Trading for the week began with a bang as key benchmark indices surged to record high after Prime Minister Narendra Modi on Friday, 15 August 2014, in his first Independence Day address to the nation emphasized the need for better governance and stressed on the need to promote the manufacturing sector. A day later, Modi said that the government's thrust is on infrastructure development. The barometer index, the S&P BSE Sensex was provisionally up 290.15 points or 1.11% at 26,393.38. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.74%. The BSE Small-Cap index was up 2.28%. Both these indices outperformed the Sensex. Decline in crude oil prices and gains in European stocks on signs of easing geopolitical tensions in Ukraine aided the upmove on the domestic bourses.
Shares of PSU OMCs rose as crude oil futures declined. BPCL hit record high. Indian Oil Corporation (IOCL) surged after the company clarified that the matter of investment in Mathura Refinery Expansion Project is in preliminary stage and has not been conceptualized. Shares of state run upstream oil and gas companies rose on hopes of a fall in subsidy sharing burden as crude oil prices dropped. Cipla rose in volatile trade.
The market sentiment was boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014.
Key benchmark indices retained positive zone almost throughout the trading session.
Key benchmark indices rose for the fifth-day in a row today, 18 August 2014.
As per provisional figures, the S&P BSE Sensex was up 290.15 points or 1.11% to 26,393.38. The index jumped 309.88 points at the day's high of 26,413.11 in late trade, a record high for the barometer index. The index fell 27.95 points at the day's low of 26,075.28 in early trade.
The CNX Nifty was up 79.80 points or 1.02% to 7,871.50, as per provisional figures. The index hit a high of 7,880.50 in intraday trade, a record high. The index hit a low of 7,779.20 in intraday trade.
The total turnover on BSE amounted to Rs 2570 crore, lower than Rs 2591.77 crore on Thursday, 14 August 2014.
The market breadth indicating the overall health of the market was strong. On BSE, 1,910 shares gained and 1,014 shares fell. A total of 103 shares were unchanged.
The BSE Mid-Cap index was up 156.83 points or 1.74% at 9,164.68. The BSE Small-Cap index was up 223.50 points or 2.28% at 10,047.56. Both these indices outperformed the Sensex.
Shares of PSU OMCs rose as crude oil futures declined. HPCL gained 6.28%.
BPCL jumped 5.52% to Rs 647 after hitting record high of Rs 658.10 in intraday trade.
Indian Oil Corporation (IOC) rose 4.1%. With respect to a news item captioned "Indian Oil Corporation to invest Rs 8700 crores in Mathura Refinery Expansion Project", the company clarified during market hours that the matter is in preliminary stage and has not been conceptualized. The Uttar Pradesh (UP) state government is looking for promoting industrial development in UP and Indian Oil has evinced interest for expansion of its Mathura Refinery, provided the UP state government agrees to give financial/tax incentives to support the viability of the project. A further view in the matter would be taken only after getting response from the UP government, IOC said.
Lower crude oil prices will reduce under-recovery of public sector oil marketing companies (PSU OMCs) on domestic sales of diesel, kerosene and LPG at government controlled prices. The government has adopted the policy of gradually increasing diesel prices to eliminate under recovery and deregulate the diesel prices. The government has already freed pricing of petrol.
State run upstream oil and gas companies rose on hopes of a fall in subsidy sharing burden as crude oil prices dropped. ONGC (up 4.84%), GAIL (India) (up 1.2%) and Oil India (up 2.43%) gained. State run upstream oil and gas companies share a part of the under recovery or revenue loss of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PSD kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
Cipla gained 4.91% to Rs 470, with the stock reversing intraday fall. The stock was volatile. The stock hit a record high of Rs 471 in intraday trade. The stock hit a low of Rs 442. The company's consolidated net profit declined 39.17% to Rs 295 crore on 13.6% growth in net sales to Rs 2647 crore in Q1 June 2014 over Q1 June 2013. The result was announced after market hours on Thursday, 14 August 2014. The stock market was closed on Friday, 15 August 2014, on account of Independence Day.
Cipla's income from operations rose 8.3% to Rs 2720 crore in Q1 June 2014 over Q1 June 2013. EBITDA declined 21.44% to Rs 542 crore in Q1 June 2014 over Q1 June 2013. EBITDA in Q1 June 2013 includes certain large one-off items.
