Key benchmark indices surged as the market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 5 June 2014. Firmness in European stocks also boosted sentiment. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, scaled lifetime high on closing as well as on intraday basis. The Sensex was up 376.95 points or 1.51%, up about 265 points from the day's low and off close to 20 points from the day's high. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap and Small-Cap indices were up over 1.5% each. Both these indices outperformed the Sensex.
Indian stocks gained for the second day in a row today, 6 June 2014. From a recent low of 24,805.83 on 4 June 2014, the Sensex has risen 590.63 points or 2.38% in two trading sessions. The Sensex has risen 1,179.12 points or 4.86% in June so far (till 6 June 2014). The Sensex has gained 4,225.78 points or 19.96% in calendar year 2014 so far (till 6 June 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,947.75 points or 45.54%.
Coming back to today's trade, shares of Tata Steel and Steel Authority of India (Sail) extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making. Tata Steel and Sail hit 52-week high. Shares of companies engaged in natural gas production rallied after a government official on Thursday, 5 June 2014, reportedly said that the oil ministry has to decide on gas pricing by 1 July 2014 and that more clarity on the issue is expected next week. ONGC scaled record high.
The market edged higher in early trade after the European Central Bank on Thursday, 5 June 2014, cut its benchmark interest rates to unprecedented lows, spurring speculation the decision will accelerate capital inflows. A bout of volatility was witnessed as key benchmark indices pared gains after extending initial gains and hitting fresh intraday high in morning trade. Volatility continued as key benchmark indices once again trimmed gains in mid-morning trade. Key benchmark indices extended gains in early afternoon trade. It regained strength after paring gains after hitting fresh intraday high in mid-afternoon trade. It extended gains and hit record high in late trade. The Sensex and the 50-unit CNX Nifty, both, hit record high.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Thursday, 5 June 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1368.97 crore on Thursday, 5 June 2014, as per provisional data from the stock exchanges.
The S&P BSE Sensex was up 376.95 points or 1.51% at 25,396.46, a record closing high for the index. The index surged 399.63 points at the day's high of 25,419.14 in late trade, a lifetime high for the index. The index rose 110.25 points at the day's low of 25,129.76 in mid-morning trade.
The CNX Nifty was up 109.30 points or 1.46% at 7,583.40, a record closing high for the index. The index hit a high of 7,592.70 in intraday trade, a lifetime high for the index. The index hit a low of 7,497.65 in intraday trade.
The BSE Mid-Cap index was up 142.63 points or 1.59% at 9,098.54. The BSE Small-Cap index was up 150.12 points or 1.56% at 9,774.04. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 5150 crore, higher than Rs 4,906.75 crore on Thursday, 5 June 2014.
The market breadth, indicating the overall health of the market, was strong, with over two gainers for every loser on BSE. On BSE, 2,144 shares rose and 959 shares fell. A total of 91 shares were unchanged.
Shares of companies engaged in natural gas production edged higher after a government official on Thursday, 5 June 2014, reportedly said that the oil ministry has to decide on gas pricing by 1 July 2014 and that more clarity on the issue is expected next week. Reports also suggest that hike in prices of kerosene and LPG is also in the offing. Oil India was up 3.5% at Rs 595.
ONGC was up 10.57% at Rs 464. The stock hit record high of Rs 467.95 in intraday trade.
Reliance Industries was up 3.07% at Rs 1,121. The stock hit high of Rs 1,132.80 and low of Rs 1,105.
The government will take a decision on revising natural gas prices after the Prime Minister is briefed about various issues of the petroleum sector, reports suggest. The current gas price of $4.2 per unit would have doubled on 1 April this year as the earlier Congress-led government had approved a new formula but the Election Commission vetoed the decision. Reliance Industries has subsequently initiated arbitration over the delay in announcing new prices as the approval for its price of $4.2 from the KG-D6 block was valid up to 31 March 2014 and the new pricing formula had been notified. It argued that investments of billions of dollars are at risk because of the uncertainty about prices.
Shares of state-run gas transmission and distribution major GAIL (India) were up 7.49% at Rs 420.25.
Cairn India rose 2.8% to Rs 376 after hitting 52-week high of Rs 377.75 in intraday trade.
