The arrival of the Southwest Monsoon on the Andaman and Nicobar Islands on Saturday, 16 May 2015, which was 4 days prior to the onset date of 20 May 2015, lifted investor sentiment as key equity benchmark indices surged on the first trading session of the week today, 18 May 2015. The arrival of the monsoon rains over the Andaman and Nicobar Islands before the normal schedule time raised expectations that rains will hit the Kerala coast before time. The timely arrival of rains bodes well for timely sowing of crops. Oil and cement stocks led rally for key benchmark indices. Index heavyweights HDFC, ITC, Infosys, HDFC Bank, Reliance Industries and L&T edged higher.
The market sentiment was also boosted by a statement from the Finance Ministry which stated that the government has managed to better its target for containing the fiscal and revenue deficits in the last financial year. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both attained 3-1/2-week closing high. The market breadth indicating the overall health of the market was strong. The Sensex gained 363.30 points or 1.33% to settle at 27,687.30.
Key benchmark indices today, 18 May 2015, gained for the second day in a row.
FMCG stocks edged higher after the news of arrival of the Southwest Monsoon on the Andaman and Nicobar Islands on Saturday, 16 May 2015 -- four days prior to the normal onset date of 20 May 2015. Asian Paints fell in volatile trade after announcing Q4 March 2015 results. Capital goods shares were in demand. Telecom stocks gained. Shares of public sector oil marketing companies (PSU OMCs) edged higher after companies announced hike in retail selling price of petrol and diesel after trading hours on Friday, 15 May 2015. Shares of state-run upstream oil companies rose. Shares of pharmaceutical companies also edged higher.
Foreign portfolio investors bought shares worth a net Rs 35.98 crore from the secondary equity market during the previous trading session on Friday, 15 May 2015, as per data from the depositories. Domestic institutional investors (DIIs) bought shares worth a net Rs 563.60 crore on Friday, 15 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower in choppy trade. Asian stocks were mixed. US stocks closed mostly higher during the previous trading session on Friday, 15 May 2015.
The S&P BSE Sensex jumped 363.30 points or 1.33% to settle at 27,687.30, its highest closing level since 23 April 2015. The index jumped 401.97 points at the day's high of 27,725.97 in late trade. The index gained 46.28 points at the day's low of 27,370.28 at the onset of trading session.
The CNX Nifty gained 111.30 points or 1.35% to settle at 8,373.65, its highest closing level since 23 April 2015. The index hit a high of 8,384.60 in intraday trade. The index hit a low of 8,271.95 in intraday trade.
The BSE Mid-Cap index rose 103.15 points or 0.98% to settle at 10,667.07. The BSE Small-Cap index rose 107.13 points or 0.97% to settle at 11,147.92. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,675 shares rose and 1,046 shares fell. A total of 123 shares were unchanged.
The total turnover on BSE amounted to Rs 3174 crore, higher than turnover of Rs 2534.77 crore registered during the previous trading session.
Among the sectoral indices on BSE, the BSE Consumer Durables index (up 2.16%), the BSE Oil & Gas index (up 2.09%), the BSE Healthcare index (up 1.54%), the S&P BSE FMCG index (up 1.37%) outperformed the Sensex.
The BSE Capital Goods index (up 1.3%), the BSE Bankex index (up 1.21%), the BSE Teck index (up 1.18%), the BSE Power index (up 1.08%), the S&P BSE IT index (up 0.96%), the BSE Auto index (up 0.79%), the BSE Metal index (up 0.69%) and the BSE Realty index (down 0.2%) underperformed the Sensex.
Index heavyweight HDFC was up 2.67% at Rs 1,266.90. The stock hit a high of Rs 1,268.55 and a low of Rs 1,228.
Index heavyweight ITC was up 1.58% at Rs 331.25. The stock hit a high of Rs 332.95 and a low of Rs 326.35.
Index heavyweight Infosys was up 1.85% at Rs 1,996. The stock hit a high of Rs 1,998 and a low of Rs 1,962.05.
