Key benchmark indices eked out small gains after witnessing intraday volatility. The barometer index, the S&P BSE Sensex, garnered 20.14 points or 0.09%, up 67 points from the day's low and off 99.09 points from the day's high. The market breadth, indicating the overall health of the market was negative.
The Sensex has lost 73.76 points or 0.32% in this month so far (till 8 May 2014). The Sensex has gained 1,173.36 points or 5.54% in calendar year 2014 so far (till 8 May 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 4,895.33 points or 28.05%. From a record high of 22,939.31 on 25 April 2014, the Sensex has fallen 595.27 points or 2.59%.
Coming back to today's trade, most bank stocks gained. But, shares of state-run Union Bank of India slumped after weak Q4 results. Index heavyweights Reliance Industries and ITC, both, dropped. Bharat Heavy Electricals (Bhel) rose after announcing the commissioning of a gas turbine-based Power Plant in Oman. Auto stocks edged higher, with shares of two-wheeler maker TVS Motor Company scaling record high.
The Sensex edged higher in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed initial gains in morning trade. Intraday volatility continued as key benchmark indices trimmed gains soon after extending intraday gains in mid-morning trade. Key benchmark indices erased a lion's part of intraday gains in early afternoon trade. Key benchmark indices recovered after hitting fresh intraday low in afternoon trade. The Nifty recovered after hitting 6-week low. The Sensex recovered after hitting its lowest level in more than 3 weeks. Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-afternoon trade.
The S&P BSE Sensex garnered 20.14 points or 0.09% to settle at 22,344.04, its highest closing level since 6 May 2014. The index jumped 119.23 points at the day's high of 22,443.13 in mid-morning trade. The index fell 46.86 points at the day's low of 22,277.04 in afternoon trade, its lowest level since 16 April 2014.
The CNX Nifty garnered 7.30 points or 0.11% to settle at 6,659.85, its highest closing level since 6 May 2014. The index hit a high of 6,688.40 in intraday trade. The index hit a low of 6,638.55 in intraday trade, its lowest level since 27 March 2014.
The BSE Mid-Cap index shed 12.10 points or 0.16% to settle at 7,347.98. The BSE Mid-Cap index underperformed the Sensex. The BSE Small-Cap index garnered 12.65 points or 0.17% to settle at 7,539.64. The Small-Cap index outperformed the Sensex.
The total turnover on BSE amounted to Rs 2283 crore, lower than Rs 2789.65 crore on Wednesday, 7 May 2014.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,407 shares dropped and 1,322 shares rose. A total of 139 shares were unchanged.
The S&P BSE Consumer Durables index (up 1.3%), the S&P BSE Bankex (up 0.74%), the S&P BSE Auto index (up 0.58%), the S&P BSE Capital Goods index (up 0.39%), the S&P BSE IT index (up 0.24%), the S&P BSE Power index (up 0.22%), the S&P BSE Metal index (up 0.14%) and the S&P BSE Teck index (up 0.1%) outperformed the Sensex.
The S&P BSE Oil & Gas index (down 0.21%), the S&P BSE Healthcare index (down 0.32%), the S&P BSE FMCG index (down 0.8%) and the S&P BSE Realty index (down 0.92%) underperformed the Sensex.
Among the 30-share Sensex pack, 17 stocks gained and rest of them fell.
Index heavyweight and cigarette maker ITC dropped 1.33% to Rs 341.95. The stock hit high of Rs 347.80 and low of Rs 340.75.
Procter & Gamble Hygiene and Health Care jumped 4.99% after net profit rose 55.04% to Rs 80.76 crore on 20.09% rise in net sales to Rs 500.35 crore in Q3 March 2014 over Q3 March 2013. The company announced the result after market hours on Wednesday, 8 May 2014.
Procter & Gamble Hygiene and Health Care (P&G Hygiene) said growth in net sales was driven by strong consumer-centric brand initiatives. Profit was driven by strong focus on costs.
The company said that both feminine care and health care businesses continued to deliver robust double-digit growth in a competitive market environment behind superior consumer propositions, strong initiatives and the strength of their portfolio. The launch of Oil Spice is delivering in-line with expectations, adding incremental sales and share growth. Strong margin growth was the result of focus on productivity across the major cost pools, the company said.
Index heavyweight Reliance Industries (RIL) slipped 0.09% to Rs 959.85. The stock hit high of Rs 969.95 and low of Rs 950.95.
Metal and mining stocks were mixed. Sesa Sterlite (up 0.81%), Hindalco Industries (up 0.92%), Steel Authority of India (Sail) (up 0.15%), Bhushan Steel (up 0.76%), Tata Steel (up 0.3%) gained. NMDC (down 0.7%), Hindustan Copper (down 1.11%), JSW Steel (down 0.12%), Hindustan Zinc (down 0.93%) and National Aluminum Company (down 0.51%) dropped.
