Sunday, May 11, 2014
Key benchmark indices rallied in the week ended Friday, 9 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 after Lok Sabha elections which conclude early next week. The barometer index, the S&P BSE Sensex settled at a record closing high after scaling a record high above the psychological 23,000 mark on Friday, 9 May 2014. The 50-unit CNX Nifty also hit a record high on intraday as well as closing basis on Friday, 9 May 2014. The market logged gains in four out of five trading sessions in the week just gone by.
Investors are hoping that a BJP-led government will give a boost to India's policy reforms, helping the economy recover from a slowdown. 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.
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.
In the week ended Friday, 9 May 2014, the 30-share S&P BSE Sensex gained 590.34 points or 2.63% to 22,994.23, a record closing high for the barometer index. The barometer index, the S&P BSE Sensex, scaled a record high of 23,048.49 in intraday trade on Friday, 9 May 2014.
The 50-unit CNX Nifty rose 164 points or 2.44% to 6,858.80. The index hit a high of 6,871.35 in intraday trade, its lifetime high in intraday trade on Friday, 9 May 2014.
The S&P BSE Mid-Cap index rose 98.63 points or 1.34% to 7,456.09. The S&P BSE Small-Cap index gained 60.87 points or 0.8% to 7,593.68. Both these indices underperformed the Sensex.
Key benchmark indices edged higher on first trading day of the week on Monday, 5 May 2014. Data showing that foreign funds remained net buyers of Indian stocks on Friday, 2 May 2014 offset weakness in European stocks and lower US index futures. The S&P BSE Sensex was up 41.23 points or 0.18% to 22,445.12, its highest closing level since 29 April 2014.
Key benchmark indices edged higher for the second day in a row on Tuesday, 6 May 2014 with the market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 5 May 2014. The S&P BSE Sensex was up 63.30 points or 0.28% to 22,508.42, its highest closing level since 28 April 2014.
Key benchmark indices edged lower on Wednesday, 7 May 2014 on weak global cues. The S&P BSE Sensex lost 184.52 points or 0.82% to settle at 22,323.90, its lowest closing level since 16 April 2014.
Key benchmark indices eked out small gains after witnessing intraday volatility on Thursday, 8 May 2014. The S&P BSE Sensex garnered 20.14 points or 0.09% to settle at 22,344.04, its highest closing level since 6 May 2014.
Key benchmark indices surged on Friday, 9 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 after Lok Sabha elections which conclude early next week. The S&P BSE Sensex was up 693.61 points or 3.1% at 23,037.65, a record closing high for the barometer index.
Among the 30-share Sensex pack, 21 stocks gained and rest of them declined in the week ended Friday, 9 May 2014.
Bharti Airtel (down 4.8%), HDFC (down 2.67%) and Sun Pharma Industries (down 0.96%) edged lower from the Sensex pack.
L&T (up 6.33%), ONGC (up 5.66%) and Coal India (up 4.58%) edged higher from the Sensex pack.
Index heavyweight and cigarette maker ITC rose 1.57% to Rs 345.50.
Index heavyweight Reliance Industries (RIL) surged 7.43% to Rs 997.35. The stock hit a 52-week high of Rs 999 in intraday trade on Friday, 9 May 2014.
Bank stocks gained across the board on renewed buying. Among private sector banks, HDFC Bank gained 5.62%.
Axis Bank jumped 6.6% to Rs 1,631.50 after hitting a record high of Rs 1,651.95 in intraday trade on Friday, 9 May 2014.
ICICI Bank surged 9.82% to Rs 1,374.85 after hitting 52-week high of Rs 1,388 in intraday trade on Friday, 9 May 2014.
PSU banking giant State Bank of India (SBI) advanced 6.2%.
Metal and mining stocks were in demand. Sesa Sterlite (up 1.55%), Hindalco Industries (up 8.69%) and Tata Steel (up 6.69%) gained.
