Intraday volatility continued as key benchmark indices trimmed gains soon after extending intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 87.96 points or 0.39%, up about 80 points from the day's low and off close to 30 points from the day's high. The market breadth, indicating the overall health of the market was positive. Gains in Asian stocks underpinned sentiment on the domestic bourses.
Realty stocks edged lower. Bank stocks gained. Union Bank of India declined ahead of its Q4 results today, 8 May 2014.
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.
Asian stocks rose on Thursday, 8 May 2014, after Federal Reserve Chairwoman Janet Yellen said a testimony to US lawmakers on Wednesday, 7 May 2014, that the Federal Reserve will continue to support the US economy.
Foreign institutional investors (FIIs) bought shares worth a net Rs 119.11 crore on Wednesday, 7 May 2014, as per provisional data from the stock exchanges.
At 11:25 IST, the S&P BSE Sensex was up 87.96 points or 0.39% to 22,411.88. The index jumped 119.23 points at the day's high of 22,443.13 in mid-morning trade. The index gained 5.49 points at the day's low of 22,329.39 in morning trade.
The CNX Nifty was up 24.15 points or 0.36% to 6,676.70. The index hit a high of 6,688.40 in intraday trade. The index hit a low of 6,656.05 in intraday trade.
The BSE Mid-Cap index was up 22.88 points or 0.31% to 7,382.96, underperforming the Sensex. The BSE Small-Cap index was up 55.65 points or 0.74% to 7,582.64, outperforming the Sensex.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,207 shares gained and 967 shares fell. A total of 118 shares were unchanged.
Among the 30-share Sensex pack, 23 stocks gained and rest of them fell. Cipla (up 1.87%), Tata Motors (up 1.32%) and Hindalco Industries (up 1.62%) edged higher from the Sensex pack.
Realty stocks edged lower. D B Realty (down 1.22%), DLF (down 0.64%) and Unitech (down 0.65%) declined. Sobha Developers rose 0.29%.
Bank stocks gained. Among private sector banks, ICICI Bank (up 1.54%), HDFC Bank (up 0.07%), Yes Bank (up 0.95%), Federal Bank (up 0.16%), Kotak Mahindra Bank (up 1.01%) and Axis Bank (up 0.27%), gained. IndusInd Bank dropped 0.31%.
Among PSU bank stocks, State Bank of India (SBI) (up 0.56%), Canara Bank (up 0.41%), Bank of India (up 0.35%), Bank of Baroda (up 0.01%) and Punjab National Bank (up 0.64%) gained.
Union Bank of India declined 0.81% ahead of its Q4 results today, 8 May 2014.
Lupin fell 0.01% to Rs 990.10. The stock was volatile. The stock hit a high of 999.25 and low of Rs 985.20 so far during the day. 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.
Mindtree rose 1.31% after the company and SAP announced their first managed mobility offering for the Australia market. The announcement was made during trading hours today, 8 May 2014. Mindtree will deliver SAP mobile solutions in the cloud and with a pay-by-usage model.
Managed mobility services from Mindtree and SAP enable organizations to rapidly mobilize their business with little complexity, minimal set-up time, and zero infrastructure costs, Mindtree said. The company will offer an end-to-end suite of services including consulting, installation, hosting, and maintenance for the SAP Work Manager application in the cloud, Mindtree said in a statement.
Parthasarathy NS, President and Chief Operating Officer, Mindtree said, "This managed mobility cloud offering speeds time to market through a low-risk solutions that cuts across industries. Mindtree's managed mobility offering combines the best of both worlds: Mindtree's expertise in delivering superior mobile experiences and SAP's leading enterprise mobility portfolio".
Greg Miller, Chief Operating Officer, SAP ANZ said, "Australian businesses are asking for a cloud-enabled mobile offering from SAP to underpin their cloud strategy. The Mindtree partnership delivers a consumption-based pricing model that allows customers to scale their mobile solutions over time, and enables ongoing mobile innovation. Importantly, it alleviates significant up-front capital expenditure, which is critical for many clients".
As a market leader in enterprise application software, SAP helps companies of all sizes and industries run better.
Simplex Projects hit an upper circuit limit of 5% to Rs 41.10 on BSE after the company said it received an approval for resumption of its stalled project in Libya. The company made the announcement after market hours on Wednesday, 7 May 2014.
Simplex Projects said it received an approval from the Government of Libya for resumption of its project for construction of 2000 housing units, service buildings and related infrastructure at Ghira, Shabiyat of Ashati, Libya which was stalled due to political unrest in Libya since February 2011.
In view of the revised agreement the project is to be completed within a period of 900 days from the date of initial payment of outstanding dues, the company said.
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 60.02, 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.
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 0.32% to 1.05%. Indonesia's Jakarta Composite fell 0.33%.
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%.
Trading in US index futures indicated that the Dow could gain 14 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.
In Europe, a monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled today, 8 May 2014.
The European Central Bank (ECB) will hold monetary policy meeting today, 8 May 2014, in Brussels, Belgium.
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