Key indices edge higher in volatile trade

Key benchmark indices edged higher after seeing intense volatility during the second half of the trading session. Benchmark indices bounced back soon after extending intraday losses in mid-afternoon trade. Earlier, benchmark indices had extended intraday losses in mid-afternoon trade after India's weather office -- India Meteorological Department -- predicted below normal rains during the June-September southwest monsoon season this year. Earlier, benchmark indices had reversed direction in afternoon trade after moving in narrow range in positive zone in early afternoon trade.

The market breadth indicating the overall health of the market once again turned positive from negative in late trade. Earlier, the breadth had turned negative from positive in mid-afternoon trade.

The barometer index, the S&P BSE Sensex, was provisionally up 226.87 points or 0.82% at 27,902.91. The index jumped 271.22 points at the day's high of 27,947.26 in late trade. The index fell 290.56 points at the day's low of 27,385.48 in mid-afternoon trade.

FMCG stocks dropped after forecast of below normal rains. Wipro edged lower after the company reported a muted 2% year-on-year growth in bottom line in Q4 March 2015 and issued a tepid revenue guidance for Q1 June 2015. L&T advanced after its construction division secured orders worth Rs 2674 crore across various business segments.

Foreign portfolio investors bought shares worth a net Rs 17488.73 crore yesterday, 21 April 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 1364.83 crore on yesterday, 21 April 2015, as per provisional data released by the stock exchanges.

Earlier, the Sensex and the 50-unit CNX Nifty, both, hit their lowest level in nearly 4 weeks in mid-afternoon trade after the India Meteorological Department predicted below normal rains during the June-September southwest monsoon season this year.

In overseas markets, European stocks reversed initial gains. In Asia, Japan's Nikkei Stock Average closed above 20,000 for the first time in 15 years to after the country registered a trade surplus in March for the first time in nearly three years.

As per provisional closing, the S&P BSE Sensex was up 226.87 points or 0.82% at 27,902.91. The index fell 290.56 points at the day's low of 27,385.48 in mid-afternoon trade, its lowest level since 27 March 2015. The index jumped 271.22 points at the day's high of 27,947.26 in late trade

The CNX Nifty was up 51.95 points or 0.62% at 8,429.70. The index hit a low of 8,284.70 in intraday trade, its lowest level since 27 March 2015. The index hit a high of 8,449.95 in intraday trade.

The BSE Mid-Cap index was up 39.53 points or 0.38% at 10,546.24. The BSE Small-Cap index was down 4.38 points or 0.04% at 11,328.51. Both theses indices underperformed the Sensex.

The market breadth indicating the overall health of the market once again turned positive from negative in late trade. On BSE, 1,374 shares fell and 1,370 shares rose. A total of 128 shares were unchanged. Earlier, the breadth had turned negative from positive in mid-afternoon trade.

The total turnover on BSE amounted to Rs 3488 crore, lower than turnover of Rs 4021.67 crore registered during the previous trading session.

FMCG stocks edged lower the India Meteorological Department (IMD) forecast below normal rains this year. Procter & Gamble Hygiene & Health Care (down 2.63%), Colgate Palmolive (India) (down 1.59%), Godrej Consumer Products (down 1.22%), Dabur India (down 1.02%), GlaxoSmithKline Consumer Healthcare (down 0.48%), Nestle India (down 0.45%) and Tata Global Beverages (down 0.27%), edged lower. Britannia Industries (up 0.09%), Marico (up 0.24%), Jyothy Laboratories (up 0.91%), Bajaj Corp (up 2.26%) and Hindustan Unilever (up 3.56%) edged higher.

FMCG companies derive substantial sales from rural India. Good and timely rains will boost agricultural income and rural demand. On the other hand, a deficient rainfall could hit agriculture income adversely which in turn would hit rural demand for consumer goods.

L&T advanced 3.42% to Rs 1,747.20 after the company said that its construction division has secured orders worth Rs 2674 crore across various business segments. The announcement was made during trading hours today, 22 April 2015.

