Key benchmark indices edged higher for the second day in a row today, 6 May 2014. The barometer index, the S&P BSE Sensex, was provisionally up 71.74 points or 0.32%, up about 40 points from the day's low and off about 85 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Index heavyweights Reliance Industries (RIL) and ITC, both, gained. Capital goods stocks gained. HDFC dropped after announcing Q4 results.
The market edged higher in early trade. The Sensex an d the 50-unit CNX Nifty, both, hit their highest level in almost one week. It held firm in morning trade. It trimmed intraday gains in mid-morning trade. It hovered in positive terrain in early afternoon trade. Key benchmark indices firmed up after hitting fresh intraday low in afternoon trade. It continued to trade firm in mid-afternoon trade. It regained strength after trimming gains and hitting fresh intraday low in late trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Monday, 5 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 279.86 crore on Monday, 5 May 2014, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 71.74 points or 0.32% to 22,516.86. The index rose 157.59 points at the day's high of 22,602.71 in early trade, its highest level since 30 April 2014. The index gained 30.53 points at the day's low of 22,475.65 in late trade.
The CNX Nifty was up 18.65 points or 0.28% to 6,718, as per provisional figures. The index hit a high of 6,743.45 in intraday trade, its highest level since 30 April 2014. The index hit a low of 6,710.90 in intraday trade.
The BSE Mid-Cap index rose 22.63 points or 0.31% to 7,370.69. The BSE Small-Cap index rose 34.74 points or 0.46% to 7,532.83. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 1943 crore, lower than Rs 2435.17 crore on Monday, 5 May 2014.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,376 shares declined and 1,364 shares rose. A total of 139 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks decliined and rest of them rose. Tata Motors (up 1.09%), Tata Steel (up 0.87%), and ICICI Bank (up 1.9%), edged higher from the Sensex.
Index heavyweight Reliance Industries (RIL) rose 2.19% to Rs 965.90. The stock hit high of Rs 967 and low of Rs 948. The stock was the biggest gainer from the Sensex pack.
Index heavyweight and cigarette maker ITC gained 0.83%.
Housing Development Finance Corporation (HDFC) dropped 1.26% after announcing Q4 results. The company's consolidated net profit rose 15.91% to Rs 2414.70 crore on 11.34% rise in total income to Rs 12296.02 crore in Q4 March 2014 over Q4 March 2013. Housing Development Finance Corporation (HDFC)'s consolidated net profit rose 19.7% to Rs 7947.82 crore on 13.41% growth in total income to Rs 40814.56 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). The result was announced during market hours.
HDFC said that the board of directors of the company at its meeting held today, 6 May 2014, inter alia, has recommended a dividend of Rs 14 per share for the financial year ended 31 March 2014. The dividend if approved by the members will be dispatched/ remitted commencing from the day after the ensuing Annual General Meeting. HDFC said that the Register of Members & Share Transfer Books of the company will remain closed from 8 July 2014 to 21 July 2014 (both days inclusive) for the purpose of payment of dividend & 37th Annual General Meeting (AGM) of the company to be held on 21 July 2014.
Capital goods stocks gained. Bharat Heavy Electricals (Bhel) (up 0.03%), BEML (up 1.3%), L&T (up 1.3%), and Punj Lloyd (up 2.76%) rose.
Shasun Pharmaceuticals hit 10% upper circuit at Rs 140.25 on BSE after the company acquired the global rights to develop and commercialise Ibuprofen the 12-hour extended release tablets from the US-based ScolrPharma. The company made the announcement during trading hours on Monday, 5 May 2014. The stock settled 0.20% lower at Rs 127.50 on Monday after rising as much as 4.46% in intraday that day.
Shasun Pharmaceuticals, through its wholly-owned subsidiary, SVADS Holdings, Switzerland (SVADS) acquired the global rights from ScolrPharma, USA (Scolr), to develop and commercialize Ibuprofen 12 hour extended release OTC tablets (Asset) as well as the associated controlled release technology (CDT) along with global rights of Nuprin trademark, a well known brand in analgesics. The Asset, having completed a successful Phase III in the US is a differentiated long acting NSAIDS in the multi billion dollar global OTC analgesic market.
Shasun is the world's leading, vertically integrated manufacturer of Ibuprofen and its derivatives, from actives to formulated packaged products for both the Rx and OTC markets. This acquisition complements Shasun's strategy to expand its range of NSAIDS products through novel, safe and efficacious delivery technologies including transdermal applications across its Ibuprofen franchise, the company said in a statement.
In the foreign exchange market, the rupee edged higher against the dollar. The partially convertible rupee was hovering at 60.16, compared with its close of 60.22 on Monday, 5 May 2014.
April data indicated that business activity across the Indian private sector fell again Markit Economics said today, 6 May 2014. The seasonally adjusted HSBC India Composite Output Index rose from 48.9 in March to 49.5. Despite being consistent with a marginal rate of reduction, this was the second consecutive sub-50.0 reading recorded. Manufacturing production increased at a softer rate in April, whereas service sector output decreased further.
