Key benchmark indices trimmed gains after initial strong rally sent share prices soaring. The barometer index, the S&P BSE Sensex, was up 656.62 points or 2.75%, off 813.41 points from the day's high and up 290.68 points from the day's low. Indian stocks edged higher today, 16 May 2014, as trends of Lok Sabha election results 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. Trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is set to form the next government at the Centre. The NDA was leading in 323 seats and was declared winner in 4 seats out of the total of 543 Lok Sabha seats. The Congress-led United Progressive Alliance (UPA) was leading in 66 seats and was declared winner in one seat. 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 BSE Mid-Cap index was up over 2%. The BSE Small-Cap index was up more than 1%.
Index heavyweight and cigarette major ITC reversed intraday gain after striking a record high. Reliance Industries edged higher in choppy trade after the company's telecom operating unit Reliance Jio Infocomm entered into a master service agreement with Tower Vision India, an independent tower company in India for tower sharing. Power generation stocks were in demand on renewed buying. Shares of Adani group companies gained, with shares of Adani Enterprises and Adani Ports & Special Economic Zone hitting 52-week high after the trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) is set to form the next government at the Centre.
The market breadth, indicating the overall health of the market was negative.
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.
The counting of votes for the Lok Sabha elections began at 8:00 IST today, 16 May 2014, and results are expected by today itself. If the NDA comes to power, Narendra Modi will become India's next Prime Minister. 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 has 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 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.
The market sentiment was boosted by data showing that foreign funds made purchases of Indian stocks on Thursday, 15 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 934.94 crore on Thursday, 15 May 2014, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was up 656.62 points or 2.75% to 24,562.22. The index jumped 1,470.03 points at the day's high of 25,375.63 in morning trade, a record high for the index. The index gained 365.94 points at the day's low of 24,271.54 in opening trade.
The CNX Nifty was up 205.85 points or 2.89% to 7,329. The index hit a high of 7,563.50 in intraday trade, a record high for the index. The index hit a low of 7,264.40 in intraday trade.
The BSE Mid-Cap index was up 168.45 points or 2.2% at 7,808.55. The BSE Small-Cap index was up 99.23 points or 1.27% at 7,890.35. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market was negative. On BSE, 1,366 shares fell and 1,284 shares rose. A total of 131 shares were unchanged.
The total turnover on BSE amounted to Rs 4869 crore by 13:15 IST.
Among the 30-share Sensex pack, 24 stocks gained and only six of them declined. Sesa Sterlite (up 10.24%), State Bank of India (up 7.15%) and ICICI Bank (up 6.94%) edged higher from the Sensex pack.
Dr Reddy's Laboratories (down 2.53%), Infosys (down 2.12%) and Cipla (down 1.28%) edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC shed 0.03% at Rs 367.80, with the stock reversing gains after striking a record high of Rs 386.75 in intraday trade.
Index heavyweight Reliance Industries (RIL) jumped 3.95% to Rs 1,094.80. 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.
Gujarat Gas Company lost 2.85% after consolidated net profit declined 16.88% to Rs 49.27 crore on 0.54% rise in total income from operations (net) to Rs 772.08 crore in Q1 March 2014 over Q1 March 2013. The company announced the result after market hours on Thursday, 15 May 2014.
Power generation stocks were in demand on renewed buying. Reliance Infrastructure (up 6.65%), Tata Power Company (up 6.12%), CESC (up 4.73%), Reliance Power (up 6.12%) and JSW Energy (up 6.22%) edged higher.
NTPC rose 5.07%. 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 trends of Lok Sabha elections showed that 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 Gujarat Chief Minister and Bharatiya Janata Party's (BJP) prime ministerial candidate Narendra Modi.
Adani Enterprises galloped 13.14% to Rs 566.30 after striking a 52-week high of Rs 585 in intraday trade.
Adani Power gained 4.91% to Rs 57.65
Adani Ports & Special Economic Zone gained 3.02% to Rs 227 after striking a 52-week high of Rs 235.40 in intraday trade.
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 58.93, compared with its close of 59.29/30 on Thursday, 15 May 2014.
Indian government bond prices edged higher 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 yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.7682%, lower than its close of 8.781% on Thursday, 15 May 2014. Bond yields and bond prices move in opposite direction.
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 struggled for direction at the open on Friday as investors digested the latest developments in Ukraine and corporate news. Key benchmark indices in UK, Germany and France were up 0.02% to 0.09%.
Asian stocks were mostly higher on Friday. Key benchmark indices in China, Indonesia, South Korea and Taiwan were up 0.08% to 0.49%. Key benchmark indices in Japan, Singapore and Hong Kong were off 0.09% to 1.41%.
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 16 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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