Firmness continued on the bourses in mid-afternoon trade after President Pranab Mukherjee said in 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 foreign direct investment (FDI). The barometer index, the S&P BSE Sensex, was up 199.71 points or 0.79%, up close to 100 points from the day's low and off about 50 points from the day's high. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up more than 1.5%. The BSE Small-Cap index was up close to 2%.
IT stocks rose after strong US job data for May 2014. Shares of power generation firms rose after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament the aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. Shares of companies whose fortunes are linked to orders from Indian Railways after the President said that modernization and revamping of Railways is on top of the government's infrastructure agenda.
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. Firmness continued on the bourses in mid-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 14:20 IST, the S&P BSE Sensex was up 199.71 points or 0.79% to 25,596.17. 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 69.35 points or 0.91% to 7,652.75. 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 137.40 points or 1.51% at 9,235.94. The BSE Small-Cap index was up 187.79 points or 1.92% at 9,961.83. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong, with over two gainers for every loser on BSE. On BSE, 2,183 shares rose and 800 shares fell. A total of 81 shares were unchanged.
IT stocks rose after strong US job data for May 2014. US is the biggest outsourcing market for the Indian IT firms. TCS (up 1.57%), Tech Mahindra (up 3.48%), Wipro (up 0.98%) and HCL Technologies (up 1.24%) gained.
Infosys dropped 0.55%, with the stock extending Friday's losses triggered by 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.
President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that the backbone of government's new ways of working will be a Digital India. Information Technology will be used to drive re-engineering of government processes to improve service delivery and programme implementation. The government will strive to provide Wi-Fi zones in critical public areas in the next five years. The National e-governance plan will be expanded to cover every government office from the centre to the Panchayat; to provide a wide variety of services to citizens.
Shares of power generation firms rose after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament the aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. GVK Power & Infrastructure (up 5.85%), Adani Power (up 0.71%), Torrent Power (up 1.27%), JSW Energy (up 0.91%), and Reliance Power (up 2.12%) gained.
Tata Power Company rose 2.71% to Rs 113.80 after hitting 52-week high of Rs 115.10 in intraday trade.
NHPC rose 0.19 %. The company said before market hours that in accordance with Ministry of Power's letter dated 6 June 2014, Shri R. S. T. Sai, CMD, THDC India has taken over the additional charge of the post of Chairman & Managing Director, NHPC.
Reliance Infrastructure rose 2.9%. The company said during market hours that the company through its special purpose vehicle -- Mumbai Metro One (MMOPL) -- successfully commenced operations of Mumbai Metro on 8 June 2014. A concessional and promotional fare of Rs 10 is being charged for the first 30 days, irrespective of the distance travelled on the Versova-Andheri-Ghatkopar corridor, for a single one way trip between any two stations. The initial fare has been fixed and notified as Rs 10, Rs 20, Rs 30 and Rs 40. The busy corridor is estimated to cater to over 7 lakh commuters per day in its very first year of operation, Reliance Infrastructure said. As per a Central government directive, the MMOPL is the Metro Railway Administration (MRA) and the fare for the Mumbai metro is to be fixed afresh by MMOPL for the initial opening of the line.
NTPC fell 0.3% to Rs 164.90 on profit booking. The company has reportedly invited bids for construction of the 1,320 megawatts Khargone thermal project in Madhya Pradesh, estimated to cost Rs 7000 crore. Bids have been sought for EPC (engineering, procurement and construction) package for the Khargone super thermal power plant coming up in Madhya Pradesh, according to reports. The state-run major plans to finance the EPC package for Khargone plant through external commercial borrowings (ECB) and own resources, according to the tender document issued on Saturday, reports suggest.
The government will come out with a comprehensive National Energy Policy and focus on development of energy related infrastructure, human resource and technology. The aim of the government will be to substantially augment electricity generation capacity through judicious mix of conventional and non-conventional sources. The government will expand the national solar mission and connect households and industries with gas-grids. Reforms in the coal sector will be pursued with urgency for attracting private investment in a transparent manner. The international civil nuclear agreements will be operationalized and nuclear power projects for civilian purposes will be developed, the President of India said in his speech.
Shares of companies whose fortunes are linked to orders from Indian Railways surged after President Pranab Mukherjee said in his speech addressing a joint sitting of Parliament that modernization and revamping of Railways is on top of the government's infrastructure agenda. Texmaco Rail & Engineering (up 10% at Rs 113.20), Titagarh Wagons (up 5% at Rs 297.70), Kernex Microsystems (India) (up 5% at Rs 76.05), Stone India (up 5% at Rs 33.80) and BEML (up 3.6% at Rs 762.90) surged. The government will launch a Diamond Quadrilateral project of high speed trains, the President said. The country will have a network of freight corridors with specialised Agri-Rail networks for perishable agricultural products. Investment in railways will be increased using innovative financing methods, the President said. Expansion of railways in hilly states and Northeast region and modernization of rail safety systems will be prime focus areas. The government will encourage R&D and high level local manufacturing for railway systems, the President said.
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 customary speech by the president is delivered at the first session of parliament every year and aims to highlight the broader policies the government intends to pursue.
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.
The President said that the government will chalk out an ambitious infrastructure development programme to be implemented in the next 10 years. A fast-track, investment friendly and predictable PPP mechanism will be put in place. Modernization and revamping of Railways is on top of the infrastructure agenda. Taking urbanization as an opportunity rather than a challenge, the government will build 100 cities focussed on specialized domains and equipped with world class amenities.
Environment and forest clearance systems will be made more predictable, transparent and time-bound. The government will adopt a National Land Use Policy which will facilitate scientific identification of non-cultivable land and its strategic development.
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.
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.
European stocks advanced on Monday, 9 June 2014, amid optimism the global economic recovery remains on track. Key benchmark indices in UK and Germany were up 0.08% to 0.57%. France's CAC 40 fell 0.01%.
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 0.73%. Key benchmark indices in Indonesia and South Korea were off 0.27% to 1.05%.
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 11 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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