Oil and cement stocks led rally as key benchmark indices surged on the first trading session of the week. Index heavyweights HDFC, ITC, Infosys, HDFC Bank, Reliance Industries and L&T edged higher. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty hit their highest level in more than three weeks as these two key benchmark indices extended intraday gains in late trade. The market breadth indicating the overall health of the market was strong. The Sensex was provisionally up 339.55 points or 1.24% at 27,663.55.
FMCG stocks were in demand. Asian Paints fell in volatile trade after announcing Q4 March 2015 results.
The market sentiment was boosted by a statement from the Finance Ministry which stated that the government has managed to better its target for containing the fiscal and revenue deficits in the last financial year.
Foreign portfolio investors sold shares worth a net Rs 38.31 crore during the previous trading session on Friday, 15 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 563.60 crore on Friday, 15 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged higher on the back of some robust corporate earnings. Asian stocks were mixed. US stocks closed mostly higher during the previous trading session on Friday, 15 May 2015.
As per provisional closing, the S&P BSE Sensex was up 339.55 points or 1.24% to 27663.55. The index jumped 401.97 points at the day's high of 27,725.97 in late trade, its highest level since 24 April 2015. The index gained 46.28 points at the day's low of 27,370.28 at the onset of trading session.
The CNX Nifty was up 111.30 points or 1.35% at 8,373.65 as per provisional closing. The index hit a high of 8,384.60 in intraday trade, its highest level since 24 April 2015. The index hit a low of 8,271.95 in intraday trade.
The BSE Mid-Cap index was up 103.15 points or 0.98% at 10667.07. The BSE Small-Cap index was up 107.13 points or 0.97% at 11,147.92. Both these indices underperformed the Sensex.
The market breadth indicating the overall health of the market was strong. On BSE, 1,672 shares rose and 1,050 shares fell. A total of 122 shares were unchanged.
The total turnover on BSE amounted to Rs 3174 crore, higher than turnover of Rs 2534.77 crore registered during the previous trading session.
Index heavyweight HDFC was up 2.67% at Rs 1,266.90. The stock hit a high of Rs 1,268.55 and a low of Rs 1,228.
Index heavyweight ITC was up 1.58% at Rs 331.25. The stock hit a high of Rs 332.95 and a low of Rs 326.35.
Index heavyweight Infosys was up 1.85% at Rs 1,996. The stock hit a high of Rs 1,998 and a low of Rs 1,962.05.
FMCG stocks were in demand. Godrej Consumer Products (up 4.25%), Britannia Industries (up 1.36%), Marico (up 1.33%), Hindustan Unilever (up 0.70%), Tata Global Beverages (up 0.68%), Dabur India (up 0.49%) and Colgate Palmolive (India) (up 0.16%), edged higher. GlaxoSmithKline Consumer Healthcare (down 0.03%), Bajaj Corp (down 0.97%), Procter & Gamble Hygiene & Health Care (down 1.18%) and Jyothy Laboratories (down 1.23%) edged lower.
Nestle India was up 0.69% at Rs 7,061. The stock hit a high of Rs 7,327 and a low of Rs 6,945. The company's net profit rose 23.58% to Rs 320.28 crore on 8.05% rise in total income to Rs 2541.95 crore in Q1 March 2015 over Q1 March 2014. The Q1 result was announced after market hours on Friday, 15 May 2015. Nestle India said that the impact of declining prices of fresh milk and derivatives compared to the increasing trend in previous year was mostly negated by the opening stock of finished goods that was manufactured when fresh milk prices were relatively higher. However, cost of materials consumed as percentage of net sales has decreased largely due to selling price increases, including carry over pricing.
Asian Paints fell 3.05% to Rs 765.90. The stock hit a high of Rs 818 and a low of Rs 763 during the day. The company's consolidated net profit rose 18.6% to Rs 341 crore on 6.9% growth in income from operations to Rs 3535 crore in Q4 March 2015 over Q4 March 2014. The Q4 result was announced during market hours today, 18 May 2015.
K.B.S. Anand, Managing Director & CEO of Asian Paints said that in the decorative business segment in India, the company has registered single digit volume growth in Q4 March 2015 due to poor demand conditions. Profitability improved due to falling raw material prices. The automotive coatings JV (PPGAP) performance was supported by growth in the general industrial category while the lower growth in automobile sales impacted the automotive coatings business. The industrial coatings JV (APPPG) witnessed good growth in Q4 March 2015 particularly in the industrial liquid paints category, Anand said. However, the business conditions for the industrial coatings JV remains challenging given the slow pace of growth in industrial activity, Anand said. International business performed well amidst challenging market conditions in some key markets like Egypt, Anand said.
