Key benchmark indices surged after a news agency quoted an unnamed official of the India Meteorological Department as saying that conditions have turned favourable for the onset of monsoon in India in about 24 hours. The barometer index, the S&P BSE Sensex, hit record closing high above the psychological 25,000 level. The 50-unit CNX Nifty also scaled record closing high. The Sensex garnered 213.68 points or 0.86%, up close to 375 points from the day's low and off about 25 points from the day's high. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The BSE Small-Cap index gained more than 1.4%. The BSE Mid-Cap index rose more than 1%. Both these indices outperformed the Sensex.
The market sentiment was also boosted by an announcement from the Prime Minister's Office (PMO) that Prime Minister Narendra Modi on Wednesday, 4 June 2014, held discussions with Secretaries of all the Ministries and senior officers of the Departments of the Government of India wherein the Prime Minister encouraged the officers to take decisions and assured them that he would stand by them.
The Sensex has risen 802.17 points or 3.31% in the first four trading sessions of June this month so far. The Sensex has gained 3,848.83 points or 18.18% in calendar year 2014 so far (till 5 June 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 7,570.80 points or 43.38%. From a record intraday high of 25,375.63 on 16 May 2014, the Sensex has fallen 356.12 points or 1.4%.
Coming back to today's trade, steel shares were in demand with Jindal Steel & Power, JSW Steel, Tata Steel and Steel Authority of India hitting 52-week high. Sesa Sterlite and NMDC also hit 52-week high. PSU OMCs extended gains as crude oil prices declined, with BPCL scaling record high.
A bout of volatility was witnessed in initial trade as key benchmark indices regained positive terrain after slipping into the red after opening higher. Key benchmark indices edged lower and hit fresh intraday low in morning trade. The Sensex trimmed intraday losses in mid-morning trade. The Sensex regained positive terrain in early afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in early afternoon trade after a news agency quoted an unnamed official of the India Meteorological Department as saying that conditions have turned favourable for the onset of monsoon in India in about 24 hours. Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade. A bout of volatilty was witnessed as key benchmark indices recovered from lower level after trimming intraday gains in late trade. The Sensex moved past the psychological 25,000 level.
The S&P BSE Sensex garnered 213.68 points or 0.86% to settle at 25,019.51, a record closing high for the index. The index jumped 238.23 points at the day's high of 25,044.06 in late trade. The index fell 160.95 points at the day's low of 24,644.88 in morning trade, its lowest level since 3 June 2014.
The CNX Nifty garnered 71.85 points or 0.97% to settle at 7,474.10, a record closing high for the index. The index hit a high of 7,484.70 in intraday trade. The index hit a low of 7,360.50 in intraday trade, its lowest level since 3 June 2014.
The BSE Mid-Cap index garnered 89.97 points or 1.01% to settle at 8,955.91. The BSE Small-Cap index garnered 135.21 points or 1.42% to settle at 9,623.92. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 4889 crore, higher than Rs 4467.78 crore on Wednesday, 4 June 2014.
The market breadth, indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. On BSE, 2,153 shares rose and 869 shares fell. A total of 105 shares were unchanged.
Shares of Reliance Anil Dhirubhai Ambani (ADA) group edged higher on renewed buying.
Reliance Infrastructure was up 6.27% at Rs 778.65. The stock hit 52-week high of Rs 789.90 in intraday trade.
Reliance Capital was up 4.47% at Rs 648. The stock hit 52-week high of Rs 649.90 in intraday trade.
Reliance Power was up 5.89% at Rs 107.95. Reliance Communications was up 2.2% at Rs 146.45.
FMCG stocks rose on reports monsoon could arrive on India's southeast coast in the next 24 hours. FMCG firms derive substantial revenue from rural India. Godrej Consumer Products (up 6.72%), Marico (up 2.38%), Hindustan Unilever (up 4.27%), Nestle India (up 1.08%) and Dabur India (up 2.36%) edged higher.
Shares of cigarette major ITC edged higher in volatile trade. The stock was up 0.74% at Rs 333.40. The stock hit high of Rs 335.65 and low of Rs 326.30.
Realty stocks edged higher. DLF (up 0.18%), Sobha Developers (up 0.62%), Housing Development and Infrastructure (HDIL) (up 2.54%), and Unitech (up 0.33%), edged higher.
Capital goods stocks extended recent gains. Bharat Heavy Electricals (Bhel) (up 0.95%), BEML (up 3.6%), ABB (India) (up 4.11%), and Siemens (up 4.26%) gained.
L&T rose 0.38% to Rs 1679.40, with the stock extending recent gains triggered by the company's strong Q4 result. The stock hit record high of Rs 1,693.55 in intraday trade so far. The company's net profit surged 69% to Rs 2723.48 crore on 11% growth in gross revenue to Rs 20229 crore in Q4 March 2014 over Q4 March 2013. The strong growth in bottom-line can be explained by strong operating performance and higher extraordinary income. The result was announced after market hours on Friday, 30 May 2014.
