Key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 403.03 points or 1.63%, off about 80 points from the day's high and up close to 185 points from the day's low. The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. The BSE Mid-Cap index was up more than 1.4%. The BSE Small-Cap index was up more than 1.7%.
Indian stocks surged today, 26 May 2014, on speculation Narendra Modi will choose a cabinet capable of reviving economic growth. Modi takes oath as Prime Minister today, 26 May 2014, evening. As per reports, the Modi led government will have smaller cabinet, with one cabinet member heading a cluster of ministries. The focus is to increase coordination between different government departments and facilitate rapid decision-making. Media reports suggested that Arun Jaitley, 61, a former trade minister, is the frontrunner to become finance minister even though he failed to win a seat in the lower house of parliament.
PSU OMCs gained as crude oil prices declined, with HPCL and Indian Oil Corporation hitting 52-week high. Shares of some road developers surged after National Highway Authority of India (NHAI) on Friday, 23 May 2014, approval proposals for deferment of premium to NHAI.
Indian stocks surged in early trade ahead of Prime Minister designate Narendra Modi's swearing in ceremony today, 26 May 2014, evening. Firmness continued on the bourses in morning trade. Key benchmark indcies extended gains and hit fresh intraday high in mid-morning trade. The Sensex hit over one-week high above the psychological 25,000 level. The 50-unit CNX-Nifty also hit its highest level in more than a week. Key benchmark indices trimmed gains after hitting fresh intraday high in early afternoon trade.
The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Friday, 23 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 416.80 crore on Friday, 23 May 2014, as per provisional data from the stock exchanges.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month May 2014 series to June 2014 series. The near month May 2014 derivatives contract expire on Thursday, 29 May 2014.
At 12:20 IST, the S&P BSE Sensex was up 403.03 points or 1.63% to 25,096.38. The index surged 481.87 points at the day's high of 25,175.22 in early afternoon trade, its highest level since 16 May 2014. The index rose 219.22 points at the day's low of 24,912.57 in early trade.
The CNX Nifty was up 124.90 points or 1.7% to 7,492. The index hit a high of 7,504 in intraday trade, its highest level since 16 May 2014. The index hit a low of 7,428.55 in intraday trade.
The BSE Mid-Cap index was up 122.21 points or 1.41% at 8,790.53, underperforming the Sensex. The BSE Small-Cap index was up 157.89 points or 1.73% at 9,285.93, outperforming the Sensex.
The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. On BSE, 2,006 shares gained and 785 shares fell. A total of 97 shares were unchanged.
Among the 30-share Sensex pack, 25 stocks gained and rest of them declined. Mahindra & Mahindra (M&M) (up 5.47%), Bharat Heavy Electricals (Bhel) (up 4.07%) and Coal India (up 3.63%) edged higher from the Sensex pack.
PSU OMCs gained as crude oil prices declined. BPCL rose 3.17%.
HPCL rose 5.11% to Rs 456.30 after hitting 52-week high of Rs 458.70 in intraday trade.
Indian Oil Corporation (IOCL) rose 4.12% to Rs 378 after hitting 52-week high of Rs 381 in intraday trade.
Crude oil prices eased today, 26 May 2014, amid speculation Ukraine's election of a new president may help ease months of tension with Russia, the world's biggest energy exporter. Brent for July settlement was off 61 cents at $109.93 a barrel on the London-based ICE Futures Europe exchange. Ukraine voted billionaire Petro Poroshenko as president yesterday, 25 May 2014, handing him the task of stemming separatist unrest in the country, a conduit for Russian oil and natural gas supplies to Europe.
Lower crude oil prices could reduce underrecoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at government controlled prices. The government has already freed pricing of petrol.
PSU OMCs review fuel prices on 1st and 16th of every month based on the average imported oil price in the previous fortnight.
Shares of some road developers surged after National Highway Authority of India (NHAI) on Friday, 23 May 2014, approval proposals for deferment of premium to NHAI. L&T jumped 6.51% to Rs 1,610 after hitting record high of Rs 1,622.70 in intraday trade.