ITC was off 0.04% at Rs 341.70. With reference to the news item titled, "ITC in talks with century textile to buy it's paper division," ITC clarified during trading hours today, 22 April 2015, that the media report under reference is incorrect. There are no negotiations with any party with respect to the subject matter, ITC said.

Wipro edged lower after the company reported a muted 2% year-on-year growth in bottom line in Q4 March 2015 and issued a tepid revenue guidance for Q1 June 2015. The stock was off 6.01% at Rs 544. The stock hit a high of Rs 563 and a low of Rs 541.75. On a consolidated basis, the company's net profit rose 2% to Rs 2270 crore on 4% growth in total revenue to Rs 12140 crore in Q4 March 2015 over Q4 March 2014. The result hit the market after market hours yesterday, 21 April 2015. The results are as per International Financial Reporting Standards (IFRS).

Wipro's IT Services segment revenue in rupee terms rose 6% to Rs 11240 crore in Q4 March 2015 over Q4 March 2014. IT Services revenue rose 3.2% to $1.774 billion in Q4 March 2015 over Q4 March 2014. Non-GAAP constant currency IT Services revenue in dollar terms rose 1.2% to $1.817 billion, within the company's earlier guidance range of $1.814 billion to $1.850 billion. Wipro expects its revenue from IT services business at between $1.765 billion to $1.793 billion in Q1 June 2015.

The India Meteorological Department (IMD) today, 22 April 2015, said quantitatively the monsoon seasonal rainfall is likely to be 93% of the Long Period Average (LPA) during the June-September southwest monsoon season this year, with a model error of plus/minus 5%. Monsoon rainfall is considered below normal when the rainfall range is 90% to 96% of LPA. The probability for below normal rainfall is 35%, for deficient 33% and for normal 28%. Currently, weak El Nino conditions are prevailing over the Pacific. The latest forecast from the IMD-IITM coupled model forecast indicates El Nino conditions are likely to persist during the southwest monsoon season, the IMD said in a press release. As the extreme sea surface temperature conditions over Pacific and Indian Oceans particularly ENSO conditions over Pacific (El Nino or La Nina) are known to have strong influence on the Indian summer monsoon, IMD is carefully monitoring the sea surface conditions over Pacific and Indian oceans.

The IMD will issue the update on monsoon forecasts in June 2015 as a part of the second stage forecast.

The southwest monsoon is crucial for the agriculture sector. India gets 70% of its annual rainfall in the southwest monsoon, which irrigates half the country's farmlands.

Meanwhile, Finance minister Arun Jaitley was quoted as saying today, 22 April 2015, that there was a broad consensus that states are in support of a nationwide goods and services tax (GST). He was speaking to reporters after meeting finance ministers from 18 states to discuss the road-map for roll-out of GST. The government, he said, will go ahead with constitutional amendment bill on GST in the current budget session of Parliament. It may be recalled that the government had tabled the Constitution Amendment Bill for GST in the Lok Sabha during the winter session of parliament.

GST, touted as the single biggest indirect taxation reforms since independence, will simplify and harmonise the indirect tax regime in the country. Central taxes like Central Excise Duty, Additional Excise Duties, Service Tax, Additional Customs Duty (CVD) and Special Additional Duty of Customs (SAD), etc. will be subsumed in GST. At the state level, taxes like VAT/Sales Tax, Central Sales Tax, Entertainment Tax, Octroi and Entry Tax, Purchase Tax and Luxury Tax, etc. would be subsumed in GST.

In Europe, the Bank of England officials voted unanimously to leave the UK central bank's main interest rate unchanged this month and concluded that the recent pickup in growth in the neighboring eurozone should help power the UK economy this year, according to the minutes of the Monetary Policy Committee's April meeting published today, 22 April 2015.

Meanwhile, global markets are closely monitoring developments with regard to Greece. Greece needs to agree on a range of economic overhauls with the lenders in order to receive the next much-needed tranche of bailout and avoid running out of cash. Eurozone finance ministers are scheduled to hold a meeting on Friday, 24 April 2015, to discuss the state of negotiations between Greece and its international creditors.

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