L&T's order intake during the quarter was steady at Rs 26737 crore. International order inflow during the quarter at Rs 11389 crore constituted 43% of the total order inflow for the quarter. The order book at Rs 162952 crore as at 31 March 2014, grew 13% on YoY basis. International order book constituted 21% of the total order book, L&T said in a statement.
With regard to future business outlook, L&T said it has weathered the challenging times of the past few years due to its inherent capabilities and strong balance sheet. Being well positioned to tap the emerging opportunities in its core businesses, the company looks forward to a period of renewed investment momentum and sustainable growth. Given its large order book, the company is optimistic to maintain its growth momentum in the medium term, as domestic and global economic environment improves, L&T said in a statement.
Bank stocks were mixed. Among private sector banks, IndusInd Bank fell 1.4%. Kotak Mahindra Bank (up 0.49%) and Axis Bank (up 1.16%), gained.
ICICI Bank slipped 0.56% as the stock turned ex-dividend today, 5 June 2014, for dividend of Rs 23 per share for the year ended 31 March 2014.
HDFC Bank dropped 1.43% as the stock turned ex-dividend today, 5 June 2014, for dividend of Rs 6.85 per share for the year ended 31 March 2014.
Among PSU bank stocks, Bank of India (down 0.9%), Bank of Baroda (down 0.67%) and Punjab National Bank (down 0.23%) declined. Canara Bank (up 1.38%), State Bank of India (SBI) (up 0.54%), and Union Bank of India (up 1.4%), gained.
IT stocks gained across the board. HCL Technologies (up 1.72%), Infosys (up 1.48%), TCS (up 0.77%), Tech Mahindra (up 1.32%) and Wipro (up 1.88%) gained.
PSU OMCs extended gains as crude oil prices declined. HPCL (up 5.16%) and Indian Oil Corporation (IOCL) (up 3.92%) gained.
BPCL rose 6.95% to Rs 616.85 after hitting record high of Rs 626.80 in intraday trade.
US crude oil futures for July delivey fell 39 cents to $102.25 a barrel in electronic trade today. Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.
PSU OMCs hiked diesel prices by 50 paise a litre, excluding state levies, with effect from 1 June 2014.
The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of June effective 2 June 2014 declined to Rs 2.80 per litre. This was Rs 4.41 per litre during the second fortnight of May 2014. In the case of PDS Kerosene, the under-recovery for the first fortnight of June 2014 declined to Rs 32.87 per litre, from Rs 33.84 per litre during the second fortnight of May 2014. In case of domestic LPG, the under-recovery for the first fortnight of June 2014 declined to Rs 432.71 per cylinder, from Rs 449.13 per cylinder during the second fortnight of May 2014. Oil Marketing Companies (OMCs), effective from 2nd June 2014, are incurring combined daily under-recovery of about Rs 262 crore on the sale of Diesel, PDS Kerosene and Domestic LPG. This is lower than Rs 318 crore daily under-recoveries during the second fortnight of May 2014.
Steel shares edged higher. Jindal Steel & Power was up 3.02% at Rs 338.10. The stock hit 52-week high of Rs 341.90 in intraday trade.
JSW Steel was up 1.34% at Rs 1,290.80. The stock hit 52-week high of Rs 1,304.65 in intraday trade.
Shares of Tata Steel and Steel Authority of India extended recent gains triggered by reports the two steel makers have restarted most of their iron ore mines in Odisha state after getting new permits from the Odisha state government. Iron ore is a key input in steel making.
Steel Authority of India (Sail) was up 6.78% to Rs 107.05. The stock hit 52-week high of Rs 107.45 in intraday trade.
Tata Steel was up 3.96% to Rs 557.85 after hitting 52-week high of Rs 558.20 in intraday trade.
Shares of other metal companies extended their recent gains. Hindustan Copper (up 2.84%), National Aluminium Company (up 0.8%), Hindustan Zinc (up 0.09%) and Hindalco Industries (up 5.98%), edged higher.
Sesa Sterlite rose 6.5% to Rs 314.45 after hitting 52-week high of Rs 315.90 in intraday trade.
NMDC rose 1.6% to Rs 193.60 after hitting 52-week high of Rs 194.50 in intraday trade. NMDC has reportedly raised ore prices by up to 9% in June, the first increase in five months as supply has been cut by a temporary ban on some mines in Odisha state. Given the expected rise in demand for NMDC's ore, the company has raised prices for iron ore fines by 9% to Rs 3,160 per tonne and by 7% to Rs 4,600 for lumps, reports suggest.
Coal India gained 0.21% to Rs 391. The stock hit high of Rs 397.30 and low of Rs 388.
Prime Minister Narendra Modi on Wednesday, 4 June 2014, held discussions with Secretaries of all the Ministries and senior officers of the Departments of the Government of India. Such a meeting has taken place after more than eight years, the Prime Minister's Office (PMO) said in a statement. The Prime Minister listened extensively to suggestions and comments of the Secretaries for nearly two and a half hours. He empathized with the sentiment expressed by the Secretaries and their anguish in not being able to realize their true potential because of circumstances. He expressed full faith in their commitment and competence to build a better future for the country.