IRB Infrastructure Developers (up 11.85%), Gayatri Projects (up 8.91%) and Sadbhav Engineering (up 6.26%) gained.
Reliance Infrastructure gained 3.76% to Rs 755.30 after hitting 52-week high of Rs 763.70 in intraday trade.
The Board of NHAI on Friday, 23 May 2014, considered 9 proposals for deferment of premium and approved the same, the Ministry of Road Transport & Highways said in a statement. In all, these 9 proposals involve deferment of premium for a total value of Rs 5959.93 crore. The period during which such deferment is considered spans the period 2014-15 till 2026-27, with the deferment granted during 2014-15 amounting to Rs 651.30 crores. Projects for which deferment permitted include, Godhra-GUJ/MP border 4 laning (BSCPL), Beawar-Pali-Pindwara 4 laning (L&T), Rohtak-Panipat 4 Laning ( Sadbhav), Hyderabad-Yadgiri 4 laning (Sadbhav), Samakhiyali-Gandihidham 6 laning (L&T), Ahmedabad -Vadodara 6 laning (IRB), Tumkur-Chitradurga 6 laning (IRB), Indore-Dewas 6 laning (Gayatri-DLF), andHosur-Krishangiri 6 laning (Reliance Infra).
This step would give huge comfort to the lenders as debt obligation would now get priority over the premium payable to NHAI. NHAI would be able to recover the deferred premium with interest in the latter period of the concession. The deferment shall be limited to the actual revenue shortfall after meeting the debt obligation and operation expenditure. The concessionaire would not be allowed to declare any dividend until the shortfall in premium is made good. The concessionaire would also be required to share their toll collection data with NHAI on real time basis.
VA Tech Wabag spurted 8.62% after consolidated net profit rose 18% to Rs 71 crore on 33% increase in total income to Rs 897 crore in Q4 March 2014 over Q4 March 2013. The result was announced on Saturday, 24 May 2014. VA Tech Wabag's earnings before interest, taxes, depreciation and amortization (EBITDA) rose 20% to Rs 107 crore in Q4 March 2014 over Q4 March 2013. The company's consolidated net profit rose 25% to Rs 113 crore on 39% increase in revenue to Rs 2230 crore in the year ended March 2014 (FY 2014) over the year ended March 2013 (FY 2013). EBITDA rose 37% to Rs 209 crore in FY 2014 over FY 2013.
Narendra Modi will be sworn in as India's next Prime Minister today, 26 May 2014, evening at the Rashtrapati Bhawan.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that the BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure.
Modi is favored by business leaders because of his record in Gujarat, which he's led since 2001. With Modi at the helm of affairs, Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole.
Modi has pledged to fight inflation by cracking down on food hoarders, creating a national agriculture market and improving rural infrastructure.
Ever since NDA's victory in the election, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
The first budget of the new government is expected by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
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 rose on Monday, 26 May 2014, after China's premier said policy will be fine tuned as needed to support the economy. Key benchmark indices in China, Taiwan, Singapore and Japan were up 0.13% to 0.97%. Key benchmark indices in Hong Kong, Indonesia and South Korea were off 0.09% to 0.34%.
China's Premier Li Keqiang said Asia's largest economy will adjust policy to address problems in the real economy, according to a statement on the government's website May 23.
Bank of Japan policy makers said the economy will probably grow above potential from summer, according to the minutes released today from an April 30 meeting.
Japan and China on Sunday accused each other's air forces of dangerous behaviour over the East China Sea, with Japan saying Chinese aircraft had come within a few dozen metres of its warplanes.
US stock markets remain closed today, 26 May 2014, on account of Memorial Day.
US stocks edged higher on Friday with the S&P 500 index closing at a record high, buoyed by a rally in housing stocks after better-than-expected home sales and a jump in Hewlett-Packard shares a day after the personal computer maker said it would cut more jobs.
Data from the Commerce Department showed sales of new US single-family homes rose more than expected in April and the supply of houses on the market hit a 3-1/2 year high.
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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