Key benchmark indices edged higher, with the market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 22 April 2014. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on closing basis as well as on intraday basis. The Sensex garnered 118.17 points or 0.52%, off close to 35 points from the day's high and up about 100 points from the day's low. The market breadth, indicating the overall health of the market was positive.
The Sensex has risen 490.27 points or 2.19% in this month so far (till 23 April 2014). The Sensex has gained 1,705.86 points or 8.05% in calendar year 2014 so far (till 23 April 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 5,427.83 points or 31.1%.
Investors are betting 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 in mid-May this year. 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. A party will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. 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.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections.
Coming back to today's trade, index heavyweight and cigarette major ITC edged higher in volatile trade. Shares of engineering and construction major L&T hit 52-week high. Cairn India dropped ahead of its audited financial results for the year ended 31 March 2014 (FY 2014) today, 23 April 2014. Mahindra & Mahindra (M&M) edged higher after the company announced that its agri division has today, 23 April 2014, signed a joint venture agreement with HZPC, Holland, one of the leading innovative companies in the world in potato breeding, seed potato growing and seed potato trading to offer the best quality seed potatoes to farmers within and outside India.
Among cement stocks, Ambuja Cements hit 52-week high. UltraTech Cement fell ahead of its audited financial results for FY 2014 today, 23 April 2014.
The market opened on a positive note after provisional data released by the stock exchanges after trading hours on Tuesday, 22 April 2014, showed that foreign funds remained net buyers of Indian stocks on that day. The Sensex and the Nifty, both, hit record high. Key benchmark indices extended initial gains in morning trade. Firmness continued on the bourses in mid-morning trade. Key benchmark indices extended gains and hit fresh intraday high in early afternoon trade. Firmness continued on the bourses in afternoon trade. Key benchmark indices retained positive zone in mid-afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 22 April 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 228.90 crore from the secondary equity markets on Tuesday, 23 April 2014, as per the data from the Securities & Exchange Board of India (Sebi).
The stock market remains closed tomorrow, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
The S&P BSE Sensex garnered 118.17 points or 0.52% to settle at 22,876.54, a record closing high for the index. The index jumped 154.15 points at the day's high of 22,912.52 in late trade, a lifetime high for the barometer index. The index rose 21.76 points at the day's low of 22,780.13 in early trade.
The CNX Nifty garnered 25.45 points or 0.37% to settle at 6,840.80, a record closing high for the index. The index hit a high of 6,861.60 in intraday trade, a lifetime high for the index. The index hit a low of 6,820.75 in intraday trade.
The BSE Mid-Cap index garnered 8.89 points or 0.12% to settle at 7,395.06. The BSE Small-Cap index garnered 17 points or 0.22% to settle at 7,646.10. Both these indices underperformed the Sensex.
The S&P BSE IT index (down 0.02%), the S&P BSE Teck index (up 0.15%), the S&P BSE Metal index (up 0.22%), the S&P BSE Realty index (down 1.28%), the S&P BSE Auto index (up 0.13%), the S&P BSE FMCG index (up 0.41%), the S&P BSE Power index (down 0.53%), the S&P BSE Oil & Gas index (down 0.33%), the S&P BSE Consumer Durables index (down 0.88%), and the S&P BSE Healthcare index (up 0.44%) underperformed the Sensex.
The S&P BSE Capital Goods index (up 1.49%) and the S&P BSE Bankex (up 1.12%) outperformed the Sensex.
The market breadth, indicating the overall health of the market was positive. On BSE, 1,468 shares gained and 1,359 shares fell. A total of 144 shares were unchanged.
The total turnover on BSE amounted to Rs 2611 crore, lower than Rs 2721.21 crore on Tuesday, 22 April 2014.
Infosys rose 0.51%. Infosys after market hours today, 23 April 2014, announced a strategic partnership with Orange to offer customers a new immersive experience on Orange's IPTV offering. Infosys will deliver a broad portfolio of interactive TV apps on the Orange Livebox Play.
Index heavyweight and cigarette major ITC rose 1.14% to Rs 354.70. The stock was volatile. The stock hit high of Rs 355 and low of Rs 348.55.
HDFC Bank rose 1.44% at Rs 736.80. The stock was volatile. The stock hit high of Rs 739.05 and low of Rs 723.50. HDFC Bank's net profit rose 23.1% to Rs 2326.52 crore on 14.94% increase in total income to Rs 12789.98 crore in Q4 March 2014 over Q4 March 2013. The result was announced during trading hours on Tuesday, 22 April 2014.
