Amid a divergent trend among various index constituents, key benchmark indices registered small losses. Benchmark indices trimmed losses in late trade after languishing in negative zone almost throughout the trading session. The 50-unit CNX Nifty once again drifted in the red after briefly turning green from red late trade. The market breadth indicating the overall health of the market was positive. The barometer index, the S&P BSE Sensex, settled above the psychological 27,000 mark. Earlier, the Sensex had fallen below that level amid initial volatility. The Sensex had settled above the psychological 27,000 mark after yesterday's rally.
The Sensex was provisionally off 55.43 points or 0.2% at 27,195.67. Small-cap stocks were in demand. Quite a few stocks which are a part of the BSE Small-Cap index rose 2% to 20% for the day.
Index heavyweight and housing finance major HDFC fell. Index heavyweight and software major Infosys declined. Shares of private sector banks edged lower in volatile trade. PSU bank stocks edged higher.
On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 71.20 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges. Domestic institutional investors (DIIs) bought shares worth a net Rs 254 crore yesterday, 13 May 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged higher in choppy trade. Earlier during the global day, Asian stocks also edged higher. US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session.
As per provisional closing, the S&P BSE Sensex was down 55.43 points or 0.2% at 27,195.67. The index lost 302.48 points at the day's low of 26,948.62 in early trade. The index rose 42.89 points at the day's high of 27,293.99 at onset of day's trading session.
The CNX Nifty was down 11.25 points or 0.14% at 8,224.20. The index hit a high of 8,236.25 in intraday trade. The index hit a low of 8,137.30 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,471 shares gained and 1,190 shares declined. A total of 118 shares were unchanged.
The BSE Mid-Cap index was up 93.07 points or 0.89% at 10,526.94. The BSE Small-Cap index was up 99.49 points or 0.92% at 10,972.34. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2873 crore, lower than turnover of Rs 3545.28 crore registered during the previous trading session.
Index heavyweight and housing finance major HDFC fell 1.1% to Rs 1,206.10. The stock hit high of Rs 1,223.05 and low of Rs 1,192.15.
Index heavyweight and software major Infosys slipped 1.12% to Rs 1,934. The stock hit high of Rs 1,960 and low of Rs 1,910.
Shares of private sector banks edged lower in volatile trade. HDFC Bank (down 0.32%), Kotak Mahindra Bank (down 0.65%), Axis Bank (down 0.43%), Yes Bank (down 0.43%), and ICICI Bank (down 0.65%) declined. IndusInd Bank rose 0.04%.
PSU bank stocks edged higher. State Bank of India (SBI) (up 2.59%), Canara Bank (up 2.99%), Bank of India (up 4.31%), Union Bank of India (up 5.42%), Vijaya Bank (up 0.88%), Punjab National Bank (up 2.96%) and Bank of Baroda (up 1.75%) gained.
Oriental Bank of Commerce jumped 10.77%. OBC reported a net loss of Rs 178.44 crore in Q4 March 2015 compared with net profit of Rs 310.32 crore in Q4 March 2014. Total income rose 1.13% to Rs 5719.39 crore in Q4 March 2015 over Q4 March 2014.
The bank's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.18% as on 31 March 2015 as against 5.43% as on 31 December 2014 and 3.99% as on 31 March 2014. The ratio of net NPAs to net advances stood at 3.34% as on 31 March 2015 as against 3.68% as on 31 December 2014 and 2.82% as on 31 March 2014.
On the macro front, the latest data showed that inflation based on the wholesale price index (WPI) remained in negative zone last month. WPI inflation stood at negative 2.65% in April 2015, data released by the government today, 14 May 2015, showed. WPI inflation was minus 2.33% in March 2015. Build up of inflation in the financial year so far was minus 0.06%, compared to a build up rate of 0.28% in the corresponding period of the previous year.
Meanwhile, WPI inflation for February 2015 was revised downwards to negative 2.17% from negative 2.06% reported earlier.
Meanwhile, global credit raging agency Moody's Investors Service yesterday, 13 May 2015, said that of the non-financial and infrastructure corporates that it rates in India, the vast majority carry either positive or stable outlooks. Twenty-six percent of all corporates that Moody's rates in India carry positive outlooks, seventy percent carry stable outlooks, leaving only four percent with negative outlooks, said Philipp Lotter, a Moody's Managing Director for the Corporate Finance Group. Lotter was speaking at the first Moody's and ICRA Annual Credit Conference in Mumbai.
Over the next 12-18 months, India's economy should grow at around 7.5%, and credit conditions should improve for Moody's-rated non-financial corporates and infrastructure debt issuers in pro-cyclical industries, according to Lotter. He further said that most of the positive outlooks were on ratings of government-related issuers and therefore linked to the recent change in outlook to positive on the Indian sovereign. However, broader improvements in credit conditions for corporates will also be due to an upturn in economic growth, the banks' pass-through of interest rate cuts, weakness in international commodity prices, and the government's pro-growth policy agenda.
Sectors that will benefit the most include industrials, transport infrastructure, metals and automotives. However, issuers in the upstream oil and gas and chemicals sectors will see their earnings and cash flows pressured by weak oil prices globally. Lotter pointed out that the latest economic data in India suggests that a cyclical pick-up in economic activity is underway, as the country's purchasing managers' indices for the manufacturing and services sectors are expanding. In addition, leading investment indicators such as capital goods production and commercial vehicle sales point to a gradual bottoming out in India's capex cycle.
A number of stubborn macroeconomic challenges have also eased significantly. Consumer price inflation has fallen to the mid-single digits, while the country's current account balance is running at a historically mild deficit of 1.1% of GDP. The reduction in both the country's headline inflation rate and current account deficit provides a more stable backdrop for Indian corporates in terms of market borrowing costs and the exchange rate.
As for the weak commodity prices globally, Lotter said that the historically low prices are generally credit positive because operating costs will be lower for sectors such as automotives, manufacturing, infrastructure and power. On leverage, Lotter said that debt levels are in general stabilizing for Moody's-rated Indian corporate and infrastructure issuers. On a weighted average basis, Moody's expects debt-to EBITDA to stabilize at 2.8x in 2015 because an upswing in earnings and improving margins should help shore up key credit metrics for Indian corporates rated by Moody's.
Meanwhile, Prime Minister Narendra Modi arrived on a three-day visit to China today, 14 May 2015.
In overseas markets, European stocks edged higher today, 14 May 2015, in choppy trade. Key indices in France, Germany and UK were up 0.01% to 0.18%.
Meanwhile, Greek Finance Minister Yanis Varoufakis reportedly said today, 14 May 2015, that Greece's debt repayments to the European Central Bank should be pushed back to the distant future. Greece on 12 May 2015 made a 750-million-euro ($836.7 million) loan repayment to the International Monetary Fund, but did so by raiding an emergency account.
Asian stocks edged higher today, 14 May 2015. Key benchmark indices in China, Singapore, Hong Kong and South Korea were up 0.06% to 0.78%. Key benchmark indices in Taiwan and Japan were off 0.98% to 1.16%. Indonesian markets are closed for a holiday.
US stocks closed virtually unchanged yesterday, 13 May 2015, as early gains faded by the end of the session. In economic data, US retail sales were unchanged in April as households cut back on purchases of cars and other big-ticket items and import prices fell for a 10th straight month in April and business inventories barely rose in March.
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