Key benchmark indices surged on speculation the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre after Lok Sabha elections which conclude early next week. The barometer index, the S&P BSE Sensex, scaled record high above 23,000 mark. The 50-unit CNX Nifty also scaled record high. The Sensex was provisionally up 693.61 points or 3.1%, up close to 720 points from the day's low and off about 10 points from the day's high. The market breadth, indicating the overall health of the market, was positive. The BSE Mid-Cap index was up almost 1.5%. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 8 May 2014.
Investors are hoping that a BJP-led government will give a boost to India's policy reforms, helping the economy recover from a slowdown. 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.
Narendra Modi, the prime ministerial candidate from the NDA, 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.
Shares of Adani group companies surged on renewed buying. Bank stocks rose across the board, with shares ICICI Bank hitting 52-week high. Axis Bank and Kotak Mahindra Bank hit record high.
The Sensex extended initial gains in morning trade. Key benchmark indices further extended gains and hit fresh intraday high in mid-morning trade. The Sensex hit its highest level in more than a week. The uptrend on the bourses continued as key benchmark indices scaled fresh intraday high in early afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in afternoon trade. The Sensex and the 50-unit CNX Nifty, both, hit two-week high. Key benchmark indices trimmed gains after hitting fresh intraday high in mid-afternoon trade. The Sensex extended gains in late trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 8 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 363.24 crore on Thursday, 8 May 2014, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 693.61 points or 3.1% at 23,037.65. The index jumped 704.45 points at the day's high of 23,048.49 in late trade, a lifetime high for the index. The index fell 26.86 points at the day's low of 22,317.18 in early trade.
The CNX Nifty was up 206.10 points or 3.09% to 6,865.95, as per provisional figures. The index hit a high of 6,871.35 in intraday trade, a lifetime high for the index. The index hit a low of 6,652.15 in intraday trade.
The BSE Mid-Cap index was up 108.11 points or 1.47% at 7,456.09. The BSE Small-Cap index was up 54.04 points or 0.72% to 7,593.68. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 3204 crore, higher than Rs 2,299.87 crore on Thursday, 8 May 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,609 shares gained and 1,144 shares fell. A total of 148 shares were unchanged.
Bharat Heavy Electricals (Bhel) (up 5.32%), Hindalco Industries (up 5.2%) and Tata Power Company (up 5.11%) surged from the Sensex pack.
Bank stocks gained across the board on renewed buying. Among private sector banks, HDFC Bank (up 5.56%), Yes Bank (up 9.38%), IndusInd Bank (up 4.32%), and Federal Bank (up 3.37%) gained.
Kotak Mahindra Bank rose 5.11% to Rs 854.80, a record high for the stock.
Axis Bank jumped 6.06% to Rs 1,650 after hitting a record high of Rs 1,651.40 in intraday trade.
ICICI Bank surged 7.05% to Rs 1,380 after hitting 52-week high of Rs 1,388 in intraday trade.
Among PSU bank stocks, State Bank of India (SBI) (up 4.07%), Canara Bank (up 3.84%), Union Bank of India (up 8.02%), Bank of India (up 4.4%), Bank of Baroda (up 2.7%) and Punjab National Bank (up 4.69%) gained.
Ranbaxy Laboratories declined 1.26%. The company reported a consolidated net loss of Rs 73.65 crore in Q1 March 2014, compared with a net profit of Rs 125.75 crore Q1 March 2013. Total income fell 1.72% to Rs 2490.51 crore in Q1 March 2014 over Q1 March 2013. The company announced results during market hours today, 9 May 2014.
Shares of Adani group companies surged on renewed buying. The Adani group is known for its proximity to Gujarat Chief Minister and Bharatiya Janata Party led National Democratic Alliance's (NDA) prime ministerial candidate Narendra Modi. Investors are betting that the NDA will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections which conclude early next week. Adani Power (up 5.53%), Adani Ports & Special Economic Zone (up 7.6%) and Adani Enterprises (up 2.3%) gained.
Sintex Industries rose 3.99% after consolidated net profit rose 7% to Rs 161.10 crore on 42% increase in net sales to Rs 1982.90 crore in Q4 March 2014 over Q4 March 2013. The company announced the results after market hours on Thursday, 8 May 2014.
Sintex Industries' consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) for Q4 March 2014 at Rs 357.30 crore, improved by 460 basis points at 18% compared to Q4 March 2013 on account of better utilisation, productivity and control on cost.
