Key benchmark indices edged higher amid high intraday volatility after the latest data showed that inflation based on monthly wholesale price index eased to 5.2 in April 2014 from 5.7% in March 2014. The barometer index, the S&P BSE Sensex, was provisionally up 78.21 points or 0.33%, up close to 150 points from the day's low and off about 80 points from the day's high. The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Wednesday, 14 May 2014.
Asian Paints dropped, with the stock reversing direction after scaling record high at the onset of the trading session. Bajaj Auto extended losses after the company reported weak Q4 results. Shares of Maruti Suzuki India scaled record high. Tata Steel edged higher in volatile trade after the company announced turnaround Q4 results. Most capital goods stocks declined.
The market breadth, indicating the overall health of the market was negative.
The Sensex edged higher amid initial volatility. Key benchmark indices trimmed initial gains in morning trade. While the barometer index, the S&P BSE Sensex, retained positive zone in mid-morning trade, the 50-unit CNX Nifty slipped into the red. Key benchmark indices hovered in negative zone in early afternoon trade. Volatility ruled the roost as the key benchmark indices regained positive zone in afternoon trade after data released by the government showed that inflation based on monthly wholesale price index eased to 5.2 in April 2014 from 5.7% in March 2014. Intraday volatility continued as key benchmark indices alternately swung between positive and negative zone in mid-afternoon trade.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Wednesday, 14 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1520.08 crore on Wednesday, 14 May 2014, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 78.21 points or 0.33% at 23,893.33. The index jumped 156.66 points at the day's high of 23,971.78 in early trade, its highest level since 13 May 2014. The index shed 72.37 points at the day's low of 23,742.75 in early afternoon trade, its lowest level since 13 May 2014.
The CNX Nifty was up 12.05 points or 0.17% at 7,120.80, as per provisional figures. The index hit a high of 7,152.55 in intraday trade, its highest level since 13 May 2014. The index hit a low of 7,082.55 in intraday trade.
The BSE Mid-Cap index lost 64 points or 0.83% at 7,640.10. The BSE Small-Cap index shed 67.91 points or 0.86% at 7,791.12. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3206 crore, lower than Rs 3547.55 crore on Wednesday, 14 May 2014.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,728 shares dropped and 1,167 shares rose. A total of 140 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined. Tata Power Company (up 2.65%), GAIL (India) (up 2.551%) and ONGC (up 2.82%) edged higher from the Sensex pack.
Tata Steel rose 1.96% to Rs 456 after the company reported a consolidated net profit of Rs 1035.87 crore in Q4 March 2014 as against net loss of Rs 6528.51 crore in Q4 March 2013. The stock was volatile. The stock hit 52-week high of Rs 468 in intraday trade. The stock hit low of Rs 451.10. The result was announced after market hours on Wednesday, 14 May 2014.
Tata Steel's total income from operations rose 22.44% to Rs 42428.05 crore in Q4 March 2014 over Q4 March 2013.
Tata Steel reported a consolidated net profit of Rs 3594.89 crore in the year ended 31 March 2014 (FY 2014) as against net loss of Rs 7057.62 crore in the year ended 31 March 2013 (FY 2013). Total income from operations rose 10.31% to Rs 148613.55 crore in FY 2014 over FY 2013.
Tata Group steel deliveries in the fiscal year ended March 2014 (FY 2014) increased to 26.56 million tonnes from 24.13 million tonnes in FY 2013. Deliveries in Q4 March 2014 (Q4 2014) increased to 7.62 million tonnes compared to 6.38 million tonnes in Q3 December 2013 (Q3 2014) and 6.56 million tonnes in Q4 March 2013 (Q4 2013).
Group consolidated turnover in FY 2014 was Rs 148614 crore versus Rs 134712 crore in FY 2013. Q4 2014 turnover increased to Rs 42428 crore from Rs 36736 crore in Q3 2014 and Rs 34650 crore in Q4 2013.
