Indian stocks surged on the last trading day of the week amid growing investor confidence that new Prime Minister Narendra Modi will take steps to boost economic growth. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained record closing high. The Sensex garnered 318.95 points or 1.31%, up 222.57 points from the day's low and off 52.51 points from the day's high. The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. The BSE Small-Cap index was up more than 1.8%. The BSE Mid-Cap index was up more than 1.7%. Both these indices outperformed the Sensex.
Index heavyweight and cigarette major ITC declined in volatile trade after declaring Q4 result during trading hours. Index heavyweight Reliance Industries (RIL) rose in volatile trade. India's biggest commercial bank in terms of branch network, State Bank of India (SBI), surged to 52-week high in volatile trade as the bank's sticky loans declined on sequential basis in Q4. Shares of a number of other PSU banks rose after SBI's Q4 results, with Punjab National Bank hitting 52-week high. Metal and mining stocks edged higher, with Sesa Sterlite hitting 52-week high.
Maruti Suzuki India scaled record high, with the stock extending Thursday's rally triggered by a foreign brokerage putting an aggressive three-year target on the stock. Bharat Heavy Electricals (Bhel) rose after the company commissioned the fourth and final 130 megawatts hydro generating unit at Parbati III Hydro Electric Project in Himachal Pradesh.
Key benchmark indices edged higher in early trade on firm Asian stocks. Key benchmark indices extended initial gains in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit one-week high. Key benchmark indices recovered from lower level after trimming intraday gains in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed intraday gains in afternoon trade. Key benchmark indices recovered from lower level after trimming intraday gains in afternoon trade. Key benchmark indices extended gains in late trade.
The S&P BSE Sensex garnered 318.95 points or 1.31% to settle at 24,693.35, a record closing high. The index jumped 371.46 points at the day's high of 24,745.86 in late trade. The index rose 96.38 points at the day's low of 24,470.78 in early trade.
The CNX Nifty garnered 90.70 points or 1.25% to settle at 7,367.10,a record closing high. The index hit a high of 7,381 in intraday trade. The index hit a low of 7,293.90 in intraday trade.
The BSE Mid-Cap index garnered 150.10 points or 1.76% to settle at 8,668.32. The BSE Small-Cap index garnered 167.34 points or 1.87% to settle at 9,128.04. Both these indices outperformed the Sensex.
The market breadth indicating the overall health of the market was strong, with more than 2 gainers for every loser on BSE. On BSE, 2,203 shares gained and 833 shares fell. A total of 92 shares were unchanged.
The total turnover on BSE amounted to Rs 5425 crore, higher than Rs 5390.67 crore on Thursday, 22 May 2014.
Among the 30-share Sensex pack, 23 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC shed 1.25% to Rs 340.50. The stock was volatile. The stock hit high of Rs 349.30 and low of Rs 340.35. ITC's net profit rose 18.15% to Rs 2278.01 crore on 11.67% increase in total income to Rs 9505.23 crore in Q4 March 2014 over Q4 March 2013. The result was announced during trading hours today, 23 May 2014.
The company's net profit rose 18.42% to Rs 8785.21 crore on 11.37% increase in total income to Rs 34345.74 crore in the year ended March 2014 over the year ended March 2013.
On a consolidated basis, net profit rose 16.87% to Rs 8891.38 crore on 11.64% increase in total income to Rs 36288.03 crore in the year ended March 2014 over the year ended March 2013.
Colgate Palmolive (India) shed 1.27%. Colgate-Palmolive (India)'s net profit rose 7.39% to Rs 132.30 crore on 10.38% increase in total income to Rs 931.22 crore in Q4 March 2014 over Q4 March 2013. The result was announced during trading hours today, 23 May 2014.
Colgate-Palmolive (India)'s net profit rose 8.68% to Rs 539.87 crore on 12.93% increase in total income to Rs 3629.13 crore in the year ended March 2014 over the year ended March 2013.
The company posted a robust volume growth of 7% for the quarter and 9% for the full year in toothpaste and continued to enhance its leadership position in toothpaste category by registering a volume market share of 57.1% for the period January 2014-April 2014, an increase of 170 basis points over the same period of the previous year. The flagship brands "Colgate Dental Cream", "Active Salt", "Max Fresh" and "Colgate Total" along with the recently launched "Visible White" have contributed to this growth. The company further strengthened its leadership position in the toothbrush category by registering a volume market share of 42.3% for January 2014-April 2014, an increase of 100 basis points over the same period of the previous year, the company said in a statement.