Shares of public sector oil marketing companies (PSU OMCs) edged higher after companies announced hike in retail selling price of petrol and diesel after trading hours on Friday, 15 May 2015. HPCL (up 4.35%), BPCL (up 3.67%) and Indian Oil Corporation (up 2.65%) edged higher.
Indian Oil Corporation (IOCL) has raised retail selling price of petrol by Rs 3.13 a litre in Delhi (including state levies) with corresponding price revision in other states. With this change, the price of petrol in Delhi stands at Rs 66.29 a litre. The hike in price took effect from the midnight of 15/16 May 2015. IOCL has raised retail selling price of diesel by Rs 2.71 a litre in Delhi (including state levies) with corresponding price revision in other states. With this change, the price of diesel in Delhi stands at Rs 52.28 a litre. IOCL said that there has been a steep increase in international prices of both petrol and diesel during the fortnight. The rupee also depreciated quite significantly during the fortnight. The combined impact of both these factors warrant an upward revision in retail selling prices, the impact of which is being passed on to the consumers with this latest price increase, IOCL said in a statement issue on Friday, 15 May 2015. The movement of prices in international oil market and the rupee-dollar exchange rate will be monitored closely and developing trends of the market will be reflected in future price changes, IOCL said.
The government has already freed pricing of petrol and diesel. PSU OMCs sell LPG and kerosene at government controlled prices.
Shares of state-run upstream oil companies rose. ONGC (up 1.07%) and Oil India (up 1.18%) edged higher.
Shares of state-run gas transmission and distribution major GAIL (India) advanced 3%.
ONGC, GAIL (India) and Oil India currently share a part of the under recovery of state-run oil marketing companies (PSU OMCs) on sale of petroleum products by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Shares of Cairn India were up 1.77%.
Reliance Industries rose 1.84%. With respect to news titled "Strike at RIL's Patalganga factory on wage issue," RIL clarified after market hours on Friday, 15 May 2015, that a part of the contract workforce at its Patalganga factory have not been reporting for work predominantly in the polyester area. All others including the regular staff and contract workforce are at work. The appropriate authorities have advised that the action of the contract workforce not reporting for work is unwarranted and uncalled for. The manufacturing operations in both the petrochemicals and the polyester area have not been impacted and continue to be normal, RIL said.
FMCG stocks edged higher after the news of arrival of the Southwest Monsoon on the Andaman and Nicobar Islands on Saturday, 16 May 2015 -- four days prior to the normal onset date of 20 May 2015. The arrival of the monsoon rains over the Andaman and Nicobar Islands before the normal schedule time raised expectations that rains will hit the Kerala coast before time. The timely arrival of rains bodes well for timely sowing of crops. FMCG firms derive substantial sales from rural India. Godrej Consumer Products (up 4.25%), Britannia Industries (up 1.36%), Marico (up 1.33%), Hindustan Unilever (up 0.70%), Tata Global Beverages (up 0.68%), Dabur India (up 0.49%) and Colgate Palmolive (India) (up 0.16%), edged higher. GlaxoSmithKline Consumer Healthcare (down 0.03%), Bajaj Corp (down 0.97%), Procter & Gamble Hygiene & Health Care (down 1.18%) and Jyothy Laboratories (down 1.23%) edged lower.
Nestle India was up 0.69% at Rs 7,061. The stock hit a high of Rs 7,327 and a low of Rs 6,945. The company's net profit rose 23.58% to Rs 320.28 crore on 8.05% rise in total income to Rs 2541.95 crore in Q1 March 2015 over Q1 March 2014. The Q1 result was announced after market hours on Friday, 15 May 2015. Nestle India said that the impact of declining prices of fresh milk and derivatives compared to the increasing trend in previous year was mostly negated by the opening stock of finished goods that was manufactured when fresh milk prices were relatively higher. However, cost of materials consumed as percentage of net sales has decreased largely due to selling price increases, including carry over pricing.
