Key benchmark indices edged higher in early trade as the market sentiment was boosted by data showing foreign funds made substantial purchases of Indian stocks on Wednesday, 14 May 2014. The counting of votes of Lok Sabha elections is scheduled tomorrow, 16 May 2014 and in all likelihood National Democratic Alliance (NDA) under the leadership of pro-business leader Narendra Modi is slated to form the next government. The barometer index, the S&P BSE Sensex, was up 131.13 points or 0.55%, up about 145 points from the day's low and off close to 25 points from the day's high. The market breadth, indicating the overall health of the market, was strong.
Bajaj Auto rose ahead of its Q4 results today, 15 May 2014. NTPC gained ahead of its Q4 results today, 15 May 2014. Tata Steel gained after the company announced a turnaround in Q4 results. Tech Mahindra declined after the company reported weak Q4 results.
The market sentiment was boosted by data showing that foreign funds made substantial purchases of Indian stocks on Wednesday, 14 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 1520.08 crore on Wednesday, 14 May 2014, as per provisional data from the stock exchanges.
At 9:35 IST, the S&P BSE Sensex was up 131.13 points or 0.55% to 23,946.25. The index rose 156.66 points at the day's high of 23,971.78 in early trade. The index shed 11.41 points at the day's low of 23,803.71 in early trade.
The CNX Nifty was up 32.91 points or 0.46% to 7,141.65. The index hit a high of 7,152.55 in intraday trade. The index hit a low of 7,109.30 in intraday trade.
The BSE Mid-Cap index was up 60.37 points or 0.78% at 7,764.47. The BSE Small-Cap index was up 49.21 points or 0.63% at 7,908.24. Both these indices outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 828 shares gained and 289 shares fell. A total of 47 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks gained and rest of them fell. Tata Power Company (up 1.71%), GAIL (India) (up 1.28%) and Bharat Heavy Electricals (Bhel) (up 1.59%) edged higher from the Sensex pack.
Bajaj Auto rose 0.57% ahead of its Q4 results today, 15 May 2014.
NTPC gained 0.64% ahead of its Q4 results today, 15 May 2014.
Tata Steel gained 2.53% after the company announced turnaround in Q4 results. The company reported a consolidated net profit of Rs 1035.87 crore in Q4 March 2014 as against net loss of Rs 6528.51 crore in Q4 March 2013. Total income from operations rose 22.44% to Rs 42428.05 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Wednesday, 14 May 2014.
Tata Steel reported a consolidated net profit of Rs 3594.89 crore in the year ended 31 March 2014 (FY 2014) as against net loss of Rs 7057.62 crore in the year ended 31 March 2013 (FY 2013). Total income from operations rose 10.31% to Rs 148613.55 crore in FY 2014 over FY 2013.
Tata Steel said that the actuarial gains and losses on funds for employee benefits (pension plans) of Tata Steel Europe for the period from 1 April 2008 have been accounted in "Reserves and Surplus" in the consolidated financial statements in accordance with IFRS/IND AS principles and as permitted by Accounting Standard 21. Had the company recognised changes in actuarial valuations of pension plans of Tata Steel Europe in the statement of profit and loss, the consolidated profit after taxes, minority interest and share of profit of associates for the year ended 31 March 2014 would have been lower by Rs 628.23 crore (Rs 247.90 crore for the quarter) and the consolidated loss after taxes, minority interest and share of profit of associates for the year ended 31 March 2013 would have been higher by Rs 317.26 crore (lower by Rs 1504.80 crore for the quarter), Tata Steel said.
Tata Steel's board of directors at its meeting held on Wednesday, 14 May 2014, recommended a dividend of Rs 10 per share for FY 2014.
Sun Pharmaceutical Industries rose 2.24%. With reference to the news item appearing in the newspaper on 14 May 2014 titled "Sun Pharma moves SC against stay on Ranbaxy merger" Sun Pharmaceutical Industries has clarified after market hours on Wednesday, 14 May 2014 that the facts mentioned under the referred news article are largely true. The company further stated that there is no material impact of the matter on the process of completion of merger of Ranbaxy Laboratories with the company.
Tech Mahindra declined 0.17% after the company reported weak Q4 results. The company's consolidated net profit declined 39.18% to Rs 614.20 crore on 3.25% growth in revenue from services to Rs 5058.10 crore in Q4 March 2014 over Q3 December 2013. The result was announced after market hours on Wednesday, 14 May 2014.
Tech Mahindra's operating profit declined 5.67% to Rs 1071.80 crore in Q4 March 2014 over Q3 December 2013.
Tech Mahindra's profit after tax (PAT) surged 54.9% to Rs 3029 crore on 31.4% growth in revenue to Rs 18831 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
EBITDA (earnings before interest, taxation, depreciation and amortization) rose 36.6% to Rs 4184 crore in FY 2014 over FY 2013.
