BSE Small-Cap index up almost 2.5%

Intraday volatility continued as key benchmark indices regained positive zone in early afternoon trade after Prime Minister-designate Narendra Modi was elected as BJP Parliamentary Party leader. The barometer index, the S&P BSE Sensex, was up 16.72 points or 0.07%, up 80.24 points from the day's low off 207.39 points from the day's high. The market breadth, indicating the overall health of the market was strong. The BSE Mid-Cap index was up over 1.5%. The BSE Small-Cap index was up almost 2.5%. Both these indices outperformed the Sensex.

IT stocks gained as the rupee edged lower against the dollar. Wipro edged higher after the company announced bagging two new contracts. Coal India dropped on profit booking after recent rally.

A bout of volatility was witnessed in early trade as key benchmark indices regained positive zone after reversing gains after a firm opening. Key benchmark indices extended intraday gains in morning trade. Volatility ruled the roost as the key benchmark indices slipped into the red after extending intraday gains in morning trade. Intraday volatility continued as key regained positive zone in early afternoon trade after Prime Minister-designate Narendra Modi was elected as BJP Parliamentary Party leader.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1350.04 crore on Monday, 19 May 2014, as per provisional data from the stock exchanges.

At 12:15 IST, the S&P BSE Sensex was up 16.72 points or 0.07% to 24,379.77. The index jumped 224.11 points at the day's high of 24,587.16 in early trade, its highest level since 16 May 2014. The index fell 63.52 points at the day's low of 24,299.53 in mid-morning trade.

The CNX Nifty was up 9.25 points or 0.13% to 7,272.80. The index hit a high of 7,353.65 in intraday trade, its highest level since 16 May 2014. The index hit a low of 7,247.70 in intraday trade.

The market breadth, indicating the overall health of the market was strong. On BSE, 1,807 shares gained and 767 shares fell. A total of 94 shares were unchanged.

The BSE Mid-Cap index was up 142.73 points or 1.76% at 8,234. The BSE Small-Cap index was up 202.71 points or 2.43% to 8,547.41. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 3291 crore by 12:15 IST, compared with Rs 2698 crore by 11:15 IST.

Among the 30-share Sensex pack, 17 stocks declined and rest of them gained.

Hero MotoCorp (down 3.08%), ONGC (down 2.98%) and Reliance Industries (down 2.9%) edged lower from the Sensex pack.

Coal India tumbled 5.09% to Rs 369.80 on profit booking after recent strong gains. The stock had surged 32.47% in the preceding seven trading sessions to settle at Rs 389.65 on Monday, 19 May 2014, from a recent low of Rs 294.15 on 8 May 2014. The stock had hit a 52-week high of Rs 393.80 in intraday trade on Monday, 19 May 2014.

IT stocks gained as the rupee edged lower against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Infosys (up 2.26%), TCS (up 1.56%), and Tech Mahindra (up 1.36%) edged higher. HCL Technologies shed 0.42%.

Wipro advanced 2.26%. Wipro before market hours announced that it has been selected by Corning Incorporated, a world leader in specialty glass and ceramics, to provide a multi-year information technology infrastructure program. Through this strategic collaboration, Wipro will make Corning's information technology services more resilient to market volatility, and enhance performance and operational efficiency. The solution will be delivered as a multi-year managed service from Wipro's global delivery and data centers.

Wipro announced after market hours on Monday, 19 May 2014, a strategic partnership with Takeda Pharmaceutical Company, the largest pharmaceutical company in Japan and one of the global leaders of the industry.

This strategic partnership will build advanced value in Takeda's operations by consolidating IT platforms across the organization. As a strategic partner, Wipro will build and maintain an "as-a-service" global platform for Takeda that will drive synergies across its global entities through standardization of IT architecture. Wipro will be primary provider of IT Infrastructure management services covering Takeda's entities across the world, touching 30,000 users in 16 different languages, operating out of data centers in Asia, Europe and America.

J Kumar Infraprojects surged 11.46% to Rs 239.80 after GMO Emerging Domestic Opportunities Fund acquired 4% equity stake in company through bulk deals on Monday, 19 May 2014.

GMO Emerging Domestic Opportunities Fund purchased 6.44 lakh shares of J Kumar Infraprojects at Rs 215.06 each on NSE and 4.75 lakh shares at Rs 215 on BSE.

Simultaneously, on NSE, Cresta Fund and Long Life Realtors sold 4 lakh equity shares at Rs 215 each and 2 lakh shares at Rs 215.25 each, respectively. Sai Prasad Estate Ventures LLP sold 1.5 lakh shares at Rs 220.89.

On BSE, Prakhar Advisors & Traders sold 1.77 lakh shares at Rs 215.02 per share and Priti Ravindra Lad sold 1.40 lakh shares at Rs 215.03 per share on same day. Sai Prasad Estate Ventures LLP sold 1.50 lakh shares at Rs 215.10 per share.

In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 58.68, compared with its close of 58.59/60 on Monday, 19 May 2014.

Indian government bond prices rose on optimism global funds will boost holdings of local debt after the elections handed a clear majority to the Bharatiya Janata Party. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.851%, lower than its close of 8.8627% on Monday, 19 May 2014. Bond yield and bond prices move in opposite direction.

After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Gujarat chief minister and Prime Minister-designate Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.

Narendra Modi was today, 20 May 2014, elected as BJP Parliamentary Party leader unanimously.

Speculation is rife about the likely allocation of key ministerial portfolios in the National Democratic Alliance (NDA) government.

The first budget of the new government is expected by July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.

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.

Asian stocks edged higher on Tuesday, 20 May 2014, tracking overnight gains in US markets. Key benchmark indices in Taiwan, Hong Kong, China and Japan were up 0.01% to 0.49%. Key benchmark indices in Singapore, Indonesia and South Korea were off 0.14% to 2.21%.

Thailand's army today, 20 May 2014, imposed martial law nationwide after months of political turmoil that brought down an elected government and tipped the economy into a contraction.

China plans to have about 100 initial public offerings from June through the end of this year as the government pushes for development in capital markets. The stock sales will be spread out to ensure there are a similar number each month, China Securities Regulatory Commission Chairman Xiao Gang said in a statement posted on the regulators website yesterday, 19 May 2014.

Singapore's gross domestic product expanded an annualized 2.3% in the three months through March from the previous quarter, when it climbed a revised 6.9%, the trade ministry said in a statement today, 20 May 2014.

Trading in US index futures indicated that the Dow could fall 5 points at the opening bell on Tuesday, 20 May 2014. US stocks ended Monday's thinly traded session higher with small-cap and tech companies leading the gains.

The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee tomorrow, 21 May 2014. 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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