IT stocks and index heavyweights HDFC, HDFC Bank and Reliance Industries (RIL) led modest gains for key benchmark indices. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained four-week closing high. The Sensex garnered 191.68 points or 0.69% to settle at 27,837.21. Key benchmark indices hovered in positive zone throughout the trading session today, 20 May 2015, after a higher opening.
IT stocks rose as the rupee edged lower against the dollar. Telecom stocks fell. Shares of pharmaceuticals companies were mixed. FMCG stocks were mixed. Cement shares were in demand. Tata Power rose after the company reported turnaround results for Q4 March 2015 after trading hours yesterday, 19 May 2015.
In the global commodities markets, Brent crude oil prices dropped overnight. The decline in global crude oil prices augur well for India as the country imports about 80% of its crude oil requirements.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said yesterday, 19 May 2015, that inflation has come down tremendously in India.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it.
Foreign portfolio investors (FPIs) bought shares worth a net Rs 141.66 crore from the secondary equity market yesterday, 19 May 2015, as per data from Central Depository Services (India). Domestic institutional investors (DIIs) bought shares worth a net Rs 451.02 crore yesterday, 19 May 2015, as per provisional data released by the stock exchanges.
In the overseas markets, European stocks edged lower after Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then. Asian indices ended on a mixed note. In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record.
The S&P BSE Sensex rose 191.68 points or 0.69% to settle at 27,837.21, its highest closing level since 22 April 2015. The index jumped 257.48 points at the day's high of 27,903.01 in morning trade. The index gained 98.46 points at the day's low of 27,743.99 at the onset of the trading session.
The Nifty rose 57.60 points or 0.69% to settle at 8,423.25, its highest closing level since 22 April 2015. The index hit a high of 8,440.35 in intraday trade. The index hit a low of 8,391.45 in intraday trade.
The BSE Mid-Cap index fell 0.24 points to settle at 10,650.78. The BSE Small-Cap index rose 19.12 points or 0.17% to settle at 11,206.85. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was positive. On BSE, 1,378 shares rose and 1,319 shares fell. A total of 138 shares were unchanged.
The total turnover on BSE amounted to Rs 2748 crore, lower than turnover of Rs 3444.17 crore registered during the previous trading session.
Among the sectoral indices on BSE, the S&P BSE IT index (up 1.78%), the BSE Teck index (up 1.51%) and the BSE Bankex (up 0.86%) outperformed the Sensex. The BSE Power index (up 0.51%), the BSE Healthcare index (up 0.34%), the BSE Consumer Durables index (up 0.14%), the BSE Oil & Gas index (up 0.11%), the BSE Realty index (up 0.09%), the S&P BSE FMCG index (up 0.06%), the BSE Capital Goods index (down 0.29%), the BSE Auto index (down 0.54%) and the BSE Metal index (down 0.77%) underperformed the Sensex.
Index heavyweight Reliance Industries (RIL) rose 1.08%. With respect to media reports titled "Reliance Jio turns to China for cheap phones ahead of 4G rollout", Reliance Industries after market hours yesterday, 19 May 2015, clarified that the company is working with multiple Indian and global manufacturers to test their devices on the company's network.
Index heavyweight and housing finance major HDFC advanced 1.86% to Rs 1,264.15. The stock hit high of Rs 1,270.90 and low of Rs 1,244.
Cement shares were in demand. UltraTech Cement (up 1.73%), Shree Cement (up 0.34%) and ACC (up 0.1%) edged higher. Ambuja Cements fell 0.54%.
Grasim Industries rose 0.17%. Grasim has exposure to the cement sector through its holding in UltraTech Cement
FMCG stocks were mixed. Colgate Palmolive (India) (down 2.62%), Nestle India (down 0.47%), Tata Global Beverages (down 1.02%), Procter & Gamble Hygiene & Health Care (down 0.86%), Marico (down 0.5%) and Dabur India (down 0.3%), edged lower. GlaxoSmithKline Consumer Healthcare (up 0.37%), Hindustan Unilever (up 0.95%), Britannia Industries (up 0.2%), Godrej Consumer Products (up 0.47%), Bajaj Corp (up 0.77%) and Jyothy Laboratories (up 0.5%) edged higher.
