HUL leads rally in FMCG stocks

Key benchmark indices logged modest gains in highly volatile session of trade. The barometer index, the S&P BSE Sensex, was provisionally up 97.50 points or 0.49%, up 170.19 points from the day's low and off 34.49 points from the day's high. The government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors boosted sentiment.

Shares of FMCG major Hindustan Unilever surged on reports that the company has raised prices of several personal care products. Many other FMCG stocks gained as a bountiful rainfall this year has prepared the ground for bumper harvest. ITC, Dabur India and Nestle India hit record high. Shares of liquor major United Spirits scaled record high. Opto Circuits plunged on high volume in highly volatile trade.

Steel stocks declined after South Korean steel major Posco on Tuesday said it has scrapped a large steel project in Karnataka. Shares of private sector steel major Tata Steel hit 52-week low. IT stocks gained as Infosys last week retained its revenue growth guidance in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result, belying fears that it may lower the guidance. Shares of IT major TCS scaled record high. Shares of another IT firm HCL Technologies reversed gains after striking record high.

Telecom stocks reversed initial gains triggered by government's decision on Tuesday, 16 July 2013, to increase FDI ceiling in the telecom services sector to 100% from 74%. MMTC dropped to 52-week low in choppy trade amid high volume. Gitanjali Gems hit 52-week low, with the stock extending its recent steep slump.

Shares of private sector oil & gas, refinery and gas utility stocks rose after the government on Tuesday, 16 July 2013, said foreign investors won't have to seek government approval for up to 49% ownership in petroleum, natural gas and refining sectors. Bank stocks fell for second day in a row as RBI's recent measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Private sector HDFC Bank fell after announcing Q1 results.

The S&P BSE Sensex was up 97.50 points or 0.49% to 19,948.73, its highest closing level since 15 July 2013. The index jumped 131.99 points at the day's high of 19,983.22 in mid-afternoon trade. The index fell 72.69 points at the day's low of 19,778.54 in late trade.

The CNX Nifty was up 18.05 points or 0.3% to 5,973.30, its highest closing level since 15 July 2013. The index hit a high of 5,989.80 in intraday trade. The index hit a low of 5,926.75 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,324 shares declined and 1,053 shares gained. A total of 149 shares were unchanged.

The BSE Mid-Cap index fell 0.5% and the BSE Small-Cap index slipped 0.22%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 2002 crore, higher than Rs 1888 crore on Tuesday, 16 July 2013.

Among the 30-share Sensex pack, 16 stocks gained and rest of them declined.

FMCG stocks gained across the board as a bountiful rainfall this year has prepared the ground for bumper harvest. India's monsoon is so far progressing well across the country and if the rains continue as expected, this could boost rural incomes. FMCG companies derive substantial revenue from rural India.

Shares of FMCG major Hindustan Unilever surged on reports that the company has raised prices of several personal care products. The stock jumped 9.86% to Rs 684.75 after scaling a record high of Rs 698.95 in intraday trade today, 17 July 2013.

Separately some media reports suggested that current float of HUL shares in MSCI India Index will come down to 30% from 40% effective today, 17 July 2013, while the float will rise to 33% from 24% in FTSE Index with effect from 19 July 2013. HUL's parent Unilever PLC on 11 July 2013 said that pursuant to the voluntary open offer to increase its stake in HUL, the shareholders of HUL tendered a total of 31.99 crore shares, out of which 31.95 crore shares have been accepted by Unilever PLC on completion of the verification of the shares tendered. Based on the shares tendered which represent 14.78% of HUL, the Unilever Group will increase its stake in HUL from 52.48% to 67.26%.

Dabur India gained 4.31% to Rs 165.80 after hitting a record high of Rs 167.55 in intraday trade today, 17 July 2013.

Nestle India rose 1.37% to Rs 5,769.95, after striking a record high of Rs 5,795 in intraday trade today, 17 July 2013.

Colgate-Palmolive (India) (up 2.65%), Godrej Consumer Products (up 1.74%), Marico (up 1.28%) gained.

Index heavyweight and cigarette major ITC rose 2.18% to Rs 368 after striking a record high of Rs 370.20 in intraday trade today, 17 July 2013. The company announces Q1 results on 25 July 2013.

United Spirits rose 0.51% to Rs 2,700.40 after striking a record high of Rs 2,735 in intraday trade today, 17 July 2013.

Berger Paints India rose 0.06%. The stock turned ex-dividend today, 17 July 2013, for dividend of Rs 1.80 per share for the year ended 31 March 2013 (FY 2013).