Up from 47.5 in March to 48.5 in April, the headline HSBC Business Activity Index adjusted for seasonal factors indicated a slower contraction of output in the Indian service sector. Nevertheless, the latest reduction was the tenth in as many months. According to survey participants, a difficult economic climate, combined with the elections and a further drop in new orders had all contributed to the latest fall in business activity. Output decreased in two of the six monitored service categories, these being Financial Intermediation and Transport & Storage.
Incoming new work at service providers dropped at a softer rate in April, and one that was modest overall. Panellists reporting lower new business linked this to weaker demand and the elections. Conversely, new orders received by manufacturers increased. Private sector companies registered lower new business for the second month running, although the rate of reduction eased to a marginal pace.
Indian services companies indicated that payroll numbers fell in April, amid evidence of lower new business inflows. Despite being fractional, the latest drop in staffing levels ended a four-month sequence of job creation. Workforce numbers in the private sector as a whole were broadly unchanged.
Input prices faced by Indian services firms continued to rise in April, with panellists reporting higher prices paid for food, packaging materials, fuel and paper. Although solid, the rate of inflation was weaker than the series long-run average. Input price inflation in the manufacturing economy moderated. Subsequently, the rise in input costs across the private sector as a whole softened to the slowest since last June.
Output charge inflation at service providers accelerated to the strongest in five months during April, as companies attempted to protect margins amid increased cost burdens. That said, the index measuring output prices registered below its long-run trend. Average tariffs across the private sector as a whole also rose, with inflation being the strongest in five months.
Unfinished business in the Indian service sector rose for the second month in succession during April, with firms reporting delayed payments from clients. Nonetheless, the rate of backlog accumulation was modest and little-changed since March. Work-in-hand in the private sector rose for the second month running.
Business sentiment in the service sector remained positive in April, with survey respondents indicating that a combination of planned increases in marketing budgets, the launch of new services and forecasts of stronger demand are all expected to result in output growth over the course of the next year. There were also mentions that economic conditions are anticipated to improve after the elections.
Commenting on the India Services PMI survey, Leif Eskesen, Chief Economist for India & ASEAN at HSBC said : While the Business Activity Index improved, it remained below the water line. This points to still subdued service sector activity. Meanwhile, the slight uptick in inflation readings suggests that inflation pressures are still lingering, which calls for the RBI to continue its starring contest with inflation.
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 upcoming 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.
Most European stocks edged lower on Tuesday. UK's FTSE 100 fell 0.2%. France's CAC 40 was flat. Germany's DAX declined 0.03%.
Euro zone businesses had a solid start to the second quarter of the year with activity picking up at its fastest pace in almost three years, surveys showed on Tuesday, suggesting a broad-based recovery is taking hold in the bloc. While Germany continued to lead the upturn, businesses in Spain and Ireland grew at their fastest pace since before the financial crisis.
Survey compiler Markit said the Composite Purchasing Managers' Index pointed to second-quarter growth of 0.5 percent, which would be the strongest in three years.
A monthly meeting of the Monetary Policy Committee of the Bank of England's (BoE) for monetary policy review is scheduled on Thursday, 8 May 2014. The Composite PMI, widely seen as a good gauge of growth, rose to 54.0 in April, as expected, from March's 53.1. It has held above the 50 mark that divides growth from contraction for 10 months in a row. Burgeoning new orders provided the boost, with the related sub-index rising to a 35-month high of 52.7 in April, while firms took on staff at the fastest pace since September 2011.
The index for the euro zone's vast service industry rose to a 34-month high of 53.1 in April from 52.2 in March thanks to a surge in new business to its highest since June 2011 and a slight rise in employment. Services business activity in France, Germany, Italy, Ireland and Spain all grew together for the first time since May 2011.
The European Central Bank (ECB) will hold monetary policy meeting on Thursday, 8 May 2014, in Brussels, Belgium. The ECB is expected to keep its key policy rates on hold.
Asian stocks were mostly higher on Tuesday, with trading volume curbed by holidays in Japan, Hong Kong and South Korea. Key benchmark indices in China, Singapore, and Taiwan were up 0.03% to 0.47%. Indonesia's Jakarta Composite was down 0.17%.
Australia's central bank left its benchmark interest rate unchanged at a record low as tame consumer prices and anticipated cuts to government spending give policy makers room to spur employment-intensive industries. Governor Glenn Stevens and his board kept the overnight cash-rate target at 2.5% as predicted.
Trading in US index futures indicated that the Dow could gain 19 points at the opening bell on Tuesday, 6 May 2014. US stocks edged higher on Monday on the back of positive economic data. The Institute for Supply Management's US services sector index rose to 55.2 in April, the fastest pace in eight months and easily topping forecasts. A reading above 50 indicates expansion. The data added to evidence that the US economy is emerging from a particularly harsh winter-induced slowdown and provided a welcome offset to worries about China.
Federal Reserve Chair Janet Yellen is due to testify to lawmakers tomorrow, 7 May 2014 after the US central bank pressed ahead April 30 with reductions to its monthly bond-buying, while holding its short-term interest-rate target at near zero.
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