Asian Paints fell 3.05% to Rs 765.90. The stock hit a high of Rs 818 and a low of Rs 763 during the day. The company's consolidated net profit rose 18.6% to Rs 341 crore on 6.9% growth in income from operations to Rs 3535 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced during market hours today, 18 May 2015.
K.B.S. Anand, Managing Director & CEO of Asian Paints said that in the decorative business segment in India, the company has registered single digit volume growth in Q4 March 2015 due to poor demand conditions. Profitability improved due to falling raw material prices. The automotive coatings JV (PPGAP) performance was supported by growth in the general industrial category while the lower growth in automobile sales impacted the automotive coatings business. The industrial coatings JV (APPPG) witnessed good growth in Q4 March 2015 particularly in the industrial liquid paints category, Anand said. However, the business conditions for the industrial coatings JV remains challenging given the slow pace of growth in industrial activity, Anand said. International business performed well amidst challenging market conditions in some key markets like Egypt, Anand said.
Anand further said that weak consumer sentiments and slower ramp-up than expectations impacted demand for the company's kitchens (Sleek) and bath fittings (ESS ESS) businesses in the home improvement business category, Anand said. The company continues to work on streamlining of both the businesses and expanding the network, he added.
Capital goods shares were in demand. Larsen & Toubro (up 1.32%), BEML (up 2.08%), Crompton Greaves (up 2.49%), Siemens (up 4%), Thermax (up 1.26%), Bharat Heavy Electricals (up 1.54%) and Bharat Electronics (up 0.03%), edged higher. ABB India shed 0.59%.
PSU bank stocks were mostly lower. Oriental Bank of Commerce (down 2.2%), Canara Bank (down 2.39%), Bank of India (down 1.03%), Union Bank of India (down 2.34%), Allahabad Bank (down 2.9%) and Andhra Bank (down 1.08%) dropped. Bank of Baroda (up 1.81%), Punjab National Bank (up 0.81%) and State Bank of India (SBI) (up 0.45%) rose.
Shares of private bank stocks rose. HDFC Bank (up 1.55%), IndusInd Bank (up 2.08%), Kotak Mahindra Bank (up 1.04%), Axis Bank (up 1.19%), Yes Bank (up 2.1%) and ICICI Bank (up 0.93%) rose.
Federal Bank fell 1.44%. The private sector bank's board of directors of the bank at its meeting held on Saturday, 16 May 2015, recommended raising share capital of the bank by way of issue of bonus shares to the shareholders of the bank in the ratio of one share for each exiting share held. The announcement was made before market hours today, 18 May 2015.
Jammu & Kashmir Bank dropped 3.71% after net profit fell 59.45% to Rs 101.61 crore on 7.14% rise in total income to Rs 2023.50 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced on Saturday, 16 May 2015.
Shares of pharmaceutical companies edged higher. Dr Reddy's Laboratories (up 3.56%), Lupin (up 3.09%), Cadila Healthcare (up 0.73%), Wockhardt (up 1.95%), Glenmark Pharmaceuticals (up 0.92%), Sun Pharmaceutical Industries (up 0.38%), Aurobindo Pharma (up 0.32%) and Cipla (up 0.15%) edged higher. GlaxoSmithKline Pharmaceuticals shed 0.21%.
Metal and mining shares were in demand. Hindalco Industries (up 1.06%), JSW Steel (up 0.95%), Jindal Steel & Power (up 0.95%), Steel Authority of India (up 0.52%), Vedanta (up 0.6%), Hindustan Zinc (up 0.29%), National Aluminum Company (up 0.5%), NMDC (up 1.18%) and Tata Steel (up 0.01%) edged higher. Hindustan Copper shed 0.16%.
Auto stocks were mostly higher. Mahindra & Mahindra (up 1.27%), Bajaj Auto (up 2.3%), TVS Motor Company (up 1.63%), Ashok Leyland (up 1.14%) and Maruti Suzuki India (up 0.72%) edged higher. Hero MotoCorp (down 0.21%) and Eicher Motors (down 0.04%) fell.