Shares of private sector oil & gas, refinery and gas utility stocks rose after the government on Tuesday, 16 July 2013, said foreign investors won't have to seek government approval for up to 49% ownership in petroleum, natural gas and refining sectors.

Index heavyweight Reliance Industries (RIL) rose 1.7% at Rs 916.20. The stock hit a high of Rs 918.70 and low of Rs 903. Oil Secretary Vivek Rae today, 17 July 2013, said that natural gas output from RIL's' KG-D6 block off India's east coast has fallen to about 14 million cubic metres per day (mmscmd). Output from the D6 block has been declining steadily after reaching 60 mmscmd in 2010.

The Cabinet Committee on Economic Affairs (CCEA) on 27 June 2013 approved new gas pricing formula from 1 April 2014. The price of gas as per the formula is likely to be about $8.4 mmBtu as opposed to $4.2 mmBtu currently.

Essar Oil fell 1.35%.

Among gas utility stocks, Indraprastha Gas (up 5.76%) and Gujarat Gas Company (up 3.69%) gained. Gujarat State Petronet dropped 1.73%.

Bank stocks fell for second day in a row as RBI's recent measures to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. Among private sector bank stocks ICICI Bank (down 1.68%), Axis Bank (down 3.32%), Kotak Mahindra Bank (down 0.41%) and Yes Bank (down 6.1%) declined.

Among PSU bank stocks, State Bank of India (down 0.95%), Canara Bank (down 3.15%), Union Bank of India (down 7.07%), Bank of India (down 2.92%), Bank of Baroda (down 3.51%) and Punjab National Bank (down 0.46%) declined.

The Reserve Bank of India (RBI) early this week announced a slew of measures to address exchange rate volatility. RBI raised the Marginal Standing Facility (MSF) rate and Bank Rate each by 200 bps to 10.25% while capped the amount up to which banks can borrow or lend under its daily liquidity window at Rs 75000 crore. Furthermore, RBI will additionally sell Rs 12000-crore of government bonds on Thursday, 18 July 2013, to mop up liquidity from the system, it said. The RBI said it will continue to closely monitor the markets, the liquidity situation and the macroeconomic developments and will take such other measures as may be necessary, consistent with the growth-inflation dynamics and macroeconomic stability.

Private sector banking major HDFC Bank fell 2.53%. The bank during market hours today, 17 July 2013 reported 30.08% rise in net profit to Rs 1843.86 crore on 17.94% growth in total income to Rs 11588.56 crore in Q1 June 2013 over Q1 June 2012. The growth in HDFC Bank's bottom line was in line with market expectations. The private sector maintained its run rate of about 30% growth in bottom line which it has consistently reported for many quarters now.

The bank's net interest income (NII) rose 21% to Rs 4418.70 crore in Q1 June 2013 over Q1 June 2012. The net interest margin (NIM) remained unchanged at 4.6% in Q1 June 2013, same as in Q4 March 2013 and Q1 June 2012.

HDFC Bank's ratio of net non-performing assets (NPAs) to net advances increased to 0.3% as on 30 June 2013, from 0.2% as on 31 March 2013 and 0.2% as on 30 June 2012. The ratio of gross NPAs to gross advances remained at the same level at 1% as on 30 June 2013 from the levels as on 31 March 2013 and as on 30 June 2012. Total restructured loans (including applications received and under process for restructuring) were at 0.2% of gross advances as of 30 June 2013, as against 0.3% as of 30 June 2012. Total floating provisions stood at Rs 1865 crore as on 30 June 2013, as against Rs 1680 crore as on 30 June 2012.

Development Credit Bank rose 0.2% after net profit surged 126.5% to Rs 42.83 crore on 26.9% jump in operating income to Rs 305.84 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 16 July 2013.

Reliance Capital fell 2.31%. The company during market hours today, 17 July 2013, said Reliance Capital Asset Management (RCAM) has increased its total assets under management (AUM) by Rs 7000 crore in Q1 June 2013. The total AUM now stands at over Rs 180000 crore across mutual funds, PMS, EPFO, Pension Funds and Offshore Mandates. The company registered a 21% rise in its average AUM in mutual funds to Rs 97771 crore in Q1 June 2013.

Shriram City Union Finance fell 1.25% on turning ex-dividend today, 17 July 2013, for final dividend of Rs 6 per share for the year ended 31 March 2013 (FY 2013).

IT stocks gained as Infosys last week retained its revenue growth guidance in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result, belying fears that it may lower the guidance.