PSU OMCs extended recent gains on reports the Oil Ministry is considering hiking liquified petroleum gas (LPG) and kerosene prices and will be consulting the Prime Minister's Office (PMO) and the Finance Ministry on the same.
BPCL rose 1.74% to Rs 627.60 after hitting record high of Rs 650 in intraday trade.
HPCL rose 1.96% to Rs 455.15 after hitting 52-week high of Rs 462.70 in intraday trade.
Indian Oil Corporation (IOCL) rose 1.72% to Rs 373.20 after hitting 52-week high of Rs 385.35 in intraday trade.
The hike could be either a one-time hike or a gradual one like is seen with diesel prices. Both the Prime Minister's Office (PMO) as well as the Finance Ministry want fuel prices to be more market-aligned and better targeted subsidies.
State-run oil marketing companies (PSU OMCs) suffer under-recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
PSU OMCs hiked diesel prices by 50 paise a litre, excluding state levies, with effect from 1 June 2014.
The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of June effective 2 June 2014 declined to Rs 2.80 per litre. This was Rs 4.41 per litre during the second fortnight of May 2014. In the case of PDS Kerosene, the under-recovery for the first fortnight of June 2014 declined to Rs 32.87 per litre, from Rs 33.84 per litre during the second fortnight of May 2014. In case of domestic LPG, the under-recovery for the first fortnight of June 2014 declined to Rs 432.71 per cylinder, from Rs 449.13 per cylinder during the second fortnight of May 2014. Oil Marketing Companies (OMCs), effective from 2nd June 2014, are incurring combined daily under-recovery of about Rs 262 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 318 crore daily under-recoveries during the second fortnight of May 2014.
Divi's Laboratories gained 3%. The company said after market hours that it has had an inspection by the US-FDA, with no major observations, for its Unit-II at vill. Chippada, Bheemunipatnam Mandal, near Visakhapatnam during June, 2014. The audit concluded with one observation primarily about further improvement of existing procedure. The purpose of this inspection was for Custom manufactured product.
IT stocks fell as rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
TCS declined 1.02% as the stock turned ex-dividend today, 6 June 2014 for final dividend of Rs 20 per share for the year ended 31 March 2014 (FY 2014).
Infosys dropped 1.26% on reports one more top executive quit the company. Prasad Thrikutam who was in charge of strategic sales, marketing and alliances quit on Thursday, 5 June 2014. President Pravin Rao will take up his portfolio, reports suggest.
Tech Mahindra shed 0.09% to Rs 1,905.85. The stock hit high of Rs 1,923 and low of Rs 1,881.10. The company and Informatica Corporation, the world's number one independent provider of data integration software, after market hours on Thursday, 5 June 2014 announced an expansion of their decade-long strategic association.
The already established global alliance now brings further value to customers through its new data management services. Customers will benefit extensively from Tech Mahindra's rich experience in data management services, along with Informatica's cutting-edge data integration solutions. Together, the two companies will play a critical role in taking data management beyond the domain of special IT projects and making it business-as-usual through data-fueled applications. With the power of the Informatica Intelligent Data Platform, the alliance will deliver a number of data management services, including Data Archive, Data Anonymization, Reference Data Management, Test Data Management, Data Governance, Master Data Management (MDM), Data Migration, Big Data, Data Integration and Data Quality.
Customers utilizing these data management services will benefit from reliable, reusable and repeatable offerings with predictable outcomes. This will be delivered through Tech Mahindra's copyrighted framework: UDMF (Unified Data Migration Framework), DQMS (Data Quality Management Services) and iDecisions, a packaged analytic framework that enables businesses to interpret information, discover knowledge and make innovative decisions.
Further, Tech Mahindra and Informatica announced plans for joint investments in developing solutions at Tech Mahindra Research Centers in Pune, Bangalore and Hyderabad. The Research Centers will focus on building portable frameworks, solutions and offerings and make them Informatica Vibe-enabled. The Informatica Vibe Virtual Data Machine is an embeddable data management engine that can access, aggregate and manage numerous types of data. Vibe provides developers the power to map data in single instance and deploy anywhere, in an application and/or on an appliance or device, regardless of the data format. It also provides further flexibility to users as the data can reside on-premise or in the Cloud.
