consumer Healthcare. Upon completion, Novartis will own a 36.5% share of the joint venture and will have four of eleven seats on the joint venture's Board. Furthermore, Novartis will have customary minority rights and exit rights at a pre-defined, market-based pricing mechanism, Novartis AG said in a statement.
In a separate transaction, Novartis has agreed to divest its Animal Health Division to Lilly for approximately $5.4 billion. This transaction is the result of a competitive process, which upon completion would create a leading animal health business under Lilly's ownership and would optimize the value of the asset in the interest of Novartis shareholders.
The overall financing for Novartis' obligations in the transactions is planned to be provided through a combination of excess liquidity at the time of closing, short-term financing instruments and limited new bond issues if needed, the company said.
Novartis said the acquisition of GSK oncology products is expected to further reinforce its leading Oncology business and improve the growth profile of the combined portfolio.
As on 31 December 2013, Novartis AG held 75% stake in Novartis India.
In the foreign exchange market, the rupee edged lower against the dollar on the back of heavy dollar demand from oil importers. The partially convertible rupee was hovering at 60.815, compared with its close of 60.59/60 on Monday, 21 April 2014.
An El Nino will probably start as soon as July, according to the Australian government forecaster, adding to predictions for the event that can affect weather patterns worldwide and roil farm-commodity prices. All the climate models surveyed indicated that an El Nino was likely this year, with six of seven models suggesting that thresholds for the event may be exceeded as early as July, the Bureau of Meteorology said in a statement today, 22 April 2014. A warming of the Pacific Ocean, which drives the changes by affecting the atmosphere above it, will probably continue in the coming months, the Melbourne-based bureau said.
The chances of an El Nino have increased to 65% from 52%, the US Climate Prediction Center said on 10 April 2014. There are signs that an El Nino is imminent, presaging changes to global weather patterns, the UN's World Meteorological Organization said on 15 April 2014.
An El Nino phenomenon is associated with above-average water temperatures in the central and eastern Pacific and can in its worst form bring drought to West Africa (the world's largest cocoa producing region), less rainfall to India during its vital monsoon season and drier conditions for the cultivations crops such as sugar and cotton in major grower Australia.
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.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
European stocks edged higher on Tuesday, 22 April 2014, aided by strength from a number of pharmaceutical shares following reports that Pfizer Inc. will bid for British drug maker AstraZeneca PLC and after Novartis AG outlined changes in its portfolio lineup, including plans to buy GlaxoSmithKline PLC's oncology unit for about $14.5 billion. Key benchmark indices in France, Germany and UK were up 0.59% to 1.08%.
Asian stock markets edged higher in choppy trade Tuesday, 22 April 2014, after Wall Street stocks rallied into a fifth session overnight. Key benchmark indices in Taiwan, China, Singapore, and South Korea were up 0.25% to 0.53%. Key benchmark indices in Hong Kong, Indonesia and Japan were off 0.13% to 0.85%.
A provisional reading of HSBC Holdings Plc and Markit Economics Ltd.'s China manufacturing purchasing managers' index is due tomorrow, 23 April 2014.
Trading in US index futures indicated that the Dow could drop 4 points at the opening bell on Tuesday, 22 April 2014. US stocks closed modestly higher on Monday, 21 April 2014, helping the S&P 500 to extend its winning streak to the longest in six months. Estimate-beating results from a number of companies on Monday boosted sentiment amid thin volumes on Wall Street.
In economic news, the Chicago Fed National Activity Index decreased slightly in March. However, the Conference Board's leading economic index rose in March and February, signaling that growth could accelerate in coming months.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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