Auto stocks edged higher. Mahindra & Mahindra (M&M) (up 0.34%), Ashok Leyland (up 1.11%), and Bajaj Auto (up 0.18%) gained. Hero MotoCorp shed 1.36%.
Tata Motors rose 1.56%. TML Holding Pte. Ltd., a wholly owned subsidiary of the company, on Wednesday, 7 May 2014, issued and allotted $300 million in principal amount of 5.75% senior fixed rate notes due 2021. The net proceeds from the notes will be used to repurchase certain shares issued to Tata Motors and for general corporate purposes, Tata Motors said in a statement today, 8 May 2014.
Mr Vijay B Somaiya, Head of Treasury & Investor Relations, Tata Motors said: "The response from investors for the issue was overwhelming, with the orders aggregating over $2 billion. We thank the investors for their confidence and support".
TVS Motor Company jumped 4.42% to Rs 105.20 after hitting a record high of Rs 108.40 in intraday trade.
India's largest Power Project exporter, Bharat Heavy Electricals (Bhel) rose 3.22%. The company announced during trading hours today, 8 May 2014, that it has achieved one more milestone in the Middle-East region with the commissioning of yet another Gas Turbine Generating unit in Oman. The 126 MW Fr-9E Gas Turbine Generator (GTG) has been successfully commissioned at Qarn Alam-3 power project of Petroleum Development Oman (PDO). This is the second successive project after the successful commissioning of the 2x126 MW Fr-9E PDO Amal GTG project in 2012, Bhel said in a statement.
The Sultanate of Oman is one of the key export territories of Bhel with various benchmark references established by the company. Bhel supplied sets today account for over 50% of the power generating capacity of Petroleum Development Oman, Bhel said.
Tata Power Company fell 0.65%. The company said during market hours that it has appointed Mr Ashok S Sethi as Executive Director of the company with immediate effect for the period upto 31 March 2017.
HCL technologies rose 1.61%. HCL Technologies after market hours today, 8 May 2014, said it has partnered with LinkedIn to launch an application aimed at encouraging users to go above and beyond the scope of their existing contracts. The application, which will launch globally in English, German and French, will highlight the changing nature of business engagements as part of the first stage of a global campaign aimed at encouraging more employees and businesses to build a 'Relationship Beyond the Contract', HCL Technologies said in a statement.
Krishnan Chatterjee, Global Head of Strategic Marketing, HCL Technologies said: "At HCL, the way we do business is premised on deeply rooted principles of trust and transparency, flexibility, and value centricity. The Relationship Beyond the Contract digital campaign is an outcome of behaviours and the Employees First, Customer Second business model we believe in, developed from the work HCL has done to seek a deeper understanding and foster clearer, more open dialogue among technology companies, vendors and partners globally".
Hari Krishnan, Managing Director APAC, LinkedIn added: "At LinkedIn, 'Relationships Matter' is a core value practiced by every employee as we go about helping our members and clients. We are pleased to be part of HCL's campaign to celebrate, and bring to life how relationships are a key ingredient behind every success story".
Cipla gained 1.4%. With reference to the news item appearing in a financial daily titled "Despite repeated rebuffs, Teva woos Cipla with $6 billion offer", Cipla during market hours today, 8 May 2014, said that the news item is baseless and speculative in nature. The claim in the news item of an offer made in November is incorrect and no such formal offer was received by the Cipla board, the Indian pharma company said. The company has consistently denied such rumours in the past and continue to do so, it said.
Lupin fell 1.13% to Rs 979. The stock was volatile. The stock hit a high of Rs 999.25 and low of Rs 965.50. A foreign brokerage house upgraded Lupin to "outperform" from "neutral" and raised its target price to Rs 1,100 from Rs 985 after the drug maker's Q4 earnings beat consensus estimates. The brokerage said accelerating US generic sales are providing comfort about margins. Given its execution track record, strong balance sheet, earnings momentum and defensive characteristics, Lupin should sustain premium valuation of around 20 times FY 2015 earnings, it said.
The company's consolidated net profit jumped 35.5% to Rs 553 crore on 20.3% increase in net sales to Rs 3051.50 crore in Q4 March 2014 over Q4 March 2013. Lupin's operating profit jumped 33.2% to Rs 876.90 crore in Q4 March 2014 over Q4 March 2013. The operating profit margin (OPM) edged up to 28.7% in Q4 March 2014, from 26% in Q4 March 2013. The result hit the market during trading hours on Wednesday, 7 May 2014.
