High volatility characterized trading as investors reacted to leads and results of Lok Sabha election that showed that Narendra Modi was on course to wrest the top job in the country as a saffron wave swept large swathes of India and leaving Congress in tatters. The barometer index, the S&P BSE Sensex, garnered 216.14 points or 0.9%, off close to 1,255 points from the day's high and up about 245 points from the day's low. The Sensex jumped a staggering 1,470.03 points or 6.14% at the day's high of 25,375.63 in early trade. The barometer index lost 32.44 points or 0.13% at the day's low of 23,873.16 in mid-afternoon trade.
Indian stocks edged higher today, 16 May 2014, as leads and results of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is all set to form the next government at the Centre. The NDA was leading in 236 seats and was declared winner in 98 seats out of the total of 543 Lok Sabha seats. The Congress-led United Progressive Alliance (UPA) was leading in 45 seats and was declared winner in 16 seats. 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 hoping that the BJP-led government will be better at getting things done and more business-friendly than the Congress-party-led coalition government which was in power during the past ten years. The Sensex and the 50-unit CNX Nifty, both, hit record high on intraday basis as well as on closing basis. The market breadth, indicating the overall health of the market was negative. The BSE Mid-Cap index rose more than 1.5%. The BSE Small-Cap index gained more than 1%. Both these indices outperformed the Sensex.
The Sensex has risen 1,703.94 points or 7.6% in this month so far (till 16 May 2014). The Sensex has gained 2,951.06 points or 13.93% in calendar year 2014 so far (till 16 May 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 6,673.03 points or 38.24%.
Coming back to today's trade, bank stocks vaulted with State Bank of India hitting 52-week high and ICICI Bank, Axis Bank and HDFC Bank hitting record high.
Indian stocks witnessed high intraday volatility today, 16 May 2014. The market surged in early trade after the early trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in the elections. The Sensex and the 50-unit CNX Nifty, both, hit record high. A bout of volatility was witnessed as key benchmark indices trimmed gains after extending initial strong gains in morning trade. The Sensex further trimmed intraday gains in mid-morning trade. Firmness continued on the bourses in early afternoon trade as Lok Sabha election trends showed that Narendra Modi was on course to wrest the top job in the country as a saffron wave swept large swathes of India and leaving Congress in tatters. The Sensex trimmed gains in afternoon trade. Volatility ruled the roost as the Sensex regained positive zone after slipping into the red for a brief period in mid-afternoon trade.
Modi is likely to be sworn in as India's Prime Minister next week. 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 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 Congress-party-led coalition government which was in power during the past ten years.
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 had promised more business-friendly policies if the party comes to power after elections. The BJP had 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.
Global crediting rating agency Fitch Ratings today, 16 May 2014, said that the new government must focus on boosting growth by spurring a pick-up in investments, calling this the most important issue from a sovereign credit perspective. Fitch added the investment climate can be strengthened by measures including a clear strategy for fiscal consolidation, creating a low inflation environment and a new push towards structural reforms, including reducing red tape and easing infrastructure bottlenecks.
The S&P BSE Sensex garnered 216.14 points or 0.9% to settle at 24,121.74, a record closing high for the index. The index jumped 1,470.03 points at the day's high of 25,375.63 in morning trade, a lifetime high for the index. The index fell 32.44 points at the day's low of 23,873.16 in mid-afternoon trade.
The CNX Nifty garnered 79.85 points or 1.12% to settle at 7,203, a record closing high for the index. The index hit a high of 7,563.50 in intraday trade, a lifetime high for the index. The index hit a low of 7,130.65 in intraday trade.
The BSE Mid-Cap index garnered 125.62 points or 1.64% to settle at 7,765.72. The BSE Small-Cap index garnered 94.64 points or 1.21% to settle at 7,885.76. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 6791 crore, much higher than Rs 3223 crore on Thursday, 15 May 2014.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,430 shares dropped and 1,380 shares rose. A total of 154 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks gained and rest of them declined.
Capital goods stocks gained. Punj Lloyd (up 2.36%) and Thermax (up 3.64%) gained.
Bharat Heavy Electricals (Bhel) rose 5.25% to Rs 229.40. The stock hit a 52-week high of Rs 234 in intraday trade today, 16 May 2014.
