GAIL (India) hits 52-week high

Key benchmark indices trimmed initial gains in morning trade. The barometer index, the S&P BSE Sensex, was up 33.21 points or 0.14%, off close to 120 points from the day's high and up about 45 points from the day's low. The market breadth, indicating the overall health of the market was negative.

NMDC and Steel Authority of India, both, reversed direction after hitting 52-week high of Rs 161 in early trade. GAIL (India) scaled 52-week high. Sun Pharmaceutical Industries rose after the company announced that one of its subsidiaries has executed a settlement agreement with Novartis Pharmaceuticals Corporation stipulating a dismissal of the lawsuits filed in the United States against the company regarding submission of an Abbreviated New Drug Application (ANDA) for a generic version of Gleevec, Imatinib Mesylate tablets.

The Sensex edged higher amid initial volatility. Key benchmark indices trimmed initial gains in morning trade.

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 10:20 IST, the S&P BSE Sensex was up 33.21 points or 0.14% to 23,848.33. The index jumped 156.66 points at the day's high of 23,971.78 in early trade, its highest level since 13 May 2014. The index shed 11.41 points at the day's low of 23,803.71 in early trade.

The CNX Nifty was up 5.20 points or 0.07% to 7,113.95. The index hit a high of 7,152.55 in intraday trade, its highest level since 13 May 2014. The index hit a low of 7,109.15 in intraday trade.

The BSE Mid-Cap index was down 7.72 points or 0.1% at 7,696.38. The BSE Small-Cap index was down 11.88 points or 0.15% at 7,847.15. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market was negative. On BSE, 1,106 shares dropped and 880 shares rose. A total of 121 shares were unchanged.

Among the 30-share Sensex pack, 24 stocks gained and rest of them fell. Tata Power Company (up 1.53%), NTPC (up 1.63%) and Bharat Heavy Electricals (Bhel) (up 1.85%) edged higher from the Sensex pack.

Sun Pharmaceutical Industries rose 1.95% after the company announced before market hours today, 15 May 2014, that one of its subsidiaries has executed a settlement agreement with Novartis Pharmaceuticals Corporation stipulating a dismissal of the lawsuits filed in the United States against the company regarding submission of an Abbreviated New Drug Application (ANDA) for a generic version of Gleevec, Imatinib Mesylate tablets. These tablets are indicated for the treatment of chronic myeloid leukemia.

Under the terms of the settlement agreement, Sun Pharma's subsidiary may launch its version of generic Gleevec in the United States on 1 February 2016. The other terms of the agreement are confidential. The agreement is subject to customary regulatory approvals. Sun Pharma's subsidiary holds a tentative approval from the US FDA for its ANDA for a generic version of Gleevec. As per IMS Health data, Gleevec had annual sales of approximately $2 billion in the United States.

Separately, with reference to the news item appearing in the newspaper on 14 May 2014 titled "Sun Pharma moves Supreme Court against stay on Ranbaxy merger", Sun Pharmaceutical Industries 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. Sun Pharma and Ranbaxy had announced on 7 April 2014 that they have entered into definitive agreements pursuant to which Sun Pharma will acquire 100% of Ranbaxy in an all-stock transaction.

NMDC fell 1.41% to Rs 156.95, with the stock reversing direction after hitting 52-week high of Rs 161 in early trade.

GAIL (India) rose 1.78% to Rs 402.05 after hitting 52-week high of Rs 406 in intraday trade.

Steel Authority of India (Sail) fell 0.2% to Rs 74.85, with the stock reversing direction after hitting 52-week high of Rs 77 in early trade.

In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 59.5175, compared with its close of 59.66/67 on Tuesday, 13 May 2014. The foreign exchange market was closed on Wednesday, 14 May 2014, on account of a bank holiday.

Indian stocks may see high intraday volatility tomorrow, 16 May 2014, as trends and actual results of wins by candidates/parties are announced during the process of counting of votes for the recently concluded Lok Sabha elections. The counting of votes will begin at 8:00 IST tomorrow, 16 May 2014, and all results are expected tomorrow itself. Various exit polls have 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. .

Asian stocks fell in choppy trade on Thursday, 15 May 2014, tracking overnight losses in US stocks. Key benchmark indices in South Korea, China, Taiwan, and Japan were off 0.1% to 0.84%. Key benchmark indices in Singapore and Hong Kong were up 0.23% to 0.26%.

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.

Trading in US index futures indicated that the Dow could drop 5 points at the opening bell on Thursday, 15 May 2014. 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.

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.

Federal Reserve Chair Janet Yellen will speak later in the global day today, 15 May 2014, after saying last week the world's biggest economy still requires a strong dose of stimulus.

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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