A bout of volatility was witnessed as key benchmark indices trimmed gains after extending initial strong gains in morning trade. The barometer index, the S&P BSE Sensex, trimmed gains after hitting record high above 25,000 level and the 50-unit CNX Nifty trimmed gains after hitting record high above 7,500. The Sensex was up 1,250.31 points or 5.23%, off close to 220 points from the day's high and up about 885 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The BSE Mid-Cap index was up almost 2.5%. The BSE Small-Cap index was up almost 1.5%. Indian stocks surged today, 16 May 2014, after the trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in 292 seats and was declared winner of one seat out of 515 seats for which trends and results were available so far. The Congress-led United Progressive Alliance (UPA) was leading in 76 seats. There are a total 543 Lok Sabha seats. Investors are hoping that the BJP-led government will be better at getting things done and more business-friendly than the current Congress-party-led coalition government. 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.
Bank stocks vaulted with State Bank of India hitting 52-week high and ICICI Bank, Axis Bank and HDFC Bank hitting record high. PSU OMCs rallied with BPCL scaling record high and HPCL and Indian Oil Corporation hitting 52-week high.
The market surged in early trade after the early trends of Lok Sabha elections showed that Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) was leading in the elections. The Sensex and the 50-unit CNX Nifty, both, hit record high. A bout of volatility was witnessed as key benchmark indices trimmed gains after extending initial strong gains in morning trade.
Indian stocks may see high intraday volatility today, 16 May 2014, as trends and actual results of wins by candidates/parties are announced during the process of counting of votes for the recently concluded Lok Sabha elections. The counting of votes began at 8:00 IST today, 16 May 2014, and results are expected by today itself.
Investors are hoping that when the results of the Lok Sabha elections are out today, 16 May 2014, a stable government which will complete its full term of five years in office comes to power. 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.
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.
The market sentiment was boosted by data showing that foreign funds made purchases of Indian stocks on Thursday, 15 May 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 934.94 crore on Thursday, 15 May 2014, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 1,250.31 points or 5.23% to 25,155.91. The index jumped 1,470.03 points at the day's high of 25,375.63 in morning trade, a record high for the index. The index gained 365.94 points at the day's low of 24,271.54 in opening trade.
The CNX Nifty was up 335.85 points or 4.71% to 7,459. The index hit a high of 7,563.50 in intraday trade, a record high for the index. The index hit a low of 7,264.40 in intraday trade.
The BSE Mid-Cap index was up 185.95 points or 2.43% at 7,826.05. The BSE Small-Cap index was up 110.70 points or 1.42% at 7,901.82. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,190 shares gained and 849 shares fell. A total of 85 shares were unchanged.
Among the 30-share Sensex pack, 29 stocks gained and only one fell. Hero MotoCorp (up 9.58%), Reliance Industries (RIL) (up 8.2%) and Sesa Sterlite (up 7.91%) edged higher from the Sensex pack.
Bank stocks vaulted. Among private sector banks, IndusInd Bank (up 8.99%), Yes Bank (up 10.98%), Federal Bank (up 5.73%), and Kotak Mahindra Bank (up 7.91%) gained.
Axis Bank jumped 10.28% to Rs 1,834.70 after hitting record high of Rs 1,878.20 in intraday trade.
ICICI Bank jumped 7.82% to Rs 1,502.10 after hitting record high of Rs 1,514 in intraday trade.
HDFC Bank jumped 6.91% to Rs 842.55 after hitting record high of Rs 850 in intraday trade.
Among PSU bank stocks, Canara Bank (up 18.97%), Union Bank of India (up 14.58%), Bank of India (up 8.9%), and Bank of Baroda (up 7.9%) gained.
Punjab National Bank jumped 11.21% to Rs 951 after hitting 52-week high of Rs 960.35 in intraday trade.
State Bank of India (SBI) jumped 9.47% to Rs 2,494.50 after hitting 52-week high of Rs 2,505.10 in intraday trade.
Karnataka Bank rose 4.68% after net profit rose 20.5% to Rs 81.21 crore on 7.54% growth in total income to Rs 1172.58 crore in Q4 March 2014 over Q4 March 2013. The result was announced after market hours on Thursday, 15 May 2014.
PSU OMCs rallied. BPCL jumped 5.26% to Rs 544.20 after hitting record high of Rs 546.25 in intraday trade.
HPCL surged 5.37% to Rs 395.70 after hitting 52-week high of Rs 399.80 in intraday trade.
Indian Oil Corporation (IOCL) vaulted 9.88% to Rs 338 after hitting 52-week high of Rs 341.95 in intraday trade.
In the foreign exchange market, the rupee edged higher against the dollar as early vote counting showed the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) leading in the Lok Sabha elections. The partially convertible rupee was hovering at 58.73, compared with its close of 59.29/30 on Thursday, 15 May 2014.
Indian government bond prices edged higher as early vote counting showed the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) leading in the Lok Sabha elections. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.712%, lower than its close of 8.781% on Thursday, 15 May 2014. Bond yields and bond prices move in opposite direction.
The India Meteorological Department (IMD) on Thursday, 15 May 2014, said that the southwest monsoon is likely to set over Kerala on 5 June 2014, with a model error of plus/minus 4 days. The normal date of onset of the southwest monsoon in India is 1 June. Advance of southwest monsoon over Andaman Sea normally takes place around 20 May with a standard deviation of about one week. Low level cross equatorial monsoon flow has started appearing over south of Andaman Sea and adjoining south Bay of Bengal, the IMD said in a statement. The monsoon is likely to advance over Andaman Sea during next three days, the IMD said. Past data suggests absence of any one to one association of the date of monsoon advance over Andaman Sea with the date of monsoon onset over Kerala or that with the seasonal monsoon rainfall over the country, the IMD said.
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.
Asian stocks fell on Friday after a report showed China's bad loans jumped the most since 2005 and the yen strengthened amid concern about global growth. Key benchmark indices in South Korea, China, Japan, Taiwan, Singapore and Hong Kong were down 0.29% to 1.89%. Indonesia's Jakarta Composite rose 0.39%.
Non-performing loans in Asia's biggest economy rose by 54 billion yuan ($8.7 billion) in the three months through March to 646.1 billion yuan, the highest level since September 2008, according to data released by the China Banking Regulatory Commission yesterday. Bad credit accounted for 1.04% of total lending, up from 1% three months earlier.
Trading in US index futures indicated that the Dow could fall 11 points at the opening bell on Friday, 16 May 2014. US stocks fell a second day on Thursday, with the Dow Jones Industrial Average sinking the most in a month, as investors continued to sell small-cap shares and Wal-Mart Stores Inc. forecast profit that missed estimates.
Economic data showed industrial production in the US unexpectedly declined in April, held back by a plunge in utilities as temperatures warmed and a broad-based decrease in manufacturing. Manufacturing, which makes up 75% of total production, decreased 0.4%. That contrasted with a higher-than-forecast reading on the Fed Bank of New York's gauge of regional manufacturing, which climbed to 19.01 this month, from 1.29 in April. Labor Department data showed the fewest Americans in seven years filed applications for unemployment benefits last week, while a separate report indicated the cost of living in the US rose in April by the most in almost a year.
Federal Reserve Chairwoman Janet Yellen yesterday said the US economy has further to go to achieve full health and predicted small businesses will play a vital role in the recovery.
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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