Market trims gains
Key benchmark indices further pared intraday gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 20.04 points or 0.1%, up close to 70 points from the day's low and off about 95 points from the day's high. Index heavyweight and cigarette major ITC extended intraday losses. Another index heavyweight Reliance Industries (RIL) held firm. The market breadth, indicating the overall health of the market, was positive.
IT stocks fell on weak economic data in the US, the biggest outsourcing market for the Indian IT firms. Metal stocks gained on renewed buying. L&T rose after the company said that its construction division won new orders valued at Rs 2542 crore across various business segments in April and May 2013.
The market moved into the positive terrain after opening lower. The barometer index, the S&P BSE Sensex, hit its highest level in over 28 months. The 50-unit CNX Nifty hit its highest level in over 30 months. The market trimmed gains after hitting fresh intraday high in morning trade. The market firmed up again later. The market once again pared gains in mid-morning trade. The market further pared intraday gains in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1646.95 crore on Wednesday, 15 May 2013, as per provisional data from the stock exchanges.
At 12:20 IST, the S&P BSE Sensex was up 20.04 points or 0.1% to 20,233. The index rose 113.52 points at the day's high of 20,326.48 in morning trade, its highest level since 6 January 2011. The index fell 50.84 points at the day's low of 20,162.12 in opening trade.
The CNX Nifty was up 15.10 points or 0.25% to 6,161.85. The index hit a high of 6,187.30 in intraday trade, its highest level since 12 November 2010. The index hit a low of 6,128.25 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 941 shares advanced and 940 shares declined. A total of 117 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and the rest of them fell. Dr Reddy's Laboratories, Cipla and State Bank of India gained by 1.85% to 3.24%.
Index heavyweight Reliance Industries (RIL) gained 1.73% to Rs 833. The stock hit a high of Rs 838.50 and low of Rs 816 so far during the day.
Index heavyweight and cigarette major ITC fell 2.44% to Rs 334.30. The stock hit a high of Rs 343.50 and low of Rs 333.60 so far during the day. The company announces its Q4 results tomorrow, 17 May 2013. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013. The Centre 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.
L&T rose 0.93% after the company announced during market hours today, 16 May 2013 that its construction division won new orders valued at Rs 2542 crore across various business segments in April and May 2013.
Cairn India gained 1.16%. The company during market hours today, 16 May 2013, announced the results of its annual review of its reserves and resources. The comprehensive review of reserve and resources potential in all the blocks where company has interests was estimated at 1,286 million barrels of oil equivalent as on 31 March 2013. DeGolyer and MacNaughton (D&M), the leading independent reserves auditors, have estimated it to be a tad higher at 1,296 mmboe.
IT stocks fell on weak economic data in the US, the biggest outsourcing market for the Indian IT firms. Tech Mahindra and Tata Consultancy Services (TCS) fell by 0.56% to 1.2%.
Wipro dropped 0.72%. The company on 9 May 2013 said that the Securities & Exchange Board of India (Sebi) has approved its proposal to meet the minimum public shareholding requirement through a transfer of equity shares by the promoter group to an 'Irrevocable Independent Trust' with trustees either from public sector banks or public financial institutions for advancing philanthropic activities through its beneficiaries. Wipro said that the company and the promoter group have undertaken multiple steps to fulfill the minimum public shareholding requirement including Offer for Sale (OFS). The demerger of the 'diversified' business is also expected to increase public shareholding. Any shortfall to meet public shareholding prior to due date of meeting the minimum public shareholding requirement would be transferred to the 'Irrevocable Independent Trust' and the trust shall effect a sale of such equity shares forming part of the trust funds within a period of two years from the date of such settlement, Wipro said.
HCL Technologies fell 0.39%. The company announced after market hours on Wednesday, 15 May 2013, that it has been selected by Husqvarna Group, a global leader in products and solutions for garden, park and forest care as well as construction, as a global strategic partner. HCL will provide comprehensive business transformation services to Husqvarna. The engagement covers Europe, Asia Pacific and US operations. As per the engagement, HCL will impact Husqvarna Group's key business operations bringing in enhanced efficiencies in their key business process areas. HCL will be using its proprietary MASCoT framework, a managed service model to provide application support and maintenance, application life cycle management, application operation through 24x7 call support and services to support Husqvarna Group's business. The agreement scope also includes legacy & custom applications and ERP systems covering key business processes at Husqvarna including future business transformation projects and services.
