PSU OMCs surge as crude oil slumps

Key benchmark indices reversed losses and moved into positive zone in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 21.20 points or 0.12%, up 119.54 points from day's low and off 11.72 points from the day's high. Index heavyweight Reliance Industries (RIL) extended intraday gains ahead of the company's Q4 results tomorrow, 16 April 2013. Another index heavyweight and cigarette major ITC also extended intraday gain. The market breadth, indicating the overall health of the market, once again turned positive from negative in mid-morning trade.

PSU OMCs rose as crude oil prices declined. Auto stocks were mostly lower. Infosys extended Friday's slump triggered by the company issuing tepid revenue guidance at the time of announcing Q4 March 2013 and the year ended 31 March 2013 results.

Key benchmark indices cut losses after a weak opening triggered by lower Asian stocks. The Sensex hit its lowest level in more than 7 months. Key benchmark indices hovered in red in morning trade. Key benchmark indices turned positive in mid-morning trade.

Foreign institutional investors (FIIs) sold shares worth a net Rs 28.59 crore on Friday, 12 April 2013, as per provisional data from the stock exchanges.

At 11:18 IST, the S&P BSE Sensex was up 21.20 points or 0.12% to 18,263.76. The index fell 98.34 points at the day's low of 18,144.22 at the onset of the trading session, its lowest level since 13 September 2012. The index rose 32.92 points at the day's high of 18,275.48 in mid-morning trade.

The CNX Nifty was up 13.05 points or 0.24% to 5,541.60. The index hit a low of 5,500.30 in intraday trade. The index hit a high of 5,544.95 in intraday trade.

The market breadth, indicating the overall health of the market, once again turned positive from negative in mid-morning trade. Earlier, the breadth had turned negative from positive in morning trade. On BSE, 935 shares advanced and 762 shares declined. A total of 80 shares were unchanged.

The total turnover on BSE amounted to Rs 642 crore by 11:20 IST compared to Rs 386 crore by 10:20 IST

Among the 30-share Sensex pack, 16 stocks advanced while rest of them declined.

Index heavyweight Reliance Industries (RIL) rose 1.06% at Rs 783.55. The scrip hit high of Rs 784.90 and a low of Rs 773.25 so far during the day. RIL announces Q4 results tomorrow, 16 April 2013.

PSU OMCs rose as crude oil prices declined. BPCL (up 4.58%), HPCL (up 4.13%) and Indian Oil Corporation (up 3.19%) edged higher. US crude oil futures for May 2013 delivery were down $2.44 a barrel at $88.87 a barrel in the electronic trading today, 15 April 2013. The contract had tumbled $2.22 a barrel or 2.37% to settle at $91.29 a barrel on the New York Mercantile Exchange on Friday, 12 April 2013.

Lower crude oil prices will reduce under-recovery of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers.

PSU OMCs cut petrol prices by a rupee with effect from midnight of 1 April 2013. The government has already freed pricing of petrol.

Index heavyweight and cigarette major ITC rose 0.97% to Rs 295.95. The scrip hit high of Rs 296.10 and a low of Rs 289.40 so far during the day. The stock had hit record high of Rs 310.75 on 4 February 2013. 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.

Auto stocks were mostly lower. Tata Motors lost 3.23%. The company during market hours on Friday, 12 April 2013, said that its global wholesales, including Jaguar Land Rover were 116,521 units in March 2013. Cumulative wholesales for the year ended 31 March 2013 (FY 2013) were 1,196,416 units.

Tata Motors' British luxury car unit Jaguar Land Rover (JLR) on Wednesday, 10 April 2013, said its global sales rose 16% to a record 53,772 units in March 2013 over March 2012. JLR's global sales rose 17% to a record 115,504 units in Q1 March 2013 over Q1 March 2012. JLR said the Jaguar brand demonstrated strong growth with sales of 9,856 in March up 28% and sales for the quarter of 20,210 up 31%. Land Rover, meanwhile, delivered the best single month and quarter in its 65 year history with March sales of 43,916, up 14% and quarter one sales of 95,294, up 15% versus 2012, JLR said.

Mahindra & Mahindra (M&M) declined 1.27%. The company after market hours on Friday, 12 April 2013, announced that its new Sub 4 metre Verito will be named the 'Verito Vibe'. The much awaited launch of the 'Verito Vibe' is scheduled next month. The 'Verito Vibe' is indigenously designed and developed by M&M and is smartly packaged in a sub-4 metre length on the proven Verito platform, M&M said.

The 'Verito Vibe' will be packaging the well acclaimed strengths of class-leading space and comfort, robust build and the ever reliable 1.5 Litre dCi Diesel Engine. The Verito Vibe will sport some first in class styling elements in this younger and sportier avatar. M&M has decided on the name 'Vibe' for its newest offering, with the aim of conveying a distinctive youthful and vibrant imagery. 'Vibe' targets the socially aware, young consumer of today, M&M said.

Speaking on the 'Verito Vibe', Pravin Shah, Chief Executive, Automotive Division, M&M, said: "Customer centric innovation has always been at the heart of any product development at the Mahindra Group. The Verito Vibe marks our entry in the high volume sub 4 metre segment. While developing this product we have paid particular attention to making this car look different and we are sure that it will appeal to customers with its young and sporty looks and that too without compromising the benefits which our existing Verito has to offer."

