Key benchmark indices hovered in positive terrain in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 78.71 points or 0.35%, off about 80 points from the day's high and up about 10 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Indian stocks rose today, 6 May 2014 tracking higher Asian stocks and after firm finish for US stocks overnight.
Realty stocks edged higher. Maruti Suzuki India declined 0.18% after the company said that production fell 1.87% to 1.03 lakh units in April 2014 over April 2013.
The market edged higher in early trade. The Sensex an d the 50-unit CNX Nifty, both, hit their highest level in almost one week. It held firm in morning trade. It trimmed intraday gains in mid-morning trade. It hovered in positive terrain in early afternoon trade.
Asian stocks shuffled higher on Tuesday after promising US economic news helped Wall Street to a firmer finish.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 5 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 279.86 crore on Monday, 5 May 2014, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 78.71 points or 0.35% to 22,523.83. The index rose 157.59 points at the day's high of 22,602.71 in early trade, its highest level since 30 April 2014. The index gained 67.11 points at the day's low of 22,512.23 in early trade.
The CNX Nifty was up 18.65 points or 0.28% to 6,718. The index hit a high of 6,743.45 in intraday trade, its highest level since 30 April 2014. The index hit a low of 6,715.90 in intraday trade.
The BSE Mid-Cap index rose 34.58 points or 0.47% to 7,382.64. The BSE Small-Cap index rose 40.73 points or 0.54% to 7,538.82. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,222 shares gained and 1,024 shares fell. A total of 106 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them fell. ICICI Bank (up 1.16%), ITC (up 1.57%) and ONGC (up 1.37%) edged higher from the Sensex pack.
Maruti Suzuki India declined 0.18% after the company said during market hours that production fell 1.87% to 1.03 lakh units in April 2014 over April 2013.
Realty stocks edged higher. D B Realty (up 0.15%), DLF (up 1.62%), Housing Development & Infrastructure (up 1.31%), Sobha Developers (up 1.28%) and Unitech (up 0.63%) gained.
Pantaloons Fashion & Retail slumped 7.21% after the company reported net loss of Rs 70.75 crore in Q4 March 2014, higher than net loss of Rs 59.52 crore in Q4 March 2013. The result was announced after market hours on Monday, 5 May 2014. Pantaloons Fashion & Retail's net sales rose 2.02% to Rs 400.61 crore in Q4 March 2014 over Q4 March 2013.
The company reported net loss of Rs 187.73 crore in the year ended March 2014, higher than net loss of Rs 68.89 crore during the previous year ended March 2013. Net sales rose 29.59% to Rs 1628.62 crore in the year ended March 2014 over the year ended March 2013.
Piramal Enterprises surged 5.3% after the company said its board of directors at its meeting held on Monday, 5 May 2014, recommended hefty dividend of Rs 52.50 per share for the financial year ended 31 March 2014. Piramal Enterprises reported a consolidated net loss of Rs 311.40 crore in Q4 March 2014, higher than net loss of Rs 200.40 crore in Q4 March 2013. Total operating income rose 19.4% to Rs 1121 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Monday, 5 May 2014.
Operating EBITDA (earnings before interest, taxation, depreciation and amortization) declined 26.54% to Rs 70.30 crore in Q4 March 2014 over Q4 March 2013.
Piramal Enterprises' financing costs rose 19.86% to Rs 269.70 crore in Q4 March 2014 over Q4 March 2013, as company raised funds for expanding its financial services businesses. These finance costs for the quarter include one-time financing charges of Rs 54 crore, the company said in a statement.
Revenue from pharmaceutical businesses rose 16.4% to Rs 765 crore in Q4 March 2014 over Q4 March 2013. Revenue from financial services (including investment income) rose 45.2% to Rs 181.90 crore in Q4 March 2014 over Q4 March 2013. Revenue from information management business rose 11.5% to Rs 174.10 crore in Q4 March 2014 over Q4 March 2013.