Tech Mahindra said that the results for the quarter and year ended 31 March 2014 include the results of merged entities giving effect to the scheme, while the results of the corresponding periods of the previous years and the previous year ended 31 March 2013 do not include the results of the merged entities and hence the same are not comparable.
The company's debt as of 31 March 2014 stood at Rs 363 crore. The company said it repaid Rs 796 crore in FY 2014. Cash and cash equivalent stood at Rs 3599 crore as of 31 March 2014. Active client count stood at 629 as against 516 in FY 2013, the company said in a statement.
Vineet Nayyar, Executive Vice Chairman, Tech Mahindra said, "This has been a landmark year for Tech Mahindra with the creation of an integrated entity through one of the largest mergers in India. Our superioe execution capabilities and ability to offer expanded service lines to our customers will help in aiding our future growth".
C P Gurnani, MD & CEO, Tech Mahindra said, "Our result this year is a reflection of our commitment towards growth and our passion to help our customers deal with the needs of a dramatically changing world, fuelled by hyper connectivity, and decisions at the speed of thought. I want the world to know that Tech Mahindra is well tuned to these aspects of modern business and we look at this a differentiator for growth".
Tech Mahindra's board of directors at its meeting held on Wednesday, 14 May 2014, recommended a dividend of Rs 20 per share for FY 2014.
Asian Paints declined 0.25%. The company after market hours on Wednesday, 14 May 2014 reported 14.45% rise in consolidated net profit to Rs 287.42 crore on 21.46% rise in total income to Rs 3338.19 crore in Q4 March 2014 over Q4 March 2013. Asian Paints said that the results for the quarter and twelve months ended 31 March 2014 include consolidated financials of Sleek International Private Limited in which the company acquired 51% stake on 8 August 2013. In view of this, the results for the quarter and twelve months ended 31 March 2014 are not comparable with the corresponding previous periods, the company said.
Asian Paints said that the Board of Directors of the company at its meeting held Wednesday, 14 May 2014, approved the reappointment of Shri K B S Anand as Managing Director & CEO of the company for a further period of three years with effect from 1 April 2015 i.e. for the period 1 April 2015 to 31 March 2018. The re-appointment will be subject to approval by the shareholders of the Company at the ensuing Annual General Meeting.
The company said at the fag end of trading session on Wednesday, 14 May 2014, that the company has entered into a binding agreement with Ess Ess Bathroom Products (Ess Ess) and its promoters to acquire its entire front end sales business including brands, network and sales infrastructure, subject to satisfaction of certain conditions precedents and applicable statutory approvals. Ess Ess is a prominent player in the bath and wash business segment in India and has high quality products in this segment.
Nestle India rose 0.27%, The stock turned ex-dividend today, 15 May 2014, for total dividend of Rs 25 per share. Of this, Rs 12.50 per share interim dividend is for year ending 31 December 2014 and final dividend of Rs 12.50 per share for the financial year ended 31 December 2013.
The next major trigger for the market is outcome of Lok Sabha elections. The counting of votes will take place tomorrow, 16 May 2014, and the results are expected on the same day. Various exit polls on Monday, 12 May 2014, predicted that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) would win a majority in the Lok Sabha elections which concluded on Monday, 12 May 2014. If exit polls prove correct, NDA's prime ministerial candidate Narendra Modi will become India's next Prime Minister. The term of the current Lok Sabha ends on 1 June and the new House has to be constituted by 31 May.
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 current Congress-party-led coalition government.
Investors are hoping that when the results of the Lok Sabha elections are out tomorrow, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. 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.
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 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 today, 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. .
Most Asian stocks fell in choppy trade on Thursday. Key benchmark indices in South Korea, China, Taiwan, and Japan were off 0.03% to 0.88%. Key benchmark indices in Singapore and Hong Kong were up 0.22% to 0.3%.
Japan's economy grew at the fastest pace since 2011 in the first quarter as companies stepped up investment and consumers splurged before the first sales-tax rise in 17 years last month. Gross domestic product grew an annualized 5.9% from the previous quarter, the Cabinet Office said today in Tokyo.
US stocks fell on Wednesday, with the Dow Jones Industrial Average and the S&P 500 index retreating from recent record highs, as small caps resumed their sell-off and consumer discretionary shares lagged.
Federal Reserve Chair Janet Yellen will speak later in the global day today after saying last week the world's biggest economy still requires a strong dose of stimulus.
Prices paid to American factories and service producers rose in April by the most in more than a year, indicating a diminishing risk of deflation as demand improves. The 0.6% increase in the producer price index was the biggest since September 2012 and exceeded all estimates, figures from the Labor Department showed.
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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