Market gives thumbs up to BJP's strong performance in assembly elections

Indian stocks surged today, 9 December 2013, after a strong performance of Bharatiya Janata Party (BJP) in assembly elections. The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro development leader -- Narendra Modi -- would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade. The market sentiment was also boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. In the foreign exchange market, the rupee edged higher against the dollar. The barometer index, the S&P BSE Sensex, regained the psychological 21,000 mark. The Sensex was provisionally up 290.02 points or 1.38%, up about 5 points from the day's low and off close to 200 points from the day's high.

Indian stocks gained for the third day in a row today, 9 December 2013.

Shares of engineering and construction major L&T scaled 52-week high. Bank stocks rose across the board. Jindal Steel & Power fell on profit booking. Shares of shipping companies rose after the Baltic Dry Index, which tracks rates to ship dry commodities, gained 1.45% on Friday, 6 December 2013.

The market surged in early trade after strong performance of Bharatiya Janata Party (BJP) in assembly elections. The Sensex and the 50-unit CNX Nifty, both, hit record high. A bout of volatility was witnessed as key benchmark indices regained strength after trimming initial strong gains in morning trade. Volatility continued on the bourses as key benchmark indices trimmed gains and hit fresh intraday low in mid-morning trade. The market was range bound in early afternoon trade. Firmness continued on the bourses in mid-afternoon trade. The market trimmed gains in late trade.

BJP has secured emphatic victory in assembly elections in Madhya Pradesh and Rajasthan, a narrower one in Chhattisgarh and emerged as the single largest party in a hung Delhi assembly, giving the party and its leader Narendra Modi confidence and momentum going into next year's general elections. Aam Aadmi Party, which confounded skeptics to win 28 seats in the 70-member Delhi assembly, denied BJP, which won 31 seats, an outright victory. Congress's debacle has also fortified the perception of Narendra Modi-led BJP being the frontrunner for 2014 Lok Sabha elections. Counting of votes for assembly elections in Rajasthan, Delhi, Madhya Pradesh and Chattisgarh took place on Sunday, 8 December 2013.

The investor community is betting that BJP's win in Lok Sabha elections next year under the leadership of pro development leader, Narendra Modi would help solve India's intrinsic problems, boost investments and propel economic growth which has seen a consistent slide under the UPA government in last one decade.

Meanwhile, the counting of elections for the 40-member Mizoram Assembly which is underway today, 9 December 2013, showed that the Congress is heading towards forming a government in the state. The Congress party won in 20 seats and was leading in 10 seats so far.

The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Friday, 6 December 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 863.77 crore on Friday, 6 December 2013, as per provisional data from the stock exchanges.

As per provisional figures, the S&P BSE Sensex was up 290.02 points or 1.38% to 21,286.55. The index jumped 487.21 points at the day's high of 21,483.74 in early trade, which is a record high. The index rose 286.11 points at the day's low of 21,282.64 in mid-morning trade.

The CNX Nifty was up 92.95 points or 1.48% to 6,352.85, as per provisional figures. The index hit a high of 6,415.25 in intraday trade, which is a record high. The index hit a low of 6,345 in intraday trade.

The total turnover on BSE amounted to Rs 2215 crore, higher than Rs 1846.02 crore on Friday, 6 December 2013.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,309 shares dropped and 1,202 shares rose. A total of 179 shares were unchanged.

From the 30-share Sensex pack, 26 stocks rose and only four fell. Sesa Sterlite (up 4.93%), Maruti Suzuki India (up 4.03%) and ONGC (up 3.45%) edged higher from the Sensex pack.

L&T advanced 3.69% to Rs 1,137 after hitting 52-week high of Rs 1,152.40 in intraday trade.

Jindal Steel & Power dropped 5.84% to Rs 267 in volatile trade. The stock hit a high of Rs 289.90 and low of Rs 265.10. The stock fell on profit booking after gaining 15.26% in the preceding 11 trading sessions to Rs 283.55 on 6 December 2013, from a recent low of Rs 246 on 21 November 2013.

Bank stocks rose across the board. AXIS Bank (up 1.59%), ICICI Bank (up 4.66%) and HDFC Bank (up 1.69%) gained.

Among PSU bank stocks, State Bank of India, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank rose 1.21% to 2.78%.

Shares of state-run Canara Bank jumped 4.1% to Rs 277 after the bank's Chairman and Managing Director R.K. Dubey said in an interview to a news agency that he expects the bank's asset quality to improve by 20-30 basis points by March 2014 on the back of the bank's focus on aggressive debt collections and better monitoring of performing accounts.

Induslnd Bank rose 3.86%. The bank said during market hours today, 9 December 2013, that it has opened a new branch in Aliganj area of Lucknow. Induslnd Bank now has nine branches in Lucknow district and overall forty nine branches in the state of Uttar Pradesh. The bank also announced its plans to further strengthen its presence and customer reach in Uttar Pradesh.