Despite the inflationary environment and pressure on the rupee, the company's, focus on driving efficiencies and reducing costs coupled with prudent price increases has resulted in higher gross margin, the company said.
During the year, the company recorded an exceptional item of Rs 51.10 crore (net of tax) with respect to the slump sale of global shared services organisation to Colgate Global Business Services, a 100% subsidiary of Colgate-Palmolive Company, USA, after obtaining the requisite approvals from the board of directors and shareholders.
Meanwhile, the company announced after market hours on Thursday, 22 May 2014, that the commercial production of toothpaste has commenced on 21 May 2014 at company's new manufacturing facility set up at Sanand in Gujarat. Further, the company has informed that in the month of March 2014 the new manufacturing facility was commissioned and fully tested. In the initial phase, the company intends to manufacture 15,000 MTs toothpaste from this manufacturing facility.
Index heavyweight Reliance Industries (RIL) rose 2.52% to Rs 1,129. The stock was volatile. The stock hit high of Rs 1,131 and low of Rs 1,102.
Shares of private sector banks were mixed. ICICI Bank (up 0.89%), Axis Bank (up 1.37%), Yes Bank (up 1.14%) gained. IndusInd Bank (down 1.05%) and Kotak Mahindra Bank (down 1.43%) fell.
HDFC Bank fell 1.76% on reports the government has turned down the bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49%.
According to reports, the government has turned down HDFC Bank's proposal to raise the cap on foreign institutional investment to 67.55% from 49% after a prolonged debate. This implies that foreign investors will not be able to invest further in HDFC Bank. The Reserve Bank of India (RBI) had stopped further purchases by foreign institutional investors (FIIs) in the bank after the 49% ceiling was breached last December. The law ministry, which was asked to give its opinion on the proposal, had wanted both the Department of Industrial Policy and Promotion (DIPP) and the Department of Economic Affairs (DEA) to take a call on the matter. DIPP and RBI had earlier said the HDFC Bank's proposal was not in line with the foreign direct investment (FDI) policy, reports added.
PSU bank stocks rose across the board. Canara Bank (up 14.05%), Union Bank of India (up 7.05%), Bank of India (up 7.66%) and Bank of Baroda (up 3.57%) gained.
Punjab National Bank gained 4.2% to Rs 1,026.90 after hitting 52-week high of Rs 1,041.20 in intraday trade.
India's biggest commercial bank in terms of branch network, State Bank of India (SBI), surged 10.36% at Rs 2,772. The stock was volatile. The stock hit 52-week high of Rs 2,775 in intraday trade. The stock hit an intraday low of Rs 2,497.35. The bank's net profit fell 7.83% to Rs 3040.74 crore on 16.82% rise in total income to Rs 42443.27 crore in Q4 March 2014 over Q4 March 2013. The result was announced during market hours today, 23 May 2014.
The bank's gross non-performing assets stood at Rs 61605.35 crore as on 31 March 2014, lower than Rs 67799.33 crore as on 31 December 2013 and higher than Rs 51189.39 crore on 31 March 2013. The ratio of gross non-performing assets (NPA) to gross advances stood at 4.95% as on 31 March 2014, lower than 5.73% as on 31 December 2013 but higher than 4.75% as on 31 March 2013. The bank's ratio of net non-performing assets (NPA) to net advances stood at 2.57% as on 31 March 2014, lower than 3.24% as on 31 December 2013 but higher than 2.1% as on 31 March 2013.
SBI's provision coverage ratio stood at 62.86% as on 31 March 2014.
Shares of SBI associate banks also gained. State Bank of Mysore (up 7.9%), State Bank of Bikaner and Jaipur (up 11.22%) and State Bank of Travancore (up 12.8%) surged.
Auto stocks edged higher on renewed buying. Tata Motors rose 0.37%.
Mahindra & Mahindra (M&M) rose 2.13%
Maruti Suzuki India jumped 5.55% to Rs 2,390.10 after hitting a record high of Rs 2,400.70 in intraday trade. The stock extended Thursday's 4.44% rally triggered by a foreign brokerage putting an aggressive three-year target on the stock.
Ashok Leyland jumped 15.4% to Rs 33.35 after hitting 52-week high of Rs 34.45 in intraday trade. Ashok Leyland's net profit surged 142.2% to Rs 363.39 crore on 17.31% fall in total income to Rs 3092.51 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Thursday, 22 May 2014.
