A bout of volatility was witnessed in opening trade as the key benchmark indices reversed initial decline only to trim gains later. The barometer index, the S&P BSE Sensex was up 14.76 points or 0.06%, off 21.97 points from the day's high and up 30.53 points from the day's low.
Sun Pharmaceutical Industries fell after the US Food and Drug Administration said in a warning letter published on Tuesday, 20 May 2014 that the company's response to an import ban on one of its plants lacked sufficient corrective actions. Essar Oil jumped after strong Q4 result announced after market hours on Tuesday, 20 May 2014.
Foreign institutional investors (FIIs) sold shares worth a net Rs 104.53 crore on Tuesday, 20 May 2014, as per provisional data from the stock exchanges.
At 9:25 IST, the S&P BSE Sensex was up 15.77 points or 0.06% to 24392.65. The index gained 37.74 points at the day's high of 24,414.62 in early trade. The index fell 14.76 points at the day's low of 24,362.12 in early trade.
The CNX Nifty was up 1.90 points or 0.03% to 7,277.40. The index hit a high of 7,287.15 in intraday trade. The index hit a low of 7,261.65 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,072 shares gained and 282 shares fell. A total of 34 shares were unchanged.
The BSE Mid-Cap index rose 141.13 points or 1.74% to 8,232.40. The BSE Small-Cap index rose 255.63 points or 3.06% to 8,600.33. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 356 crore by 09:30 IST.
Among the 30-share Sensex pack, 16 stocks gained and rest of them declined.
Coal India (down 2.05%), L&T (down 0.62%) and State Bank of India (down 0.46%) edged lower from the Sensex pack.
NTPC (up 2.03%), Sesa Sterlite (up 1.16%) and Bajaj Auto (up 0.94%) edged higher from the Sensex pack.
Sun Pharmaceutical Industries fell 1.07%. Sun Pharmaceutical Industries response to an import ban on one of its plants lacked sufficient corrective actions, the US Food and Drug Administration said in a warning letter published on Tuesday, 20 May 2014. The FDA banned imports from Sun Pharma's Karkhadi plant in Gujarat in March 2014, but the reason for the ban was not clear at that time. In the warning letter, the regulator said Sun Pharma failed to ensure laboratory records had complete data and that manufacturing staff had inadequate training and experience.
Essar Oil jumped 17.27% after consolidated net profit surged 404.6% to Rs 1,008 crore on 7.5% rise in gross revenue to Rs 27,691 crore in Q4 March 2014 over Q4 March 2013. The company reported a consolidated net profit of Rs 126 crore in the year ended 31 March 2014 (FY 2014) as compared to a net loss of Rs 1180 crore in the year ended 31 March 2013 (FY 2013). Gross revenue rose 10.7% to Rs 107190 crore in FY 2014 over FY 2013. The result was announced after market hours on Tuesday, 20 May 2014.
Throughput was up 2.3% to 20.23 million metric tonnes (MMT) in FY 2014 over FY 2013. Current price gross refining margin (CP GRM) for the year was at $7.98/bbl compared to $7.96/bbl in FY 2013. Premium over benchmark IEA margin for the full year was at $8.82/bbl against $6.80/bbl in FY13. This was achieved on the back of improved crude diet93% heavy and ultra heavy crude processed in FY14 vs 86% in FY13and a stable product slate.
Essar Oil's CP GRM for Q4 March 2014 was at $10.12/bbl, compared to $9.06/bbl in Q4 March 2013. The Vadinar Refinery, at 20 million metric tonnes per annum (MMTPA) capacity and 11.8 complexity, is India's second largest single site refinery and amongst the most complex globally for a facility of this scale. During the quarter, it processed 5.05 MMT of crude, which was almost at the same level of 5.08 MMT processed during Q4 March 2013. Vadinar Refinery continues to operate above 100% capacity post expansion.
Speaking about the results, Mr LK Gupta, Managing Director and CEO, Essar Oil, said: "We are happy to report that the company has returned to profitability for the full year. Having breached the rupees one lakh crore revenue mark, Essar Oil is today one of India's top 10 companies by topline, having achieved this distinction in a relative short span of five years of beginning commercial production. Operationally we continue to do well with the refinery further optimizing on its crude diet and product slate, which has resulted in the company delivering healthy GRMS at $10.12/bbl."
Mr Suresh Jain, CFO, Essar Oil, said, "This is the first full year of operations of our expanded refinery. We are happy to share that our company has demonstrated excellent financials backed by solid operating performance, which has resulted in improved GRMs, EBIDTA, and PAT for the quarter, and closed our financial year with a profit of Rs 126 crore."
The Bharatiya Janata Party Parliamentary party on Tuesday, 20 May 2014, elected Narendra Modi as its leader, officially making him the Prime Minister-in-making. Modi will be sworn in as India's next Prime Minister on Monday, 26 May 2014, evening at the Rashtrapati Bhawan.
After Bharatiya Janata Party (BJP) led National Democratic Alliance's (NDA) landslide victory in the recently concluded Lok Sabha election, investors are expecting measures from the incoming government to revive the Indian economy. There are expectations that Gujarat chief minister and Prime Minister-designate Narendra Modi will be in a position to replicate the economic success he enjoyed in Gujarat state when he takes over as the country's Prime Minister. Gujarat's economy expanded by 10.1% a year, on average and adjusting for inflation, from 2001 and 2012, compared with 7.7% growth a year for India's economy as a whole. India's GDP growth slowed sharply at 4.7% in Q3 December 2013. Investors hope that a BJP-led government would be able to accelerate policy reforms and overhaul the country's poor infrastructure. Investors will now be keenly watching policy announcements from the new government to drive a turnaround in the investment cycle.
Ever since NDA's victory in the election last week, speculation has been rife about the likely allocation of key ministerial portfolios in the Modi-led NDA government.
The first budget of the new government is expected by 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) 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.
Most Asian markets edged lower on Wednesday tracking overnight decline in US markets. Key benchmark indices in Taiwan, China and South Korea rose by 0.06% to 0.19%. Key benchmark indices in Singapore, Hong Kong, Japan and Indonesia fell by 0.03% to 0.44%.
The Bank of Japan refrained from boosting stimulus as the economy shows signs of weathering the impact of the first sales-tax increase since 1997. The central bank will continue to expand the monetary base at a pace of 60 trillion yen to 70 trillion yen per year, it said in a statement today in Tokyo.
Japan posted a trade deficit of 808.9 billion yen ($8 billion) for April, data showed today. Exports gained 5.1% year on year, while imports increased 3.4%.
US stocks ended Tuesday with broad-based losses after disappointing earnings from TJX Companies, Inc, Staples, Inc. and weak sales numbers from Caterpillar Inc. weighed on investor sentiment. Selling intensified in the afternoon after comments from Philadelphia Fed President Charles Plosser, who said that Fed may need to act sooner rather than later should the economy accelerate.
The Federal Reserve releases minutes from the April 29-30 meeting of Federal Open Market Committee today, 21 May 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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