Essar Oil rose 0.54% after the company said that it has issued and allotted 8.38 crore equity shares of Rs 10 each (face value) fully paid-up, to the promoter company, Essar Energy Holdings (EEHL) on exercise of option by EEHL to convert its entire holding of foreign currency convertible bonds (FCCBs) aggregating to $262 million into equity shares. This includes issue and allotment of 3.88 crore equity shares of Rs 10 each at a premium of Rs 128 per share, aggregating to Rs 138 per share to EEHL on conversion of 1,150 FCCBs aggregating to $115 million which were issued on 15 June 2010 and allotment of 4.50 crore equity shares of Rs 10 each at a premium of Rs 143 per share, aggregating to Rs 153 per share to EEHL on conversion of 1,470 FCCBs aggregating to $147 million which were issued on 9 July 2010.

Shares of shipping companies rose after the Baltic Dry Index, which tracks rates to ship dry commodities, gained 1.45% on Friday, 6 December 2013. Great Eastern Shipping Company (up 0.63%), Shipping Corporation of India (up 10.36%), Mercator (up 4.88%), Varun Shipping Company (up 7.67%) and Essar Shipping (up 1.83%) gained. The Baltic Dry Index (BDI) is widely followed by analysts, money managers, shipping companies and investors because it provides benchmark rates for transporting dry bulk commodities such as iron ore, coal, and grain across water.

In the foreign exchange market, the rupee edged higher against the dollar after strong performance of Bharatiya Janata Party (BJP) in assembly elections. The partially convertible rupee was hovering at 61.06, compared with its close of 61.41/42 on Friday, 6 December 2013.

On macro front, the Reserve Bank of India (RBI) announces next Mid-Quarter Review of Monetary Policy for 2013-14 on 18 December 2013. The Third Quarter Review of Monetary Policy for 2013-14 is scheduled 28 January 2014.

European stocks reversed initial gains on Monday, 9 December 2013, on speculation that upbeat US job data could lead to the US Federal Reserve reducing monetary stimulus for the US economy earlier that previously thought. Key benchmark indices in France and UK shed 0.11% to 0.3%. Germany's DAX rose 0.27%.

Asian stocks rose on Monday, 9 December 2013, after better-than-forecast growth in US jobs and Chinese exports boosted investor confidence cuts to Federal Reserve stimulus won't derail the global economic recovery. Key benchmark indices in China, Taiwan, Indonesia, South Korea, Japan and Hong Kong rose 0.05% to 2.29%. Singapore's Straits Times fell 0.02%. Fed's bond-buying program has been a source of liquidity for most Asian and emerging markets this year.

China today reported inflation slowed more than estimated last month, after data yesterday showed export growth helped swell the nation's trade surplus to $33.8 billion, the widest since January 2009. The consumer-price index rose 3 percent from a year earlier, the National Bureau of Statistics said today in Beijing.

China's trade surplus widened last month to the largest in more than four years as exports exceeded estimates. The surplus of $33.8 billion was the biggest since January 2009, data from the General Administration of Customs showed yesterday in Beijing. Outbound shipments rose 12.7% from a year earlier, while import gained 5.3%.

Japan's growth slowed more than an initial estimate in the third quarter while the country posted an unexpected deficit in its broadest trade gauge in October, underscoring headwinds to Prime Minister Shinzo Abe's efforts to cement a recovery. Gross domestic product expanded an annualized 1.1% from the previous quarter when it rose 3.6%, the Cabinet Office said today in Tokyo, lower than a preliminary reading of 1.9%. Japan's current account registered a 128 billion yen ($1.2 billion) shortfall, the first deficit since January, according to the finance ministry.

Trading in US index futures indicated that the Dow could advance 10 points at the opening bell on Monday, 9 December 2013. US stocks surged on Friday, 6 December 2013, after the latest data showed American employers added more jobs than forecast and the jobless rate dropped to the lowest since 2008. The 203,000 increase in payrolls in November followed a revised 200,000 advance in October, Labor Department figures showed. The US jobless rate fell to 7%, showing progress in the labor market that will help provide a spark for the US economy. Another report showed consumer confidence rose more than forecast in December to the highest level in five months, easing concern about household spending heading into the holiday-shopping season. The Thomson Reuters/University of Michigan preliminary December consumer sentiment index rose to 82.5, the strongest since July, from 75.1 in November.

Investors are keeping a close watch on economic data in the United States as the Federal Reserve monitors the pace of recovery to gauge when it will begin to reduce monetary stimulus for the US economy, which has been aimed at encouraging growth. The Federal Open Market Committee (FOMC) holds a two-day policy meeting on interest rates in the United States on 17-18 December 2013. The US central bank currently buys bonds worth $85 billion a month in a bid to hold interest rates low and encourage economic growth in the world's biggest economy. Minutes of the Fed's October meeting released on 20 November 2013 showed officials may reduce their $85 billion a month of bond buying if the economy improves as anticipated.

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