Auto stocks edged higher. Maruti Suzuki India (up 4.61%), Mahindra & Mahindra (M&M) (up 4.51%), Bajaj Auto (up 1.16%) and Hero MotoCorp (up 0.96%) gained.
Tata Motors rose 3.08%. TML Holding Pte., a wholly owned subsidiary of the company, on Wednesday, 7 May 2014, issued and allotted $300 million in principal amount of 5.75% senior fixed rate notes due 2021. The net proceeds from the notes will be used to repurchase certain shares issued to Tata Motors and for general corporate purposes, Tata Motors said in a statement on Thursday, 8 May 2014.
India's largest Power Project exporter, Bharat Heavy Electricals (Bhel) surged 7.48%. The company announced during trading hours on Thursday, 8 May 2014, that it has achieved one more milestone in the Middle-East region with the commissioning of yet another Gas Turbine Generating unit in Oman. The 126 MW Fr-9E Gas Turbine Generator (GTG) has been successfully commissioned at Qarn Alam-3 power project of Petroleum Development Oman (PDO). This is the second successive project after the successful commissioning of the 2x126 MW Fr-9E PDO Amal GTG project in 2012, Bhel said in a statement.
The Sultanate of Oman is one of the key export territories of Bhel with various benchmark references established by the company.
Tata Power Company rose 0.75%. The company said during market hours on Thursday, 8 May 2014, that it has appointed Mr Ashok S Sethi as Executive Director of the company with immediate effect for the period upto 31 March 2017.
Cipla dropped 2.22%. With reference to the news item appearing in a financial daily titled "Despite repeated rebuffs, Teva woos Cipla with $6 billion offer", Cipla during market hours on Thursday, 8 May 2014, said that the news item is baseless and speculative in nature. The claim in the news item of an offer made in November is incorrect and no such formal offer was received by the Cipla board, the Indian pharma company said. The company has consistently denied such rumours in the past and continue to do so, it said.
IT stocks edged lower. TCS (down 2.15%) and Wipro (down 2.89%) declined.
Infosys edged lower after a foreign brokerage downgraded the stock to "sell" from "buy" and cut its target price to Rs 2,750 from Rs 4,050, saying a turnaround at the IT outsourcer could take longer than expected. The stock shed 3.55% to Rs 3,105.40. The brokerage has cited Infosys' high staff attrition and its focus on boosting margins at the expense of stabilising revenue and market share as other risk factors.
The European Central Bank (ECB) kept interest rates unchanged on Thursday, 8 May 2014 giving itself more time to gauge whether the euro-area recovery has reignited inflation. The 24-member Governing Council, meeting in Brussels, left the main refinancing rate at a record low of 0.25%.
Bank of England (BOE) officials left the UK central bank's main interest rate unchanged on Thursday, 8 May 2014 at their first meeting since unemployment tumbled past a threshold they set out in August. The BOE said its Monetary Policy Committee kept the central bank's benchmark interest rate at a record low of 0.5% and the total size of its bond portfolio at £375 billion ($636 billion) after a two-day meeting.
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 on Thursday, 8 May 2014. Imports gained 0.8%, leaving a trade surplus of $18.46 billion.
China's manufacturing contracted in April for a fourth month, according to a private survey, signaling the risk of a deeper slowdown in an economy already projected to expand this year at the slowest pace since 1990. A purchasing managers' index was at 48.1, HSBC Holdings Plc and Markit Economics said in a statement on Monday, 5 May 2014. That compared with 48 in the previous month. Numbers below 50 indicate contractions.
The global economy will strengthen over the coming two years, but urgent action is still required to further reduce unemployment and address other legacies from the crisis, according to the OECD's latest Economic Outlook. GDP growth across the 34-member OECD is projected to accelerate to a 2.2% rate in 2014 and 2.8% in 2015, according to the Outlook. The world economy will grow at a 3.4% rate in 2014 and 3.9% in 2015.