Key benchmark indices retained positive zone in morning trade after the government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors. The barometer index, the S&P BSE Sensex, was up 73.53 points or 0.37%, off 45.26 points from the day's high and up 9.12 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Index heavyweight and cigarette major ITC extended initial gains to hit record high. Another index heavyweight Reliance Industries also extended initial gains. FMCG major Nestle India hit record high. Bank stocks fell for the second day in a row as the Reserve Bank of India's (RBI) decision to tighten liquidity in the banking system will make it costlier for banks and financial companies to raise short-term funds. HDFC Bank fell ahead of its Q1 June 2013 results today, 17 July 2013. MMTC droped in choppy trade amid high early volume. Gitanjali Gems hit 52-week low, with the stock extending its recent steep slump.
Key benchmark indices edged higher in early trade boosted by the government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors. The market retained positive zone in morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 357.40 crore on Tuesday, 16 July 2013, as per provisional data from the stock exchanges.
At 10:18 IST, the S&P BSE Sensex was up 73.53 points or 0.37% to 19,924.76. The index jumped 118.79 points at the day's high of 19,970.02 in early trade, its highest level since 15 July 2013. The index rose 64.41 points at the day's low of 19,915.64 in early trade.
The CNX Nifty was up 16.65 points or 0.28% to 5,971.90. The index hit a high of 5,988 in intraday trade, its highest level since 15 July 2013. The index hit a low of 5,968.80 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 765 shares gained and 431 shares fell. A total of 58 shares were unchanged.
The total turnover on BSE amounted to Rs 361 crore by 10:20 IST compared to Rs 99 crore by 09:20 IST.
Among the 30-share Sensex pack, 19 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 1.5% to Rs 365.55 after striking a record high of Rs 366.15 in intraday trade today, 17 July 2013. The company announces Q1 results on 25 July 2013.
FMCG major Nestle India rose 1.73% to Rs 5,790 after striking a record high of Rs 5,795 in intraday trade today, 17 July 2013
Index heavyweight Reliance Industries (RIL) rose 1.13% at Rs 911.05, with the stock extending initial gain. The stock hit a high of Rs 911.80 and low of Rs 903 so far during the day. 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.
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 0.87%), Axis Bank (down 2.61%), Kotak Mahindra Bank (down 0.71%) and Yes Bank (down 3.11%) declined.
HDFC Bank fell 1.33% ahead of its Q1 June 2013 results today, 17 July 2013. The private sector bank is expected to continue its run rate of about 30% growth in bottom line in Q1 June 2013.
Among PSU bank stocks, State Bank of India (down 0.61%), Canara Bank (down 0.32%), Union Bank of India (down 3.56%), Bank of India (down 0.77%), Bank of Baroda (down 0.23%) and Punjab National Bank (down 1.21%) 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.
MMTC fell 1.7% to Rs 54.90 after sliding to 52-week low of Rs 53.10. Volumes in the stock were high as 42.73 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 11.99% 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.
The government on Tuesday, 16 July 2013, eased overseas-investment rules for a number of sectors. The government has allowed 100% foreign direct investment (FDI) in telecom. 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.
In power exchanges and petroleum refiners, foreign investors won't have to seek government approval for up to 49% ownership, which is also the total cap for these sectors.
In defence, 26% FDI through the FIPB route has been maintained for state-of-the-art technologies. The increase in defence FDI will be on a case-to-case basis and will take place after consent from the Cabinet Committee on Security.
In a boost to the power sector, the government has allowed 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%.
FDI cap for private insurers would be raised to 49% but that would need Parliament's approval. The FDI limit for credit information firms was raised from 49% to 74% --all of it may come through the automatic route, against the requirement for clearance from the Foreign Investment Promotion Board (FIPB) at present.
In single-brand retail, though there is no FDI limit at present, the investment has come only after FIPB clearance. This has been eased to allow up to 49 per cent investment through the automatic route.
The tea sector too had some reason to cheer as the condition of divestment to Indian partners has been deleted.
The government didn't take any decisions on increasing FDI caps in multibrand retail and print and electronic media. Commerce Minister Anand Sharma said that that the government will come out with clarifications related to multibrand retail policy soon.
Asian shares were mostly lower on Wednesday, 17 July 2013, on caution as two-day congressional testimony from Federal Reserve Chairman Ben Bernanke begins today, 17 July 2013. Key benchmark indices in China, Japan, Taiwan and Singapore were down 0.23% to 0.4%. Key benchmark indices in Hong Kong, South Korea and Indonesia were up 0.2% to 1.42%.
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 a flat opening of US stocks 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