Tata Motors shed 0.06%. A total of 15.04 crore shares of the company which were allotted to the shareholders of the company on rights basis on 13 May 2015 were admitted for trading on the bourses today, 18 May 2015. Additionally, a total of 2.65 crore 'A' ordinary shares with differential voting rights were also admitted for trading on the bourses today, 18 May 2015. The 'A' ordinary shares were allotted on rights basis on 13 May 2015 to the shareholders holding 'A' ordinary shares.
Tata Motors had priced the rights issue at Rs Rs 450 per share. The rights issue of 'A' ordinary shares was priced at Rs 271 per share.
Meanwhile, the Tata Motors Group global wholesales including Jaguar Land Rover (JLR) rose 4% to 77,701 units in April 2015 over April 2014, as per figures released by the company after market hours on Friday, 15 May 2015.
Cement shares were in demand. Ambuja Cements (up 3.39%), UltraTech Cement (up 3.23%) and ACC (up 2.8%) edged higher. Shree Cement was off 0.25%.
Grasim Industries was up 0.10%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
JK Lakshmi Cement was off 1.21% to Rs 339. JK Lakshmi Cement's net profit fell 88.56% to Rs 6.05 crore on 11.41% decline in total income to Rs 595.94 crore in Q4 March 2015 over Q4 March 2014. The result was announced after market hours on Friday, 15 May 2015.
Telecom stocks were in demand. Reliance Communications (up 3.61%), Idea Cellular (up 1.82%), MTNL (up 1.42%) and Tata Teleservices (Maharashtra) (up 0.13%) edged higher.
Bharti Airtel advanced 1.52%. Bharti Airtel announced on Saturday, 16 May 2015, that the company has received financing commitments of up to $2.5 billion from China Development Bank and Industrial and Commercial Bank of China. Subject to final agreements and requisite approvals, Bharti Airtel can draw these funds over a long availability period, depending on its financing requirements. These financing options will allow the company to diversify its global financing pool and access funds to invest in the growth of data networks across its global operations, Bharti Airtel said.
China Development Bank has committed financing of up to $2 billion with an average maturity of about nine years. This is the single largest bilateral commitment by China Development Bank to any telecom operator globally and the largest bilateral commitment to a private Indian company, Bharti Airtel said in a statement. Industrial and Commercial Bank of China has committed $500 million with an average life of about nine years, making it the largest and longest bilateral commitment to an Indian telecom operator, Bharti Airtel said.
Key benchmark indices today, 18 May 2015, gained for the second day in a row. The Sensex has gained 481.24 points or 1.76% in two trading days from recent low of 27,206.06 on 14 May 2015. The Sensex has risen 675.99 or 2.5% in this month so far (till 18 May 2015). The Sensex has gained 187.88 points or 0.68% in this calendar year so far (till 18 May 2015). From a 52-week low of 23,742.75 on 15 May 2014, the Sensex has risen 3,944.55 points or 16.61%. The Sensex is off 2,337.44 points or 7.78% from a record high of 30,024.74 hit on 4 March 2015.
The Southwest Monsoon arrived over the Andaman and Nicobar Islands on Saturday, 16 May 2015, which is 4 days prior to the usual onset date of 20 May 2015. Private weather forecaster Skymet today, 18 May 2015, said that the conditions for the advancement of the Northern Limit of Monsoon (NLM) are favourable over some more parts of south Bay of Bengal, through Sri Lanka. It will take about 8 to 10 days from the current position for the monsoon to strike Kerala, Skymet said. This means that the onset will be 3 to 4 days earlier than the official date of 1 June 2015, Skymet said.
On 14 May 2015, the India Meteorological Department (IMD) forecast that the southwest monsoon will hit the Kerala coast around 30 May 2015. The onset of southwest monsoon over Kerala signals the arrival of monsoon over the Indian subcontinent and represents beginning of rainy season over the region. The IMD has forecast below normal rains during the June-September southwest monsoon season this year. The annual monsoon is critical for the country's agriculture.