Shares of JM Financial dropped 3.29%. Both HDFC Bank and JM Financial today, 23 April 2014, denied media reports that they have initiated talks for the merger of JM Financial with HDFC Bank.
Asian Paints fell 1.26%. Asian Paints during market hours today, 23 April 2014, said that the Asian Paints Employees Union, Sriperumbudur and workmen have ended the strike and resumed work from today, 23 April 2014. Earlier, Asian Paints had on 20 December 2013 informed that the operation of the company's plant situated at Sriperumbudur, Tamil Nadu will be affected due to the strike called by Asian Paints Employees Union, Sriperumbudur and workmen with effect from 20 December 2013.
Engineering and construction major L&T rose 2.16% to Rs 1,373 after hitting a 52-week high of Rs 1,387.85 in intraday trade.
Cairn India dropped 2.94%. Cairn India's consolidated profit after tax (PAT) rose 18% to Rs 3035 crore on 16% growth in revenue to Rs 5049 crore in Q4 March 2014 over Q4 March 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) jumped 26% to Rs 3654 crore in Q4 March 2014 over Q4 March 2013. EBITDA margin surged to 72% in Q4 March 2014, from 67% in Q4 March 2013. The result was announced after market hours today, 23 April 2014.
Consolidated PAT rose 5% to Rs 3035 crore on 1% growth in revenue to Rs 5049 crore in Q4 March 2014 over Q3 December 2013. EBITDA rose 3% to Rs 3654 crore in Q4 March 2014 over Q3 December 2013. EBITDA margin edged up to 72% in Q4 March 2014, from 71% in Q3 December 2013. Cairn India said that the 5% sequential growth in PAT in Q4 March 2014 was primarily led by increase in investment income consequent to realisation of gains on maturity of investible funds and one time charge of ESOP policy change accounted in previous quarter.
Consolidated PAT rose 3% to Rs 12432 crore on 7% rise in revenue to Rs 18762 crore in the year ended 31 March 2014 (FY 2014) over the year ended March 2013 (FY 2013). Cairn India said that revenue growth in FY 2014 was driven by increase in working interest volume to 137.1 kboepd in FY 2014, from 127.8 kboepd in FY 2013 and due to benefit from rupee depreciation. This increase was partly offset by higher profit sharing with the Government of India (GoI) in DA1 consequent to tranche change, Cairn India said. The company said its forex gain was higher at Rs 739 crore in FY 2014 on account of over 10% rupee depreciation against the dollar.
Cash and cash equivalents stood at Rs 13707 crore in rupee funds and $1.53 billion in dollar funds as on 31 March 2014, part of which is expected to be used for share buy-back and dividends, Cairn India said. Till 31 March 2014, Cairn India has bought back 32.70 lakh shares for a total consideration of approximately Rs 106 crore from the open market through stock exchanges under the ongoing share buyback programme.
The company's board recommended a final dividend of Rs 6.50 per share for FY 2014, entailing an outflow of approximately Rs 1451 crore including dividend distribution tax. This along with the interim dividend paid in October 2013 cumulatively amounts to around 22.46% of the company's annual consolidated net profit.
With regard to future business outlook, Cairn India said that the management remains committed to create long term shareholder value. Considering the significant potential in the Rajasthan asset, the company will continue to focus on key development projects to enhance recovery with overall planned net capex of $3 billion by FY 2017, it said. The company said it is targeting to achieve reserve replacement ratio of 150% in next 3 years subject to PSC extension till 2030 and a 3 year production CAGR of 7-10% from known discoveries with flat production in FY 2015. Further exploration activity across the portfolio provides additional value upside and momentum while technology adoption supports low cost operations and development, Cairn India said.
Ambuja Cements gained 2.4% to Rs 219.80 after hitting 52-week high of Rs 220 in intraday trade. The company announces its Q1 March 2014 results tomorrow, 24 April 2014.
UltraTech Cement fell 0.86% ahead of its audited financial results for the year ended 31 March 2014 (FY 2014) today, 23 April 2014.
