Key benchmark indices edged higher in choppy trade, with the market sentiment boosted by Narendra Modi's comments in his victory speeches in his home state of Gujarat on Friday, 16 May 2014, where he stressed on the country's development and good governance. Modi will become India's next Prime Minister after a landslide victory for the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) in the recently concluded Lok Sabha elections. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, attained record closing high. The Sensex garnered 241.31 points or 1%, off close to 85 points from the day's high and up about 255 points from the day's low. The market breadth, indicating the overall health of the market was strong. The BSE Mid-Cap index rose more than 4%. The BSE Small-Cap index jumped almost 6%. Both these indices outperformed the Sensex. The market sentiment was upbeat after a clear mandate given by voters the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) in the recently concluded Lok Sabha elections. The market sentiment was also boosted by a statement from global credit rating agency Moody's Investor Service that BJP's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges. The market sentiment was also boosted by data showing that foreign funds made massive purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections.
Indian stocks edged higher today, 19 May 2014, amid growing conviction among investors that Modi can replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole. Investors are betting that the incoming government will take steps to revive the economy. India's GDP growth has slowed to a decade low of below 5%. The GDP grew 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure.
From a recent low of 23,815.12 on 14 May 2014, the Sensex has gained 547.93 points or 2.3% in three trading sessions. The Sensex has risen 1,945.25 points or 8.67% in this month so far (till 19 May 2014). The Sensex has gained 3,192.37 points or 15.07% in calendar year 2014 so far (till 19 May 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 6,914.34 points or 39.62%. From a record high of 25,375.63 on 16 May 2014, the Sensex has fallen 1,012.58 points or 3.99%.
Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher. Index heavyweight and cigarette major ITC dropped in volatile trade. Shares of state-rum oil exploration major ONGC scaled record high. Capital goods stocks gained on renewed buying with shares of L&T, Bharat Heavy Electricals (Bhel), ABB India and Siemens hitting 52-week high. Construction shares rallied on fresh buying.
Key benchmark indices trimmed gains after a firm opening triggered by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014, the day when Modi-led BJP routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Key benchmark indices further trimmed intraday gains in morning trade. Volatility ruled the roost as the key benchmark indices regained positive zone after reversing intraday gains in mid-morning trade. Key benchmark indices extended intraday gains in afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in mid-afternoon trade. Key benchmark indices trimmed gains in late trade.
The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 16 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 3699.50 crore from the secondary equity markets on Friday, 16 May 2014, as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex garnered 241.31 points or 1% to settle at 24,363.05, a record closing high for the index. The index jumped 326.73 points at the day's high of 24,448.47 in mid-afternoon trade. The index fell 13.75 points at the day's low of 24,107.99 in mid-morning trade.
The CNX Nifty garnered 60.55 points or 0.84% to settle at 7,263.55, a record closing high for the index. The index hit a high of 7,291.10 in intraday trade. The index hit a low of 7,193.55 in intraday trade.
The BSE Mid-Cap index garnered 325.55 points or 4.19% to settle at 8,091.27. The BSE Small-Cap index garnered 458.94 points or 5.82% to settle at 8,344.70. Both these indices outperformed the Sensex.
The S&P BSE Realty index (up 6.91%), the S&P BSE Metal index (up 6.81%), the S&P BSE Consumer Durables index (up 2%), the S&P BSE Power index (up 10.15%), the S&P BSE Bankex (up 2.61%), the S&P BSE Capital Goods index (up 8.34%) and the S&P BSE Oil & Gas index (up 5.26%) outperformed the Sensex.
The S&P BSE FMCG index (down 4%), the S&P BSE Auto index (up 0.11%), the S&P BSE Teck index (down 3.46%), the S&P BSE Healthcare index (down 3.66%), and the S&P BSE IT index (down 4.95%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 5611 crore, lower than Rs 6808.44 crore on Friday, 16 May 2014.
The market breadth, indicating the overall health of the market was quite strong. On BSE, 2,135 shares gained and 715 shares fell. A total of 98 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Jaiprakash Power Ventures (up 30.24%), KSK Energy Ventures (up 20%), MMTC (up 20%), Edelweiss Financial Services (up 19.92%), Indiabulls Power (up 19.91%), Suzlon Energy (up 19.81%), Jaypee Infratech (up 19.07%), Shipping Corporation of India (up 17.84%), IL&FS Transportation Networks (up 17.49%) and GMR Infrastructure (up 16.96%) were the biggest gainers from the BSE Mid-Cap index.
Ansal Properties (up 20%), GVK Power & Infrastructure (up 10%), Indian Metals & Ferro Alloys (up 20%), JK Lakshmi Cement (up 20%), Reliance Industrial Infrastructure (up 20%), Apar Industries (up 20%), Dalmia Bharat (up 20%), IVRCL (up 20%), Ramco Industries (up 20%) and Motilal Oswal Financial Services (up 20%) were the biggest gainers from the BSE Small-Cap index.