FY 2014 Group EBITDA was Rs 16377 crore compared to Rs 12654 crore in FY 2013, implying an improvement of 29%. Q4 2014 EBITDA increased significantly to Rs 4917 crore from Rs 3921 crore in Q3 2014 and Rs 4368 crore in Q4 2013.
Group Profit after Tax (after minority interest and share of profit of associates) in FY 2014 swung to Rs 3595 crore versus the loss of Rs 7058 crore in FY 2013. FY 2014 results included exceptional charges of Rs 28 crore compared to the charges of Rs 7390 crore in FY 2013. Profit after tax in Q4 2014 doubled to Rs 1036 crore compared to Rs 503 crore in Q3 2014 and was a significant improvement over the loss of Rs 6529 crore in Q4 2013. Q4 2014 results were affected by exceptional charges of Rs 46 crore while the exceptional charges for Q4 2013 were Rs 7413 crore.
The improved and steady performance of operations across geographies, despite weak market conditions, led to this significantly improved Group performance, the company said in a statement.
Cash and cash equivalents as on 31 March 2014 were Rs 11373 crore and net debt was Rs 67326 crore.
Tata Steel said that the actuarial gains and losses on funds for employee benefits (pension plans) of Tata Steel Europe for the period from 1 April 2008 have been accounted in "Reserves and Surplus" in the consolidated financial statements in accordance with IFRS/IND AS principles and as permitted by Accounting Standard 21. Had the company recognised changes in actuarial valuations of pension plans of Tata Steel Europe in the statement of profit and loss, the consolidated profit after taxes, minority interest and share of profit of associates for the year ended 31 March 2014 would have been lower by Rs 628.23 crore (Rs 247.90 crore for the quarter) and the consolidated loss after taxes, minority interest and share of profit of associates for the year ended 31 March 2013 would have been higher by Rs 317.26 crore (lower by Rs 1504.80 crore for the quarter), Tata Steel said.
Tata Steel's board of directors at its meeting held on Wednesday, 14 May 2014, recommended a dividend of Rs 10 per share for FY 2014.
Tech Mahindra edged lower in choppy trade after the company announced weak Q4 March 2014 results after trading hours on Wednesday, 14 May 2014. The stock shed 0.41% at Rs 1,830.55. The stock hit high of Rs 1,873 and low of Rs 1,813.90 in intraday trade. The company's consolidated net profit declined 39.18% to Rs 614.20 crore on 3.25% growth in revenue from services to Rs 5058.10 crore in Q4 March 2014 over Q3 December 2013.
Tech Mahindra's operating profit declined 5.67% to Rs 1071.80 crore in Q4 March 2014 over Q3 December 2013.
Tech Mahindra's profit after tax (PAT) surged 54.9% to Rs 3029 crore on 31.4% growth in revenue to Rs 18831 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
EBITDA (earnings before interest, taxation, depreciation and amortization) rose 36.6% to Rs 4184 crore in FY 2014 over FY 2013.
Tech Mahindra said that the results for the quarter and year ended 31 March 2014 include the results of merged entities giving effect to the scheme, while the results of the corresponding periods of the previous years and the previous year ended 31 March 2013 do not include the results of the merged entities and hence the same are not comparable.
The company's debt as of 31 March 2014 stood at Rs 363 crore. The company said it repaid Rs 796 crore in FY 2014. Cash and cash equivalent stood at Rs 3599 crore as of 31 March 2014. Active client count stood at 629 as against 516 in FY 2013, the company said in a statement.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said, "This has been a landmark year for Tech Mahindra with the creation of an integrated entity through one of the largest mergers in India. Our superioe execution capabilities and ability to offer expanded service lines to our customers will help in aiding our future growth".
C P Gurnani, MD & CEO, Tech Mahindra said, "Our result this year is a reflection of our commitment towards growth and our passion to help our customers deal with the needs of a dramatically changing world, fuelled by hyper connectivity, and decisions at the speed of thought. I want the world to know that Tech Mahindra is well tuned to these aspects of modern business and we look at this a differentiator for growth".
