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Reports India

Indian stock market daily morning report (May 22, 2014, Thursday)

May 22, 2014, Thursday, 07:15 GMT | 02:15 EST | 10:45 IST | 13:15 SGT
Contributed by Keynote Capitals

Views on markets today

- Both Sensex and Nifty snapped their four-day winning streak on account of profit taking in heavyweight banking and capital goods stocks.

Weakness in heavyweight banking and capital goods shares was instrumental in pulling benchmarks- Sensex and Nifty lower. Larsen & Toubro, State Bank of India, Axis Bank, ICICI Bank and HDFC Bank collectively pulled the benchmark Sensex 93 points lower.

A fall in rupee for a second straight day helped beaten down IT shares recoup some of their losses amid investors' frenzy to dump software stocks in favour of cyclicals such as banks and capital goods on hopes of a turnaround in the economy after probusiness BJP party was elected to power.

A depreciating rupee augurs well for IT companies as over 80% of their revenues come from exports to the US.

The 30-share Sensex shed 79 points at 24,29- and the 50-share Nifty slipped 23 points to 7,253 levels.

- Among the 12 BSE Sectoral indices, 7 indices closed in positive while 5 indices ended the day in negative. Top Gainers: BSE Realty up by 1.90% and BSE IT by 0.79%. Top Losers: BSE Capital Goods down by 1.63% and bSe Bankex by 1.07%.

Market breadth was sharply positive at ~2.30 as investors bought large cap stocks. On provisional basis, FII's sold Rs 2.66bn worth of Indian equities and DII's sold Rs 4.39bn worth of equities. The ratio of NSE Total Market Capitalization to GDP (at Current Prices) stands at 295.4%.

Economic and Corporate Developments

The Reserve Bank of India (RBI) has drawn up a list of issues that should be pushed by the new government.

With inflation-control on top of RBI Governor Raghuram Rajan's mind, sources familiar with the developments said implementation of the Urjit Patel committee's recommendations will be the main agenda the central bank will take up for discussions with the new finance minister. The Patel committee had suggested inflation targeting should be RBI's singular mandate and the central bank should be accountable for meeting the target.

While some of the recommendations of the panel have already been implemented, the government's comfort is required for pushing through some of the other key suggestions, such as setting up a five-member monetary policy committee (MPC) with a majority of the members representing rBi.

The finance ministry under P Chidambaram had raised its reservations on the issue and made a detailed presentation to the Prime Minister's Office (PMO). Since no conclusion was reached during the previous government's tenure, sources indicated Rajan would engage with the new government on this issue.

Buzzing Stocks

- Essar Oil closed 15.34% up at Rs 89.50 on BSE after consolidated net profit surged 404.6% to Rs 100- crore on 7.5% rise in gross revenue to Rs 27,691 crore in Q4 March, 2014 over Q4 March, 2013.

- Mangalore Refinery and Petrochemicals closed 11.15% up at Rs 75.25 on BSE after the company reported a net profit of Rs 1,067.04 crore in Q4 March, 2014 compared with net loss of Rs 61.90 crore in Q4 March, 2013.

- Sun Pharmaceutical Industries closed 1.73% down at Rs 577.15 on BSE after US drug regulator warned that the response to an import ban on one of the company's plants lacked sufficient corrective actions.

- VIP Industries jumped 5.03%, in the opening trade, to Rs 111.70 on BSE after consolidated net profit surged 217.2% to Rs 20.30 crore on 21.5% increase in net sales to Rs 226.60 crore in Q4 March, 2014 over Q4 March, 2013.

- Bajaj Auto closed 4.69% up at Rs 1,959.20 on BSE on bargain hunting after the stock fell 8.29% in the preceding four trading sessions to Rs 1,871.40 on 20th May, 2014, from a recent high of Rs 2,040.55 on 14th May, 2014.

- SpiceJet closed 6.14% up at Rs 18.15 on BSE, extending Tuesday's 3.32% rise triggered by the company announcing that it is in advanced talks with an unnamed investor to raise funds.

- Mahindra & Mahindra closed 1.26% up at Rs 1,149.60 on BSE after the company said it has decided to enforce no production days for up to three days during the remaining period of May, 2014.

- Readymade Steel India closed 4.39% up at Rs 300.55 on BSE after the company said its Singapore-based subsidiary has bagged a piling contract worth Rs 150 crore, which includes a large contract for mass rapid transport station in Singapore.

- NIIT closed 15.66% up at Rs 41.00 on BSE after consolidated net profit surged 415% to Rs 14 crore on 5% increase in net revenue to Rs 232.90 crore in Q4 March, 2014 over Q4 March, 2013.

- Gati closed 2.65% up at Rs 98.60 on BSE after Macquarie Bank purchased 1.18% equity stake in the company via open market on NSE on Tuesday, 20th May, 2014.