A bout of volatility was witnessed as key benchmark indices recovered from lower level after erasing a lion's portion of intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex was currently up 52.35 points or 0.19% at 27,258.41. The market breadth indicating the overall health of the market was strong. Small-Cap stocks were in demand. Quite a few stocks which are a part of the BSE Small-Cap index were up 2% to about 11%.
Metal and mining stocks declined. Tata Steel fell after the company said it expects to recognize a non-cash write-down of the goodwill and assets in the consolidated financial results in Q4 March 2015 of approximately Rs 5000 crore.
Meanwhile, the India Meteorological Department (IMD) yesterday, 14 May 2015, forecast that the the southwest monsoon will hit the Kerala coast on 30 May, two days ahead of schedule. This bodes well for timely sowing of crops.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 73.76 crore yesterday, 14 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 302.57 crore yesterday, 14 May 2015, as per provisional data.
In overseas markets, Asian stocks edged lower. US stocks edged higher yesterday, 14 May 2015, with the S&P 500 index ringing up a new closing high, overshadowing a string of small losses on the week.
At 11:18 IST, the S&P BSE Sensex was up 52.35 points or 0.19% at 27,258.41. The index jumped 173.51 points at the day's high of 27,379.57 in early trade, its highest level since 12 May 2015. The index fell 46.30 points at the day's low of 27,159.76 in morning trade.
The 50-unit CNX Nifty was up 17.25 points or 0.21% at 8,241.45. The index hit a high of 8,279.20 in intraday trade, its highest level since 12 May 2015. The index hit a low of 8,212.20 in intraday trade.
The market breadth indicating the overall health of the market was strong. On BSE, 1,293 shares gained and 789 shares fell. A total of 107 shares were unchanged.
The BSE Mid-Cap index was up 46.78 points or 0.44% at 10,573.72. The BSE Small-Cap index was up 84.77 points or 0.77% at 11,057.11. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 877 crore by 11:15 IST compared with turnover of Rs 603 crore by 10:15 IST.
ONGC fell 0.43%. Minister of State for Petroleum and Natural Gas Dharmendra Pradhan visited the ONGC installations and facilities in the Mumbai High Western Offshore yesterday, 14 May 2015. Pradhan visited the Rig-Virtue 1 to have an overall understanding about the complex nature of offshore drilling operations. Pradhan also showed keen interest in the various kinds of complex activities that the offshore installations undertake for production of crude oil from the subsurface.
Metal and mining stocks declined. JSW Steel (down 3.06%), Vedanta (down 0.47%), NMDC (down 1.2%), Hindustan Zinc (down 0.8%), Jindal Steel & Power (down 0.26%) and Hindalco Industries (down 1.56%) edged lower. Steel Authority of India (Sail) (up 0.22%) and National Aluminium Company (up 0.51%) rose.
Tata Steel lost 1.81%. Tata Steel announced after market hours yesterday, 14 May 2015, that the company expects to recognize a non-cash write-down of the goodwill and assets in the consolidated financial results in Q4 March 2015 of approximately Rs 5000 crore, mainly relating to the Long Products UK business in Tata Steel Europe which will now be fully impaired. The impairment also includes a write down of investments in overseas raw materials projects in Mozambique, Ivory Coast and Taconite project in Canada because the economic viability of these projects remains uncertain at the current level of commodity prices. Additionally, the company undertook a non cash impairment charge of Rs 1577 crore in Q1 June 2014 towards its investment in the Mozambique Coal Project. The total impairment charge for the year ended 31 March 2015 (FY 2015) would be around Rs 6500 crore in the consolidated financial results. The details of the impairments will be included in the audited financial results on 20 May 2015. The company's liquidity position or financial covenants are unaffected by the above non-cash write down, Tata Steel said.
Meanwhile, the India Meteorological Department (IMD) yesterday, 14 May 2015, forecast that the the southwest monsoon will hit the Kerala coast on 30 May, two days ahead of schedule. This bodes well for timely sowing of crops. The IMD said that the southwest monsoon is likely to set over Kerala on 30 May, with a model error of plus/minus 4 days. 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 Australian Bureau of Meteorology and Japan Meteorological Agency both announced the emergence of El Ni conditions this week. El Ni has also been linked to a weaker Indian monsoon. The annual monsoon is critical for the country's agriculture. Lower than average rainfall could adversely affect crops including rice, wheat, cotton and sugar.
Meanwhile, Prime Minister Narendra Modi today, 15 May 2015, said that India and China have signed over 20 agreements, covering diverse areas of cooperation. Modi is currently on a three-day visit to China. According to a joint statement issued by India and China, the two nations have agreed to take necessary measures to remove impediments to bilateral trade and investment, facilitate greater market access to each other's economies and support local governments of the two countries to strengthen trade and investment exchanges, with a view to optimally exploiting the present and potential complementarities in identified sectors in the Five Year Trade and Economic Development Plan signed in September 2014, including Indian pharmaceuticals, Indian IT services, tourism, textiles and agro-products.
The two sides resolved to take joint measures to alleviate the skewed bilateral trade so as to realize its sustainability. Such measures will include cooperation on pharmaceutical supervision including registration, speedier phytosanitary negotiations on agro-products for two-way trade, stronger links between Indian IT companies and Chinese enterprises, and increasing services trade in tourism, films, healthcare, IT and logistics. The leaders of the two countries welcomed the decision to expedite discussion and endeavour to favourably address, in the spirit of mutual cooperation and reciprocity, the issues pertaining to tariff reduction in respect of relevant Indian products under the framework of Asia-Pacific Trade Agreement.
The two sides recognized that enhancing border areas cooperation through border trade, pilgrimage by people of the two countries and other exchanges can effectively promote mutual trust and agreed to further broaden this cooperation so as to transform the border into a bridge of cooperation and exchanges. The two sides agreed to hold negotiation on augmenting the list of traded commodities, and expand border trade at Nathu La, Qiangla/Lipu-Lekh Pass and Shipki La.
In overseas markets, Asian stocks edged lower today, 15 May 2015. Key benchmark indices in China, Indonesia, Singapore, Taiwan and South Korea fell by 0.07% to 1.45%. Key benchmark indices in Hong Kong and Japan rose by 0.3% to 0.67%.
The Bank of Korea's monetary policy board today, 15 May 2015 decided to keep nation's benchmark interest rate steady at the record low of 1.75%. The Bank of Korea had earlier trimmed the rate by 25 basis points from 2% in March.
US stocks ended higher yesterday, 14 May 2015, with the S&P 500 index ringing up a new closing high. The rally for stocks came as US economic reports offered no real clarity on when the Federal Reserve may hike rates for the first time since 2006.
A report on weekly jobless claims unexpectedly declined, pointing to stability in the employment picture, while a measure of inflation suggested that headline inflation is falling below the central bank's 2% target- the target the Fed is looking for before it feels comfortable lifting rates.
Meanwhile, in a major speech delivered in Washington, European Central Bank (ECB) President Mario Draghi yesterday, 14 May 2015, said that the ECB's vast stimulus efforts will remain in place as long as needed to achieve a desired level of inflation.
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