Maruti Suzuki India rose 0.83%. Maruti on 2 April 2013 said that its total sales declined 4.8% to 1,19,937 units in March 2013 over March 2012. The company's domestic sales fell 4.3% to 1,07,890 units in March 2013 over March 2012. The company's exports dropped 8.9% to 12,047 units in March 2013 over March 2012

Shares of bike makers were mixed. Bajaj Auto rose 1.77%. The company announced on 2 April 2013 that its total sales fell 10% to 3.01 lakh units in March 2013 over March 2012. Motorcycles sales declined 11% to 2.67 lakh units in March 2013 over March 2012. Commercial vehicles sales fell 1% to 34,194 units in March 2013 over March 2012. Exports declined 6% to 1,01,374 units in March 2013 over March 2012.

Shares of Hero MotoCorp slipped 0.13%.

Infosys extended Friday's slump triggered by the company issuing tepid revenue guidance at the time of announcing Q4 March 2013 and the year ended 31 March 2013 results. The stock was off 2.07%. The scrip had tumbled 21.33% on Friday, 12 April 2013. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 1.1% to Rs 2394 crore on 0.3% growth in revenue to Rs 10454 crore in Q4 March 2013 over Q3 December 2012. Net profit rose 13.3% to Rs 9421 crore on 19.6% growth in revenue to Rs 40352 crore in the year ended March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The company announced the results before market hours on Friday, 12 April 2013.

The company has forecast a tepid 6% to 10% growth in revenue in both rupee terms and dollar terms for the year ending 31 March 2014 (FY 2014) as the company says that global economic uncertainties remain challenging for the IT industry. The revenue growth outlook is lower than industry body Nasscom's projection of 12% to 14% growth in IT exports in the current fiscal year. Infosys has not given full year earnings guidance this time. Infosys had earlier stopped offering quarterly guidance in July 2012.

On the macro front, the government will unveil data on the wholesale price index (WPI) for March 2013 today, 15 April 2013. WPI inflation is projected to ease to 6.4% in March 2013 from 6.84% in February 2013, as per the median estimate of a poll of economists carried out by Capital Market. WPI inflation had edged up to 6.84% in February 2013 from 6.62% in January 2013.

The combined consumer price inflation for rural and urban India stood at 10.39% in March 2013, lower than 10.91% in February 2013, another data showed. Inflation under the category 'food and beverages' stood at 12.42%, the data showed.

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 could 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 30 June 2013, while the deadline for state-run firms is 31 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 near term focus of the market is on Q4 results. Reliance Industries (RIL) announces Q4 results tomorrow, 16 April 2013. TCS announces Q4 results on 17 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Wipro announces Q4 results on 19 April 2013. Cairn India announces Q4 results on 22 April 2013. UltraTech Cement announces Q4 results on the same day.

HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank and Maruti Suzuki unveil Q4 results on 26 April 2013. IDFC announces Q4 results on 1 May 2013. ACC announces Q1 March 2013 results on 3 May 2013. HDFC announces Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Dr. Reddys Laboratories announces Q4 results on 14 May 2013.

The index of industrial production rose 0.6% in February 2013, data released by the government on Friday, 12 April 2013, showed. Manufacturing sector recorded a growth of 2.2%. The mining sector registered a decline of 8.1% and electricity sector declined 3.2%. As per use-based classification, production of basic goods declined 1.8% and that of intermediate goods fell 0.7%. Capital goods production rose 9.5%. Production of consumer non-durables rose 2.9% whereas that of consumer durables shrunk 2.7%.

Industrial production rose 0.9% during the period April 2012 to February 2013.

The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.

The Reserve Bank of India (RBI) Governor D. Subbarao on 6 April 2013 said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The RBI will announce the Monetary Policy Statement 2013-14 on 3 May 2013. The 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 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 at that time. 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.

On the political front, the Congress led UPA government has been reduced to a minority government, with DMK removing support to the government in March this year citing differences on the issue of atrocities on Tamils in Sri Lanka. Earlier, the Trinamool Congress withdrew support to the government in September last year as it opposed economic reforms. The Samajwadi Party (SP) along with its regional rival in Uttar Pradesh Bahujan Samaj Party (BSP) provide outside support to the UPA government. SP has 22 MPs in Lok Sabha and BSP has 21 MPs.

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 second half of the Budget session of the Parliament begins on 22 April 2013. The government has lined up a number of key bills for consideration and passing during the 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 Budget Session of the Parliament ends on 10 May 2013.

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 lower on Monday as the latest Chinese economic data came in weaker than expected. Key benchmark indices in Hong Kong, Singapore, South Korea, Japan, China, Taiwan and Indonesia were down by 0.06% to 1.21%.

Chinese economic data came in weaker than expected, as the nation reported first quarter gross domestic product, March industrial output and other statistics today, 15 April 2013. GDP for the January-March quarter rose 7.7% from a year earlier, weakening from 7.9% growth in the fourth quarter. Industrial production for March increased 8.9% from the year-earlier period, the weakest in more than a year and slowing from a 9.9% average rise for the January-February period, which China's statistics bureau reports in one figure due to seasonal distortions from the Lunar New Year holiday. March retail sales rose 12.6%, improving from 12.3% year-on-year growth in the January-February 2013 period, but far less than the 15.2% gain in December 2012.

Trading in US index futures indicated that the Dow could fall 38 points at the opening bell on Monday, 15 April 2013. US stocks closed slightly lower on Friday, 12 April 2013 after weak retail sales and consumer sentiment data indicated that the world's largest economy is losing momentum. US retail sales slid 0.4% in March 2013, the biggest decline since June 2012, Commerce Department figures showed on Friday, 12 April 2013.

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