Market edges higher in opening trade

Key benchmark indices edged higher in early trade on higher Asian stocks. The market breadth, indicating the overall health of the market, was positive. The S&P BSE Sensex was up 70.84 points or 0.38%, up 34.33 points from the day's low and off 32.45 points from the day's high. Index heavyweight Reliance Industries (RIL) edged higher in choppy trade. Index heavyweight and cigarette major ITC fell after the Maharashtra state government in its Budget for 2013-14 presented on Wednesday, 20 March 2013, raised the rate of tax on cigarettes to 25% from 20%.

Shares of ACC after turning ex-dividend today, 21 March 2013, for final dividend for the year ended 31 December 2012. Shares of Oil India slipped after turning ex-dividend today, 21 March 2013, for interim dividend for the year ending 31 March 2013. Shares of jewellery makers were mostly higher.

Asian stocks edged higher on Thursday, 21 March 2013, as China's manufacturing sector picked up in March, showing signs of recovery in the world's second largest economy.

At 9:31 IST, the S&P BSE Sensex was up 70.84 points or 0.38% to 18,955.03. The index gained 103.29 points at the day's high of 18,987.48 in early trade. The index rose 36.51 points at the day's low of 18,920.70 in early trade.

The CNX Nifty was up 18.85 points or 0.33% to 5,713.25. The index hit a high of 5,728.80 in intraday trade. The index hit a low of 5,705.90 in intraday trade, its lowest level since 4 March 2013.

The market breadth, indicating the overall health of the market, was positive. On BSE, 753 shares gained and 478 shares declined. A total of 50 shares were unchanged.

The total turnover on BSE amounted to Rs 269 crore by 09:30 IST

Among the 30-share Sensex pack, 22 stocks gained while rest of them declined.

Index heavyweight Reliance Industries (RIL) rose 0.72% at Rs 828.50. The telecom department early this month cleared a proposal to allow companies with Internet permits to also offer basic mobile telecom services by paying a one-time license-conversion fee. RIL's telecom unit, Reliance Jio Infocomm, has frequencies to provide broadband Internet across India. Under the new rule, RIL will have to pay about Rs 1658 crore to also provide voice services.

The Finance Minister said in his speech while presenting the Union Budget 2013-14 on 28 February 2013 that the oil and gas exploration policy will be reviewed to move from profit sharing to revenue sharing contracts. The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed. NELP blocks that were awarded but are stalled will be cleared. A policy to encourage exploration and production of shale gas will be announced.

Index heavyweight and cigarette major ITC fell 0.46% to Rs 306 after the Maharashtra state government in its Budget for 2013-14 presented on Wednesday, 20 March 2013, raised the rate of tax on cigarettes to 25% from 20%.

Earlier, the government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14 which was unveiled on 28 February 2013.

Shares of ACC fell 0.46% after turning ex-dividend today, 21 March 2013, for final dividend of Rs 19 per share for the year ended 31 December 2012.

Shares of Oil India slipped 1.26% after turning ex-dividend today, 21 March 2013, for interim dividend of Rs 12 per share for the year ending 31 March 2013.

L&T Finance Holdings rose 0.93%. L&T Finance Holdings said after trading hours on Wednesday, 20 March 2013, that a Committee of Directors at its meeting held on 20 March 2013 has approved the allotment of 5 crore unlisted 8.75 % Cumulative Compulsorily Redeemable preference shares of face value Rs 100 each at par on private placement aggregating to Rs 500 crore to eligible allottees on pro-rata basis.

Steel Authority of India (Sail) fell 1.23%. The Government of India (GoI) has decided to sell up to 24.03 crore equity shares, constituting 5.82% of the total paid up capital of the company via Offer for Sale (OFS) through the stock exchanges mechanism tomorrow, 22 March 2013. The floor price for the OFS will be announced after trading hours today, 21 March 2013.

Shares of liquor maker United Spirits (up 1.75%) and beer maker United Breweries (up 1.8%) edged higher. The Maharashtra state government in its Budget for 2013-14 presented on Wednesday, 20 March 2013, raised the excise duty on Indian Made Foreign Liquor (IMFL) and strong beer. Excise duty on IMFL has been hiked from Rs 240 Per Proof Litre (PPL) to Rs 300 PPL. The excise duty on strong beer has been raised from Rs 42 per bulk litre or 175% of manufacturing cost whichever is higher, to Rs 60 per bulk litre or 200% of the manufacturing cost whichever is higher.

Shares of jewellery makers were mostly higher. Tribhovandas Bhimji Zaveri (TBZ) (up 1.3%), Thangamayil Jewellery (up 3.57%), Titan Industries (up 0.06%), PC Jeweller (up 1.44%), Shree Ganesh Jewellery House (up 0.15%) gained. Rajesh Exports (down 0.87%), Gitanjali Gems (down 0.42%), and Tara Jewels (down 1.79%), declined.

The Maharashtra state government in its Budget for 2013-14 presented on Wednesday, 20 March 2013, increased the tax rate on gold, silver and their jewellery by 0.1% to 1.1% from 1% to raise fund for drought relief. The hike in tax is limited for one year i.e. only for the year 2013-14.

Foreign institutional investors (FIIs) sold shares worth a net Rs 236.72 crore on Wednesday, 20 March 2013, as per provisional data from the stock exchanges.

The Union Cabinet on Tuesday, 19 March 2013, cleared an ambitious food-security bill that would allow 67% of the population access to cheap food grains. The program would increase food subsidy costs and further bloat the government's fiscal deficit. Food subsidies account for more than 40% of India's total subsidy costs. Prices of the food grain to be supplied under the program would be frozen for three years from the date of implementation, expected in the second half of the year. Parliament's approval for the bill would permit the release of huge quantities of grain from the government's overflowing storage sites at near giveaway prices and is expected to become a big vote-winner for the Congress party-led coalition government, which faces a general election in early 2014.