Infosys declined 1.61%. The company after trading hours on Wednesday, 15 May 2013, said that Turkland Bank (T-Bank), one of Turkey's leading private banks, has deployed Infosys' Finacle core banking, CRM and treasury solutions. This deployment empowers T-Bank to meet the needs of retail and corporate customer segments with faster product rollout and improved customer service, Infosys said.
Metal stocks gained on renewed buying. Sterlite Industries (India), JSW Steel, Tata Steel, Sail and Hindustan Zinc rose by 0.01% to 3.42%.
Hindalco Industries advanced 0.46%, with the stock extending Wednesday's 2.7% gains post Novelis results. Novelis, Hindalco's US subsidiary, reported net income attributable to its common shareholders of $202 million for the year ended 31 March 2013 (FY 2013). Excluding tax-effected certain items, net income for FY 2013 was $241 million, compared to a net income of $218 million for the year ended 31 March 2012 (FY 2012). Net sales declined 11% to $9.8 billion in FY 2013 over FY 2012. This decline was due to lower average aluminum prices and lower shipments when compared to last year, Novelis said.
Adjusted EBITDA for FY 2013 was $961 million, compared to $1.053 billion for FY 2012. The year-over-year decrease was mostly due to disruptions related to the ERP implementation in two North American plants in the third quarter, pricing pressures in several operating regions, lower average aluminum prices, an impact from a fire at a North American plant in the fourth quarter and higher pension expense.
Net income for Q4 March 2013, excluding tax-effected certain items, was $80 million, representing a $55 million increase when compared to the same period in the prior year, Novelis said. For the fourth quarter, sales were $2.5 billion compared to $2.6 billion reported for the fourth quarter of fiscal 2012. Adjusted EBITDA for the fourth quarter of fiscal 2013 was $240 million, representing a 3% increase when compared to the $233 million reported for the same period a year ago, due primarily to stronger demand and good cost control.
Jindal Steel and Power (JSPL) fell 0.91%.
The focus of the market is on Q4 results. ITC unveils Q4 results tomorrow, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, Power Grid Corporation of India, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
The monsoon rains may arrive on the southern coast around 3 June 2013, the weather office forecast on Wednesday, 15 May 2013. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The India Meteorological Department (IMD) has predicted normal rains this year.
The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government on Tuesday, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.
Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.
The consumer price inflation fell below the 10% mark in April 2013. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013, data released by the government on 13 May 2013, showed.
Reserve Bank of India Governor D Subbarao on Tuesday, 14 May 2013, said that the central bank will take note of falling inflation when discussing potential interest rate cuts.
The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
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.
Asian shares rose on Thursday after data showed Japan's economy accelerated in the first three months of the year. Key benchmark indices in Indonesia, China, South Korea, Hong Kong and Taiwan rose by 0.14% to 0.99%. Key benchmark indices in Japan and Singapore fell by 0.07% to 0.39%.
Japan's economy grew 0.9% in the first quarter, speeding up from a 0.3% pace in the previous quarter.
Foreign direct investment in China lagged behind analysts' estimates in April, highlighting concern at the growth outlook for the world's second-biggest economy after an unexpected slowdown last quarter. Investment rose 0.4% from a year earlier to $8.4 billion, the Ministry of Commerce said in a statement today in Beijing.
Trading in US index futures indicated that the Dow could fall 10 points at the opening bell on Thursday, 16 May 2013. US stocks rose on Wednesday, with the Dow Jones Industrial Average and S&P 500 hitting new all-time highs in a broad market rally as the recent upward momentum persisted. In the latest reads on the economy, activity in New York state's manufacturing sector unexpectedly contracted in May. Another report showed that US industrial production fell more than expected in April. In other data released on Wednesday, the US Producer Price Index recorded its largest drop in three years in April, falling a seasonally adjusted 0.7%.
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