Infosys rose 0.53%. Infosys retained its guidance of 6% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result on Friday, 12 July 2013. The company has raised the guidance in rupee terms due to a steep depreciation of the rupee against the dollar. The company has forecast 13% to 17% growth in revenue in rupee terms for FY 2014, higher than its earlier guidance of 6% to 10% growth which the company had given at the time of announcement of Q4 March 2013 results.

Infosys said that compensation increases for FY 2014 which will become effective from July 2003, will adversely impact the company's profit margins in the future quarters. The company's management is cautiously optimistic about rest of the year.

Wipro advanced 3.37%.

TCS gained 1.52% to Rs 1,674.05. The stock hit record high of Rs 1,684 in intraday trade today, 17 July 2013.

Tech Mahindra advanced 0.36% to Rs 1,096.30. Tech Mahindra on Friday, 12 July 2013, announced that it has completed the process of allocating shares of the company to the shareholders of erstwhile Mahindra Satyam. The issued capital of the company has gone up from earlier 12.9 crore shares to 23.2 crore shares. Subsequent to the scheme of amalgamation between Tech Mahindra and Mahindra Satyam becoming effective, the board of directors fixed 5 July 2013 as record date for Mahindra Satyam shareholders. The new shares were admitted for trading on the stock exchanges on 12 July 2013.

HCL Technologies shed 0.25% to Rs 873.30. The stock reversed direction after hitting record high of Rs 888.20 in intraday trade today, 17 July 2013.

Oracle Financial Services Software slipped 1.19%. The company during market hours today said that Bank Muamalat, the primary Islamic bank of Indonesia, has successfully implemented Oracle FLEXCUBE Universal Banking suite to streamline its core business process ensuring productivity and agile Shariah banking practices.

Steel stocks fell after South Korean steel major Posco on Tuesday said it is no longer pursuing plans to build a steel plant in Karnataka after failing to secure land and infrastructure due to local opposition.

Private sector steel major Tata Steel fell 3.36% to Rs 243 after hitting a 52-week low of Rs 242.50 in intraday trade today, 17 July 2013.

JSW Steel shed 1.93%. The company after trading hours on Tuesday, 16 July 2013, said that as a policy it does not respond to speculative stories and market rumours after media reports said that JSW Steel is in talks to purchase a significant stake in Sandur Manganese and Iron Ores to improve its access to iron ore and cut logistics costs. Earlier, Sandur Manganese during trading hours on Tuesday, 16 July 2013, had denied stake sale reports. Neither Sandur Manganese nor its promoters have appointed any investment bankers to scout for a buyer, Sandur Manganese had said.

Shares of Sandur Manganese and Iron Ores lost 2.06%.

Sail fell 3.09%. Jindal Steel & Power declined 2.03%.

Other metal stocks also declined. Sterlite Industries (India) (down 1.47%), Hindustan Zinc (down 1.42%), Sesa Goa (down 0.56%), Nalco (down 4.42%), NMDC (down 2.62%), Hindalco Industries (down 1.79%), and Hindustan Copper (down 1.26%) edged lower.

L&T shed 0.55%. The company today, 17 July 2013, said its transportation infrastructure business made a major breakthrough in its international business by securing a new order worth Rs 2085 crore from the Ministry of Transport and Communications, Sultanate of Oman, for the construction of the Al Batinah Expressway Package 4. The project is scheduled to be completed in 36 months. This order was won against stiff international competition and augurs well for L&T's expansion in international infrastructure, the company said.

Shares of Multi Commodity Exchange of India rose 2.78% to Rs 722 after the government on Tuesday, 16 July 2013, said foreign investors won't have to seek government approval for up to 49% ownership in commodity exchanges. Earlier, FDI in commodity exchanges needed an approval from the Foreign Investment Promotion Board (FIPB). The government retained the 49% foreign equity cap in commodity exchanges but made the route automatic to help bring more investment and make the existing exchanges more competitive.

PTC India rose 1.9% to Rs 48.35 after the government on Tuesday, 16 July 2013, said it has decided to allow foreign direct investment (FDI) in power exchanges through the automatic route. This means that no FIPB approval will have to be sought. However, it has retained the cap at 49%.

Telecom stocks reversed initial gains triggered by government's decision on Tuesday, 16 July 2013, to increase FDI ceiling in the telecom services sector to 100% from 74%. FDI in the telecom services sector was increased from 74% to 100%, but all investments above 49% will continue to be routed through the FIPB.

Reliance Communications fell 1.99% to Rs 143, with the stock reversing gains after striking 52-week high of Rs 151.25 in intraday trade today, 17 July 2013.

