Market summary pptx 2.6.2014


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Market summary pptx 2.6.2014

  1. 1. India-GlobalMarketSummary 2-6-2014 • Market surged on the first trading session of the week after a manufacturing sector survey showed that production volumes at Indian manufacturers continued to rise in the month just gone by. The market breadth indicating the overall health of the market was strong, with more than two gainers for every loser on BSE. The market sentiment was boosted by data showing that foreign funds made heavy purchases of Indian stocks on Friday, 30 May 2014. Gains in European and Asian stocks also boosted sentiment on the domestic bourses. Sensex garnered 1.93% to settle at 24,684.85 and Nifty garnered 1.83% to settle at 7,362.50. From 30-share Sensex pack, 21 rose and rest fell. • PSU OMCs suffer revenue loss on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price. The government decontrolled pricing of petrol in 2010. • The under-recovery on High Speed Diesel (HSD) applicable for first fortnight of June effective 2 June 2014 will go down to Rs 2.80 per litre. This was Rs 4.41 per litre during the second fortnight of May 2014 w.e.f. 16 May 2014. In the case of PDS Kerosene, the under-recovery for the first fortnight of June 2014 will be Rs 32.87 per litre, lower than Rs 33.84 per litre in the preceding fortnight. In case of domestic LPG, the under-recovery for the first fortnight of June 2014 will be Rs 432.71 per cylinder, lower than Rs 449.13 per cylinder in the preceding fortnight. The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas has reviewed international prices of crude oil and petroleum products during the 2nd fortnight of May 2014. • Markit Economics today, 2 June 2014, said that the HSBC India Manufacturing PMI for May 2014 indicated that production volumes at Indian manufacturers continued to rise. Growth of both total new orders and new export business accelerated over the month, leading to further job creation across the sector, Markit Economics said. Up marginally from 51.3 in April to 51.4 in May, the seasonally adjusted HSBC India Purchasing Managers' Index (PMI) pointed to a slight improvement in operating conditions and one that was weaker than the series average, Markit Economics said. Output rose for the seventh consecutive month in May. That said, the rate of expansion was unchanged from the modest pace registered in April. Panellists highlighted stronger increases in new orders, although there were mentions that growth was stymied by power cuts and the elections. The latest rise in production was broad-based by sector, with the sharpest expansion signalled by consumer goods producers.
  2. 2. • May data highlighted further rises in incoming new work, marking a seven-month sequence of expansion. Moreover, the pace of increase accelerated to the quickest since February. Those survey respondents reporting higher new orders commented on the signing of new contracts and improved demand from both domestic and foreign clients. Growth of order book volumes was registered across the three broad areas of the manufacturing economy, led by consumer goods producers. • New orders from abroad also increased during May, thereby stretching the current period of expansion to eight months. New export business rose at a solid rate that was quicker than in April. Surveyed firms reported having benefited from favourable exchange rates. Overseas demand improved in two of the three sub-categories, the exception being investment goods. • Staffing levels were raised in May, amid evidence of increased production requirements. Employment growth has maintained a broadly steady trend pace in the current eight-month expansionary sequence. All three monitored sub-sectors registered higher workforce numbers. • Indian manufacturers indicated that purchasing activity increased further in May. Where input buying rose, this was associated with new order growth. Nonetheless, the rate of expansion was only slight and moderated since the previous month. Growth of quantity of purchases was noted across the three market groups. • Input costs continued to rise in May, albeit at the weakest rate in one year. There were reports of higher prices paid for some raw materials, although a number of panellists reported successful price negotiations with suppliers. Concurrently, output charges increased further. The rate of charge inflation was, however, marginal and weaker than the series average. • While stocks of purchases were broadly unchanged, post -production inventories increased in May. Meanwhile, outstanding business rose further during the latest month, with monitored firms reporting power outages.