Bank stocks rose on renewed buying. Among private sector banks, ICICI Bank (up 0.43%), Axis Bank (up 5.58%), Kotak Mahindra Bank (up 1.2%), Yes Bank (up 3.75%), and Federal Bank (up 6.93%), gained. IndusInd Bank declined 0.14%.
HDFC Bank gained 0.88%. HDFC Bank during market hours said that the Board of Directors of the bank at its meeting held today, 19 May 2014, has decided to seek an enabling approval of the shareholders at the ensuing Annual General Meeting to raise the equity share capital up to an aggregate sum of Rs 10000 crore including share premium amount. The proposed issue is to be made by creating, issuing, offering in the course of one or more public or private offerings in domestic or one or more international markets, equity shares and/or equity shares through depository receipts and/or securities convertible into equity shares at the option of the Bank and/or the holders of such securities, and/or securities linked to equity shares and/or any instrument or securities representing equity shares and/or convertible securities linked to equity shares, HDFC Bank said. The issue is proposed to be completed within a period of one year from the date of shareholders approval, the bank added.
Among PSU bank stocks, Bank of Baroda (up 3.7%), Canara Bank (up 9.29%), Union Bank of India (up 11.11%), and Bank of India (up 6.67%), gained.
Punjab National Bank jumped 10.54% to Rs 1,013.75 after hitting 52-week high of Rs 1,025 in intraday trade.
State Bank of India (SBI) jumped 6.45% to Rs 2,570 after hitting 52-week high of Rs 2,591.65 in intraday trade.
PSU OMCs extended Friday's rally triggered by a drop in under-recovery on High Speed Diesel (HSD). BPCL jumped 4.28% to Rs 575.15 after hitting record high of Rs 588.50 in intraday trade.
HPCL surged 7.38% to Rs 434.45 after hitting 52-week high of Rs 439.35 in intraday trade.
Indian Oil Corporation (IOCL) vaulted 9.99% to Rs 359 after hitting 52-week high of Rs 363.90 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.
Shares of upstream oil & gas companies also surged. GAIL (India) rose 5.13% to Rs 430.40. The stock hit 52-week high of Rs 435.90 in intraday trade.
Index heavyweight Reliance Industries (RIL) rose 3.13% to Rs 1,114.35. RIL after market hours on Friday, 16 May 2014, said that its board has recommended the appointment of Nita M. Ambani, the Chairperson of Reliance Foundation, as a director on the board of RIL. She is being nominated to the board in place of Ramnik H. Ambani, who is retiring at the age of 90 years.
ONGC surged 8.07% to Rs 416 after scaling a record high of Rs 419.70 in intraday trade. ONGC on Sunday, 18 May 2014, said that the company has scaled its highest-ever market capitalization of Rs 3.56 lakh crore in intra-day trade on 16 May 2014, indicating its hidden potential to its investors. In intra-day trade on 16 May 2014, ONGC scrip logged a new peak of Rs 416.35 (on National Stock Exchange), taking its market capitalization to highest ever value.
ONGC said its market capitalisation is 51% higher than the next highest valuable company among the listed CPSEs. ONGC said that the company remains committed to create more value for all its stakeholders.
Shares of Oil India jumped 7.96%. Cairn India rose 4.11%.
Petronet LNG rose 3.68%.
Realty stocks jumped. D B Realty (up 8.88%), Housing Development & Infrastructure (up 4.89%), Sobha Developers (up 2.3%) and Unitech (up 17.74%) gained.
DLF surged 7.57%. DLF during market hours said that the Hon'ble COMPAT has pronounced the order today, 19 May 2014, upholding certain findings of the earlier orders of CCI. The company is yet to examine the detailed order and therefore the company at this stage will not be in a position to make any further comments. The company shall be challenging this order passed by the Hon'ble COMPAT in the Hon'ble Supreme Court for which COMPAT has given 60 days time, DLF said. The realty major said that the company wishes to point out that it has successfully delivered Park Place, Belaire and Magnolia projects which were the subject matter of the above appeals. The company has respected in true letter and spirit the customer commitments made by it, DLF said. In testament thereof, out of over 2,600 apartments, over 2,200 have been handed over and more than 1,800 families are already residing therein, DLF said.
Power generation stocks rose on renewed buying. NTPC (up 10.35%), Reliance Power (up 9.85%), JSW Energy (up 9.05%), Adani Power (up 7.64%) edged higher.
Tata Power Company jumped 7.95% to Rs 97.80 after hitting a 52-week high of Rs 98.60 in intraday trade.
