Key benchmark indices logged strong gains on first trading day of the week. The barometer index, the S&P BSE Sensex hit highest closing level in 2-1/2 weeks. The 50-unit CNX Nifty hit one-week closing high. The Sensex rose 401.91 points or 1.48% to settle at 27,507.30. The market breadth indicating the overall health of the market was strong.
Metal and mining stocks gained after China cut interest rates for the third time in six months on Sunday, 10 May 2015 to stimulate growth. Pharma shares were in demand on renewed buying. Telecom stocks edged higher. Capital goods stocks also gained. Bank stocks were in demand. Bank of Baroda spurted as bank's bad loans declined sequentially.
Meanwhile, the Narendra Modi government today, 11 May 2015 reportedly decided to send the controversial land acquisition bill to the joint committee of Parliament in view of continued opposition to the proposed legislation. The controversial bill was introduced in the Lok Sabha today amid a huge uproar by the Opposition.
In overseas markets, European stocks edged lower as investors await the outcome of the Eurogroup finance ministers meeting on Greece in Brussels later today, 11 May 2015. Asian stocks edged higher today, 11 May 2015 as investors cheered China's latest cut to interest rates to bolster its flagging economy and as US markets rallied on Friday, 8 May 2015 after a robust headline reading for US employment. US stocks surged on Friday, 8 May 2015 after a robust headline reading for US employment.
Foreign portfolio investors sold shares worth a net Rs 354.75 crore into secondary equity market on Friday, 8 May 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) sold shares worth a net Rs 1114.38 crore during the previous trading session on Friday, 8 May 2015, as per provisional data.
The S&P BSE Sensex rose 401.91 points or 1.48% to settle at 27,507.30, its highest closing level since 23 April 2015. The index gained 438.85 points at the day's high of 27,544.24 in late trade. The index rose 125.89 points at the day's low of 27,231.28 in early trade.
The CNX Nifty gained 133.75 points or 1.63% to settle at 8,325.25, its highest closing level since 4 May 2015. The index hit a high of 8,332.75 and a low of 8,224.65 in intraday trade.
The BSE Mid-Cap index rose 217.75 points or 2.13% to settle at 10,453.96, outperforming the Sensex. The BSE Small-Cap index gained 138.56 points or 1.28% to settle at 10,967.62, underperforming the Sensex.
Among sectoral indices on BSE, the S&P BSE Healthcare index (up 1.69%), BSE Auto index (up 2.52%), BSE Bankex index (up 2.4%), BSE Consumer Durables index (up 2.27%), BSE Metal index (up 2.52%) and BSE Power index (up 1.56%) outperformed the Sensex. The S&P BSE FMCG index (down 0.32%), BSE IT index (up 1.34%), BSE Capital Goods index (up 1.18%), BSE Oil & Gas index (up 1.25%), BSE Realty index (up 0.9%) and BSE Teck index (up 1.12%) underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,760 shares gained and 969 shares fell. A total of 102 shares were unchanged.
The total turnover on BSE amounted to Rs 2709 crore, lower than turnover of Rs 2718.72 crore registered during the previous trading session on Friday, 11 May 2015.
Telecom stocks edged higher. Idea Cellular (up 0.97%), MTNL (up 2.47%), Tata Teleservices (Maharashtra) (up 1.2%) and Reliance Communications (up 3.6%) gained. Bharti Airtel fell 0.41%.
Capital goods stocks gained. Crompton Greaves (up 3.02%), Bharat Heavy Electricals (Bhel) (up 1.41%), Bharat Electronics (up 1.19%), L&T (up 1.08%), Siemens (up 2.94%), and BEML (up 2.86%) gained.
Bank stocks were in demand. Bank of Baroda spurted 16.88% as bad loans declined sequentially. The bank's ratio of net non-performing assets (NPAs) to net advances stood at 1.89% as on 31 March 2015, lower than 2.11% as on 31 December 2014.
The bank's ratio of gross NPAs to gross advances stood at 3.72% as on 31 March 2015, lower than 3.85% as on 31 December 2014.
The state-run bank's net profit declined 48.29% to Rs 598.35 crore on 3.81% growth in total income to Rs 12057.39 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced during market hours today, 11 May 2015.
Shares of other PSU bank stocks also spurted after Bank of Baroda announced Q4 results. State Bank of India (SBI) (up 5.44%), Punjab National Bank (up 2.2%), Bank of India (up 5.39%) and Union Bank of India (up 4.63%) gained.
Canara Bank rose 5.38%. The bank said at the fag end of trading hours on Friday, 8 May 2015. that it has reduced the base rate by 20 basis points from 10.2% to 10% for loans/advances with effect from 11 May 2015.
Among private bank stocks, IndusInd Bank (up 1.3%), Axis Bank (up 1.62%), Yes Bank (up 2.28%), ICICI Bank (up 2.04%), HDFC Bank (up 0.83%), and Kotak Mahindra Bank (up 0.87%) gained.
Metal and mining stocks gained after China cut interest rates for the third time in six months on Sunday, 10 May 2015 to stimulate growth. China is the world's largest consumer of steel, copper and aluminum.