Mahindra & Mahindra (M&M) rose 1.34%. M&M during market hours today, 23 April 2014, said that the company's agri division has signed a joint venture agreement with HZPC, Holland, one of the leading innovative companies in the world in potato breeding, seed potato growing and seed potato trading to offer the best quality seed potatoes to farmers within and outside India. Mahindra will hold 60% stake and HZPC the remaining 40% stake in the new joint venture company.
The joint venture will benefit from the expertise of both the companies where HZPC with its strong R&D focus will bring in access to the latest technology, new varieties and open up global markets for the Indian farmers, M&M and HZPC said in a joint statement. Mahindra will contribute to the joint venture through the group's strong farmer connect, wide spread domestic distribution and agronomy expertise. The new company will construct a set of the art facility to produce Tissue culture plants and mini-tubers. The aim of the facility is to offer high quality mini-tubers and early generation seed potatoes to the farmers.
In the foreign exchange market, the rupee edged lower against the dollar on importers' dollar purchases and on concern a decline in China's factory output will damp demand for the region's assets. The partially convertible rupee was hovering at 61.08, compared with its close of 60.76/77 on Tuesday, 22 April 2014.
The India Meteorological Department (IND) is scheduled to announce its first forecast on this year's June-September southwest monsoon rains tomorrow, 24 April 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 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.
European stocks edged lower on Wednesday, 23 April 2014, as data signaled a fourth month of contraction in Chinese manufacturing. Key benchmark indices in UK, France and Germany were off 0.12% to 0.41%.
The Bank of England's (BOE) Monetary Policy Committee at its monthly meeting held on 9 April 2014 voted 9-0 in favor of keeping interest rates on hold and making no changes to its 375 billion pound ($631 billion) asset-purchase program, according to minutes of the meeting released today, 23 April 2014. The central bank said the decision was made within the forward-guidance framework laid out in August 2013 as the unemployment rate remained above the 7% threshold at the time of the meeting. After the April policy decision, the headline joblessness rate dropped to 6.9% in the three months to February, likely activating the BOE's new, "fuzzy" guidance. The BOE is unlikely to hike interest rates in the near future, however, as its new framework focuses on absorbing slack in the economy and a wider improvement across the economy, including wage growth and productivity.
Economic growth in the euro zone accelerated at the start of the second quarter, but businesses once again cut the prices they charged customers, a sign that the European Central Bank's (ECB) worries over low inflation are far from over. Data firm Markit's survey of 5,000 manufacturing and services businesses found that activity expanded again in April, and at the fastest pace since May 2011. The composite Purchasing Managers Index--a gauge of activity across the manufacturing and services sectors--rose to 54 from 53.1 in March. A reading above 50 indicates month-to-month expansion in activity.
The business surveys add to recent evidence that the currency area's return to growth, which started in the second quarter of 2013, is gaining some momentum. A survey released by the European Commission on Tuesday, 22 April 2014, found that consumer confidence was at its highest since October 2007 in April, while recent data releases have pointed to rises in retail sales, industrial production, exports and construction.
However, the business surveys carried a warning for the ECB, with manufacturers and services providers reporting that they cut their prices again in April, and at the fastest pace since August 2013.
Markit's survey found that businesses hired additional workers for only the second month since 2011, and at the fastest pace since September of that year.
Asian stocks edged lower on Wednesday, 23 April 2014, after Chinese manufacturing data signaled persisting weakness in the world's second-largest economy. Key benchmark indices in Taiwan, China, Indonesia, South Korea, Singapore and Hong Kong were off 0.1% to 0.97%. In Japan, the Nikkei 225 index rose 1.09%.
China's Purchasing Managers' Index for manufacturing was at 48.3 in April, compared with 48 in March, according to a preliminary reading published by HSBC Holdings Plc and Markit Economics today, 23 April 2014. A figure below 50 signals a contraction.
On Tuesday, 22 April 2014, China's central bank lowered reserve ratios at some rural lenders in the latest in a series of measures to help combat a slowing economy.
Trading in US index futures indicated that the Dow could decline 8 points at the opening bell on Wednesday, 23 April 2014. US stock markets edged higher Tuesday, 22 April 2014, with the S&P 500 extending its winning streak to six days, the longest streak of gains since September 2013. Investors welcomed better-than-expected results from Comcast Corp. and Harley-Davidson, Inc., while a flurry of deal news in the health-care sector added to positive sentiment.
In economic data, the sales pace of existing homes ticked down in March to the slowest rate since July 2012, according to data released Tuesday, 22 April 2014.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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