Ashok Leyland's net profit slumped 93.22% to Rs 29.38 crore on 20.19% decline in total income to Rs 10009.94 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
"In fiscal year ended March 2014 (FY 2014), we retained our market share in an intensely competitive medium and heavy commercial vehicles (M&HCV) market that declined by over 25%, second year in a row," said Mr Vinod K Dasari, MD, presenting the annual results of Ashok Leyland, the Hinduja Group flagship. "In a very tough year, we restructured ourselves to reduce the overall fixed cost base while continuing to invest in new products, network, quality and sales processes. We also sold non-core assets, and reduced our working capital drastically, and used the funds to reduce debt."
Shares of two-wheeler makers were mostly higher. TVS Motor Company jumped 3.23% to Rs 132.55 after hitting a record high of Rs 137.70 in intraday trade.
Hero MotoCorp rose 1.78%. Bajaj Auto shed 0.08%.
Metal and mining stocks edged higher. JSW Steel (up 3.95%), Tata Steel (up 1.53%), Steel Authority of India (Sail) (up 3.44%), National Aluminium Company (up 9.41%), Hindustan Zinc (up 8.06%) edged higher. Hindalco Industries (down 1.71%), NMDC (down 0.36%) and Hindustan Copper (down 0.57%) declined.
Sesa Sterlite advanced 3.36% to Rs 267.80 after hitting a 52-week high of Rs 271 in intraday trade.
Capital goods stocks edged higher on renewed buying. L&T (up 2.13%), Punj Lloyd (up 6.99%), Crompton Greaves (up 2.81%), Siemens (up 4.72%) gained. Thermax was down marginally by 0.05%.
Bharat Heavy Electricals (Bhel) rose 3.17%. Bhel today, 23 May 2014, said that the company has commissioned the fourth and final 130 megawatts hydro generating unit at Parbati III Hydro Electric Project in Himachal Pradesh. With this, Bhel has successfully commissioned all the four units of the 520 MW underground hydro power plant of NHPC, Bhel said. The first three units at Parbati III HEP were commissioned by Bhel in February and March 2014.
Bhel is presently executing three more hydro projects of NHPC viz. 3x110 MW Kishanganga HEP in J&K, 4x40 MW Teesta Low Dam IV HEP in West Bengal and 4x200 MW Parbati II in Himachal Pradesh, which are in different stages of execution. Bhel is presently executing hydro power projects of around 5,000 MW which are under various stages of implementation. In Himachal Pradesh, another hydro project at Rampur, being set up by Bhel is in an advanced stage of commissioning.
So far, more than 500 hydro generating sets of various ratings have been contracted on Bhel in India and abroad, with a cumulative capacity of more than 26,000 MW, out of which, equipment for about 5,000 MW generating capacity has been contracted outside India, Bhel said.
Power generation stocks rose on renewed buying. Reliance Power (up 3.94%), Reliance Infrastructure (up 2.12%), JSW Energy (up 2.47%), and Adani Power (up 2.18%) edged higher.
India's largest power generation firm by capacity NTPC rose 5.27% to Rs 161.70 after hitting a 52-week high of Rs 162 in intraday trade.
Tata Power Company rose 6.89% to Rs 106.30 after hitting a 52-week high of Rs 106.70 in intraday trade.
Power Grid Corporation of India advanced 4.66% to Rs 131.35 after hitting a 52-week high of Rs 130.40 in intraday trade.
Shares of power finance companies edged higher. Rural Electrification Corporation was up 5.68% at Rs 352.70. The stock hit 52-week high of Rs 353.05 in intraday trade.
Power Finance Corporation was up 6.86% at Rs 320.05. The stock hit 52-week high of Rs 320.90 in intraday trade.
Realty stocks were in demand on renewed buying. DLF (up 2.63%), Parsvnath Developers (up 4.9%), Oberoi Realty (up 0.16%), Housing Development & Infrastructure (HDIL) (up 5.72%), Sobha Developers (up 0.34%), D B Realty (up 2.65%) and Unitech (up 5.13%) gained. Indiabulls Real Estate fell 3.29%.
IG Petrochemicals rose by maximum permissible limit of 20% to Rs 37.40 after the company reported a net profit of Rs 14.17 crore in Q4 March 2014 as against net loss of Rs 20.37 crore in Q4 March 2013. The Q4 result was announced after market hours on Thursday, 22 May 2013. IG Petrochemicals' net profit rose 1.95% to Rs 3.13 crore on 24.11% growth in total income from operations to Rs 1204.29 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). There was an exceptional item of Rs 17.85 crore in FY 2014 pertaining to foreign exchange loss due to significant movement and volatility in value of Indian rupee against US dollar.
