Key benchmark indices hit fresh intraday low in afternoon trade. Selling was broad based as all the 13 sectoral indices on BSE were negative. The barometer index, the S&P BSE Sensex, was down 212.18 points or 1.13%, off close to 144 points from the day's high and up about 28 points from the day's low. Index heavyweight and cigarette maker ITC extended losses. Another index heavyweight Reliance Industries (RIL) also edged lower. The market breadth was weak. Shares of power generation firms witnessed selling pressure. Metal shares fell as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.91% on Wednesday, 3 April 2013.
The market edged lower in early trade. The Sensex and the 50-unit CNX Nifty hit their lowest level in a week. Weakness continued on the bourses in morning trade. The Sensex continued to hover in the negative terrain in mid-morning trade. Weakness continued on the bourses in early afternoon trade. Key benchmark indices hit fresh intraday low in afternoon trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Wednesday, 3 April 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 368.39 crore on Wednesday, 3 April 2013, as per provisional data from the stock exchanges.
At 13:15 IST, the S&P BSE Sensex was down 212.18 points or 1.13% to 18,589.46. The index fell 240.65 points at the day's low of 18,560.99 in afternoon trade, its lowest level since 26 November 2012. The index declined 68.02 points at the day's high of 18,733.62 in early trade.
The CNX Nifty was down 74.65 points or 1.32% to 5,598.25. The index hit a low of 5,598.25 in intraday trade, its lowest level since 23 November 2012. The index hit a high of 5,644.45 in intraday trade.
The BSE Mid-Cap index was down 1.48% and the BSE Small-Cap index was down 1.62%. Both these indices underperformed the Sensex.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,633 shares fell and 790 shares rose. A total of 128 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks declined while rest of them rose. Infosys (down 2.46%), Tata Steel (down 2.37%), ICICI Bank (down 2.28%), TCS (down 2.14%), Bhel (down 1.70%), HDFC (down 1.66%), Hero MotoCorp (down 1.39%), State Bank of India (down 1.21%) and HDFC Bank (down 1.14%), edged lower from the Sensex pack.
Dr Reddy's Laboratories (up 2.73%), Coal India (up 2.15%), Hindustan Unilever (up 1.33%), Maruti Suzuki India (up 1.18%), ONGC (up 0.82%), Tata Motors (up 0.60%), M&M (up 0.53%) and GAIL (India) (up 0.37%), edged higher from the Sensex pack.
Index heavyweight Reliance Industries (RIL) fell 1.05% at Rs 768.65. The scrip hit high of Rs 777.70 and a low of Rs 765.90 so far during the day. Shares of Reliance Communications rose 0.7%, with the stock gaining for the third straight day. Reliance Jio Infocomm and Reliance Communications (RCom) on Tuesday, 2 April 2013, announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network, to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC declined 1.36% to Rs 303.65 on profit booking. The scrip hit high of Rs 308.90 and a low of Rs 304.40 so far during the day. The stock had hit a 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.
Metal shares fell as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 0.91% on Wednesday, 3 April 2013. Tata Steel (down 1.69%), Sesa Goa (down 1.44%), Sterlite Industries (down 1.33%), Jindal Steel & Power (down 0.92%), Bhushan Steel (down 0.46%), Hindustan Zinc (down 0.38%) and Hindalco Industries (down 0.17%), edged lower.
Adani Power fell 0.84% on profit booking after rising 8.79% on Wednesday, 3 April 2013. Adani Power (APL) announced after market hours on Wednesday, 3 April 2013, that it had filed a petition with the Central Electricity Regulatory Commission (CERC) to review the tariff in the Power Purchase Agreement (PPA) with government utilities of Gujarat and Haryana. CERC has issued an order, by virtue of the power vested to the Commission and the statutory responsibility to balance the interest of the consumers and the project developers, while regulating the tariffs of the generating companies. Commission has therefore seen a need to direct the parties to set down a consultative process to find out an acceptable solution in the form of compensatory tariff over and above the tariff decided under the PPAs to mitigate the hardship arising out of absence of full domestic coal linkage and the need to import coal at benchmark price on account of Indonesian Regulations.
As per the order of the Commission, the stakeholders viz. the Petitioners, Respondents and the respective state government, have been directed to constitute a Committee within one week. Further, the Committee has been directed to go into the impact of the price escalation and suggest a package for compensatory tariff which can be allowed to the Petitioner over and above the tariff in the PPAs. The Committee is required to provide its recommendations keeping certain parameters in consideration, by 30 April 2013, APL said in a statement.
The Order by Commission clearly affirms the need for adequate return on the investment made which would improve the quality and supply of electricity to the consumers. Thus the Commission has achieved the twin objective of contribution to consumer interest and recovery of cost of services provided by the generating Companies. The order passed by the Commission is in line with its responsibility to intervene in the matter in the interest of the consumers, investments and the power sector as a whole, APL said.