L. Ravichandran, chief operating officer (Telecom), Tech Mahindra, said, "We are excited about this strategic offering with Informatica in the data management space. This offering comes at an appropriate time when organizations have started moving toward being data driven. There is a tremendous potential for this unique offering, and we're confident that Informatica and Tech Mahindra's customers will reap extensive value from these offerings. We consider these offerings as key enablers to achieve our Mission 2015."
Anil Chakravarthy, executive vice president and chief product officer, Informatica, said, "The relationship between Tech Mahindra and Informatica brings together two technology leaders who share a vision for helping our mutual customers gain a competitive advantage from their data. With this expanded alliance, the two companies will build on our individual strengths - Tech Mahindra's rich experience in IT services and Informatica's differentiated technology offerings, including the Intelligent Data Platform. Together, we are focused on building and delivering solutions and services that are the foundational elements for the deep insight necessary to make the promise of flexible IT and agile business a reality."
HCL Technologies dropped 0.29%. Wipro rose 1.34%.
Realty stocks gained on renewed buying. DLF gained 6.1% to Rs 233.05 after hitting 52-week high of Rs 233.95 in intraday trade.
Sobha Developers surged 10.68% to Rs 508.45 after hitting 52-week high of Rs 527.90 in intraday trade.
Housing Development and Infrastructure (HDIL) gained 3.49% to Rs 106.65 after hitting 52-week high of Rs 107.80 in intraday trade.
Unitech gained 6.24% to Rs 32.35 after hitting 52-week high of Rs 32.70 in intraday trade. .
Bank stocks rose on renewed buying. Among PSU banks, Union Bank of India (up 7.53%), Bank of India (up 1.83%), Bank of Baroda (up 2.16%), Punjab National Bank (up 2.52%) and State Bank of India (up 1.31%) edged higher.
Among private sector banks, Kotak Mahindra Bank (up 4.26%), ICICI Bank (up 1.42%), IndusInd Bank (up 2.16%), Axis Bank (up 1.39%) and HDFC Bank (up 3.85%) edged higher.
Yes Bank gained 1.18% to Rs 581.05 after the bank said after market hours on Thursday, 5 June 2014 that in respect of the qualified institutional placement (QIP), the Capital Raising Committee of the bank has, at its meeting held on 5 June 2014, approved the issue and allotment of 5.34 crore shares to eligible qualified institutional buyers at the issue price of Rs 550 per share, which is at a discount of Rs. 0.04 per share on the floor price of Rs 550.04 per share, aggregating to approximately Rs 2942.07 crore under the SEBI Regulations and Section 42 of the Companies Act, 2013 (including the rules made thereunder).
Capital goods stocks extended recent gains. Bharat Heavy Electricals (Bhel) (up 0.88%), BEML (up 7.15%), ABB (India) (up 6.33%), and Siemens (up 0.31%) gained.
Crompton Greaves rose after the company bagged a Rs 244-crore contract from Spanish multinational electric utility company Iberdrola to supply over 1 million ZIV single smart meters in a year. The stock was up 0.84%. The order comprises single-phase and three-phase meters and reiterates CG's growing dominance in the global smart grid sector.
A significant advantage for CG in the Spanish market has been the regulatory framework in the country which makes it mandatory that 70 percent of the analog meters are replaced by 2016 and 100 percent by 2018. ZIV as the world's main PRIME meter supplier, is uniquely positioned to benefit from this regulation, by collaborating closely with the distribution utilities and assisting them in achieving the challenge on time.
The announcement was made after market hours on Thursday, 5 June 2014.
L&T rose 0.55% to Rs 1,688.70, with the stock extending recent gains triggered by the company's strong Q4 result. The stock hit record high of Rs 1,700 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 Friday, 30 May 2014.
L&T Finance Holdings dropped 1.42% to Rs 76.15.
Securities and Exchange Board of India (Sebi) on Thursday, 5 June 2014, issued an order restraining Factorial Master Fund, which is domiciled in Cayman Islands and operates as a hedge fund, from dealing in the securities in Indian securities market, including through Offshore Derivative Instruments and/or accessing the Indian securities market, directly or indirectly, in any manner whatsoever till further orders on allegations of insider trading in shares of L&T Finance Holdings.