Piramal Enterprises reported a consolidated net loss of Rs 501.40 crore in the year ended 31 March 2014 (FY 2014), higher than net loss of Rs 227.30 crore in the year ended 31 March 2013 (FY 2013). Total operating income rose 27.5% to Rs 4520.20 crore in FY 2014 over FY 2013. Finance costs surged 82.53% to Rs 1049.60 crore in FY 2014 over FY 2013, as the company raised funds for expanding its financial services businesses. These financing costs include one-time financing charge of Rs 178 crore on account of discounting of receivables for investing in lending operations and in acquiring stakes in Shriram Group entities, Piramal Enterprises said in a statement.
Revenue from pharmaceutical businesses rose 14.9% to Rs 2877.20 crore in FY 2014 over FY 2013. Revenue from financial services (including investment income) rose 91.3% to Rs 743.70 crore in FY 2014 over FY 2013. Revenue from information management business rose 38.1% to Rs 899.30 crore in FY 2014 over FY 2013. FY 2013 results included the financial results of DRG only for ten months as DRG was acquired in June 2012, Piramal Enterprises said in a statement.
Piramal Enterprises' board of directors at its meeting held on Monday, 5 May 2014, approved a Scheme of Amalgamation for merger of the step-down wholly-owned subsidiaries viz. PHL Capital, Piramal Pharmaceutical Development Services, Oxygen Bio Research with the company. Since all the transferor companies are step down wholly owned subsidiaries of the Company, no shares are proposed to be issued pursuant to the merger. This Scheme is subject to requisite approvals, including under the Listing Agreement and by the Hon'ble High Courts. The merger being of step down wholly owned subsidiaries into the company, a specific dispensation will be sought from the Hon'ble High Courts from filing the application /petition by the company and accordingly, the company may not be required to file petition with the High Court, Piramal Enterprises said.
Piramal Enterprises' board of directors at its meeting held on Monday, 5 May 2014, recommended dividend of Rs 52.50 per share for FY 2014. In addition to normal dividend of Rs 17.50 per share, the Board has also recommended a substantial reward to shareholders through a special dividend of Rs 35 per share considering the strength of company's balance sheet. This will result in a total outlay of Rs 1059.93 crore including the dividend distribution tax, Piramal Enterprises said in a statement.
Punj Lloyd rose 2.94% after the company said it bagged a Rs 1270 crore expressway project in Yemen. The company made the announcement during trading hours today, 6 May 2014. Punj Lloyd said it has received a letter of award for the construction of 42 kilometre (km), 2x3 lane dual carriageway project between Doraigh and Noubat Dokaim from Ministry of Public Works & Highways, Republic of Yemen. This project, valued at Rs 1270 crore ($211.41 million), is funded by Saudi Development Fund (SDF).
Located 60 km from the port city of Aden, the scope of work for this project comprises construction of 210 lane-km new carriageway greenfield project. The work involves excavation of over 10 million cubic meter, road paving, surface sealing, two major concrete overpass bridges, box & pipe culvert construction and associated infrastructure work.
Speaking on this achievement, President & CEO, Buildings & Infrastructure, MEA & CIS, Pardeep Tandon said, "This is the first major expressway project for Punj Lloyd in the Middle East. Our existing expertise in this sector coupled with our strong assets of equipment and manpower, was a strong determinant in our winning this order amidst tough global competition. This is an excellent opportunity for us to showcase our construction expertise in the Middle East market."
Yemen is also a repeat country for Punj Lloyd which has already executed work on the offsites and utilities of the prestigious Yemen LNG project. The dual carriageway project is reflective of the Group's intent to aggressively pursue global infrastructure opportunities.
With this new order, the Group's order backlog stands at Rs 23376 crore. The order backlog is the value of unexecuted orders on 31 December 2013 plus new orders received after that date.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.215, compared with its close of 60.22 on Monday, 5 May 2014.