On a consolidated basis, net profit rose 13% to Rs 364.70 crore on 15% increase in net sales to Rs 5842.60 crore in the year ended March 2014 over the year ended March 2013.
The year ended March 2014 (FY 2014) EBITDA at Rs 964.20 crore, a jump of 25% as compared to the year ended March 2013 (FY 2013). EBITDA margins at 16.5% in FY 2014 an improvement of 150 bps over FY 2013.
In the foreign exchange market, the rupee edged higher against the dollar as equities rose. The partially convertible rupee was hovering at 59.95, compared with its close of 60.065/075 on Thursday, 8 May 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.
A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on Monday, 12 May 2014. Results of exit polls predicting the outcome of the election will likely start coming in from Monday evening. The counting of votes will take place on 16 May 2014 and the results are expected on the same day. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Investors are hoping that a stable government which will complete its full term of five years in office comes to power after the elections. 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.
There are expectations that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections which conclude next week. Various opinion polls have forecast that the NDA with Narendra Modi as its prime ministerial candidate is leading the race to Parliament. Most opinion polls have forecast that the NDA will be unable to form the government on its own and that it will have to rely on support from smaller regional parties to form the government. For the first time in mid-April, an opinion poll for a television news channel showed the NDA winning a narrow majority of 275 seats.
European stock markets edged lower on Friday, 9 May 2014, falling from a six-year high reached the prior day when ECB President Mario Draghi hinted at a rate cut next month. Key benchmark indices in UK, Germany and France were off 0.39% to 0.6%.
The European Central Bank kept interest rates unchanged on Thursday, giving itself more time to gauge whether the euro-area recovery has reignited inflation. The 24-member Governing Council, meeting in Brussels, left the main refinancing rate at a record low of 0.25%.
The European Central Bank is ready to take action next month to boost the euro zone economy if updated inflation forecasts merit it, its president said on Thursday, warning outsiders not to pressure the bank into action. Stressing that the euro's strength was "a serious concern", ECB chief Mario Draghi said the exchange rate would have to be addressed, adding that the bank's policymakers held a discussion about "all instruments" at their meeting in Brussels.
Bank of England officials left the UK central bank's main interest rate unchanged on Thursday at their first meeting since unemployment tumbled past a threshold they set out in August. The BOE said its Monetary Policy Committee kept the central bank's benchmark interest rate at a record low of 0.5% and the total size of its bond portfolio at 375 billion ($636 billion) after a two-day meeting.
UK manufacturing production expanded more than forecast in March, adding to evidence that the economic recovery is gathering strength. Output rose 0.5% from February, when it gained 1%, the Office for National Statistics in London said today. Industrial production fell 0.1% as oil and gas extraction plunged.
Asian stocks edged higher on Friday, 9 May 2014, after a tame inflation report from China. Key benchmark indices in Indonesia, Singapore, South Korea and Japan were up 0.14% to 0.77%. Key benchmark indices in Hong Kong, China and Taiwan were off 0.21% to 0.46%.
China's producer prices slumped more than estimated in April, the latest data showed. Consumer price index (CPI) rose 1.8% from a year earlier, the National Bureau of Statistics said today, 9 May 2014. Meanwhile, the deflation for wholesale prices showed signs of easing in April, with a 2% drop in the producer price index (PPI) after a 2.3% fall in March.
South Korea's central bank left its key rate unchanged and the government said it will speed up spending, seeking to spur growth that faces headwinds from a surge in the won and weaker consumption after a deadly ferry accident.
The Reserve Bank of Australia reinforced that interest rates will remain on hold for the foreseeable future as a fall in mining investment and fiscal tightening weigh on growth. The central bank, in minor adjustments to its forecasts, raised projected gross domestic product growth for June 2014 to 3% from 2.75% three months earlier, and lowered its growth ranges for 2015 by a quarter percentage point. On core inflation, the RBA cut the forecast for June to 2.75% from 3%, while other periods were little changed.
Trading in US index futures indicated that the Dow could slide 25 points at the opening bell on Friday, 9 May 2014. US stocks mostly fell on Thursday led by losses in the energy and utility sectors.
Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the labor market continues to gain traction. Jobless claims fell 26,000 to 319,000 in the week ended May 3 from a revised 345,000 in the prior period, the Labor Department reported in Washington.
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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