Siemens rose 2.03% to Rs 835.20. The stock hit a 52-week high of Rs 850.10 in intraday trade today, 16 May 2014.
Index heavyweight and cigarette major ITC shed 2.81% at Rs 357.55, with the stock reversing gains after striking a record high of Rs 386.75 in intraday trade.
Index heavyweight Reliance Industries (RIL) rose 2.59% to Rs 1,080.50. The stock hit 52-week high of Rs 1,142.50 in intraday trade. The company said after market hours on Thursday, 15 May 2014, Reliance Jio Infocomm (Reliance Jio), a subsidiary of RIL and the first telecom operator to hold a Pan-India Unified License, and Tower Vision India, an independent tower company in India, have entered into a MSA (Master Service Agreement) for tower sharing. Under the agreement, Reliance Jio would utilise the telecom tower infrastructure of Tower Vision to launch its services across the country. Tower Vision has a portfolio of 8,400 towers in India.
Separately, RIL clarified after market hours on Thursday, 15 May 2014 that it appears that ONGC has filed certain proceedings in relation to issues pertaining to development and production of natural gas from KG basin before the Delhi High Court. All petroleum operations undertaken by RIL have been in accordance with the Production Sharing Contract and the Development Plan approved by Management Committee which has Government representatives with veto powers. All well locations and well profiles have been specifically reviewed and approved by the Management Committee.
RIL has been constructively engaged with ONGC in sharing of data and finding a suitable resolution through appointment of an independent Third Party expert - the most recent being as late as on 9 May 2014. ONGC and RIL have jointly signed Minutes of a Meeting to record such an understanding. Any inference prior to such assessment is mere speculation and commencement of legal proceedings at this juncture is unwarranted. Any claims of any impropriety on the part of RIL, if these have been made, are baseless and RIL will take appropriate steps to safeguards its position and rights.
Shares of RIL turned ex-dividend today, 16 May 2014, for dividend of Rs 9.50 per share for the year ended 31 March 2014.
Power generation stocks were in demand on renewed buying. Reliance Infrastructure (up 6.5%), Tata Power Company (up 3.72%), Reliance Power (up 4.06%) and JSW Energy (up 5.44%) edged higher.
NTPC rose 2.01%. The company's net profit declined 29.39% to Rs 3093.54 crore on 18.56% growth in total income to Rs 21637.87 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Thursday, 15 May 2014.
NTPC's net profit declined 13.03% to Rs 10974.74 crore on 8.49% growth in total income to Rs 74707.82 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
On consolidated basis, NTPC's net profit declined 9.42% to Rs 11403.61 crore on 8.52% growth in total income to Rs 81699.10 crore in FY 2014 over FY 2013.
Shares of Adani group companies gained after the results of the Lok Sabha elections showed Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is set to form the next government at the Centre. The Adani group is known for its proximity to Narendra Modi.
Adani Enterprises galloped 6.06% to Rs 530.90 after striking a 52-week high of Rs 585 in intraday trade.
Adani Power gained 1.27%.
Shares of power finance firms surged. Power Finance Corporation (PFC) (up 9.83%) and Rural Electrification Corporation (REC) (up 6.94%) jumped.
IT stocks edged lower on firm rupee. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. TCS (down 1.64%), Infosys (down 2.83%), Tech Mahindra (down 0.4%) HCL Technologies (down 2.77%) and Wipro (down 2.61%) declined.
Cement stocks rallied. ACC rose 3.8% to Rs 1,428.35 after hitting 52-week high of Rs 1,455.40 in intraday trade.
Ambuja Cements rose 2.49% to Rs 224.65 after hitting record high of Rs 241 in intraday trade.
UltraTech Cement rose 4.59% to Rs 2,332.60 after hitting record high of Rs 2,465 in intraday trade.
Auto stocks rose. Mahindra & Mahindra (M&M) rose 0.63% to Rs 1,110.60 after hitting record high of Rs 1,180.55 in intraday trade.
Tata Motors was up 2.39% at Rs 449.80 after hitting record high of Rs 464.20.
Maruti Suzuki India rose 1.7% to Rs 2,154.45 after hitting record high of Rs 2,315 in intraday trade.