  3. 3. • Commenting on the India Manufacturing PMI survey, Frederic Neumann, Co-Head of Asian Economic Research at HSBC said: "The momentum in the manufacturing sector improved at the margin, thanks to higher domestic and export order flows. However, output growth held steady as frequent power cuts forced firms to accumulate backlogs at a faster pace. Encouragingly, input price pressures eased further, but with output prices still rising the RBI cannot take down its inflation guards". • India's gross domestic product (GDP) rose at steady pace of 4.6% in Q4 March 2014 same as in the previous quarter. The GDP growth rose to 4.7% in the fiscal year ended 31 March 2014 (FY 2014) from 4.5% in FY 2013, but remained below the advances estimate of 4.9% released in February 2014. The 'agriculture, forestry and fishing' sector has shown a growth rate of 4.7% in FY 2014, as against the growth rate of 4.6% in the Advance Estimates. • Fiscal deficit has declined to 4.5% of GDP in FY 2014 against 4.8% of budget estimates in February 2014 and 4.6% of revised estimates in February 2014. The fiscal deficit has also declined from 4.9% of GDP in FY 2013. • The Prime Minister's Office (PMO) on Saturday, 31 May 2014, announced that Prime Minister Narendra Modi has decided to abolish all the existing nine Empowered Group of Ministers (EGoMs) and twenty-one Groups of Ministers (GoMs). This would expedite the process of decision making and usher in greater accountability in the system, the PMO said in a statement. The Ministries and Departments will now process the issues pending before the EGoMs and GoMs and take appropriate decisions at the level of Ministries and Departments itself, the PMO said. Wherever the Ministries face any difficulties, the Cabinet Secretariat and the Prime Minister's Office will facilitate the decision making process, the PMO said. • Finance minister Arun Jaitley vowed on Sunday, 1 June 2014, to uphold fiscal discipline, despite pressure on public finances from figures showing the economy grew by less than 5% in the fiscal year just ended. In a post on his Facebook page, Jaitley said pulling India out of its current economic malaise would involve fiscal rectitude as a combination of monetary and fiscal policy. Slower GDP growth will imply lower tax buoyancy and a higher fiscal deficit, Jaitley said. "We must move towards an era of fiscal discipline where we can reduce the fiscal deficit, contain inflation and improve upon our growth rates", Jaitley said. Jaitley did not name any deficit numbers, but said he would target fiscal discipline in the near term so as to maximise India's growth potential over the longer run. "We must commit ourselves to this discipline. Short term disciplining till we reverse the present trend will give us long term benefits," he wrote.
  4. 4. • The Reserve Bank of India (RBI) is widely expected to keep its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review tomorrow, 3 June 2014, as the central bank waits for further proof that inflation is under control. While high inflation rates have come down in recent months, the central bank is waiting to see if they will flare up again. The RBI has said it wants the consumer price index inflation rate to cool to 8% by January and further to 6% a year after that. The central bank will want to see if the crucial monsoon rains this year will exacerbate or ease food price inflation. The RBI left 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. • Jaitley is expected to table Union Budget for 2014-15 in Lok Sabha 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. • Maruti Suzuki India rose after the company reported strong sales in May. Hero MotoCorp gained after the company reported good sales figures in May 2014. Bajaj Auto rose after the company reported a small increase in sales volume for the month just gone by. Shares of companies involved in life insurance business edged higher on reports the finance ministry could recommend an increase in the limit on foreign direct investment (FDI) in insurance sector to 49% from 26%. • Maruti Suzuki India rose 3.06% after the company reported strong sales in May. The company's total sales rose 19.2% to 1 lakh units in May 2014 over May 2013. • IndusInd Bank rose 3.14%. The bank said it has launched a new customer-centric service titled Video Branch. • Shares of Tata Steel and Steel Authority of India surged on 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.
