Key benchmark indices extended intraday gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 172.70 points or 0.72%, up 186.45 points from the day's low and off 132.66 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 over 2.5%. The BSE Small-Cap index was up more than 4%. Both these indices outperformed the Sensex. The market sentiment was upbeat after a clear mandate given by voters the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) in the recently concluded Lok Sabha elections. The market sentiment was also boosted by Narendra Modi's comments in his victory speeches in his home state of Gujarat on Friday, 16 May 2014, where he stressed on the country's development and good governance. Modi will become India's next Prime Minister. The market sentiment was also boosted by data showing that foreign funds made massive purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections.
Investors expect measures for revival of the economy, business-friendly policies and good governance from Modi-led government after the clear mandate given by voters to the BJP-led NDA. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
Modi is perceived as being business-friendly and a decisive leader by the business community. As chief minister for the fast-growing state of Gujarat, Modi has built a reputation for getting things done.
Power generation stocks rose on renewed buying. Tata Power Company hit 52-week high. Reliance Infrastructure also hit 52-week high. Shares of state-run coal giant Coal India hit 52-week high. Pharma stocks dropped as the rupee edged higher against the dollar.
Key benchmark indices trimmed gains after a firm opening triggered by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Key benchmark indices further trimmed intraday gains in morning trade. Volatility ruled the roost as the key benchmark indices regained positive zone after reversing intraday gains in mid-morning trade. Key benchmark indices extended intraday gains in early afternoon trade.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 3634.82 crore on Friday, 16 May 2014, as per provisional data from the stock exchanges.
At 12:15 IST, the S&P BSE Sensex was up 172.70 points or 0.72% to 24,294.44. The index jumped 305.36 points at the day's high of 24,427.10 in early trade. The index fell 13.75 points at the day's low of 24,107.99 in mid-morning trade.
The CNX Nifty was up 41.95 points or 0.58% to 7,244.95. The index hit a high of 7,290.35 in intraday trade. The index hit a low of 7,193.55 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,774 shares gained and 738 shares fell. A total of 104 shares were unchanged.
The BSE Mid-Cap index was up 214.83 points or 2.77% at 7,980.55. The BSE Small-Cap index was up 329.53 points or 4.18% at 8,215.29. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2867 crore by 12:15 IST, compared with Rs 2046 crore by 11:15 IST.
Among the 30-share Sensex pack, 21 stocks gained and rest of them declined.
Power generation stocks rose on renewed buying. NTPC (up 5.65%), Reliance Power (up 6.78%), JSW Energy (up 7.78%), CESC (up 2.15%), Adani Power (up 3.05%) edged higher.
Tata Power Company jumped 6.24% to Rs 96.20 after hitting a 52-week high of Rs 97.90 in intraday trade.
Reliance Infrastructure surged 8.05% to Rs 674.40 after hitting a 52-week high of Rs 681.75 in intraday trade.
Shares of power finance companies jumped. Rural Electrification Corporation was up 18.29% at Rs 343.75. The stock hit 52-week high of Rs 348.70 in intraday trade.
Power Finance Corporation was up 16.13% at Rs 299.20. The stock hit 52-week high of Rs 302.10 in intraday trade.
Coal India jumped 8.94% to Rs 376.55 after hitting a 52-week high of Rs 380.20 in intraday trade.
Pharma stocks dropped as the rupee edged higher against the dollar. A firm rupee will reduce the value of overseas earnings in local terms. Pharma companies derive substantial revenue from exports.
Cadila Healthcare (down 2.63%), Cipla (down 1.6%), Dr Reddy's Laboratories (down 4.21%), Glenmark Pharmaceuticals (down 4.85%), Lupin (down 3.09%), Ranbaxy Laboratories (down 4.76%), Sun Pharmaceutical Industries (down 6.16%) and Wockhardt (down 4%) declined.
In the foreign exchange market, the rupee edged higher against the dollar on expectations of continued robust foreign buying in domestic shares and debt after the Bharatiya Janata Party (BJPL) swept the country's Lok Sabha elections. The partially convertible rupee was hovering at 58.45, compared with its close of 58.79/80 on Friday, 16 May 2014.
Global credit rating agency Standard & Poor's Ratings Services on Friday, 16 May 2014, said that the fiscal and economic reforms taken by India's new government in the next two to three months will have significant implications on India's sovereign credit rating. S&P's statement came after Narendra Modi-led Bharatiya Janata Party (BJP) routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Modi is likely to be sworn in as India's Prime Minister on Wednesday, 21 May 2014.
S&P said that the next government would need to regain fiscal prudence in a sustainable way, such as by implementing a goods and services tax to help stabilise government revenues. "What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy. If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election," S&P credit analyst Takahira Ogawa was quoted as saying in the statement.
S&P is the only of the three major credit agencies to have India with a "negative outlook" for its "BBB-minus" rating, meaning any downgrade would send the country to below investment grade.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in Lok Sabha election, focus has shifted to those who will take up key posts in the next cabinet of the NDA government at the Centre.
US President Barack Obama invited Narendra Modi to Washington in a phone call on Friday, 16 May 2014, to congratulate him on his victory in the country's elections, the White House said. "The President noted he looks forward to working closely with Mr. Modi to fulfill the extraordinary promise of the US-India strategic partnership, and they agreed to continue expanding and deepening the wide-ranging cooperation between our two democracies," the White House said in a statement. The White House didn't specify a time frame for Mr. Modi's visit but said it would take place at a mutually agreeable time. US Secretary of State John Kerry also extended his congratulations to Mr. Modi.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
Asian stocks edged higher on Monday, 19 May 2014. Key benchmark indices in South Korea, Singapore, Taiwan and Indonesia were up 0.03% to 0.18%. Key benchmark indices in Japan, Hong Kong and China were off 0.38% to 0.92%.
China's new-home prices rose in April in the fewest cities in 1-1/2 years as developers offered discounts and the economy slowed, prompting the easing of property curbs in some places. Prices last month climbed in 44 of the 70 cities tracked by the government compared with 56 cities in March. That was the fewest cities with price gains since October 2012, when increases were recorded in only 35 on a monthly basis.
Trading in US index futures indicated that the Dow could fall 28 points at the opening bell on Monday, 19 May 2014. US stocks closed higher on Friday, 16 May 2014, after an abrupt late-day reversal.
In economic data, construction on new US homes surged in April to the fastest pace in five months, with the volatile apartment category leading that jump, according to government data released Friday.
The preliminary May reading of the University of Michigan and Thomson Reuters's gauge of consumer sentiment fell unexpectedly to 81.8 from 84.1 in April.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee on Wednesday, 21 May 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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