Ashok Leyland jumped 5.7% to Rs 26.90 after hitting 52-week high of Rs 28.30 in intraday trade.
Shares of two-wheeler makers declined. Hero MotoCorp declined 1.78% to Rs 2,397.60, with the stock reversing direction after hitting record high of Rs 2,775.05 in intraday trade.
Bajaj Auto dropped 0.97%. TVS Motor Company fell 2.07%.
PSU OMCs rallied as the under-recovery on High Speed Diesel (HSD) dropped. BPCL jumped 6.68% to Rs 551.55 after hitting record high of Rs 573.80 in intraday trade.
HPCL surged 7.71% to Rs 404.50 after hitting 52-week high of Rs 411.20 in intraday trade.
Indian Oil Corporation (IOCL) vaulted 6.11% to Rs 326.40 after hitting 52-week high of Rs 341.95 in intraday trade.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas has reviewed international prices of crude oil and petroleum products during the first fortnight of May 2014. Accordingly, the under-recovery on High Speed Diesel (HSD) applicable for 2nd fortnight of May, effective from 16 May 2014, will go down to Rs 4.41 per litre. This was Rs 6.80 per litre during first fortnight of May 2014. In the case of PDS Kerosene, the under-recovery for the second fortnight of May 2014 will be Rs 33.84 per litre, lower than Rs 34.85 per litre during the first fortnight of May 2014.
Oil Marketing Companies (OMCs), effective 16th May 2014, are now incurring combined daily under-recovery of about Rs 318 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is less than Rs 342 crore daily under-recoveries during the first fortnight of May 2014.
GAIL (India) rose 1.25% to Rs 409. The stock hit 52-week high of Rs 430 in intraday trade.
Bank stocks vaulted. Among private sector banks, IndusInd Bank (up 4.48%), Yes Bank (up 3.95%), and Federal Bank (up 5.24%), gained.
Kotak Mahindra Bank rose 4.11% to Rs 925 after hitting record high of Rs 950 in intraday trade.
Axis Bank gained 5.68% to Rs 1,758.15 after hitting record high of Rs 1,878.20 in intraday trade.
ICICI Bank jumped 5.43% to Rs 1,468.80 after hitting record high of Rs 1,590.35 in intraday trade.
HDFC Bank rose 1.99% to Rs 803.75 after hitting record high of Rs 852.35 in intraday trade.
Among PSU bank stocks, Canara Bank (up 8.54%), Union Bank of India (up 6.74%), aand Bank of India (up 5.75%), gained.
Bank of Baroda rose 2.02% to Rs 940 after hitting 52-week high of Rs 1,009 in intraday trade.
Punjab National Bank jumped 8.14% to Rs 924 after hitting 52-week high of Rs 960.35 in intraday trade.
State Bank of India (SBI) jumped 5.92% to Rs 2,414.05 after hitting 52-week high of Rs 2,505.10 in intraday trade.
Steel Authority of India (Sail) rose 3.24% to Rs 78.15. The stock pared gains after hitting 52-week high of Rs 86.50 in intraday trade. The stock hit low of Rs 76.60.
The Supreme Court ordered on Friday the temporary closure of some iron ore mines in the top producing Odisha to curb illegal mining, electronic media reported, in a blow to local steel mills that depend on high-quality ore from the state. According to reports, the Supreme Court on Friday, 16 May 2014, passed a limited mining ban on Odisha, which produces over 50% of the country's iron ore and manganese, affecting only those who have been operating on deemed renewals for a second time and beyond.
The ban affects only 26 companies who were on their second renewal. They will apply for grant of license to the state which will take a call on their applications within six months, a three-judge bench, comprising justices AK Patnaik, SS Nijjar and FMI Kalifullah, reportedly said.
The state will have to pass reasoned orders on this, the court reportedly said.
Fourteen leases who are operating after their first renewal will be permitted to continue mining. Another sixteen have already been granted leases by the state. These can operate too, reports added.
However, another 102 identified by the central empowered committee, as not working for not having environmental clearances, cannot operate. Another 29 leases which have lapsed or who's clearances have been rejected will not operate till they get clearances, reports said.
Adani Ports & Special Economic Zone gained 1.95% to Rs 224.65 after striking a 52-week high of Rs 235.40 in intraday trade.
