Key benchmark indices extended initial gains and hit fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, was up 105.49 points or 0.47%, up about 70 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 strong. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained net buyers of Indian stocks on Monday, 7 April 2014. Gains in Asian stocks also boosted sentiment on the domestic bourses.
Sun Pharmaceutical Industries extended Monday's gains and Ranbaxy Laboratories recovered from Monday's slide. Oil India rose after the company said it has priced on 8 April 2014 and will issue $500 million fixed rate unsecured notes due 2019 (2019 Notes) and $500 million fixed rate unsecured notes due 2024. Hindalco Industries rose after Alcoa, the largest US aluminium producer on Tuesday, 8 April 2014, reported earnings that topped analyst forecasts.
The market edged higher in early trade on firm Asian stocks. Key benchmark indices extended initial gains and hit fresh intraday high in morning trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 7 April 2014. Foreign Institutional Investors (FIIs) bought shares worth a net Rs 703.71 crore on Monday, 7 April 2014, as per provisional data from the stock exchanges. The stock markets was closed on Tuesday, 8 April 2014, on account of Ram Navami.
At 9:35 IST, the S&P BSE Sensex was up 105.49 points or 0.47% to 22,448.94. The index jumped 135.62 points at the day's high of 22,479.07 in morning trade. The index rose 45.76 points at the day's low of 22,389.21 in opening trade.
The CNX Nifty was up 27.90 points or 0.42% to 6,722.93. The index hit a high of 6,733.60 in intraday trade, its highest level since 4 April 2014. The index hit a low of 6,711.70 in intraday trade.
The BSE Mid-Cap index was up 60.92 points or 0.85% at 7,226.28. The BSE Small-Cap index was up 57.05 points or 0.78% at 7,338.12. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,141 shares rose and 490 shares fell. A total of 72 shares were unchanged.
Tata Steel (up 1.48%), Tata Motors (up 1.56%) and State Bank of India (SBI) (up 1.26%) edged higher from the Sensex pack.
Hindalco Industries rose after Alcoa, the largest US aluminium producer on Tuesday, 8 April 2014, reported first quarter earnings that topped analyst forecasts. The stock was up 3.03%.
Alcoa's profit, excluding restructuring costs and other one-time items, was 9 cents a share in Q1 March 2014, it said in a statement on Tuesday, 8 April 2014. Earnings from Alcoa's rolled-products unit, which supplies carmakers, surpassed its January forecast. In contrast, the smelting division posted an after-tax loss of $15 million. Overall, Alcoa had a net loss of 16 cents a share compared with a net income of 13 cents a year earlier.
Alcoa maintained its forecast for worldwide aluminum demand to grow 7% this year. It boosted its projection for aerospace growth to as much as 9%, citing demand for large commercial aircraft and regional jets.
Oil India rose 1.27%. The company on Tuesday, 8 April 2014, said it has priced on 8 April 2014 and will issue $500 million fixed rate unsecured notes due 2019 (2019 Notes) and $500 million fixed rate unsecured notes due 2024 (2014 Notes). The 2019 Notes carry a coupon of 3.875% per annum payable semi-annually and are of 5 years tenure. The 2014 Notes carry a coupon of 5.375% per annum payable semi-annually and are of 10 years tenor. The notes represent unsecured obligations of the company and will rank pari passu with all its other existing and future subordinated obligations. The notes will be listed on the Singapore Stock Exchange Securities Trading. The net proceeds will be used for refinancing existing bridge loans, Oil India said in a statement.
Sun Pharmaceutical Industries rose 4.16%, with the stock extending Monday's gains. Ranbaxy Laboratories gained 2.57%. The two companies in a joint statement issued on Sunday, 6 April 2014, announced that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an all-stock transaction. As per the share swap ratio, Ranbaxy shareholders will receive 8 shares of Sun Pharma for every 10 equity shares of Ranbaxy. This exchange ratio represents an implied value of Rs 457 for each Ranbaxy share, a premium of 18% to Ranbaxy's 30-day volume-weighted average share price and a premium of 24.3% to Ranbaxy's 60-day volume-weighted average share price, in each case, as of the close of business on 4 April 2014.
The combination of Sun Pharma and Ranbaxy creates the fifth-largest specialty generics company in the world and the largest pharmaceutical company in India. The combined entity will have operations in 65 countries, 47 manufacturing facilities across 5 continents, and a significant platform of specialty and generic products marketed globally, including 629 ANDAs. On a pro forma basis, the combined entity's revenues are estimated at $4.2 billion with EBITDA of $1.2 billion for the twelve month period ended December 31, 2013. The transaction value implies a revenue multiple of 2.2 based on 12 months ended 31 December 2013.
Tech Mahindra declined 1.67%. The company on Tuesday, 8 April 2014, announced the opening of a new Belgian delivery center in Antwerp. Following the recent opening of a delivery center in Dseldorf, Germany, this new Belgian facility is the next important milestone in the growth journey as the company derives 31% of its revenue from European markets, Tech Mahindra said. Tech Mahindra already has a development center in Brussels and with the opening of this second Belgian delivery center, the company aims at further growth in the region.
Speaking at the inauguration ceremony Vishaal Gupta, Head (Telecom) - Europe, Tech Mahindra said: "The Antwerp delivery center will further accelerate a hub and spoke delivery model for the Benelux region. This new location reflects our deep commitment to the customers in the region and will also help us deliver real-time near-shore services.