Reliance Infrastructure surged 17.24% to Rs 731.75 after hitting a 52-week high of Rs 739 in intraday trade.
Shares of power finance companies jumped. Rural Electrification Corporation was up 13.75% at Rs 330.55. The stock hit 52-week high of Rs 348.70 in intraday trade.
Power Finance Corporation was up 14.42% at Rs 294.80. The stock hit 52-week high of Rs 302.10 in intraday trade.
Coal India jumped 12.73% to Rs 389.65 after hitting a 52-week high of Rs 393.80 in intraday trade.
Pharma stocks dropped as the rupee edged higher against the dollar. A firm rupee will reduce the value of overseas earnings in local terms. Pharma companies derive substantial revenue from exports.
Cadila Healthcare (down 0.99%), Cipla (down 0.64%), Dr Reddy's Laboratories (down 5.23%), Glenmark Pharmaceuticals (down 4.61%), Lupin (down 4.52%), Ranbaxy Laboratories (down 3.66%), Sun Pharmaceutical Industries (down 4.83%) and Wockhardt (down 6.66%) declined.
Metal and mining stocks were in demand on renewed buying. JSW Steel (up 5.73%), Tata Steel (up 2.45%), Hindustan Copper (up 15.53%), National Aluminium Company (up 7.93%) and Jindal Steel & Power (up 7.1%) edged higher.
NMDC jumped 4.78% to Rs 169.25 after hitting 52-week high of Rs 171.70 in intraday trade.
Steel Authority of India (Sail) jumped 10.36% to Rs 86.25 after hitting 52-week high of Rs 87.15 in intraday trade.
Sesa Sterlite jumped 5.86% to Rs 227.55 after hitting a 52-week high of Rs 229.65 in intraday trade.
Hindalco Industries surged 7.76%. Novelis, Hindalco's US subsidiary, on Friday, 16 May 2014, said its net income attributable to its common shareholder was $54 million in Q4 March 2014, lower than $59 million in Q4 March 2013. Excluding certain tax-effected items, net income was $75 million in Q4 March 2014. Net sales rose to 1.96% to $2.54 billion in Q4 March 2014 over Q4 March 2013.
The company reported shipments of aluminum rolled products of 753 kilotonnes in the fourth quarter of fiscal 2014, up 8% compared to the prior year. Every global operating region reported an increase in shipments year-over-year. Higher global shipments were the primary driver behind the 4% increase in adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) versus the prior year to $250 million in the fourth quarter of fiscal 2014.
Adjusted EBITDA for fiscal 2014 was $885 million compared to $961 million reported for the prior year. The decline was primarily due to pricing pressures experienced in the Asian and North American beverage can markets, a higher fixed cost base due to expansions ahead of revenue generation and higher incentive costs, partially offset by higher shipments and benefits from increasing recycled content.
Shipments of aluminum rolled products totaled 2,895 kilotonnes in fiscal 2014, an increase of 4% compared to 2,786 kilotonnes reported in fiscal 2013. Net sales in fiscal 2014 were $9.8 billion, which is flat compared to the prior year resulting from higher shipments partially offset by a 10% decrease in average aluminum prices and lower conversion premiums.
Novelis reported negative free cash flow of $16 million for the year. "Our excellent cash generation essentially funded the $717 million in capital investments we made last year," said Steve Fisher, Chief Financial Officer for Novelis. "In addition, we drove liquidity levels in excess of $1 billion by fiscal year end, allowing us to return $250 million of capital to our parent company in the first quarter of fiscal 2015."
Hindustan Zinc rose 5.49%. The stock turned ex-dividend today, 19 May 2014, for final dividend of Rs 1.90 per share for the year ended 31 March 2014.
IT stocks dropped as the rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. Infosys (down 4.88%), Wipro (down 4.25%), TCS (down 5.69%), HCL Technologies (down 4.48%), and Tech Mahindra (down 4.66%) edged lower.
Index heavyweight and cigarette major ITC dropped 4.95% to Rs 339.85. The stock was volatile. The stock hit high of Rs 360.10 and low of Rs 336.65.
Capital goods stocks gained on renewed buying. Punj Lloyd (up 19.28%), BEML (up 19.99%), Bharat Electronics (up 2.89%) and Thermax (up 6.18%) gained.
India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) galloped 15.52% to Rs 265. The stock hit a 52-week high of Rs 272.95 in intraday trade today, 19 May 2014.
ABB India rose 4.87% to Rs 919.10. The stock hit a 52-week high of Rs 930 in intraday trade today, 16 May 2014.
Siemens rose 12.31% to Rs 938, also its 52-week high hit in intraday trade today, 16 May 2014.