Among other power generation stocks, Lanco Infratech (down 1.84%), Torrent Power (down 1.13%), NHPC (down 0.93%), Tata Power (down 0.88%), Reliance Infrastructure (down 0.83%) and JSW Energy (down 0.12%), edged lower.
Reliance Power was down 1.51% at 65.10. The company announced during trading hours today, 4 April 2013, that the first unit of 660 megawatts (MW) out of the 3960 MW Ultra Mega Power Project (UMPP) being developed at Sasan, Madhya Pradesh by the company's wholly owned subsidiary, Sasan Power, has been successfully commissioned.
The company said coal production has commenced from the Moher and Moher-Amlohri coal mines. The Chhatrasal coal block has also received forest clearance and is under development. The electricity generated from the project will be sold to 14 distribution companies across seven states benefiting an estimated 35 crore people.
The Sasan Ultra Mega Power Project, is the largest integrated power plant and coal mining project in the world with an estimated investment of over Rs 23000 crore.
J.P. Chalasani, the Chief Executive Officer of Reliance Power said, "The successful commissioning of the first unit in record time is a clear demonstration of the execution capabilities of Reliance - the ability to build large power and coal mine projects ahead of schedule."
The Indian economy is facing a temporary downturn, and average rates of economic growth above 8% are possible in the medium term, Prime Minister Dr. Manmohan Singh said at the CII National Conference and Annual General Meeting, in New Delhi Wednesday, 3 April 2013.
Growth in services sector eased last month to its slowest since October 2011 as order books filled at a slower pace, a business survey showed on Wednesday, 3 April 2013. The HSBC services Purchasing Managers' Index, based on a survey of around 400 companies, fell to a 17-month low of 51.4 in March from 54.2 in February. Services make up nearly 60% of India's output. While the headline PMI fell for the second straight month, it has held above the 50 mark that separates growth from contraction since late 2011.
The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on 12 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank announces Q4 results on 26 April 2013.
On the political front, the DMK on 19 March 2013 withdrew support to the Congress led UPA government at the Centre citing differences on the issue of atrocities on Tamils in Sri Lanka. After the withdrawal of support by the DMK to the UPA government on 19 March 2013, Parliamentary Affairs Minister Kamal Nath on 20 March 2013 said the government was not a lame duck government and was stable. He said that no party has challenged the government for a floor test.
The UPA has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year. 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 Reserve Bank of India (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.
The upside on the bourses may be capped as 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 will 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 India Meteorological Department will issue its first forecast of 2013 southwest monsoon in this month.
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 Budget Session of the Parliament ends on 10 May 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.
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.
Key indices in Europe were mostly higher in early trade. Key benchmark indices in France and Germany were up by 0.12% to 0.31%. However, FTSE 100, UK's key benchmark index, was down 0.18%.
Asian markets traded lower on Thursday, tracking a negative lead from Wall Street overnight. Key benchmark indices in Indonesia, Singapore and South Korea fell by 0.27% to 1.20%. Stock markets in mainland China, Hong Kong and Taiwan were shut for holidays.
Japan's Nikkei Average jumped 2.2%. The Japanese market bounded back into positive territory after the Bank of Japan's announcement of additional easing measures at the first meeting under newly appointed Gov. Haruhiko Kuroda. The central bank pledged to achieve a 2% inflation target in about two years, while taking additional easing action, such as increasing Japanese government bond (JGB) holdings at an annual pace of 50 trillion ($530 billion), with JGB holdings to double in two years. The bank will terminate its asset-purchase program, with asset purchases to be absorbed with JGB purchases, under its new easing scheme called "Quantitative and Qualitative Monetary Easing."
Stronger manufacturing and services output in China helped lift emerging market business confidence in March, masking slower growth in Brazil, Russia and India, a monthly purchasing managers' survey showed. The HSBC Emerging Market Index (EMI) survey, which collects data from purchasing managers at about 7,500 firms in 16 emerging markets, showed on Thursday that strong manufacturing output from China helped boost growth in neighbouring south-east Asian economies including Korea, Taiwan, Indonesia and Vietnam.
HSBC's composite manufacturing and services PMI for the world's second-largest economy increased in March to 53.7 from 51.4 the previous month. That helped lift the HSBC EMI index to 52.6, from 52.4 the previous month.
North Korea barred entry to a joint industrial complex it shares with the South for a second day on Thursday, telling the association of companies that operate factories in the Kaesong industrial zone to complete pull out by April 10.
The United States said on Wednesday it would soon send a missile defense system to Guam to defend it from North Korea, as the US military adjusts to what Defense Secretary Chuck Hagel has called a "real and clear" danger from Pyongyang.
Trading in US index futures indicated that the Dow could gain 28 points at the opening bell on Thursday, 4 April 2013. US stocks fell on Wednesday following lower-than-expected readings on the US non-manufacturing sector and private-sector jobs growth. Private-payrolls processor ADP reported private-sector job growth of 158,000 in March, below expectations of 215,000 and versus an upwardly revised gain of 237,000 in February. US services sector, with the Institute for Supply Management's non manufacturing index in March fell to 54.4 from 56 the month before.
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