Shasun Pharmaceuticals gained by maximum permissible level of 10% to Rs 165 after Morgan Stanley Asia (Singapore) PTE acquired 4.02 lakh equity shares, or 0.71% equity, of Shasun Pharmaceuticals at Rs 146.86 per share on NSE on Wednesday, 7 May 2014.
Bank stocks gained. Among private sector banks, ICICI Bank (up 1.27%), HDFC Bank (up 0.55%), Yes Bank (up 1.75%), Federal Bank (up 0.85%), and Axis Bank (up 0.83%), gained. IndusInd Bank (down 0.52%) and Kotak Mahindra Bank (down 0.2%) declined.
State Bank of India (SBI) rose 0.88%.
Union Bank of India slumped 8.55% on weak Q4 results. The bank's net profit fell 26.65% to Rs 578.96 crore on 12.59% rise in total income to Rs 8444.95 crore in Q4 March 2014 over Q4 March 2013. The bank announced results during market hours.
Union Bank of India's net profit fell 21.39% to Rs 1696.25 crore on 16.24% increase in total income to Rs 32170.93 crore in the year ended March 2014 over the year ended March 2013.
The bank's ratio of net non-performing assets (NPA) to net advances stood at 2.33% as on 31 March 2014, compared with 2.26% as on 31 December 2013 and 1.61% as on 31 March 2013.
The bank's ratio of gross NPA to gross advances stood at 4.06% as on 31 March 2014, compared with 3.85% as on 31 December 2013 and 2.98% as on 31 March 2013.
Provisions and contingencies rose 40.42% to Rs 920.52 crore in Q4 March 2014 over Q4 March 2013. The provisioning coverage ratio as on 31 March 2014 stood at 59.89%.
The bank's Capital Adequacy Ratio (CAR) as per Basel III norms stood at 10.12% as on 31 March 2014, compared with 10.12% as on 31 December 2013.
IDFC slipped 0.32%. The Reserve Bank of India on Wednesday, 7 May 2014, notified that Foreign Institutional Investors (FIIs), through primary market and stock exchanges, can now purchase up to 52.25% of the paid up capital of IDFC under the Portfolio Investment Scheme (PIS). IDFC has passed resolutions at the board of directors' level and a special resolution by the shareholders, agreeing for decreasing the limit for the purchase of its equity shares and convertible debentures by Foreign Institutional Investors (FIIs). Further the Reserve Bank notified that IDFC will remain included in the ban list for FIIs.
Shriram City Union Finance rose 2.4% to Rs 1,270. The stock hit a record high of Rs 1,295 in intraday today.
Magma Fincorp lost 6.66% after consolidated net profit declined 4.5% to Rs 42.17 crore on 10.9% growth in total income to Rs 561.22 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Wednesday, 7 May 2014.
Magma Fincorp's consolidated net profit rose 9.8% to Rs 151.83 crore on 24.4% growth in total income to Rs 2117.43 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
The company's total loan book rose 10% YoY to Rs 17877 crore as on 31 March 2014.
The Capital Adequacy Ratio (CAR) of the company stood at 16.6% as on 31 March 2014.
Telecom stocks declined. Bharti Airtel (down 0.9%), MTNL (down 1.17%) Tata Teleservices (Maharashtra) (down 2.17%) and Reliance Communications (down 0.94%) declined. Idea Cellular rose 0.35%.
Realty stocks edged lower. D B Realty (down 3.91%), Sobha Developers (down 0.81%), Housing Development and Infrastructure (down 1.35%), Indiabulls Real Estate (down 2.73%), DLF (down 0.36%) and Unitech (down 2.27%) declined.
Financial Technologies (India) (FTIL) declined by maximum permissible level of 5% to Rs 276.70. Multi Commodity Exchange of India (MCX) dropped 6.49%. The Mumbai police on Wednesday, 7 May 2014, arrested FTIL chairman Jignesh Shah in connection with the Rs 5500 crore-fraud at the National Spot Exchange or NSEL, which is a commodity exchange promoted by the Financial Technologies group. Shah has been under police investigation since August 2013 after NSEL abruptly suspended trade in most of its commodities contracts on 31 July 2013. Investigations by commodities regulator the Forward Markets Commission showed what it said was a Rs 5500 crore fraud, as the exchange defaulted on obligations to market participants because it did not have enough collateral.
In a statement issued to BSE on Wednesday, 7 May 2014, FTIL acknowledged that Shah has been arrested.
Commodities market regulator Forward Markets Commission has already ruled that FTIL is not "fit and proper" to run a bourse. It has directed FTIL to cut its stake in MCX to 2% from 26%. FTIL has announced that it would sell the 24% MCX stake, although it has not yet completed the sale.
De Nora India lost 4.48% as the stock turned ex-dividend today, 8 May 2014, for dividend of Rs 4 per share for the year ended 31 December 2013.