Crompton Greaves advanced 13.79%. With reference to the news item appearing in leading news channel titled "Crompton Greaves $15 - million deal with Spanish Company", Crompton Greaves during market hours clarified that the company follows a policy of disclosing material price sensitive events. In this context, the order mentioned in the abovementioned email is less than 1% of Crompton Greaves' consolidated turnover for the year ended 31 March 2013, and hence, is not considered for disclosure under Clause 36 of the Listing Agreement., Crompton Greaves said in a statement.
Engineering and construction major L&T jumped 6.46% to Rs 1,518 after hitting a 52-week high of Rs 1,533.55 in intraday trade today, 16 May 2014.
In the foreign exchange market, the rupee edged higher against the dollar on expectations of continued robust foreign buying in domestic shares and debt after the Bharatiya Janata Party (BJPL) swept the country's Lok Sabha elections. The partially convertible rupee was hovering at 58.5925, compared with its close of 58.79/80 on Friday, 16 May 2014.
Global credit rating agency Moody's Investor Service today, 19 May 2014, said that the Bharatiya Janata Party's resounding election win is credit positive for India as it boosts the prospect that a stable government will address the country's economic challenges. Moody's rates India "Baa3", the lowest investment-grade rating with a "stable" outlook. "The completion of the election will allow stalled policies relating to the corporate and infrastructure sectors to resume, a credit positive for the country's corporates. Closer co-ordination between the central and state governments on clearances for mega projects and land use, two proposals outlined in the BJP's manifesto, would address investment delays," Vikas Halan, vice president and senior credit officer at Moody's, said in a statement.
Another global credit rating agency -- Standard & Poor's Ratings Services -- on Friday, 16 May 2014, said that the fiscal and economic reforms taken by India's new government in the next two to three months will have significant implications on India's sovereign credit rating. S&P's statement came after Narendra Modi-led Bharatiya Janata Party (BJP) routed the Congress-led United Progressive Alliance (UPA) across the nation, registering the biggest ever win for any single party since 1984 in Lok Sabha elections. Modi is likely to be sworn in as India's Prime Minister on Wednesday, 21 May 2014.
S&P said that the next government would need to regain fiscal prudence in a sustainable way, such as by implementing a goods and services tax to help stabilise government revenues. "What the next government says and does in the coming months is crucial to boosting confidence in the policy settings and the economy. If confidence rises, investment and consumption in India could strengthen, after being held back by the uncertainty surrounding the election," S&P credit analyst Takahira Ogawa was quoted as saying in the statement.
S&P is the only of the three major credit agencies to have India with a "negative outlook" for its "BBB-minus" rating, meaning any downgrade would send the country to below investment grade.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in Lok Sabha election, investors' focus has shifted to the likely allocation of key ministerial portfolios in the National Democratic Alliance (NDA) government. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.
The first budget of the new government is expected by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
US President Barack Obama invited Narendra Modi to Washington in a phone call on Friday, 16 May 2014, to congratulate him on his victory in the country's elections, the White House said. "The President noted he looks forward to working closely with Mr. Modi to fulfill the extraordinary promise of the US-India strategic partnership, and they agreed to continue expanding and deepening the wide-ranging cooperation between our two democracies," the White House said in a statement. The White House didn't specify a time frame for Mr. Modi's visit but said it would take place at a mutually agreeable time. US Secretary of State John Kerry also extended his congratulations to Mr. Modi.
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.
AstraZeneca PLC led European stock markets lower on Monday, 19 May 2014, after rejecting a sweetened takeover offer from US pharma giant Pfizer Inc. Key benchmark indices in Germany, France and UK were off 0.42% to 0.45%.
Asian stocks edged lower on Monday, 19 May 2014, after data showed a spreading slowdown in China's housing market. Key benchmark indices in Indonesia, Japan, Hong Kong and China were off 0.04% to 1.05%. Key benchmark indices in South Korea and Taiwan were up 0.08% to 0.13%. In Singapore, the Straits Times was unchanged.
China's new-home prices rose in April in the fewest cities in 1-1/2 years as developers offered discounts and the economy slowed, prompting the easing of property curbs in some places. Prices last month climbed in 44 of the 70 cities tracked by the government compared with 56 cities in March. That was the fewest cities with price gains since October 2012, when increases were recorded in only 35 on a monthly basis.
Trading in US index futures indicated that the Dow could fall 50 points at the opening bell on Monday, 19 May 2014. US stocks closed higher on Friday, 16 May 2014, after an abrupt late-day reversal.
In economic data, construction on new US homes surged in April to the fastest pace in five months, with the volatile apartment category leading that jump, according to government data released Friday.
The preliminary May reading of the University of Michigan and Thomson Reuters's gauge of consumer sentiment fell unexpectedly to 81.8 from 84.1 in April.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee on Wednesday, 21 May 2014. 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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