The government on Wednesday, 20 March 2013, said that it intends to move amendments to the draft Resolution before the United Nations Human Rights Council (UNHRC) related to the Sri Lankan Tamils issue. The amendments were finalized on Tuesday, 19 March 2013. India's Permanent Representative to the UNHRC is in Delhi for consultations. He will be given suitable instructions to move the amendments at the meeting of the UNHRC, a government statement said. India's position has always been -- and remains -- that the UNHRC should adopt a strong Resolution that would send a resolute message to Sri Lanka and goad Sri Lanka to accept an independent and credible investigation, the government statement said.

All eyes are now on the UN Human Rights Council (UNHRC) vote on Sri Lankan war crimes, that will take place in Geneva today, 21 March 2013. The US-sponsored draft resolution before the ongoing session of the UNHRC calls the Sri Lankan government to conduct an "independent and credible" investigation into allegations of human rights violations.

Parliamentary Affairs Minister Kamal Nath on Wednesday, 20 March 2013, said the government was not a lame duck government and was stable. He said that no party has challenged the government for a floor test. "No party has challenged us for a floor test. No one has challenged the majority of the government inside or outside Parliament," Kamal Nath said.

The DMK on Tuesday, 19 March 2013, withdrew support to the Congress led UPA government at the Centre citing differences on the issue of atrocities on Tamils in Sri Lanka.

All the five DMK ministers met Prime Minister Manmohan Singh on Wednesday, 20 March 2013, and submitted their resignations. The DMK has called for an emergency executive committee meeting on 25 March 2013.

The UPA has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year.

Reacting to DMK's decision to withdraw support to the UPA government, Samajwadi Party (SP) Rajya Sabha MP Ram Gopal Yadav on Tuesday said that the DMK has still not sent the letter to the President, so the party hasn't withdrawn support. He said that SP will continue to extend outside support the UPA government.

Bahujan Samaj Party (BSP) chief Mayawati has also decided not to rock the Congress-led UPA's boat. Mayawati on Tuesday said her party would continue extending outside support to the UPA. The BSP supremo also added that the Central government was not in minority and there was no threat of a Lok Sabha election due to the DMK pulling out.

The Lok Sabha has 539 MPs at present as four seats are vacant. The half-way mark is 270. With DMK deciding to withdraw from the UPA, its strength reduces by 18 to 232. Outside support for UPA totals 49 including SP 22, BSP 21, RJD 3 and JDS 3.

The Reserve Bank of India (RBI) cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on Tuesday, 19 March 2013. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said.

Notwithstanding moderation in non-food manufactured products inflation, headline inflation is expected to be range-bound around current levels over 2013-14 in view of sectoral demand-supply imbalances, the ongoing corrections in administered prices and their second-round effects, the RBI said. Elevated food prices, including pressures stemming from MSP increases, and the wedge between wholesale and retail inflation have adverse implications for inflation expectations, the central bank said. Risks on account of the CAD remain significant notwithstanding likely improvement in Q4 over an expected sharp deterioration in Q3 of 2012-13. Accordingly, even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.

Reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 13 June 2013, while the deadline for state-run firms is 13 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.

The India Meteorological Department will issue its first forecast of 2013 southwest monsoon in April 2013.

Moody's Investors Service on Monday, 18 March 2013, said that the current pace of food inflation in India is much faster than the global average and is negative for the country's credit rating as it hurts the government's finances.

Finance Minister P. Chidambaram on 4 March 2013 said that the government will soon announce more measures -- including sops for exporters -- to boost economic growth. Some of these steps will be announced in parliament during the debate on the Budget, Chidambaram told industry representatives at a customary address held on Monday, 4 March 2013, after the budget announcement on 28 February 2013. The finance minister said that the fiscal deficit could turn out to be lower than the projected 5.2% of gross domestic product for the current fiscal year ending 31 March 2013. The government aims to reduce the fiscal deficit to 4.8% of GDP in the year ending 31 March 2014.

The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.

The first leg of the Budget Session of the Parliament ends on Friday, 22 March 2013. After a one month recess, the Parliament reconvenes on 22 April 2013. The Budget Session of the Parliament ends on 10 May 2013.

The government has lined up a number of key bills for consideration and passing during the ongoing Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.

The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014. The target of divestment of government stake in state-run firms has been reduced to Rs 24000 crore for FY 2013 from the initial Rs 30000 crore.

The government expects to mop up Rs 40847 crore from the sale of telecom bandwidth and fees in FY 2014. The government has substantially pruned the expected mop up from the sale of telecom bandwidth and fees to Rs 19440 crore from an initial target of Rs 58217 crore for FY 2013.

The Election Commission of India on Wednesday, 20 March 2013, said that assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.

Asian stocks edged higher on Thursday, 21 March 2013, after China's manufacturing sector picked up in March, showing signs of recovery in the world's second largest economy. Key benchmark indices in Singapore, Japan, China, Taiwan and Indonesia were up by 0.05% to 1.29%. Key benchmark indices in Hong Kong and South Korea fell by 0.05% and 0.14%.

Business conditions for Chinese manufacturers saw further improvement in March after nearly leveling off in the previous month, according to preliminary data released by HSBC on Thursday. The so-called flash manufacturing Purchasing Managers' Index for March came in at 51.7 in March, improving from a final reading of 50.4 for February. A measure above 50 indicates expansion.

US stocks rose Wednesday, 20 March 2013, after the Federal Reserve wrapped up its monthly policy meeting with an assurance it would continue to support the US economy.

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