Shares of private sector banks rose. HDFC Bank (up 1.33%), Kotak Mahindra Bank (up 0.71%), Yes Bank (up 1.17%), and ICICI Bank (up 0.98%) gained. Axis Bank shed 0.89%.
IndusInd Bank rose 0.24%. The bank announced during trading hours today, 20 May 2015, that Worldpay -- the global leader in payments -- has partnered with IndusInd Bank to offer domestic acquiring services in India. The association will assist both companies in processing customers' payments and marks the first step for Worldpay in entering the Indian market, IndusInd Bank said.
PSU bank stocks were mixed. Punjab National Bank (up 0.2%), State Bank of India (SBI) (up 1.02%) and Union Bank of India (up 0.46%) rose. Bank of Baroda (down 1.45%), Oriental Bank of Commerce (down 0.12%), Canara Bank (down 0.61%), Bank of India (down 0.68%) and Andhra Bank (down 0.44%) fell.
The finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry reportedly said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
Syndicate Bank rose 1.69%. The board of Syndicate Bank at its meeting held yesterday, 19 May 2015, approved raising equity capital of Rs 2000 crore, including premium to be decided as per the guidelines by way of qualified institutional placement (domestic and foreign financial institutions)/rights issue /follow-on public/or any other mode approved by Reserve Bank of India/Government of India at an appropriate time. Syndicate Bank's board also approved raising Basel III complaint additional tier I bonds upto Rs 1800 crore and tier II bonds upto Rs 1750 crore, as per eligibility at an appropriate time. The announcement was made after market hours yesterday, 19 May 2015.
Shares of power generation companies were mixed. CESC (up 1.87%), JSW Energy (up 2.12%), NTPC (up 0.37%) edged higher. Adani Power (down 0.24%), GMR Infrastructure (down 0.47%), Reliance Power (down 0.64%) and Reliance Infrastructure (down 0.56%) edged lower.
Meanwhile, the Ministry of Power today, 20 May 2015, announced that transmission lines worth Rs 33900 crore were allotted for bidding during 2014-15. These transmission schemes includes 765 kV and 400 kV transmission system strengthening schemes in the Northern, Western, Southern, North Eastern Regions and would facilitate transfer of power from new hydro electric projects in Bhutan and the generation linked projects in Chhattisgarh and Odisha etc.
Tata Power rose after the company reported turnaround results for Q4 March 2015 after trading hours yesterday, 19 May 2015. The stock advanced 2.04% to Rs 77.40. The stock hit a high of Rs 79.80 and a low of Rs 76.85. The company reported consolidated net profit of Rs 159.14 crore in Q4 March 2015 compared with consolidated net loss of Rs 145.33 crore in Q4 March 2014. Total income fell 8.12% to Rs 8227.14 crore in Q4 March 2015 over Q4 March 2014.
Net profit in Q4 March 2015 was up at Rs 159 crore mainly due to lower depreciation and lower coal prices in company's wholly owned subsidiary viz. Coastal Gujarat Power (CGPL) and better performance of Mumbai operations. The profits for the quarter also include adverse forex impact at the South African Joint Venture-Cennergi. The impact of lower coal price realization was offset by better operational efficiencies of coal mines as well as forex gains on value added tax (VAT) related settlement during the year. Operating profit rose 28% at Rs 1408 crore in Q4 March 2015 over Q4 March 2014, mainly due to lower depreciation and lower coal price in CGPL and higher contribution from Mumbai operations.
Auto stocks were mixed. Maruti Suzuki (India) (up 0.05%), Ashok Leyland (up 0.64%) and Eicher Motors (up 1.08%) edged higher. Mahindra & Mahindra (down 0.34%), Tata Motors (down 0.8%), Bajaj Auto (down 2.19%) and TVS Motor Company (down 0.72%) edged lower.
Shares of Hero MotoCorp ended unchanged for the day at Rs 2575.10.