SKS Microfinance lost 3.98% to Rs 271.35, with the stock sliding on profit booking after recent rally. The stock had jumped 18% in five trading sessions to settle at Rs 282.60 on Thursday, 22 May 2014, from a recent low of Rs 239.50 on 15 May 2014.
SKS Microfinance after trading hours on Thursday, 22 May 2014, announced closure of qualified institutional placement (QIP) of 1.77 crore shares to qualified institutional buyers at Rs 225 per share aggregating to approximately Rs 400 crore. The QIP was launched on 19 May 2014, and closed on Thursday, 22 May 2014. The QIP was oversubscribed, SKS Microfinance said in a statement.
Announcing the closure, Mr. S. Dilli Raj, President, SKS Microfinance said, "The overwhelming response to our QIP endorses investors' confidence in SKS Microfinance's turnaround and the improved business prospects for the MFI sector. This is a market opening transaction, and we are delighted that the first issuance post the election of the new Central Government is from an inclusive sector like microfinance".
"The QIP will enable us to augment our member base from the present 4 million to 8.5 million over the next three years, and meet their credit requirements. This growth capital will help us fund our stable growth plans", said Mr. M.R. Rao, Managing Director and Chief Executive Officer, SKS Microfinance.
SKS Microfinance's networth of Rs 459 crore as of March 31, 2014 will cross Rs 850 crore (approximate) post the QIP, the company said in a statement.
Gitanjali Gems fell 5.28% to Rs 96.90 on profit booking after the stock surged 58.48% in the preceding four trading sessions to Rs 102.30 on 22 May 2014, from a recent low of Rs 64.55 on 16 May 2014.
Jain Irrigation Systems surged 13.25% to Rs 125.25 after net profit jumped 95% to Rs 81.60 crore on 8.9% growth in sales including other operating income and excise duty to Rs 1428.10 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Thursday, 22 May 2014.
Jain Irrigation Systems (Jain Irrigation)'s adjusted profit after tax before forex surged 163.23% to Rs 71.60 crore in Q4 March 2014 over Q4 March 2013.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. With Modi at the helm of affairs, 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. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that the BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure.
Modi has pledged to fight inflation by cracking down on food hoarders, creating a national agriculture market and improving rural infrastructure.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
Modi will be sworn in as India's next Prime Minister on Monday, 26 May 2014, evening at the Rashtrapati Bhawan.
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.
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 reversed initial losses on Friday, 23 May 2014. Key benchmark indices in France and Germany were up 0.06% to 0.17%. In UK, the FTSE 100 was off 0.3%.
German business confidence declined more than economists forecast, a report showed today, 23 May 2014. The Ifo institute's business climate index, based on a survey of 7,000 executives, fell to 110.4 in May from 111.2 in April.
Greece's credit rating was increased one level by Fitch Ratings, which cited an improving economic and fiscal outlook for the country that sparked the euro area's sovereign-debt crisis. Fitch raised the Mediterranean nation's long-term debt to B, five levels below investment grade, from B-.
Standard & Poor's upgraded Spain's rating one level to BBB from BBB-. The change follows similar moves by Fitch last month and by Moody's Investors Service in February.
Asian stocks edged higher on Friday, 23 May 2014, on signs of growth in the world's largest economies. Key benchmark indices in China, Indonesia, Hong Kong, South Korea, Taiwan, Singapore and Japan were up 0.05% to 0.87%.
Thailand's army staged its 12th coup in eight decades on Thursday, 22 May 2014, as the army chief said he was seizing control to restore peace. Thailand's military seized control following a six-month political stalemate that has sapped economic growth.
Trading in US index futures indicated that the Dow could advance 5 points at the opening bell on Friday, 23 May 2014. US stocks built on advances from the previous session and closed modestly higher on Thursday, 22 May 2014, as data showing strength in manufacturing boosted confidence in the global economy.
The Markit Economics preliminary index of US manufacturing increased to 56.2 in May from 55.4 a month earlier as output accelerated, the London-based group said on Thursday, 22 May 2014. Readings above 50 for the purchasing managers' measure indicate expansion and the May figure was the highest in three months.
In other economic news, new applications for unemployment benefits rose sharply in mid-May, reversing a big drop earlier in the month that put initial claims at a seven-year low. Sales of existing homes rose 1.3% in April to a seasonally adjusted annual rate of 4.65 million, the National Association of Realtors reported Thursday.
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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