Hindalco Industries (up 2.19%), Vedanta (up 4.95%), JSW Steel (up 1.28%), Tata Steel (up 2.95%), Steel Authority of India (Sail) (up 2.22%), Hindustan Copper (up 2.81%), NMDC (up 0.53%), National Aluminium Company (up 3.4%), and Jindal Steel & Power (up 1.04%) edged higher. Hindustan Zinc shed 0.17%.
Pharma shares were in demand on renewed buying. Dr Reddy's Laboratories (up 0.47%), Glenmark Pharmaceuticals (up 4.37%), Sun Pharmaceutical Industries (up 2.21%), Aurobindo Pharma (up 5.75%) and Wockhardt (up 0.64%) gained.
Cipla rose 1.91% on buzz a foreign brokerage upgraded the stock to outperform citing strong Nexium sales. According to the brokerage, Nexium profits will lead to strong earnings growth in the first half of FY 2016 and approval of generic Advair MDI in UK are strong near-term triggers of Cipla.
Key indices gained for the second day in a row today, 11 May 2015. From a recent low of 26,599.11 on 7 May 2015, the Sensex has gained 908.19 points or 3.41% in two sessions. The Sensex has gained 495.99 points or 1.83% in this month so far (till 11 May 2015). The Sensex has gained 7.88 points or 0.02% in this calendar year so far (till 11 May 2015). From a 52-week low of 22,277.04 on 8 May 2014, the Sensex has risen 5,230.26 points or 23.47%. The Sensex is off 2,517.44 points or 8.38% from a record high of 30,024.74 hit on 4 March 2015.
On the macro front, the government will unveil data on inflation based on the consumer price index (CPI) for April 2015 tomorrow, 12 May 2015. The all-India general CPI inflation slowed down to three months low of to 5.2% in March 2015 from 5.4% in February 2015. On the same day, the Index of Industrial Production (IIP) data for March 2015 will also be released. IIP increased 5% in February 2015 compared with the revised growth of 2.8% in January 2015.
Meanwhile, proceedings in parliament are being keenly watched. The Narendra Modi government today, 11 May 2015 reportedly decided to send the controversial land acquisition bill to the joint committee of Parliament in view of continued opposition to the proposed legislation. The controversial bill was introduced in the Lok Sabha today amid a huge uproar by the Opposition. It remains to be seen if the government is able to pass the Land Acquisition Bill during the ongoing Budget session. The amended Land Acquisition Bill seeks to scrap the consent clause for acquiring land for five sectors industrial corridors, public private partnership projects, rural infrastructure, affordable housing and defence. The bill also exempts projects in these five areas from social impact assessments and allows the purchase of irrigated multi-cropped land and other types of agricultural land.
The Lok Sabha on 6 May 2015, passed the Constitution Amendment Bill in respect of goods and services tax (GST). A constitutional amendment bill needs to be approved by a two-thirds majority in both houses of Parliament and ratified by half the state legislative assemblies before coming into effect. While the Bharatiya Janata Party-led National Democratic Alliance found it easy to pass the GST bill in the Lok Sabha where it is in a majority, the real test will come in the Rajya Sabha where the ruling alliance is in a minority, with 62 members in a 245-member house. The bill is expected to be introduced in the Rajya Sabha later during the budget session which ends on 13 May 2015.
Before voting on the GST bill began, the opposition Congress party walked out of the lower house after the government turned down its demand to send the bill to a standing committee.
GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.
In overseas markets, European stocks edged lower today, 11 May 2015 as investors await the outcome of the Eurogroup finance ministers meeting on Greece in Brussels later today, 11 May 2015. Key indices in France and Germany fell by 0.59% to 1.56%. UK's FTSE 100 rose 2.44%.
The Bank of England made no changes to monetary policy at its meeting today, 11 May 2015, as expected, maintaining its lending rate at a record low of 0.5%. The rate has been held at that level since March 2009. The bank's quantitative-easing program was also left unchanged at 375 billion pounds ($579.5 billion). Minutes from the meeting will be released on May 20.
The newly re-elected British Prime Minister David Cameron on Sunday, 10 May 2015 reportedly ruled out giving Scotland another independence referendum despite gains by Scottish nationalists in a UK-wide election.
Eurogroup finance ministers will meet today, 11 May 2015 to discuss once more Greece's progress in implementing economic reforms in exchange for bailout funds as it gets dangerously close to running out of cash. The Greece government is facing a 750 million euro ($832 million) debt repayment to the International Monetary Fund (IMF) tomorrow, 12 May 2015.
Asian stocks edged higher today, 11 May 2015, led by gains in Chinese stocks, as investors cheered China's latest cut to interest rates to bolster its flagging economy and as US markets rallied on Friday, 8 May 2015 after a robust headline reading for US employment. Key benchmark indices in China, Singapore, Hong Kong, Japan, and South Korea rose by 0.54% to 3.04%. Key benchmark indices in Taiwan and Indonesia were off 0.19% to 0.29%.
China cut interest rates for the third time in six months on Sunday, 10 May 2015 to stimulate growth. The People's Bank of China cut its benchmark, one-year lending rate by 25 basis points to 5.1% effective from today, 11 May 2015 and its benchmark deposit rate by the same amount to 2.25%.
US stocks surged on Friday, 8 May 2015 after a robust headline reading for US employment.
In economic data, the US Labor Department data showed on Friday, 8 May 2015 nonfarm payrolls increased 223,000 in April 2015, while the unemployment rate dropped to a near seven-year low of 5.4%.
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