Sebi said on 13 March 2014, abnormal movement was observed in the share price of L&T Finance Holdings (LTFH) and, therefore, Sebi undertook preliminary examination in the matter. Sebi said it observed that on 13 March 2014, i.e. the day on which the shares of LTFH were included in the futures & options (F&O) segment, the price of the March expiry futures contract of LTFH in the F&O segment opened at Rs 87.80, and dropped by more than 10% to close at Rs 75.55 on the same day. In cash segment, the scrip had opened at Rs 86, rose to Rs 88 and then dropped by more than 10% to close at Rs 79.20.
Sebi observed that just before 13 March 2014, Factorial was involved as potential investor in the market gauging exercise undertaken by Credit Suisse Securities (India) with regard to Offer for Sale (OFS) of LTFH shares by promoter L&T. Credit Suisse was appointed by L&T as Seller Broker in the OFS.
Sebi observed that Factorial built substantial short position in LTFH (84.15% of the market wide open interest) in the futures & options segment on 13 March 2014 at average price of Rs 80.94 ahead of announcement of the OFS of shares of LTFH at a floor price of Rs 70 on the same day in the late evening. Sebi also observed that Factorial had taken such an aggressive short position without any existing exposure in the shares or derivatives of LTFH. Sebi said five different and independent FIIs were used to build the short position in LTHF. Sebi also said nearly the same number of shares were covered in cash segment the next day by subscribing to the OFS at a price of Rs 71.50, locking a profit of approximately Rs 20 crore.
Sebi said that Factorial may file its reply, if any, to Sebi on this order within 21 days from the date of receipt of this order, if it so desires, avail an opportunity of personal hearing on a date, place and time fixed in that regard by Securities and Exchange Board of India.
Idea Cellular rose 3.26% to Rs 140.80 after the company after trading hours Thursday, 5 June 2014, said that the Securities Allotment Committee of the board of directors of the company has decided to open bidding for issue of shares under qualified institutional placement (QIP). The company intends to raise up to Rs 3000 crore from the issue. The floor price for the QIP issue has been fixed at Rs 136.98 per share. Shares of Idea Cellular gained 0.41% to settle at Rs 136.35 on BSE on Thursday, 5 June 2014, ahead of the announcement.
Tata Power Company rose 1% to Rs 110 after hitting 52-week high of Rs 112.35 in intraday trade.
NTPC rose 0.7% to Rs 165.40 after hitting 52-week high of Rs 168.80 in intraday trade. With reference to the earlier announcement dated 27 May 2014, NTPC said before market hours that basis of allotment to employees of offer for sale has been finalized and 34.83 lakh shares will be transferred from Government of India's demat to respective demat accounts of successful applicants (employees.)
Accordingly, Government of India's share holding in NTPC's would reduce to 618.06 crore shares i.e.74.96% of paid-up equity capital of the company from 618.40 crore shares i.e. 75 of paid-up capital of the Company. Post transfer of equity share to respective demat accounts of employees, these shares will be available for trading, company added.
Shares of Tata Steel and Steel Authority of India (Sail) extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making.
Steel Authority of India (Sail) was up 1.49% to Rs 108.65. The stock hit 52-week high of Rs 109.90 in intraday trade.
Tata Steel was up 0.88% to Rs 560 after hitting 52-week high of Rs 568.80 in intraday trade.
NMDC fell 1.34% to Rs 191.05, with the stock reversing gains after hitting 52-week high of Rs 196.15 in intraday trade. The company said after market hours on Thursday, 5 June 2014 that production rose 0.81% to 4.94 million tonnes in May 2014 over May 2013. Despatches rose 11.22% to 5.65 million tonnes in May 2014 over May 2013. Prices of lump ore for the month of June 2014 was fixed at Rs 4600/WMT. Prices of fines for the month of June 2014 was fixed at Rs 3160/WMT.
Sugar shares surged after Food Minister Ram Vilas Paswan was quoted as saying on Thursday, 5 June 2014, that the government will examine raising import tax on sugar to support local prices and help mills clear dues to cane growers which is estimated at Rs 11000 crore. India, the world's second-biggest producer after Brazil, imposes a 15% tax on sugar imports. Local mills have been demanding raising the duty to as much as 40% to help lift prices, which have been pressured by huge stocks. Shree Renuka Sugars (up 13.44%), Bajaj Hindusthan (up 9.82%), Triveni Engineering & Industries (up 10%), Dhampur Sugar Mills (up 15.21%) and Balrampur Chini Mills (up 7.82%) surged.