Stone India rose by maximum permissible upper limit of 5% at Rs 22.15 on BSE after the company said it won a contract worth Rs 83 crore from Delhi Metro Rail Corporation. The company made the announcement during trading hours today, 8 May 2014.
Stone India, in consortium with South Korea's NRT Co., executed contract valued at Rs 83 crore for fitment of Platform Screen Door in 6 stations in Line 2 of Delhi Metro Rail Corporation (DMRC). The contract is scheduled to be executed by end of December 2015.
The company has been aggressively pursuing businesses outside Indian Railways in the recent past. This is the first major contract for the company outside Indian Railways, Stone India said in a statement.
Aditya Birla Chemicals (India) slumped 18.09% after net profit declined 90.6% to Rs 0.74 crore on 62.4% growth in net sales to Rs 271.91 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Wednesday, 7 May 2014.
Balaji Amines spurted 18.54% after net profit surged 59.47% to Rs 9.09 crore on 21.21% growth in total income from operations to Rs 171.50 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Wednesday, 7 May 2014. Balaji Amines' net profit rose 7.53% to Rs 33.53 crore on 19.21% growth in total income from operations to Rs 610.13 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Brigade Enterprises rose 3.43% after net profit rose 73.42% to Rs 49.25 crore on 27.81% rise in net sales to Rs 345.11 crore in Q4 March 2014 over Q4 March 2013. The company announced the result after market hours on Wednesday, 8 May 2014. Brigade Enterprises' net profit rose 39.77% to Rs 89.80 crore on 10.87% rise in net sales to Rs 743.80 crore in the year ended March 2014 over the year ended March 2013.
In the foreign exchange market, the rupee edged higher against the dollar after Federal Reserve Chair Janet Yellen signaled the US still needs monetary stimulus and as China's exports beat forecasts. The partially convertible rupee was hovering at 60.07, compared with its close of 60.135/145 on Wednesday, 7 May 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 ongoing 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.
Investors are hoping that a stable government which will complete its full term of five years in office comes to power after the elections. 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 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.
There are expectations 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 next week. 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. 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. The BJP has 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.
Narendra Modi, the prime ministerial candidate from the NDA, 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.
European stocks rose on Thursday, 8 May 2014, following dovish comments from US Federal Reserve Chair Janet Yellen and better-than-expected Chinese trade figures. Key benchmark indices in UK, France and Germany were up by 0.45% to 0.53%.
The Bank of England on Thursday held the size of its bond-buying program steady and left its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee maintained its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($636 billion).
The European Central Bank (ECB) will hold monetary policy meeting today, 8 May 2014, in Brussels, Belgium.
German industrial output unexpectedly fell for the first time in five months in a sign that expansion in Europe's largest economy is slowing. Production adjusted for seasonal swings, declined 0.5% from February, when it gained a revised 0.6%, the Federal Statistics Office in Wiesbaden said today. Production rose 3% in March from the previous year when adjusted for working days.
Asian stocks rose on Thursday, 8 May 2014, as Federal Reserve Chairwoman Janet Yellen said the Federal Reserve will continue to support the US economy. Key benchmark indices in Japan, Hong Kong, China, Singapore, South Korea and Taiwan were up 0.26% to 0.93%. Indonesia's Jakarta Composite fell 0.02%.
China's exports and imports unexpectedly rose in April, helping leaders put a floor under a slowdown in the world's second-biggest economy. Overseas shipments increased 0.9% from a year earlier, when figures were inflated by fraudulent invoicing, data from the Beijing-based customs administration showed today. Imports gained 0.8%, leaving a trade surplus of $18.46 billion.
Australian employers boosted payrolls in April, underscoring an improving economic outlook that prompted the central bank to adopt a neutral policy stance. The number of people employed rose by 14,200 from a month earlier, the statistics bureau said in Sydney. The jobless rate held at 5.8%.
Business activity across emerging markets expanded slightly in April following four months of declining growth, but output fell in all the BRIC emerging economies, a survey showed on Thursday. HSBC's composite emerging markets index of manufacturing and services purchasing managers' surveys edged up to 50.4 from 50.3 in March, but remained well below its long-run trend level of 53.9.
Trading in US index futures indicated that the Dow could advance 17 points at the opening bell on Thursday, 8 May 2014. Most US stocks rose on Wednesday after comments from Federal Reserve Chair Janet Yellen signaled continued support for the US economy.
Yellen told US lawmakers the economic stimulus that has fueled global asset gains is still required because employment and inflation are well short of the central bank's goals.
The Labor Department said that US nonfarm productivity fell at its fastest pace in a year in the first quarter because of severe weather. That led to the largest gain in unit labor costs in more than a year. Productivity fell at a 1.7% annual rate in the quarter, the Labor Department said.
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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