Domestic sales rose 17% to Rs 1289 crore in Q1 June 2014 over Q1 June 2013, largely driven by growth in respiratory, anti-infective and cardiac therapies, Cipla said in a statement. Exports and formulations rose 12.7% to Rs 1218 crore in Q1 June 2014 over Q1 June 2013. Exports of APIs declined 5.4% to Rs 140 crore in Q1 June 2014 over Q1 June 2013. The growth in export revenues was primarily due to growth in anti-retroviral, anti-asthma and anti-allergic segments, Cipla said in a statement.
Cipla said that the current year figures include the relevant results of Cipla's subsidiaries from the date they became subsidiary of the company and therefore the corresponding figures for the previous period are not comparable.
The company's management in a post-result conference call said that the company expects mid-teens revenues growth in FY 2015 with over 20% EBIDTA margins. Cipla's EBIDTA margin stood at 19.9% in Q1 June 2014.
Cipla aspires to record revenues of $5 billion by 2020.
India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent crude oil futures fell below $103 a barrel on Monday as Libya increased its oil output and as worries over supply from key producer Iraq eased. The October Brent crude contract was off $1.34 at $102.19 a barrel. The contract rose $1.52 a barrel to settle at $103.53 on Friday, 15 August 2014.
The market sentiment was boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014. FPIs bought shares worth a net Rs 625.18 crore on Thursday, 14 August 2014, as per provisional data from the stock exchanges.
In his Independence Day address to the nation from the ramparts of the Red Fort, Prime Minister Narendra Modi on Friday, 15 August 2014, emphasized the need for better governance. After becoming the country's Prime Minister in May this year, Modi said he had observed that there was disunity and conflict among different government departments. Modi said he has started making efforts at making the Central government function as an organic unity moving in one direction.
The Prime Minister stressed on the need to promote the manufacturing sector. He has invited manufacturers from across the world to start manufacturing in India, and help boost India's industrial growth. He also called upon the youth of India to unleash their entrepreneurial spirit and work towards manufacturing in India, the various items that add to the country's import bill. Let "Made in India" become a synonym of excellence, he added. Modi also announced that a new institution would be created to replace the Planning Commission. This new institution would respect the federal structure of the country, he asserted.
In a major new scheme to universalize banking access and financial inclusion, the Prime Minister announced the Pradhanmantri Jan-Dhan Yojana which will provide for a bank account, a debit card and an insurance amount of Rs 1 lakh to poor families.
The Prime Minister said development and good governance are the only two tracks which could take the nation forward.
At a function at Solapur in Maharashtra, the Prime Minister on 16 August 2014 outlined a comprehensive vision for new modes of infrastructure development in the country, which would include nationwide connectivity networks of roads, power transmission lines, gas grids and water grids. He asserted that roads and highways development will be given priority by the new Government, drawing inspiration from the Golden Quadrilateral and Pradhan Mantri Gram Sadak Yojana launched by former Prime Minister Atal Bihari Vajpayee. The Prime Minister said the Government is concerned at the large number of stalled SEZ projects across the country, and a high-level team has been constituted to review the problems and resolve them at the earliest. He added that his Government wishes to create an environment for ease of business, and encouragement for youth. Elaborating his theme of Come, make in India, which he mentioned during his Independence Day address, the Prime Minister said his Government will encourage foreign investment in shipbuilding.
European stocks advanced today, 18 August 2014, on signs of easing geopolitical tensions in Ukraine. Key benchmark indices in UK, Germany and France were up 0.61% to 1.36%.
Over the weekend, foreign ministers from Germany, Russia, Ukraine and France reportedly met outside Berlin in a session billed as a prelude to cease-fire talks.
Asian stocks were mixed on Monday, 18 August 2014. Key benchmark indices in South Korea, Taiwan, and Singapore were off 0.06% to 0.71%. Key benchmark indices in China, Japan and Indonesia were up 0.03% to 0.57%. Hong Kong's Hang Seng was flat.
China's foreign-direct investment slumped 17% in July from a year earlier, the Ministry of Commerce said today, 18 August 2014. Another data showed that China's new-home prices fell in July in almost all cities that the government tracks.
Trading in US index futures indicated that the Dow could gain 73 points at the opening bell on Monday, 18 August 2014. Most US stocks ended lower on Friday, 15 August 2014, as increasing violence in Ukraine sent oil prices to the biggest increase in a month.
Global markets will be focused on the Aug. 21-23 annual meeting of top central bankers at Jackson Hole, Wyoming, for possible clues about the path for monetary policy in the months ahead.
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