Idea Cellular dropped 4.1% to Rs 151, with the stock reversing gain after hitting a record high of Rs 163.50 in intraday trade today, 17 July 2013.

Bharti Airtel declined 1.73%.

Tata Teleservices (Maharashtra) (up 4.24%), and MTNL (up 1.79%) edged higher.

Tata Communications slipped 3.32% as the stock turned ex-dividend today, 17 July 2013, for dividend of Rs 3 per share for the year ended 31 March 2013 (FY 2013).

UltraTech Cement shed 0.43% on turning ex-dividend today, 17 July 2013, for dividend of Rs 9 per share for the year ended 31 March 2013 (FY 2013).

MMTC dropped 5% to Rs 53.10, also its 52-week low in volatile trade. Volumes in the stock were high as 67.09 lakh shares changed hands in the counter, as compared to an average daily volume of 77,355 shares in the past one quarter. On 13 June 2013, the Government of India (GoI) sold 9.33% stake in MMTC via Offer for Sale (OFS) through stock exchanges mechanism at an indicative price of Rs 60.86 per share, at a discount of 71.21% to the closing price of the stock of Rs 211.45 on 12 June 2013.

Gitanjali Gems (GGL) was locked at 5% lower circuit at Rs 121.65, also its 52-week low, with the stock extending its recent steep slump. Credit rating agency CARE on 5 July 2013, revised the ratings assigned to the bank facilities/instruments of GGL and its subsidiaries/step-down subsidiaries and placed them on credit watch. The revision in the ratings takes into account stressed liquidity position of GGL as evidenced by full utilisation of the existing working capital limits which along with the recent RBI guidelines on gold import for domestic purpose would further put pressure on its liquidity position, CARE said.

CARE further added that it has also taken into account the significant erosion in share price and market capitalisation of the company in the last two weeks of June 2013 which in CARE's opinion would have weakening effect on GGL's financial flexibility and liquidity. The rating has been placed on credit watch due to lack of adequate information in-order to take a final view, the rating agency added.

Sabero Organics Gujarat spurted 16.1% after the company reported a consolidated net profit of Rs 9.45 crore in Q1 June 2013 compared with a net loss of Rs 1.89 crore in Q1 June 2012. Consolidated net sales jumped 43.7% to Rs 174.15 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 16 July 2013.

Torrent Pharmaceuticals rose 1.38% after the company after trading hours on Tuesday, 16 July 2013, said it has fixed 24 July 2013 record date for 1:1 bonus share issue.

Shasun Pharmaceuticals rose 2.71% after the company said it has successfully completed USFDA inspection and Brazilian inspection during the first week of June and July 2013 respectively. The announcement was made during trading hours today, 17 July 2013.

Opto Circuits dropped 10.02% to Rs 25.60 on high volume of 1.18 crore shares. The stock was volatile. The stock rose as much as 14.76% at the day's high of Rs 32.65 and lost as much as 22.14% at the day's low of Rs 22.15.

European stocks reversed initial gains on Wednesday, 17 July 2013, as minutes from the Bank of England's July policy meeting showed all members voted in favor of keeping asset purchases unchanged, marking a shift from recent meetings when three out of the nine members preferred to boost the easing program. Key benchmark indices in UK, France and Germany were down by 0.31% to 0.5%.

Asian shares were mostly higher on Wednesday, 17 July 2013. Key benchmark indices in China, Taiwan and Singapore were down 0.01% to 1.01%. Key benchmark indices in Japan, Hong Kong, South Korea and Indonesia were up 0.11% to 1.13%.

The latest data showed that foreign-direct-investment flows into China jumped more than 20% in June 2013.

Meanwhile, the Xinhua news service, the official press agency of the People's Republic of China, reported that profit at Chinese state-owned companies outside the financial sector rose 7% in the first half of the year, accelerating from a 6.5% increase in the first five months of 2013.

Trading in US index futures indicated that the Dow could fall 29 points at the opening bell on Wednesday, 17 July 2013. US stocks fell on Tuesday, 16 July 29013, with Coca-Cola Co. and Goldman Sachs Group Inc. losing ground after their quarterly results, and as investors considered Kansas City Fed President Esther George's comment that the Federal Reserve should pare its bond purchases sooner rather than later.

Federal Reserve Chairman Ben Bernanke kicks off his two-day testimony on monetary policy in Washington today, 17 July 2013. In comments last week, Bernanke had eased concerns that the Fed would quickly unwind its monetary stimulus.

The minutes of the Fed's June meeting released on 10 July 2013 showed that while several members judged that a reduction in asset purchases would likely soon be warranted, many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.

Powered by Capital Market - Live News