Tech Mahindra's board of directors at its meeting held on Wednesday, 14 May 2014, recommended a dividend of Rs 20 per share for FY 2014.
Maruti Suzuki India rose 1.65% to Rs 2,121 after hitting record high of Rs 2,124 in intraday trade.
Bajaj Auto declined 4.19% after the company reported weak Q4 results. The company's net profit fell 0.24% to Rs 763.93 crore on 2.54% rise in total income to Rs 5117.10 crore in Q4 March 2014 over Q4 March 2013. The result was announced during market hours. Operating earnings before interest, taxes, depreciation and amortization (EBITDA) margin stood at 20.6% in Q4 March 2014 compared with 18.9% in Q4 March 2013.
Bajaj Auto's net profit rose 6.56% to Rs 3243.32 crore on 0.30% increase in total income to Rs 20855.92 crore in the year ended March 2014 over the year ended March 2013.
Operating EBITDA margin stood at 21.5% in the year ended March 2014 compared with 19.1% in the year ended March 2013.
On a consolidated basis, net profit rose 7.90% to Rs 3380.28 crore in the year ended March 2014 over the year ended March 2013. Sales were almost flat at Rs 20840.10 crore in the year ended March 2014 over the year ended March 2013.
Cash and cash equivalents as on 31 March 2014 stood at Rs 7759 crore as against Rs 5706 crore as on 1 April 2013.
Asian Paints lost 5.5% to Rs 526.30, with the stock reversing direction after scaling record high of Rs 565 at the onset of the trading session. The stock hit low of Rs 524.45.
Asian Paints reported 14.45% rise in consolidated net profit to Rs 287.42 crore on 21.5% rise in total income to Rs 3338.19 crore in Q4 March 2014 over Q4 March 2013. The company's consolidated net profit rose 9.4% to Rs 1218.81 crore on 16.2% rise in total income to Rs 12849.03 crore in the year ended 31 March 2014 over the year ended 31 March 2013. The Q4 result was announced after market hours on Wednesday, 14 May 2014.
Asian Paints said that the results for the quarter and twelve months ended 31 March 2014 include consolidated financials of Sleek International in which the company acquired 51% stake on 8 August 2013. In view of this, the results for the quarter and twelve months ended 31 March 2014 are not comparable with the corresponding previous periods, the company said.
Asian Paints said that the Board of Directors of the company at its meeting held Wednesday, 14 May 2014, approved the reappointment of Shri K B S Anand as Managing Director & CEO of the company for a further period of three years with effect from 1 April 2015 i.e. for the period 1 April 2015 to 31 March 2018. The re-appointment will be subject to approval by the shareholders of the company at the ensuing Annual General Meeting.
Asian Paints said at the fag end of trading session on Wednesday, 14 May 2014, that the company has entered into a binding agreement with Ess Ess Bathroom Products (Ess Ess) and its promoters to acquire its entire front end sales business including brands, network and sales infrastructure, subject to satisfaction of certain conditions precedents and applicable statutory approvals. Ess Ess is a prominent player in the bath and wash business segment in India and has high quality products in this segment.
Capital goods stocks declined. ABB (India) (down 0.52%), BEML (down 2.24%), L&T (down 1.31%), Punj Lloyd (down 2.17%) and Thermax (down 2.92%) declined. Bharat Heavy Electricals (Bhel) rose 0.9%.
In the foreign exchange market, the rupee edged higher against the dollar on signs the Lok Sabha election results due tomorrow, 16 May 2014, will show a clear winner. The partially convertible rupee was hovering at 59.38, compared with its close of 59.66/67 on Tuesday, 13 May 2014. The foreign exchange market was closed on Wednesday, 14 May 2014, on account of a bank holiday.
The annual rate of inflation based on monthly wholesale price index (WPI) eased to 5.2% for the month of April 2014 from 5.7% in March 2014, helped by a decline in fuel prices, data released by the government today, 15 May 2014, showed. Simultaneously, the government revised upwards the rate of WPI inflation for February 2014 to 5.03%, from 4.68% reported on 14 March 2014.