He called upon the senior bureaucrats to simplify and streamline the administrative rules and procedures to make them people-friendly. He emphasized the need for a team spirit and urged the Secretaries to be leaders of their teams. He also encouraged the officers to take decisions and assured them that he would stand by them. He added that in the process of governance, ideas should be converted into institutions because institutions last longer than individuals. However, he clarified that there may be rules and processes which have become outdated, and instead of serving the process of governance, they are leading to avoidable confusion. He stressed upon the need to identify and do away with such archaic rules and procedures. He even added that the process of governance of his government should begin with cleaning-up of the offices, improving the workplace, which would automatically result in a better work culture and efficient services to the citizens.
The Prime Minister emphasized the need for use of technology for greater efficiency and effectiveness in administration. He further added that in a democracy, redressal of citizens' grievances is very important, and information technology can help greatly in this regard. He also added that through use of technology, and better understanding among departments, administrative and schematic convergence is possible. The Prime Minister said that faster results can be achieved through collective action. The Prime Minister offered that he would always be ready to give an account of the work being done by him. The senior bureaucrats echoed this sentiment and welcomed a similar standard of accountability.
The Prime Minister said that he was accessible to all officers and encouraged them to approach him with their inputs and ideas.
Finance Minister Arun Jaitley said in his opening remarks while holding his first Pre-Budget Consultation with the representatives of the agriculture sector today, 5 June 2014, that despite the constraints of the economy as it exist today, the government will try its best to boost the agriculture sector. He said that the concerns of agriculture sector are high on the priority of the government. Even as agriculture and its allied sector employ the largest numbers of people in the country, yet its share in the GDP has contracted over the years, Jaitley said.
The Ministry of Finance said that various suggestions were received from the different representatives of the agriculture sector. Major suggestions include establishing a Kissan TV Channel to create awareness among farmers about new technologies, government programmes and quality parameters etc among others.
Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha by mid-July 2014. An interim budget was presented by P. Chidambaram in February this year. Essentially, in the nature of a vote on account, the interim budget was intended to get Parliament approval for expenditure to be incurred during the first few months of fiscal year 2014-15 due to Lok Sabha elections.
The Reserve Bank of India (RBI)'s next undertakes monetary policy review on 5 August 2014. The RBI kept its main lending rate -- repo rate -- unchanged at 8% after a monetary policy review on 3 June 2014. The central bank at that time signaled it would ease monetary policy if inflation slows faster than targeted.
European stocks edged lower on Thursday, 5 June 2014, as investors were hesitant of making any major moves ahead of the European Central Bank meeting later in the day. Key benchmark indices in Germany and UK were off 0.09% to 0.33%. France's CAC 40 rose 0.1%.
German factory orders rebounded in April from the biggest plunge in more than a year, signaling that growth in Europe's largest economy remains on track. Orders, adjusted for seasonal swings and inflation, increased 3.1% from March, when they declined 2.8%, the Federal Statistics Office in Wiesbaden said today.
There are expectations that ECB will announce new stimulus measures when the Governing Council of the ECB holds a monthly meeting on euro area interest rates today, 5 June 2014.
Bank of England's Monetary Policy Committee will probably keep its benchmark interest rate at a record-low 0.5% and leave its bond-purchase program unchanged at a monthly meeting on interest rates in UK today, 5 June 2014.
Asian stocks edged higher in choppy trade on Thursday, 5 June 2014. Key benchmark indices in China, Indonesia, Taiwan and Japan were up 0.06% to 0.79%. Key benchmark indices in Singapore, South Korea and Hong Kong were off 0.02% to 0.65%.
HSBC/Markit's measure of the China service sector eased to 50.7 in May from April's 51.4, though that was still above the 50-point level that is supposed to separate growth from contraction.
Trading in US index futures indicated that the Dow could gain 3 points at the opening bell on Thursday, 5 June 2014. US stocks edged up on Wednesday with the S&P 500 index ending at a new record as investors brushed off weaker-than-expected labor market data and focused on acceleration in services-sector growth.
Service industries in the US expanded at the fastest pace in nine months in May. The Institute for Supply Management said its services sector index rose to 56.3 last month from 55.2 in April as new orders, order backlogs and hiring increased. It was the highest reading in nine months. The Federal Reserve said in its Beige Book review of regional conditions that the world's largest economy expanded at a modest to moderate pace last month. The Beige Book, released two weeks before policy makers meet, supported Fed Chair Janet Yellen's view that the US economy is rebounding from a 1% contraction in the first quarter caused largely by harsh winter weather. The Commerce Department said the trade gap increased 6.9% to $47.2 billion in April as imports hit a record high and exports slipped. It was the largest deficit in two years.
A private report showed employment rose less than economists projected. Private employers added 179,000 jobs to their payrolls last month after hiring 215,000 workers in April, according to payrolls processor ADP.
The influential US nonfarm payroll data for May 2014 is due for release tomorrow, 6 June 2014.
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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