Key benchmark indices retained positive zone in afternoon trade. The barometer index, the S&P BSE Sensex, was up 78.95 points or 0.37%, off 67 points from the day's high and up 141.44 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The market sentiment was boosted by Reserve Bank of India's announcement on Friday, 17 January 2014, that it will conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 10000 crore on Wednesday, 22 January 2014, in a bid to ease the strain on liquidity in the banking system.
Investors also cheered Bharatiya Janata Party's (BJP's) prime ministerial candidate Narendra Modi's economic vision for India in his speech on Sunday, 19 January 2014, wherein he said that if the BJP comes to power after Lok Sabha elections, his emphasis will be on urbanisation, infrastructure and inflation control and said his wish list also includes setting up 100 new smart cities and introduction of bullet trains to all four corners of the country.
Index heavyweight and cigarette maker ITC edged higher, with the stock recovering from Friday's post-result slide. Index heavyweight Reliance Industries (RIL) extended initial losses as the company's net profit remained flat in Q3 December 2013 due to fall in gross refining margins (GRM). UltraTech Cement edged lower in choppy trade after reporting weak Q3 result. Metal and mining stocks were mostly lower after China's economic growth slowed in the fourth quarter as gains in factory output and investment spending eased. Reliance MediaWorks jumped after the company's board of directors today, 20 January 2014, approved a proposed of delisting of equity shares.
The Sensex reversed initial gains on weak Asian stocks. The Sensex hit one-week low. The 50-unit CNX Nifty hit its lowest level in almost a week. Key benchmark indices regained positive terrain and hit fresh intraday high in morning trade. The Sensex trimmed gains after hitting fresh intraday high in mid-morning trade. The Sensex further trimmed intraday gains in early afternoon trade. Key benchmark indices retained positive zone in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was up 78.95 points or 0.37% to 21,142.57. The index jumped 145.95 points at the day's high of 21,209.57 in mid-morning trade. The index declined 62.49 points at the day's low of 21,001.13 in early trade, its lowest level since 13 January 2014.
The CNX Nifty was up 19.10 points or 0.31% to 6,280.75. The index hit a high of 6,304.95 in intraday trade. The index hit a low of 6,243.35 in intraday trade, its lowest level since 14 January 2014.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,225 shares gained and 1,182 shares fell. A total of 152 shares were unchanged.
The total turnover on BSE amounted to Rs 989 crore by 13:20 IST.
Among the 30-share Sensex pack, 16 stocks rose and rest fell.
Index heavyweight and cigarette maker ITC edged higher, with the stock recovering from Friday's post-result slide. The stock was up 0.82% at Rs 327.50. The stock hit a high of Rs 330.20 and low of Rs 320 so far during the day. The company's net profit rose 16.25% to Rs 2385.34 crore on 13.4% increase in total income to Rs 9117.91 crore in Q3 December 2013 over Q3 December 2012. The company announced the results during market hours on Friday, 17 January 2014.
Index heavyweight Reliance Industries (RIL) extended initial losses as the company's net profit remained flat in Q3 December 2013 due to fall in gross refining margins (GRM). The stock was off 1.92% at Rs 867.60. The stock hit a high of Rs 888.85 and low of Rs 867.25 so far during the day. The company's net profit rose 0.2% to Rs 5511 crore on 10.5% growth in revenue to Rs 106383 crore in Q3 December 2013 over Q3 December 2012. The Q3 result was announced after market hours on Friday, 17 January 2014.
RIL's profit before depreciation, interest and taxation (PBDIT) declined 1.8% to Rs 9927 crore in Q3 December 2013 over Q3 December 2012. RIL's non-operational income jumped 32.47% to Rs 2305 crore in Q3 December 2013 over Q3 December 2012.
RIL's gross refining margin (GRM) declined to $7.6/barrel in Q3 December 2013, from $7.7/barrel in Q2 September 2013 and $9.6/barrel in Q3 December 2012.
RIL said its refining business maintained stable earnings on Q-o-Q basis ni Q3 December 2013 despite lower volumes and decline in regional benchmark complex margins. RIL's margins were positively impacted by widening crude differentials, strength in middle-distillates and naphtha product cracks, which was offset by weak gasoline cracks
RIL said that the net addition to fixed assets for the nine month ended 31 December 2013 was Rs 27645 crore including exchange rate difference capitalization. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej, Silvassa and Hazira.
RIL said its retail unit Reliance Retail continued its growth momentum in Q3 December 2013 despite challenging macroeconomic environment. Reliance Retail's revenue jumped 38.32% to Rs 3927 crore in Q3 December 2013 over Q3 December 2012.