The Ministry of Road Transport & Highways yesterday, 19 May 2015, released the notification for mass emission standards for flex-fuel ethanol E85 and ED95 in vehicles. The notification will enable vehicle manufacturers to manufacture vehicles running on bio-ethanol E85 and ED95. A bio-ethanol fuel bus is already under trial in Nagpur. The Ministry of Road Transport & Highways is amending the rules under CMVR, 1989 to facilitate the use of greener alternate fuels in vehicles. Alternative fuels are either produced in the country for e.g. Ethanol, Bio-CNG etc. or generated locally like solar photovoltaic and other sources of electric power which can be stored in electric batteries.
The Ministry of Road Transport & Highways has already notified draft rules for mass emission norms and testing standards of vehicles running on bio-CNG which are under finalisation. The standards of small series testing of vehicles running on electric power have already been notified by the ministry. All the above steps will enable use of alternative fuels in vehicles in India, the notification added, the Ministry of Road Transport & Highways said in a statement.
Metal and mining shares were mostly lower. Hindalco Industries (down 1.04%), Hindustan Zinc (down 1.41%), NMDC (down 0.04%), Jindal Steel & Power (down 0.36%), JSW Steel (down 0.02%), Steel Authority of India (down 0.6%) edged lower. Vedanta (up 0.72%), Hindustan Copper (up 0.8%), National Aluminum Company (up 0.3%) edged higher.
Tata Steel declined 1.94% ahead of its Q4 result announcement today, 20 May 2015. Shares of Electrosteel Steels were up 7.3%. With respect to news article titled "Tata Steel in advance talk to buy ELECTROSTEEL STEELS", Tata Steel clarified during trading hours today, 20 May 2015, that it is a large Indian multi-national steel manufacturing company having operations in 26 countries and commercial presence in over 50 countries. The company is the world's second most geographically diversified steel producer with about 80,000 employees spread across five continents. Tata Steel, as part of its business strategy, regularly evaluates organic and inorganic growth opportunities across various segments of its operations. The board and management of Tata Steel is committed to making disclosures at the appropriate time so as to eliminate any asymmetry of information. The company has robust disclosure principles and follows a policy of not commenting on market speculation. Currently, there has been no event that requires a disclosure under Clause 36 of the listing agreement, the company said in a statement.
IT stocks rose as the rupee edged lower against the dollar. Persistent Systems (up 2.94%), HCL Technologies (up 2.48%), Oracle Financial Services Software (up 2.15%), CMC (up 2.07%), Wipro (up 1.84%), Infosys (up 1.18%), Hexaware Technologies (up 0.96%), MindTree (up 0.35%) and MphasiS (up 0.31%), edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
TCS rose 1.99% to Rs 2,561.90. The company announced during trading hours that its client -- Euroclear Finland -- the central securities depository (CSD) for the Finnish capital markets, has launched a new transaction processing platform known as 'Infinity'. Infinity is a multi-year program powered by TCS BaNCS for market infrastructure and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017.
Infinity's processing capabilities for fixed-income was recently unveiled, following a 22 month implementation of this first phase, TCS said. The next phases will be rolled out in the course of 2016 and the processing environment will also feature a new central register as well as equity processing capabilities, TCS said.
Infinity is a multi-year program powered by TCS BaNCS for Market infrastructure, and is a key component of Euroclear Finland's outsourcing its securities settlement processing toTARGET2Securities (T25) as part of the European Central Bank's fourth migration wave in February 2017. Through Infinity, TCS BaNCS has provided Euroclear with a single, consolidated platform for depository, registry and corporate actions functions, thereby, enabling simplified business operations.
Tech Mahindra rose 3.37% to Rs 640.10 after the company after market hours yesterday, 19 May 2015, announced that the company will build an Intelligent Electric Vehicle Charging System (IEVCS) designed to help build Ontario's clean energy future. The project, sponsored by Ontario Ministry of Energy and funded in part through the Ontario Smart Grid Fund initiative, will analyze the effects of electric vehicle charging on transformers by creating a real time transformer monitoring and analytics solution. The key benefit of the solution is the real time monitoring of the transformers and the ability to automatically manage the charging between vehicles to ensure the transformers do not overload as a result of EV charging.