Anand further said that weak consumer sentiments and slower ramp-up than expectations impacted demand for the company's kitchens (Sleek) and bath fittings (ESS ESS) businesses in the home improvement business category, Anand said. The company continues to work on streamlining of both the businesses and expanding the network, he added.
Cement shares were in demand. Ambuja Cements (up 3.39%), UltraTech Cement (up 3.23%) and ACC (up 2.8%) edged higher. Shree Cement was off 0.25%.
Grasim Industries was up 0.10%. Grasim has exposure to the cement sector through its holding in UltraTech Cement.
JK Lakshmi Cement was off 1.21% to Rs 339. JK Lakshmi Cement's net profit fell 88.56% to Rs 6.05 crore on 11.41% decline in total income to Rs 595.94 crore in Q4 March 2015 over Q4 March 2014. The result was announced after market hours on Friday, 15 May 2015.
Meanwhile, the Finance Ministry announced yesterday, 17 May 2015, that the government has bettered its own financial targets during 2014-15. Based on provisional accounts for the year ended 31 March 2015 (2014-15), the fiscal deficit stood at 4% of GDP for 2014-15 as against the target of 4.1%. The fiscal deficit was 4.4% of GDP in 2013-14. The revenue deficit stood at 2.8% of GDP in 2014-15 as against target of 2.9%. The revenue deficit was 3.2% of GDP in 2013-14. The government's gross tax collections rose 9% to Rs 12.45 lakh crore in 2014-15.
Meanwhile, data released by the government after trading hours on Friday, 15 May 2015, showed that India's merchandise exports declined 13.96% to $22.05 billion in April 2015 over April 2014. Imports declined 7.48% to $33.04 billion in April 2015 over April 2014. Oil imports fell 42.65% to $7.44 billion in April 2015 over April 2014. Non-oil imports rose 12.58% to $25.60 billion in April 2015 over April 2014. The trade deficit for April 2015 was estimated at $10.99 billion, which was higher than trade deficit of $10.08 billion in April 2014.
Meanwhile, Prime Minister Narendra Modi said after holding bilateral talks with South Korean President Park Geun-hye today, 18 May 2015, that India and South Korea have agreed to upgrade the bilateral relationship to 'Special Strategic Partnership'. Modi said that India considers South Korea as a crucial partner in India's economic modernization. Modi further said that Korean companies will be participating in India's plans to acquire and manufacture LNG tankers. Modi is currently on a two-day official visit to South Korea.
Meanwhile, India and South Korea today, 18 May 2015, signed an agreement for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income. The India-Republic of Korea Double Taxation Avoidance Convention which was signed in 1985 has been revised with a view to avoiding the burden of double taxation on taxpayers in the two countries, the Prime Minister's Office (PMO) said.
In overseas markets, European stocks edged higher today, 18 May 2015, on the back of some robust corporate earnings. Key benchmark indices in UK and Germany were up 0.13% to 0.55%. France's CAC 40 was down 0.20%.
Greece remains a focus for investors in Europe, as the uncertainty over the country's debt situation persists. Canadian ratings service DBRS Inc. on Friday, 15 May 2015, cut its rating on Greece, citing uncertainty over whether it will be able reach an agreement with its creditors. Greece faces a key debt repayment deadline of 5 June 2015.
Asian stocks were mixed today, 18 May 2015. Key benchmark indices in South Korea, Japan, Indonesia and Taiwan were up 0.03% to 0.80%. Key benchmark indices in China, Hong Kong and Singapore were off 0.15% to 0.83%.
In Japan, the latest data showed that Japan's core machinery orders, excluding often volatile orders for electric power companies and ships, rose 2.9% in March from the previous month.
US stocks closed mostly higher Friday, 15 May 2015, with the S&P 500 index setting a record for the second straight session. Investors grappled with weaker-than-expected economic reports which left the timing of the Federal Reserve's next rate hike still uncertain for investors.
Meanwhile, the president of the Chicago Fed Charles Evans today, 18 May 2015, said in a speech prepared for delivery to a conference in Stockholm, Sweden that he sees no compelling reason for the US Federal Reserve to be in a hurry to tighten financial conditions. Evans said that the case could even be made that the US economy needed more accommodation at the moment, according to reports. Evans is one of only two Fed officials who think the US central bank should wait until 2016 to increase interest rates.
Investors will get a closer look at the US Federal Reserve's thoughts about interest rates and economic data when the minutes of the Federal Open Market Committee meeting from its meeting held in late April 2015 are released on Wednesday, 20 May 2015.
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