Market breadth turns negative from positive

Key benchmark indices recovered after hitting fresh intraday low in afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, turned positive after entering negative terrain for a brief period. The Nifty recovered after hitting 6-week low. The Sensex recovered after hitting its lowest level in more than 3 weeks. The Sensex was up 9.66 points or 0.04%, up about 57 points from the day's low and off close to 110 points from the day's high. The market breadth, indicating the overall health of the market turned negative from positive in afternoon trade.

Bharat Heavy Electricals rose after announcing the commissioning of a gas turbine-based Power Plant in Oman.

The Sensex edged higher in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed initial gains in morning trade. Intraday volatility continued as key benchmark indices trimmed gains soon after extending intraday gains in mid-morning trade. Key benchmark indices erased a lion's part of intraday gains in early afternoon trade. Key benchmark indices recovered after hitting fresh intraday low in afternoon trade. The Nifty recovered after hitting 6-week low. The Sensex recovered after hitting its lowest level in more than 3 weeks.

Foreign institutional investors (FIIs) bought shares worth a net Rs 119.11 crore on Wednesday, 7 May 2014, as per provisional data from the stock exchanges.

At 13:15 IST, the S&P BSE Sensex was up 9.66 points or 0.04% to 22,333.56. The index fell 46.86 points at the day's low of 22,277.04 in afternoon trade, its lowest level since 16 April 2014. The index jumped 119.23 points at the day's high of 22,443.13 in mid-morning trade.

The CNX Nifty was up 2.25 points or 0.03% to 6,654.80. The index hit a low of 6,638.55 in intraday trade, its lowest level since 27 March 2014. The index hit a high of 6,688.40 in intraday trade.

The BSE Mid-Cap index was down 11.22 points or 0.15% to 7,348.86, underperforming the Sensex. The BSE Small-Cap index was up 20.99 points or 0.28% to 7,547.98, outperforming the Sensex.

The market breadth, indicating the overall health of the market turned negative from positive inj afternoon trade. On BSE, 1328 shares dropped and 1,157 shares rose. A total of 140 shares were unchanged.

Among the 30-share Sensex pack, 18 stocks gained and rest of them fell. Cipla (up 1.61%), Wipro (up 1.48%), State Bank of India (up 1.23%), Tata Motors (up 0.98%), ONGC (up 0.91%), Hindalco Industries (up 0.89%), ICICI Bank (up 0.83%), HDFC Bank (up 0.76%), Sesa Sterlite (up 0.70%) and Tata Steel (up 0.60%), edged higher from the Sensex pack.

ITC (down 1.57%), GAIL (India) (down 0.92%), Hero MotoCorp (down 0.9%), Sun Pharmaceutical Industries (down 0.7%), Tata Power (down 0.65%), HDFC (down 0.55%), TCS (down 0.5%), Larsen & Toubro (down 0.44%), Bharti Airtel (down 0.37%) and Infosys (down 0.37%), edged lower from the Sensex pack.

lndia's largest Power Project exporter, Bharat Heavy Electricals (Bhel) rose 1.12% to Rs 180.50. The company announced during trading hours today, 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. Bhel supplied sets today account for over 50% of the power generating capacity of Petroleum Development Oman, Bhel said.

Shasun Pharmaceuticals hit an upper circuit limit of 10% to Rs 165 after Morgan Stanley Asia (Singapore) PTE acquired 4.02 lakh equity shares, or 0.71% equity, of Shasun Pharmaceuticals at Rs 146.86 per share on NSE on Wednesday, 7 May 2014.

Aditya Birla Chemicals (India) slumped 15.30% after net profit declined 90.6% to Rs 0.74 crore on 62.4% growth in net sales to Rs 271.91 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Wednesday, 7 May 2014.

Hatsun Agro Product lost 2.17% after net profit declined 34% to Rs 4.01 crore on 8.2% growth in net sales to Rs 642.07 crore in Q4 March 2014 over Q4 March 2013. The Q4 result was announced after market hours on Wednesday, 7 May 2014.

In the foreign exchange market, the rupee edged higher against the dollar after Federal Reserve Chair Janet Yellen signaled the US still needs monetary stimulus and as China's exports beat forecasts. The partially convertible rupee was hovering at 60.0125, compared with its close of 60.135/145 on Wednesday, 7 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.

A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.

Investors are hoping that a stable government which will complete its full term of five years in office comes to power after the elections. 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.

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.

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.

European stocks rose in early trade on Thursday, 8 May 2014, following dovish comments from US Federal Reserve Chair Janet Yellen and better-than-expected Chinese trade figures. Key benchmark indices in UK, France and Germany were up by 0.21% to 0.50%.

A monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled today, 8 May 2014.

The European Central Bank (ECB) will hold monetary policy meeting today, 8 May 2014, in Brussels, Belgium.

German industrial output unexpectedly fell for the first time in five months in a sign that expansion in Europe's largest economy is slowing. Production adjusted for seasonal swings, declined 0.5% from February, when it gained a revised 0.6%, the Federal Statistics Office in Wiesbaden said today. Production rose 3% in March from the previous year when adjusted for working days.

Asian stocks rose on Thursday, 8 May 2014, as Federal Reserve Chairwoman Janet Yellen said the Federal Reserve will continue to support the US economy. Key benchmark indices in Japan, Hong Kong, China, Singapore, South Korea and Taiwan were up 0.27% to 0.93%. Indonesia's Jakarta Composite fell 0.08%.

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 today. Imports gained 0.8%, leaving a trade surplus of $18.46 billion.

Australian employers boosted payrolls in April, underscoring an improving economic outlook that prompted the central bank to adopt a neutral policy stance. The number of people employed rose by 14,200 from a month earlier, the statistics bureau said in Sydney. The jobless rate held at 5.8%.

Trading in US index futures indicated that the Dow could advance 13 points at the opening bell on Thursday, 8 May 2014. Most US stocks rose on Wednesday after comments from Federal Reserve Chair Janet Yellen signaled continued support for the US economy.

Yellen told US lawmakers the economic stimulus that has fueled global asset gains is still required because employment and inflation are well short of the central bank's goals.

The Labor Department said that US nonfarm productivity fell at its fastest pace in a year in the first quarter because of severe weather. That led to the largest gain in unit labor costs in more than a year. Productivity fell at a 1.7% annual rate in the quarter, the Labor Department said.

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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