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.
Indian stocks may see high intraday volatility tomorrow, 16 May 2014, as trends and actual results of wins by candidates/parties are announced during the process of counting of votes for the recently concluded Lok Sabha elections. The counting of votes will begin at 8:00 IST tomorrow, 16 May 2014, and results are expected by tomorrow itself. Various exit polls have predicted that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) would win a majority in the Lok Sabha elections which concluded on Monday, 12 May 2014. If exit polls prove correct, NDA's prime ministerial candidate Narendra Modi will become India's next Prime Minister. The term of the current Lok Sabha ends on 1 June and the new House has to be constituted by 31 May.
Modi is perceived as being more business-friendly and decisive by the business community. As chief minister for the fast-growing state of Gujarat, Modi has built a reputation for getting things done. While campaigning for the Lok Sabha elections, Modi has pledged to reinvigorate the country's manufacturing sector, create more jobs and overhaul the country's inadequate infrastructure. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government.
Investors are hoping that when the results of the Lok Sabha elections are out tomorrow, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are expecting measures for revival of the economy, business-friendly policies and good governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections. The BJP has said that measures for the revival of the economy are its priority if the party comes to power after elections. India's GDP growth has slowed to a decade low of below 5%. The GDP grew 4.7% in Q3 December 2013.
European stock markets edged lower in choppy trade on Thursday, 15 May 2014, as the euro-area recovery failed to gather momentum last quarter. Key benchmark indices in UK, Germany and France were off 0.03% to 0.19%.
The euro-area recovery failed to gather momentum last quarter, as France unexpectedly stalled and economies from Italy to the Netherlands shrank. Growth of just 0.2% for the currency bloc, half as much as economists had forecast, adds pressure on the European Central Bank to deliver stimulus measures next month in its battle against weak inflation and anemic output.
Italy's economy unexpectedly contracted last quarter, signaling the country's failure to sustain a pullout from its longest recession on record. Gross domestic product in the three months through March decreased 0.1% from the fourth quarter, when it rose 0.1%, the national statistics institute Istat said in a preliminary report in Rome today.
German economic growth accelerated more than forecast in first quarter as mild weather boosted construction and domestic demand countered weaker exports. Gross domestic product expanded 0.8% from the fourth quarter, when it rose 0.4%, the Federal Statistics Office in Wiesbaden said today. Germany, as the euro area's largest economy, is key to the 18-nation currency bloc's drive to sustain a recovery from its longest-ever recession.
France's economic recovery stalled in the first quarter as tax increases used by President Francois Hollande to cut the budget deficit squeezed consumers. Gross domestic product was unchanged in the period, compared with a revised 0.2% gain in the previous three months, national statistics office Insee said.
Asian stocks were mixed on Thursday, 15 May 2014. Key benchmark indices in China, South Korea, and Japan were off 0.03% to 1.12%. Key benchmark indices in Taiwan, Singapore and Hong Kong were up 0.06% to 0.66%.
Japan's economy grew at the fastest pace since 2011 in the first quarter as companies stepped up investment and consumers splurged before the first sales-tax rise in 17 years last month. Gross domestic product grew an annualized 5.9% from the previous quarter, the Cabinet Office said today in Tokyo.
Trading in US index futures indicated that the Dow could fall 8 points at the opening bell on Thursday, 15 May 2014. US stocks fell on Wednesday, with the Dow Jones Industrial Average and the S&P 500 index retreating from recent record highs, as small caps resumed their sell-off and consumer discretionary shares lagged.
Prices paid to American factories and service producers rose in April by the most in more than a year, indicating a diminishing risk of deflation as demand improves. The 0.6% increase in the producer price index was the biggest since September 2012 and exceeded all estimates, figures from the Labor Department showed.
Federal Reserve Chair Janet Yellen will speak later in the global day today, 15 May 2014, after saying last week the world's biggest economy still requires a strong dose of stimulus.
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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