  5. 5. • Coal India rose 0.51% after the company and its subsidiaries achieved 94% of targeted production at 36.27 million tonnes in May 2014. • Bajaj Auto rose 1.02% after the company said its total vehicle sales rose 4% to Rs 3.51 lakh units in May 2014 over May 2013. • Uflex jumped 14.99% after consolidated net profit rose 45.9% to Rs 60.10 crore on 17.5% increase in net sales to Rs 1376.87 crore in Q4 March 2014 over Q4 March 2013. • Easun Reyrolle lost 3.1% after the company reported a net loss of Rs 16.08 crore in Q4 March 2014 as against net profit of Rs 12.46 crore in Q4 March 2013. • REI Agro was locked at 5% upper circuit after the company reported a net loss of Rs 49.70 crore in Q4 March 2014 as against net profit of Rs 67.73 crore in Q4 March 2013 • Simplex Infrastructures' net profit rose 1.27% to Rs 60.58 crore on 5.28% decline in total income from operations to Rs 5512.98 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). • Cox & Kings reported a consolidated net loss of Rs 46 crore in Q4 March 2014, lower than net loss of Rs 49 crore in Q4 March 2013. • MCX's net profit fell 42.90% to Rs 43.75 crore on 42.63% decline in total income to Rs 96.98 crore in Q4 March 2014 over Q4 March 2013. • Financial Technologies (India) (FTIL) posted a net loss of Rs 371.25 crore in Q4 March 2014 compared with net profit of Rs 87.81 crore in Q4 March 2013. • Aurobindo Pharma's consolidated net profit jumped 362.02% to Rs 501.81 crore on 47.71% rise in total income to Rs 2340.46 crore in Q4 March 2014 over Q4 March 2013. • Ruchi Soya Industries reported net loss of Rs 19.65 crore in Q4 March 2014 as compared to net profit of Rs 78.58 crore in Q4 March 2013. • Jyoti Structures reported net loss of Rs 12.53 crore in Q4 March 2014 as compared to net profit of Rs 22.20 crore in Q4 March 2013. Total income from operations (net) rose 39.33% to Rs 1307.62 crore in Q4 March 2014 over Q4 March 2013 • Panacea Biotec reported net profit of Rs 33.98 crore in Q4 March 2014 as compared to net loss of Rs 82.75 crore in Q4 March 2013.
  6. 6. Global news • European shares edged higher on Monday, 2 June 2014, as a report showed that Chinese manufacturing expanded at the fastest pace since December. Asian stocks advanced on Monday, 2 June 2014, after a gauge of China's manufacturing expanded at the fastest pace this year in May. Trading in US index futures indicated that the Dow Jones Industries Average could gain 21 points at the opening bell on Monday, 2 June 2014. The Dow and the S&P 500 eked out small gains on Friday, 30 May 2014. • Manufacturing in the euro area slowed more than initially estimated in May amid weakness in France, adding to evidence of the region's uneven recovery as the European Central Bank weighs more stimulus to shore up growth and inflation. A Purchasing Managers' Index fell to 52.2 last month from 53.4, below a May 22 preliminary reading of 52.5, London-based Markit Economics said today. The index has held above the 50 mark, which separates growth from contraction, for 11 months. Growth in new orders eased, according to the report. • UK manufacturing maintained its momentum last month as improving global demand boosted orders at factories for a 15th straight month. Markit Economics said its industry index was at 57 in May after a reading of 57.3 in April. While a gauge of new orders slipped to 59.4 from 59.9, it remained above the 50 level that signifies growth, and Markit said its survey indicates quarterly manufacturing growth of almost 1.5% • There are expectations that the European Central Bank (ECB) will announce new stimulus measures when the Governing Council of the ECB holds a monthly meeting on euro area interest rates on Thursday, 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 on Thursday, 5 June 2014. • China's Purchasing Managers' Index increased to 50.8 in May, the National Bureau of Statistics and China Federation of Logistics and Purchasing said on Sunday, while authorities reduced some lenders' reserve requirement ratios as the government acts to support growth in the world's second-biggest economy. • The influential US nonfarm payroll data for May 2014 is due for release on Friday, 6 June 2014.
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