In the foreign exchange market, the rupee edged higher against the dollar after the European Central Bank on Thursday, 5 June 2014, cut its benchmark interest rates to unprecedented lows, spurring speculation the decision will accelerate capital inflows. The partially convertible rupee was hovering at 59.175, compared with its close of 59.33/34 on Thursday, 5 June 2014.
The crucial South West monsoon rains arrived over India's southern Kerala state today, 6 June 2014, around five days later than usual. After arriving over Kerala, the monsoon usually spreads over the entire country by mid-July. L.S. Rathore, director general of India Meteorological Department was quoted as saying by a news agency today, 6 June 2014, that the monsoon has finally arrived but it is currently moving at a slow pace as the parameters that support its progress are either weaker than their normal positions or not properly placed.
India's rainy season usually starts in the first week of June. With the majority of the country's agricultural land dependent on rainfall, not manual irrigation, variations in the rains' arrival date can seriously affect plans for sowing summer crops such as rice, sugar cane, cotton and oilseeds.
The 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.
Finance Minister Arun 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 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.
European stock markets edged higher in choppy trade on Friday, 6 June 2014, as banks continued to benefit from easing measures announced by the European Central Bank in the prior session and ahead of US jobs data due later in the global day. Key benchmark indices in UK, Germany and France were up 0.12% to 0.27%.
German industrial output rose in April in a sign that Europe's largest economy is poised to continue growing at a solid pace. Production, adjusted for seasonal swings, increased 0.2% from March, when it declined a revised 0.6%, the Federal Statistics Office in Wiesbaden said today.
The European Central Bank cut interest rates to record lows on Thursday, launched a series of measures to pump money into the sluggish euro zone economy, and pledged to do more if needed to fight off the risk of Japan-like deflation. The ECB lowered the deposit rate to sub zero -- negative 0.1%. It cut its main refinancing rate to 0.15%, and the marginal lending rate - or emergency borrowing rate - to 0.40%.
For the first time, the ECB will charge banks for parking funds at the central bank overnight in an attempt to force them to lend to small- and medium-sized businesses. The measures were also aimed at easing pressure on the strong euro, which is threatening economic recovery and importing disinflation.
ECB President Mario Draghi outlined a four-year 400 billion euro ($544.86 billion) scheme giving banks that have been holding back credit due to looming stress tests an incentive to increase lending to businesses in the euro zone. "Now we are in a completely different world," Draghi said, citing "low inflation, a weak recovery and weak monetary and credit dynamics". The package, adopted unanimously, was aimed at increasing lending to the "real economy", he said.
Other steps included extending the duration of unlimited cheap liquidity for euro zone banks, injecting about 170 billion euros by stopping tenders that withdrew funds spent on past government bond purchases, and preparing for possible future purchases of asset-backed securities to support small business. "If required, we will act swiftly with further monetary policy easing," he said, adding that the policy-setting Governing Council was unanimous in its commitment to use unconventional instruments if needed "to further address risks of too prolonged a period of low inflation".
UK interest rates have been held at the record low of 0.5% for another month by the Bank of England on Thursday. The size of the Bank's bond-buying economic stimulus programme was also kept unchanged at 375 billion. The decision was widely expected, despite continued signs of strength in the UK economy.
Asian stocks edged lower in choppy trade on Friday, 6 June 2014, before US payrolls data due later in the global day. Key benchmark indices in Taiwan, Hong Kong and China were off 0.07% to 0.69%. Key benchmark indices in Indonesia and Singapore were up 0.03% to 0.6%.
Trading in US index futures indicated that the Dow could gain 35 points at the opening bell on Friday, 6 June 2014. US stocks rose to records on Thursday as European Central Bank stimulus boosted optimism in the global economy before US jobs report.
The Fed said in its Beige Book business survey that the economy expanded at a modest to moderate pace last month as auto sales led household spending and the labor market improved. The survey, released two weeks before policy makers meet in Washington, supports Chair Janet Yellen's view that the economy is rebounding from a 1% contraction in the first quarter caused largely by harsh winter weather. Claims for American unemployment benefits climbed by a more-than-estimated 312,000 in the week to May 31, data yesterday showed.
The influential US nonfarm payroll data for May 2014 is due for release today, 6 June 2014.
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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