April data indicated that business activity across the Indian private sector fell again Markit Economics said today, 6 May 2014. The seasonally adjusted HSBC India Composite Output Index rose from 48.9 in March to 49.5. Despite being consistent with a marginal rate of reduction, this was the second consecutive sub-50.0 reading recorded. Manufacturing production increased at a softer rate in April, whereas service sector output decreased further.
Up from 47.5 in March to 48.5 in April, the headline HSBC Business Activity Index adjusted for seasonal factors indicated a slower contraction of output in the Indian service sector. Nevertheless, the latest reduction was the tenth in as many months. According to survey participants, a difficult economic climate, combined with the elections and a further drop in new orders had all contributed to the latest fall in business activity. Output decreased in two of the six monitored service categories, these being Financial Intermediation and Transport & Storage.
Incoming new work at service providers dropped at a softer rate in April, and one that was modest overall. Panellists reporting lower new business linked this to weaker demand and the elections. Conversely, new orders received by manufacturers increased. Private sector companies registered lower new business for the second month running, although the rate of reduction eased to a marginal pace.
Indian services companies indicated that payroll numbers fell in April, amid evidence of lower new business inflows. Despite being fractional, the latest drop in staffing levels ended a four-month sequence of job creation. Workforce numbers in the private sector as a whole were broadly unchanged.
Input prices faced by Indian services firms continued to rise in April, with panellists reporting higher prices paid for food, packaging materials, fuel and paper. Although solid, the rate of inflation was weaker than the series long-run average. Input price inflation in the manufacturing economy moderated. Subsequently, the rise in input costs across the private sector as a whole softened to the slowest since last June.
Output charge inflation at service providers accelerated to the strongest in five months during April, as companies attempted to protect margins amid increased cost burdens. That said, the index measuring output prices registered below its long-run trend. Average tariffs across the private sector as a whole also rose, with inflation being the strongest in five months.
Unfinished business in the Indian service sector rose for the second month in succession during April, with firms reporting delayed payments from clients. Nonetheless, the rate of backlog accumulation was modest and little-changed since March. Work-in-hand in the private sector rose for the second month running.
Business sentiment in the service sector remained positive in April, with survey respondents indicating that a combination of planned increases in marketing budgets, the launch of new services and forecasts of stronger demand are all expected to result in output growth over the course of the next year. There were also mentions that economic conditions are anticipated to improve after the elections.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said : While the Business Activity Index improved, it remained below the water line. This points to still subdued service sector activity. Meanwhile, the slight uptick in inflation readings suggests that inflation pressures are still lingering, which calls for the RBI to continue its starring contest with inflation.
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.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Asian stocks rose on Tuesday, with trading volume curbed by holidays in Japan, Hong Kong and South Korea. Key benchmark indices in China, Singapore, Indonesia and Taiwan were up 0.05% to 0.47%.
Australia's central bank left its benchmark interest rate unchanged at a record low as tame consumer prices and anticipated cuts to government spending give policy makers room to spur employment-intensive industries. Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5% as predicted.
Trading in US index futures indicated that the Dow could gain 26 points at the opening bell on Tuesday, 6 May 2014. US stocks edged higher on Monday on the back of positive economic data. The Institute for Supply Management's US services sector index rose to 55.2 in April, the fastest pace in eight months and easily topping forecasts. A reading above 50 indicates expansion. The data added to evidence that the US economy is emerging from a particularly harsh winter-induced slowdown and provided a welcome offset to worries about China.
Federal Reserve Chair Janet Yellen is due to testify to lawmakers tomorrow, 7 May 2014 after the US central bank pressed ahead April 30 with reductions to its monthly bond-buying, while holding its short-term interest-rate target at near zero.
In Europe, a monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled on Thursday, 8 May 2014.
The European Central Bank (ECB) will hold monetary policy meeting on Thursday, 8 May 2014, in Brussels, Belgium.
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