Power finance stocks decline sharply for second day in a row

Key benchmark indices held firm in mid-morning trade. The S&P BSE Sensex was up 136.79 points or 0.71%, up 69.54 points from the day's low and off 40.21 points from the day's high. The market breadth, indicating the overall health of the market, was positive. Gains in Asian stocks underpinned sentiment.

Index heavyweight and cigarette major ITC extended intraday gain. Tata Power Company advanced on bargain hunting after recent slide. Power finance stocks declined sharply for second day in a row. Telecom stocks gained.

Key benchmark indices cut initial gains triggered by higher Asian stocks. Volatility ruled the roost in morning trade as the key benchmark indices regained strength after hitting intraday low. Key benchmark indices held firm in mid-morning trade.

Foreign institutional investors (FIIs) sold shares worth a net Rs 705.06 crore on Wednesday, 3 July 2013, as per provisional data from the stock exchanges.

At 11:18 IST, the S&P BSE Sensex was up 136.79 points or 0.71% to 19,314.55. The index gained 177 points at the day's high of 19,354.76 in early trade, its highest level since 2 July 2013. The index rose 67.25 points at the day's low of 19,245.01 in morning trade.

The CNX Nifty was up 39.90 points or 0.69% to 5,810.80. The index hit a high of 5,831.50 in intraday trade, its highest level since 2 July 2013. The index hit a low of 5,787.70 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 923 shares gained and 734 shares fell. A total of 92 shares were unchanged.

The total turnover on BSE amounted to Rs 563 crore by 11:20 IST compared to Rs 369 crore by 10:20 IST.

Among the 30-share Sensex pack, 17 stocks gained and rest of them declined. L&T (up 2.35%), Infosys (up 1.51%) and Sun Pharmaceutical Industries (up 1%) edged higher from the Sensex pack.

Sterlite Industries (India) (down 1.36%), Bhel (down 1.77%) and Bajaj Auto (down 1.43%) edged lower from the Sensex pack.

Index heavyweight and cigarette major ITC advanced 2.45% to Rs 334.30, with the stock extending intraday gain.

Tata Power Company advanced 3.27% to Rs 85.20 bargain hunting. Shares of Tata Power Company had declined 6.67% in prior two trading sessions to settle at Rs 82.50 on Wednesday, 3 July 2013, from a recent high of Rs 88.40 on 1 July 2013, after credit rating agency Moody's reportedly downgrading the outlook on the company to negative from stable. The negative outlook reflects renewed uncertainties related to the material covenant breaches on bank debt associated with Tata Power Company's Gujarat-based Mundra Ultra Mega Power Project which is being executed under its fully owned subsidiary, Coastal Gujarat Power or CGPL, Moody's said.

Telecom stocks gained. Reliance Communications (up 0.53%), Idea Cellular (up 0.32%) and MTNL (up 0.28%) edged higher. Tata Teleservices (Maharashtra) shed 0.85%.

Bharti Airtel rose 1.78%. The company during market hours today, 4 July 2013, announced that it has subscribed to an additional 2% equity share capital in all the four India Broadband Wireless Access (BWA) entities of Qualcomm AP. With this, all four entities are now subsidiaries of Bharti Airtel. On 24 May 2012, Bharti Airtel and Qualcomm had announced an agreement under which Bharti had acquired 49% interest in Qualcomm AP's India entities that hold BWA licenses in Delhi, Mumbai, Haryana and Kerala.

Power finance stocks declined sharply for second day in a row. REC (down 4.35%) and Power Finance Corporation (down 5.74%) fell.

Mangalore Chemicals and Fertilizers was locked at 10% lower circuit after Deepak Fertilisers & Petrochemicals Corporation acquired 2.89 crore shares, or 24.46% stake, in the company on Wednesday, 3 July 2013.

Deepak Fertilisers & Petrochemicals Corporation (DFPCL) made the announcement after market hours on Wednesday, 3 July 2013. Shares of DFPCL rose 1.76%.

DFPCL acquired a 24.46% stake in Mangalore Chemicals and Fertilizers (MCFL) for Rs 179 crore, becoming MCFL's largest shareholder. DFPCL, through its wholly-owned subsidiary SCM Soilfert, acquired 2.89 crore shares in MCFL at an average price of Rs 61.75 per share through multiple block deals executed on the BSE on Wednesday, 3 July 2013.

DFPCL said that given its considerable strengths in the fertiliser business, the investment is very strategic and a good fit with the company's business. DFPCL said it looks forward to working closely with MCFL to enhance long-term value for the shareholders of both companies. As on 31 March 2013, Vijay Mallya's UB Group held 22% in MCFL.

Meanwhile, the government finally cleared an ambitious Rs 1.25 lakh crore food security plan, promising subsidized food to two out of every three Indians. The move is expected to help the Congress party gain significant political support in the run-up to the 2014 general election, although it may stretch the government's fiscal deficit.

Asian stocks were mostly higher on Thursday, 4 July 2013, after better-than-expected US economic data spurred gains on Wall Street. Key benchmark indices in Hong Kong, Indonesia, South Korea, China and Singapore were up 0.39% to 1.62%. Key benchmark indices in Japan and Taiwan were down 0.11% to 0.37%.

The US stock market remains closed today, 4 July 2013, for Independence Day holiday. US stocks edged higher on Wednesday as positive jobs data countered international concerns in the abbreviated trading session.

The European Central Bank (ECB) is widely expected to keep its main refinancing rate unchanged at 0.5% after a monetary policy review today, 4 July 2013, with the spotlight set to fall on ECB President Mario Draghi's press conference following the meeting. The Bank of England is also expected to leave its lending rate unchanged at a record low 0.5% after a monetary policy review today, 4 July 2013.

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