The market may extend recent strong gains as exit polls commissioned by various TV channels on Monday, 12 May 2014, showed that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the Centre by winning 272 or more seats or will bag just few seats lower than the majority 272 seats needed to form the next government in a house of 543. The exit polls were out on Monday, 12 May 2014, evening after the 9th and the final pahse of Lok Sabha elections got over at 18:00 IST on Monday. If exit polls prove correct, NDA's prime ministerial candidate Narendra Modi will become India's next Prime Minister. Firmness in Asian stocks will also support markets. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 87.50 points at the opening bell. The counting of votes will take place on Friday, 16 May 2014, and the results are expected on the same day. The term of the current Lok Sabha ends on 1 June and the new House has to be constituted by 31 May.
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. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government.
Various post-poll surveys on Monday predicted an easy win for NDA with CNN-IBN forecasting about 280, Headlines Today 272, India TV 289, ABP 281 and News 24 up to 340 seats in a house of 543. The predictions of an NDA victory are primarily based on survey results showing BJP and its allies doing exceedingly well in Uttar Pradesh, Bihar and Maharashtra, which account for 168 seats and also in BJP's strongholds of Gujarat, Madhya Pradesh, Rajasthan and Chhattisgarh. Only Times NOW gave NDA cause for worry by not predicting a simple majority. It gave BJP and its allies 249-265 seats, still putting NDA in a comfortable zone, requiring just 20 or so seats from post-poll allies.
CNN-IBN said its post-poll survey is based on the data of the first 8 rounds of polling. In the ninth and the last round on Monday, 12 2014, 41 seats in Bihar, West Bengal and Uttar Pradesh went to polls.
Bank of Baroda, Punjab National Bank and Dr Reddys Laboratories (DRL) are scheduled to announce results today, 13 May 2014.
PSU OMCs will be in focus as diesel prices have been raised by Rs 1.22 per litre in New Delhi from Tuesday, immediately after the end of elections as the government ordered the biggest increase in the fuel price since September 2012.
Rural Electrification Corporation (REC) after market hours on Monday, 12 May 2014, said that after the receipt of approval from the Ministry of Power vide their letter dated 22 April 2014, 50,000 equity shares of NRSS XXXI (A) Transmission held by REC Transmission Projects Company (RECTPCL) (a wholly owned subsidiary of REC) and its nominees, have been transferred along with all assets and liabilities of the company to Power Grid Corporation of India (PGCIL) and their nominees, on 12 May 2014, substantially upon the terms and conditions as detailed in the Share Purchase Agreement executed between the RECTPCL, NRSS XXXI (A) Transmission and Power Grid Corporation of India, for establishment of "Transmission System for Northern Region System Strengthening Scheme, NRSS XXXI (Part A)."
REC also informed that 50,000 equity shares of NRSS XXXI (B) Transmission held by REC Transmission Projects Company (RECTPCL) (a wholly owned subsidiary of REC) and its nominees, have been transferred along with all assets and liabilities of the company to Essel Infraprojects (EIL) and their nominees, on 12 May 2014, substantially upon the terms & conditions as detailed in the Share Purchase Agreement executed between the RECTPCL, NRSS XXXI (B) Transmission Limited and Essel Infraprojects, for establishment of Transmission System for Northern Region System Strengthening Scheme, NRSS XXXI (Part B).
Inflation based on the combined consumer price index for urban and rural India accelerated to 8.59% (provisional) in April 2014, from 8.31% (final) in March 2014, data released by the government after trading hours on Monday, 12 May 2014, showed.
Another data released by the government after trading hours on Monday, 12 May 2014, showed that industrial production shrank for a second straight month in March 2014. Industrial production declined 0.5% in March 2014, compared with a contraction of 1.8% in February 2014. Mining production declined 0.4% and manufacturing sector registered a contraction of 1.2% in March 2014. Electricity generation rose 5.4% in March 2014. As per use-based classification, production of basic goods rose 4% and that of intermediate goods rose 0.6%. Production of capital goods registered a contraction of 12.5%. The consumer goods sector registered a contraction in production of 0.9% in March 2014. Within the consumer goods sector, production of consumer non-durables registered a growth of 7.2% whereas production of consumer durables registered a contraction of 11.8% in March 2014.
For the year ended 31 March 2014 (FY 2014), the industrial production registered a contraction of 0.1%. The fall in February's output was revised to 1.8% from 1.9% reported earlier.
The rate of inflation based on the wholesale price index is expected to remain at 5.7% in April 2014, at the same level it was in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for April 2014 at about 12:00 noon on Thursday, 15 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.
Key benchmark indices surged on Monday, 12 May 2014 on speculation the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre and that Narendra Modi will become the next Prime Minister of India after the final phase of Lok Sabha elections which concluded on Monday, 12 May 2014. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, hit record high on intraday basis as well as on closing basis. The 50-unit CNX Nifty settled at record high above 7,000 level. The Sensex attained record closing high above 23,000 mark. Speculation was rife that exit-poll results will show a victory by the NDA in Lok Sabha elections. The S&P BSE Sensex garnered 556.77 points or 2.42% to settle at 23,551 on that day, a record closing high for the barometer index
Foreign institutional investors (FIIs) bought shares worth a net Rs 1217.95 crore on Monday, 12 May 2014, as per provisional data from the stock exchanges.
Asian stocks rose on Tuesday as investors weighed earnings and after US stocks climbed to records. Key benchmark indices in Indonesia, South Korea, Hong Kong, Taiwan, and Japan were up 0.37% to 1.66%. China's Shanghai Composite fell 0.08%. Markets in Malaysia, Singapore, Thailand and Bangladesh are closed for a holiday.
The Dow Jones Industrial Avergae and the S&P 500 ended at record highs on Monday while the Nasdaq Composite index rallied as shares of Internet and biotech shares advanced.
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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