The new facility has the capacity of about 120 work stations and is located in the Mensura House at Italiei 2 in Antwerp.
Suzlon Energy surged 5.95% after the company said its wholly-owned subsidiary has signed an agreement with a consortium of banks for a syndicated working capital facilities of Euro 850 million for the period of 3 years. The announcement was made on Tuesday, 8 April 2014. The stock market was closed on that day on account of Ram Navami.
Suzlon Energy said that its wholly-owned subsidiary, Senvion SE, signed an agreement in late March with a consortium of banks headed by BayernLB, Commerzbank Aktiengesellschaft and Deutsche Bank AG for a syndicated working capital facilities of Euro 850 million for a period of 3 years. This move enables Senvion SE to secure follow-on financing early for the credit facilities of Euro 750 miliion agreed in May 2012 for the period up to August 2014, Suzlon said.
In total, 14 international banks and credit insurance companies are participating in this financing with a term of three years, syndication of which was significantly oversubscribed, Suzlon said. Six globally reputed financial institutions and banks with excellent ratings have been added to the banks consortium. The financing structure remains largely unchanged and primarily consists of non-fund based (guarantee) facilities, Suzlon said in a statement.
Marcus A. Wassenberg, CFO of Senvion said, "This enhanced facility with long tenure is of significant importance for the growth of the company and the oversubscription of the same with new additions to the consortium clearly reflects strong confidence of global banks and credit insurance companies in business fundamentals, company management and strategy of the company".
In the foreign exchange market, the rupee edged higher against the dollar, tracking gains in most other Asian units versus the greenback. The partially convertible rupee was hovering at 60.045, compared with its close of 60.11/12 on Monday, 7 April 2014. India's financial markets were closed on Tuesday, 8 April 2014, on account of Ram Navami.
The Securities and Exchange Board of India (Sebi) on Monday, 7 April 2014, partially reversed curbs on dollar-rupee forward contracts that were imposed last year after the rupee hit record low against the dollar. Sebi had doubled the margin requirement on the domestic dollar-rupee forward trades last year in a bid to arrest the steep decline of the rupee. The stock market regulator on Monday, 7 April 2014, asked stock exchanges and clearing corporations to restore the initial margins and extreme loss margin for dollar-rupee trades to pre 8 July 2013 levels from 15 April 2014.
The Reserve Bank of India (RBI) on Monday, 7 April 2014, said that with a view to further liberalising the existing facilities the RBI has decided to allow all resident individuals, firms and companies, who have actual or anticipated foreign exchange exposures to book foreign exchange forward contracts up to $250,000 on the basis of a simple declaration without any requirement of further documentation, the RBI said in a circular issued to Authorised Dealer Category-I (AD Category-I) banks. This is higher than the existing limit of $100,000. The existing facilities in terms of this circular for Small and Medium Enterprises (SMEs) having direct and/or indirect exposures to foreign exchange risk permitting them to book/cancel/roll over forward contracts without production of underlying documents to manage their exposures effectively subject to conditions specified therein shall remain unchanged, the RBI 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.
The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.
A major near term trigger for the stock market is the outcome of the upcoming 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 June 1 and the new House has to be constituted by May 31.
Polling began for the lone parliamentary seat in Nagaland in the second phase of Lok Sabha elections today, 9 April 2014. The poll will decide the fate of Chief Minister Neiphiu Rio, who is the candidate from his Naga Peoples Front party.
Asian stocks outside Japan rose on Wednesday, 9 April 2014, as consumer companies advanced. Key benchmark indices in Hong Kong, Singapore, China, Taiwan and South Korea were up 0.18% to 1.02%. Japanese equities fell after the yen rose against the dollar. The Nikkei 225 Avergae was off 2%.
The Bank of Japan (BOJ) refrained from adding to unprecedented monetary stimulus after a monetary policy review on Tuesday, 8 April 2014, as Governor Haruhiko Kuroda said the blow to the economy from last week's sales-tax increase will fade during the summer. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen ($682 billion) per year, it said in a statement in Tokyo. At a press briefing, Kuroda said the BOJ would always adjust policy without hesitation as needed, including easing or tightening. The economy has continued to recover moderately, "albeit with some fluctuations due to the consumption tax hike," the BOJ said in its statement. Kuroda said he will adjust record easing that the BOJ began in April last year should prospects for achieving the price target be jeopardized.
Indonesia's central bank kept its key interest rate unchanged after a monetary policy review on Tuesday, 8 April 2014, extending a pause in monetary tightening as inflation slowed. Bank Indonesia Governor Agus Martowardojo and his board maintained the reference rate at 7.5%, the central bank said in Jakarta. It also kept the deposit facility rate unchanged at 5.75%.
Trading in US index futures indicated that the Dow could gain 3 points at the opening bell on Wednesday, 9 April 2014. US stocks snapped three-day losing streak on Tuesday, 8 April 2014, on bargain-hunting as investors picked up stocks that had fallen the most in the slump over the previous three days.
The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.
In Europe, a monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled tomorrow, 10 April 2014.
Stronger US growth this year and next will help the world economy withstand weaker recoveries in emerging markets including Brazil and Russia, the International Monetary Fund said in a report yesterday, 8 April 2014. The IMF predicted global growth of 3.6% this year, compared with a January estimate of 3.7%. Next year, the expansion will accelerate to 3.9%, unchanged from the prior forecast.
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