In February 2015, Tech Mahindra announced plans to invest $150 million over the next three to four years to create innovative solutions and develop next-generation technologies.
Shares of pharmaceuticals companies were mixed. IPCA Laboratories (up 1.88%), Wockhardt (up 1.62%), Cadila Healthcare (up 1.33%), Sun Pharmaceutical Industries (up .88%), Cipla (up 0.85%) and Aurobindo Pharma (up 0.09%), edged higher. Lupin (down 0.26%), Piramal Enterprises (down 0.67%), Dr. Reddy's Laboratories (down 0.73%), Divi's Laboratories (down 0.74%), Strides Arcolab (down 1.29%) and GlaxoSmithKline Pharmaceuticals (down 1.64%) edged lower.
Glenmark Pharmaceuticals rose 0.85% to Rs 907 after the Reserve Bank of India (RBI) after trading hours yesterday, 19 May 2015, notified increase the limit for the purchase of equity shares of the company by foreign institutional investors (FIIs) under the portfolio investment scheme to 49% of the company's paid up capital from earlier 40%. The total FII holding in Glenmark Pharmaceuticals stood at 34.71% as per the shareholding pattern as on 31 March 2015.
Telecom stocks fell. Idea Cellular (down 2.07%), MTNL (down 0.84%) and Tata Teleservices (Maharashtra) (down 4.30%) declined. Bharti Airtel rose 0.64%.
Reliance Communications (RCom) lost 4.3%. With respect to media reports titled "Reliance Communications tower sale said to draw ATC", Reliance Communications after market hours today, 20 May 2015, said that the company had informed the stock exchange on 6 May 2015 that the company has invited certain investment banks to make proposals for running a process to monetise the valuable tower and fiber assets held in its subsidiary viz. Reliance Infratel within the current financial year. There is no change in the aforesaid status and the company remains engaged in such discussions, Reliance Communications said. The company will make further disclosures as and when these developments lead to a disclosable event, RCom said.
Bajaj Finance rose 0.37%. The company's net profit rose 26.84% to Rs 230.98 crore on 31.39% growth in total income to Rs 1445.05 crore in Q4 March 2015 over Q4 March 2014. The result was announced during market hours today, 20 May 2015.
Bajaj Finance said that pursuant to the approval of the shareholders at an extra ordinary general meeting held today, 20 May 2015, the company's board of directors approved issuance of 9.25 lakh warrants on preferential basis to the promoter- Bajaj Finserv at an issue price of Rs 4,412 per warrant.
Indian Oil Corporation shed 0.57%. With respect to media reports titled "Indian Oil Corp to own 45% stake in Ennore LNG's Tamil Nadu terminal", Indian Oil Corporation after market hours today, 20 May 2015, clarified that as per the company's earlier clarification on 5 January 2015, the company's board at its meeting held in October 2014 had accorded approval for setting up a 5 million tonne LNG project at Ennore through a joint venture company. The cost of the project is estimated at Rs 5150 crore. The project would be implemented through a joint venture company and not directly by the company, Indian Oil Corporation said. Indian Oil Corporation will hold 45% equity stake, TIDCO (a Tamil Nadu state government enterprise) will own 5% stake and balance 50% will be held by financial institutions. Indian Oil Corporation clarified that no significant or material development has taken place with respect to this project after this clarification issued by the company on 5 January 2015.
In the global commodities market, Brent crude oil prices edged higher. Brent for July settlement was up 81 cents at $64.83 a barrel. The contract had lost $2.25 a barrel or 3.39% to settle at $64.02 a barrel during the previous trading session. The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In the foreign exchange market the rupee edged lower against the dollar. The partially convertible rupee was currently hovering at 63.86, compared with its close of 63.68 during the previous trading session.
The Sensex has risen 825.90 points or 3.05% in this month so far (till 20 May 2015). The Sensex has gained 337.79 points or 1.22% in this calendar year so far (till 20 May 2015). From a 52-week low of 24,107.99 on 19 May 2014, the Sensex has risen 3,729.22 points or 15.46%. The Sensex is off 2,187.53 points or 7.28% from a record high of 30,024.74 hit on 4 March 2015.