Commenting on the company's Q3 performance, Mukesh D. Ambani, CMD, RIL said: "Reliance's robust refining configuration enabled it to deliver stable refining profits in Q3 December 2013, against the backdrop of declining regional benchmark margins. Even as we invest to further strengthen our energy businesses, this quarter demonstrates the outstanding quality of our refining and petrochemical business resources and their ability to deliver creditable performance in a period marked by cyclicality and uncertainties. We are happy to announce the commissioning of our new polyester facility in Silvassa, the first amongst a series of projects that underpin RIL's industry-leading competitive position. Our retail business continues on its rapid growth trajectory with 38% revenue growth during the quarter".
RIL's outstanding debt as on 31 December 2013 was Rs 81330 crore compared to Rs 72427 crore as on 31 March 2013. RIL had cash and cash equivalents of Rs 88705 crore as on 31 December 2013. These were in bank deposits, mutual funds, CDs and Government securities/bonds. RIL is debt free on a net basis as at 31 December 2013.
The Ministry of Petroleum and Natural Gas notified the Domestic Natural Gas Pricing Guidelines, 2014 for all domestically produced gas, including conventional, shale, coal bed methane (CBM). These guidelines will be applicable from 1 April 2014.
UltraTech Cement shed 0.25% after net profit fell 38.45% to Rs 369.76 crore on 1.85% decline in total income to Rs 4885.99 crore in Q3 December 2013 over Q3 December 2012. The result was announced during trading hours today, 20 January 2014.
UltraTech Cement said that the combined domestic cement and clinker sales remained flat at 9.7 million tonnes in Q3 December 2013. Cement and wall care putty sales jumped 10.3% to 2.89 lakh tonnes in Q3 December 2013 over Q3 December 2012.
UltraTech Cement that the Q3 December 2013 result was impacted adveserly by lower selling prices due to the subdued demand. However, on-going cost optimization measures have helped in containing costs despite the continuing increase in input and logistics cost, UltraTech Cement said.
With regard to future business outlook, UltraTech Cement said that the outlook continues to remain challenging. In the long term, demand growth for cement is likely to be around 8%. The key demand drivers will continue to be housing and infrastructure spends, UltraTech Cement said.
Metal and mining stocks were mostly lower after China's economic growth slowed in the fourth quarter as gains in factory output and investment spending eased. China is the world's largest consumer of copper and aluminum.
Jindal Steel & Power (down 0.88%), Tata Steel (down 1.47%), National Aluminum Company (down 0.82%), Hindustan Copper (down 0.37%), JSW Steel (down 1.24%), Sesa Sterlite (down 1.07%) and NMDC (down 2.27%) declined.
Hindalco Industries (up 1.08%) and Sail (up 0.97%) gained.
Hindustan Zinc rose 2.67%. The company's net profit rose 7% to Rs 1723 crore on 9% growth in net sales to Rs 3410 crore in Q3 December 2013 over Q3 December 2012. The company announced the results during market hours on Friday, 17 January 2014.
Hindustan Zinc said its top line growth during the quarter was driven by higher zinc sales volume and rupee depreciation, partially offset by lower silver and acid prices.
Hindustan Zinc's earnings before interest, taxation, depreciation and amortization (EBITDA) rose 21% to Rs 1828 crore in Q3 December 2013 over Q3 December 2012. The increase in EBITDA was driven by higher integrated sales volume and rupee depreciation, partially offset by lower silver price and higher costs in rupee terms.
With regard to its expansion projects, Hindustan Zinc said that the mine development is progressing well at all its underground projects. Kayad mine has become operational during the quarter. The company's project capex will be in line with its guidance of $250 million per year, Hindustan Zinc said in a statement.
Reliance MediaWorks jumped 13.36% after the company's board of directors at its meeting held today, 20 January 2014, considered the proposal made by Reliance Land and Reliance Capital (promoter group entities) to make a voluntary delisting offer to all the public shareholders of the company in accordance with the Securities and Exchange Board of India delisting regulations. The board of directors has granted its approval to the proposed delisting offer and intends to seek the approval of shareholders of the company through postal ballot in terms of the SEBI Delisting Regulations, Reliance MediaWorks said.
Promoters own 73.3% stake in Reliance MediaWorks (as per the shareholding pattern as on 30 September 2013).
In the foreign exchange market, the rupee edged lower against the dollar on global dollar strength. The partially convertible rupee was hovering at 61.5975, lower than its close of 61.54/55 on Friday, 17 January 2013. The US dollar edged higher amid speculation the Federal Reserve will continue reducing stimulus as the US economy improves.