Meanwhile, the Finance Ministry announced yesterday, 17 May 2015, that the government has bettered its own financial targets during 2014-15. Based on provisional accounts for the year ended 31 March 2015 (2014-15), the fiscal deficit stood at 4% of GDP for 2014-15 as against the target of 4.1%. The fiscal deficit was 4.4% of GDP in 2013-14. The revenue deficit stood at 2.8% of GDP in 2014-15 as against target of 2.9%. The revenue deficit was 3.2% of GDP in 2013-14. The government's gross tax collections rose 9% to Rs 12.45 lakh crore in 2014-15.
Meanwhile, data released by the government after trading hours on Friday, 15 May 2015, showed that India's merchandise exports declined 13.96% to $22.05 billion in April 2015 over April 2014. Imports declined 7.48% to $33.04 billion in April 2015 over April 2014. Oil imports fell 42.65% to $7.44 billion in April 2015 over April 2014. Non-oil imports rose 12.58% to $25.60 billion in April 2015 over April 2014. The trade deficit for April 2015 was estimated at $10.99 billion, which was higher than trade deficit of $10.08 billion in April 2014.
Meanwhile, Prime Minister Narendra Modi said after holding bilateral talks with South Korean President Park Geun-hye today, 18 May 2015, that India and South Korea have agreed to upgrade the bilateral relationship to 'Special Strategic Partnership'. Modi said that India considers South Korea as a crucial partner in India's economic modernization. Modi further said that Korean companies will be participating in India's plans to acquire and manufacture LNG tankers. A Joint Working Group that includes the government and private sectors of the two countries will be established to facilitate cooperation in the shipbuilding sector. Modi is currently on a two-day official visit to South Korea.
Meanwhile, according to a joint statement issued by India and South Korea after Modi's bilateral talks with Park Geun-hye, the Ministry of Strategy and Finance, South Korea and the Export-Import Bank of Korea have expressed their intention to provide $10 billion for mutual cooperation in infrastructure, comprising Economic Development Cooperation Fund ($1 billion) and export credits ($9 billion) for priority sectors, including smart cities, railways, power generation and transmission, and other sectors to be agreed. The two governments and the EXIM Banks of the two countries will hold consultations to chalk out a roadmap in order to materialize the envisioned financial support for priority sectors, according to the joint statement.
Meanwhile, India and South Korea today, 18 May 2015, signed an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The India-Republic of Korea Double Taxation Avoidance Convention which was signed in 1985 has been revised with a view to avoiding the burden of double taxation on taxpayers in the two countries, the Prime Minister's Office (PMO) said.
In overseas markets, European stocks edged lower today, 18 May 2015 in choppy trade. Key benchmark indices in UK and UK were off 0.07% to 0.77%. Germany's DAX was up 0.05%.
Greece remains a focus for investors in Europe, as the uncertainty over the country's debt situation persists. Canadian ratings service DBRS Inc. on Friday, 15 May 2015, cut its rating on Greece, citing uncertainty over whether it will be able reach an agreement with its creditors. Greece faces a key debt repayment deadline of 5 June 2015.
Asian stocks were mixed today, 18 May 2015. Key benchmark indices in South Korea, Japan, Indonesia and Taiwan were up 0.2% to 0.80%. Key benchmark indices in China, Hong Kong and Singapore were off 0.1% to 0.83%.
In Japan, the latest data showed that Japan's core machinery orders, excluding often volatile orders for electric power companies and ships, rose 2.9% in March from the previous month.
US stocks closed mostly higher Friday, 15 May 2015, with the S&P 500 index setting a record for the second straight session. Investors grappled with weaker-than-expected economic reports which left the timing of the Federal Reserve's next rate hike still uncertain for investors.
Meanwhile, the president of the Chicago Fed Charles Evans today, 18 May 2015, said in a speech prepared for delivery to a conference in Stockholm, Sweden that he sees no compelling reason for the US Federal Reserve to be in a hurry to tighten financial conditions. Evans said that the case could even be made that the US economy needed more accommodation at the moment, according to reports. Evans is one of only two Fed officials who think the US central bank should wait until 2016 to increase interest rates.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released on Wednesday, 20 May 2015.
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