Meanwhile, Reserve Bank of India (RBI) Governor Raghuram Rajan reportedly said in New York yesterday, 19 May 2015, that inflation has come down tremendously in India. Rajan also reportedly called the government's spending cuts significant. Rajan said that the depreciation of the rupee is due in part to the US dollar's strength and that the rupee has fallen less and in a less volatile fashion than other currencies. While the rupee has slid against the strengthening dollar, he said that it has actually strengthened against other currencies.
Meanwhile, the finance ministry yesterday, 19 May 2015, reportedly issued draft guidelines on gold monetization scheme that will encourage Indians to vest the gold in their possession with banks and earn interest on it. Banks could treat gold deposits as part of their cash reserve ratio (CRR) or statutory liquidity ratio (SLR), the finance ministry reportedly said in its guidelines released to seek opinions about its gold monetisation scheme. The SLR is the minimum amount of bonds that banks must have, while the CRR is the share of deposits they have to compulsory keep with the central bank. Under the scheme, customers will have to deposit gold for at least a year and banks may pay the interest after 30 or 60 days of the opening of the gold savings account. Both the interest and the principal payable to depositors are likely to be valued in gold and the gains will be tax-free.
The minimum quantity of gold that a customer can bring is proposed to be set at 30 grams so that even small depositors are encouraged. The government has sought feedback on the scheme by 2 June 2015.
The scheme will also allow jewellers to obtain loans in their metal account. It has been proposed to allow banks to lend the gold they collect under this scheme to jewellers. This will help meet some of the demand of the jewellery industry. This will also help reduce the reliance of jewellers on imports.
Meanwhile, credit rating agency CRISIL yesterday, 19 May 2015, said that it believes that India's growth is on a slow grind up in the short term and will touch 7.9% in 2015-16 if monsoon is normal; else it would flat-line at 7.4%. According to the rating agency, a meaningful recovery in capex is not expected until fiscal 2017. On the legislative side, consensus is necessary to push through legislations on Goods & Services Tax and land without much dilution. This will test the government's resolve and statecraft, but they are critical building blocks that will raise India's 'potential-growth' rate, CRISIL said.
In overseas markets, European stocks edged lower today, 20 May 2015, after Greece government's parliamentary speaker Nikos Filis reportedly told a television channel that Greece will not make a payment to the International Monetary Fund that falls due on 5 June 2015 if there is no deal with its creditors by then. Key benchmark indices in France and Germany were off 0.16% to 0.22%. UK's FTSE 100 was up 0.12%.
The minutes from the Bank of England's meeting earlier this month showed a 9-0 vote on keeping the UK benchmark interest rate steady at 0.5%.
Asian indices were mixed today, 20 May 2015. Key benchmark indices in China, Indonesia, Japan and South Korea were up by 0.44% to 0.88%. Key benchmark indices in Taiwan, Singapore and Hong Kong were off 0.32% to 0.42%.
The latest data showed that Japan's economy grew an annualized 2.4% during the first quarter, much stronger than a revised 1.1% expansion in the previous quarter.
In US, stocks lost steam by the end of session and closed mostly lower yesterday, 19 May 2015, though Dow industrials eked out a small gain to finish at a fresh record. Falling oil prices weighed on energy stocks, with the sector selling off sharply. Meanwhile, investors digested a report showing a sharp increase in housing starts last month, pondering the effect it might have in determining the course of the Federal Reserve's interest rate policy.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released in the global day today, 20 May 2015.
Chicago Federal Reserve President Charles Evans reportedly said in Munich today, 20 May 2015, that a hike in US interest rates is not likely to be appropriate until early 2016. Evans, who has long argued for a delay to rate hikes so as not to undermine economic recovery, said that the US central bank should not move on rates until there was greater confidence that its inflation goal could be hit within one or two years, according to reports. Evans is a voting member this year on Fed policy and among the most dovish of US central bankers.
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