L&T rose 3.52% to Rs 1,425.95. The stock hit a 52-week high of Rs 1,493.15 in intraday trade today, 16 May 2014.
Tata Steel slipped 4.4% to Rs 440.45. The stock reversed direction after hitting 52-week high of Rs 484.85 in intraday trade. The stock hit low of Rs 428.30 in intraday trade.
Tata Steel and L&T Infrastructure Development Projects (L&T IDPL) today, 16 May 2014, announced that they have executed a definitive agreement with Adani Ports & Special Economic Zone (Adani Ports) to sell 100% stake in the Dhamra Port Company (DPCL) for an Enterprise Value of around Rs 5500 crore. DPCL is a 50:50 joint venture between L&T IDPL and Tata Steel. The port was commissioned in May 2011 with an 18 km approach channel and a dedicated 62.7 km rail link to Bhadrak. In FY 2014, DPCL handled 14.3 mtpa of cargo.
As part of Tata Steel's review of its investments portfolio, the board of the company has approved the divestment of its equity holding in the JV at an attractive valuation, Tata Steel said. To secure its long term requirement and access to a deep-water port for its operations in Jamshedpur and Odisha, Tata Steel has also entered into a long-term cargo handling arrangement with DPCL.
In the foreign exchange market, the rupee edged higher against the dollar after the trends of Lok Sabha elections showed that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is set to form the next government at Centre. The partially convertible rupee was hovering at 58.83, compared with its close of 59.29/30 on Thursday, 15 May 2014.
The India Meteorological Department (IMD) on Thursday, 15 May 2014, said that the southwest monsoon is likely to set over Kerala on 5 June 2014, with a model error of plus/minus 4 days. The normal date of onset of the southwest monsoon in India is 1 June. Advance of southwest monsoon over Andaman Sea normally takes place around 20 May with a standard deviation of about one week. Low level cross equatorial monsoon flow has started appearing over south of Andaman Sea and adjoining south Bay of Bengal, the IMD said in a statement. The monsoon is likely to advance over Andaman Sea during next three days, the IMD said. Past data suggests absence of any one to one association of the date of monsoon advance over Andaman Sea with the date of monsoon onset over Kerala or that with the seasonal monsoon rainfall over the country, the IMD said.
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.
European stocks edged lower on Friday as investors digested the latest developments in Ukraine and corporate news. Key benchmark indices in UK, Germany and France were down 0.25% to 0.46%.
Asian stocks were mostly higher on Friday. Key benchmark indices in China, Indonesia, South Korea and Taiwan were up 0.08% to 0.8%. Key benchmark indices in Japan, Singapore and Hong Kong were off 0.08% to 1.41%.
Hong Kong's economy grew in the first quarter at the slowest pace since a contraction in 2012 because of weakness in exports. Gross domestic product expanded 0.2% from the previous three months, the government said in a statement on its website today.
Non-performing loans in Asia's biggest economy rose by 54 billion yuan ($8.7 billion) in the three months through March to 646.1 billion yuan, the highest level since September 2008, according to data released by the China Banking Regulatory Commission yesterday. Bad credit accounted for 1.04% of total lending, up from 1% three months earlier.
Trading in US index futures indicated that the Dow could fall 25 points at the opening bell on Friday, 16 May 2014. US stocks fell a second day on Thursday, with the Dow Jones Industrial Average sinking the most in a month, as investors continued to sell small-cap shares and Wal-Mart Stores Inc. forecast profit that missed estimates.
Economic data showed industrial production in the US unexpectedly declined in April, held back by a plunge in utilities as temperatures warmed and a broad-based decrease in manufacturing. Manufacturing, which makes up 75% of total production, decreased 0.4%. That contrasted with a higher-than-forecast reading on the Fed Bank of New York's gauge of regional manufacturing, which climbed to 19.01 this month, from 1.29 in April. Labor Department data showed the fewest Americans in seven years filed applications for unemployment benefits last week, while a separate report indicated the cost of living in the US rose in April by the most in almost a year.
Federal Reserve Chairwoman Janet Yellen yesterday said the US economy has further to go to achieve full health and predicted small businesses will play a vital role in the recovery.
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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