Bond prices rose after the Reserve Bank of India on Friday, 17 January 2014, said it has decided to conduct Open Market Operations by purchasing government securities for an aggregate amount of Rs 10000 crore on Wednesday, 22 January 2014, in a bid to ease the strain on liquidity in the banking system. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.5619%, lower than its close of 8.6269% on Friday, 17 January 2014. Bond yield and bond prices are inversely related.
The Reserve Bank of India said on Friday, 17 January 2014, that the liquidity conditions are undergoing some stress in the recent period, primarily on account of the build-up of cash balances of the Government of India. In order to address the temporary liquidity deficit situation, the Reserve Bank of India has been infusing additional liquidity through 7/14/28 days term repo auctions in addition to the existing overnight repo under liquidity adjustment facility and standing liquidity facilities. The current assessment suggests that the strain on market liquidity is likely to remain enduring in view of the fiscal targets set for the year as well as projections for aggregate credit growth, warranting the need to provide liquidity of a more permanent nature. Accordingly, the Reserve Bank has decided to conduct Open Market Operations by purchasing the following government securities for an aggregate amount of Rs 10000 crore on Wednesday, 22 January 2014, through multi-security auction using the multiple price method.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014. The RBI kept its main lending rate viz. the repo rate unchanged after its last policy review in December and said at that time that it expected inflation to ease in the following months.
Bharatiya Janata Party's (BJP's) prime ministerial candidate Narendra Modi on Sunday, 19 January 2014, came out with his vision for a new India ahead of the 2014 Lok Sabha elections, pledging to project the country as a brand worldwide if a BJP government was voted to power. The key elements of the Bharatiya Janata Party prime ministerial candidate's programme are urbanisation, infrastructure, education and healthcare, apart from cracking down on scourges such as inflation and black money. Modi said he wanted to reach out to every level of society to ensure that the benefits of economic change didn't just go to the advantaged. His wish list includes Indian Institutes of Technology, Indian Institutes of Management and All India Institutes of Medical Science in every state, 100 new smart cities and bullet trains to all four corners of the country. He said inflation - one of BJP's main election planks besides corruption and "mis-governance" by the UPA government - was the country's biggest predicament and said steps needed to be taken to contain it. The answer lay in farm data that was much more current than it is now and a fund that could be used to protect the vulnerable. Modi also floated the idea of a price stabilisation fund to ensure that nobody went hungry.
He spoke of the need to focus on Brand India, referring to five Ts in this connection-tradition, talent, tourism, technology and trade. He also pledged a mix of social welfare schemes that would bring India on a par with developed economies, urging people to vote for him.
Other priorities in Modi's programme include development of infrastructure such as roads, ports and airports, reviving power plants that are shut, creating jobs, skill development, setting up agro infrastructure gas grids, deploying optical fibre networks, pushing the river interlinking project and establishing special courts to punish black marketing. In the 75-minute speech, Modi said the country has to treat urbanisation as an "opportunity", not as a "challenge", something India hasn't done. A BJP government under him will build 100 new cities to be developed as smart cities, twin cities and satellite cities, he said. "If the railways is modernised, we can give impetus to progress. By the time the country celebrates the diamond jubilee of independence (2022), we should have bullet trains going in four directions. The world will start seeing us with a new vision," he said.
Modi also touched on senior BJP leader LK Advani's pet theme of getting black money stashed overseas back to the country, saying that a task force will be set up to ensure that this is achieved. Modi also spoke of the need to uphold what he regarded as India's traditions, likening it to a rainbow with seven shades family values, agriculture and rural India, empowerment of women, environment, youth, democracy and knowledge.
Asian stocks edged lower on Monday, 20 January 2014, after China's economic growth slowed in the fourth quarter as gains in factory output and investment spending eased. Key benchmark indices in China, Japan, Singapore and Hong Kong were off 0.59% to 0.85%. Key benchmark indices in Indonesia, South Korea and Taiwan rose 0.2% to 0.48%.
China's economy expanded 7.7% in the fourth quarter from a year earlier, the National Bureau of Statistics said today. That compares 7.8% growth in the previous three months. Industrial production rose 9.7% in December from a year earlier, data showed, down from a 10% gain in November. Retail sales last month rose 13.6% from a year earlier, slowing from 13.7% in November. Fixed-asset investment in China excluding rural households increased 19.6% in the January-to-December period from a year earlier, when it expanded 20.6%.
The US stock market remains closed today, 20 January 2014, for a holiday commemorating civil rights leader Martin Luther King Jr.
US stocks settled mostly lower on Friday as disappointing results from Intel Corp. and General Electric Co. weighed on sentiment.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014. By a 9-to-1 vote, the Fed on 18 December 2013 decided to trim its asset-purchase program by $10 billion to $75 billion per month starting in January 2014.
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