Key indices witnessed divergent trend in morning trade. While the barometer index, the BSE Sensex, was slightly lower, 50-unit CNX Nifty was a tad higher. The Sensex was up 6.77 points or 0.04%, off close to 60 points from the day's high and up about 30 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Bharat Heavy Electricals (Bhel) extended initial losses after the company reported weak Q1 results on Saturday, 3 August 2013. IT stocks rose on recent weakness of rupee against the dollar, with TCS hitting a record high and Infosys scaling a 52-week high. Steel major Tata Steel hit 52-week low.
A bout of initial volatility was witnessed as key benchmark indices alternately swung between positive and negative zone. The Sensex regained positive terrain after moving into the negative terrain from positive zone in morning trade. The 50-unit CNX Nifty trimmed losses after moving into the negative terrain from positive zone in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 283.79 crore on Friday, 2 August 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 6.77 points or 0.04% to 19,170.79. The index rose 69.26 points at the day's high of 19,233.28 in early trade. The index fell 22.34 points at the day's low of 19,141.68 in early trade.
The CNX Nifty was down 8.60 points or 0.15% to 5,669.30. The index hit a low of 5,661.50 in intraday trade. The index hit a high of 5,691.05 in intraday trade.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 678 shares fell and 529 shares rose. A total of 44 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell. GAIL (India) (down 1.87%), Tata Power Company (down 1.66%) and Cipla (down 1.39%), edged lower.
Bharat Heavy Electricals (Bhel) was now trading 10.64% lower at Rs 133.50 on weak Q1 results. The stock hit 52-week low of Rs 132 in intraday trade today, 5 August 2013. The stock had hit the intial 10% lower circuit in early trade. The company's net profit fell 49.45% to Rs 465.43 crore on 20.54% decline in total income to Rs 6996.60 crore in Q1 June 2013 over Q1 June 2012. The result was announced on Saturday, 3 August 2013.
Bhel had an outstanding order book position of about Rs 108600 crore as on 30 June 2013, lower than to Rs 115160 crore as on 31 March 2013 and Rs 122300 crore as on 30 June 2012.
Bhel's operating profit margin (OPM) crashed to the extent of 820 basis points (bps) year on year (YoY) to 6% during the quarter, largely on account of under recovery of capacity. This resulted in operating profit declining by 68% to Rs 388.58 crore.
Bhel's finance costs surged 402.89% to Rs 27.76 crore in Q1 June 2013 over Q1 June 2012.
L&T declined 0.51% to Rs 826 after hitting a 52-week low of Rs 824.35 in intraday trade today, 5 August 2013.
IT stocks rose on recent weakness of rupee against the dollar. TCS rose 0.65% to Rs 1857.85 after hitting a record high of Rs 1869.55 in intraday trade today, 5 August 2013.
Infosys gained 0.19% to Rs 3012.35 after hitting a 52-week high of Rs 3020 in intraday trade today, 5 August 2013.
Wipro (up 0.51%) and HCL Technologies (up 1.18%), edged higher.
A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. The rupee recovered and was trading at 60.83 in early deals today, 5 August 2013, after closing at a record low of 61.10/11 per dollar on Friday, 2 August 2013.
Steel major Tata Steel declined 1.14% to Rs 200 after hitting a 52-week low of Rs 198.50 in intraday trade today, 5 August 2013.
Strides Arcolab rose 3.97% after the company said its shareholders have approved increasing the foreign institutional investors' investment limit in the company to 74% of the paid up equity share capital of the firm. The announcement was made before trading hours today, 5 August 2013. The current FII holding in the company is 52%. As required under the FEMA Regulation, the company has made necessary intimation to the Reserve Bank of India confirming the shareholders' approval for the increased FII investment limit.
Shares of Financial Technologies rose after the National Spot Exchange (NSEL) on Sunday, 4 August 2013, proposed two options for settlement of trades on the exchange in the aftermath of NSEL's decision on 31 July 2013 to suspend trading in most one-day forward contracts and to defer the settlement of all pending contracts for 15 days. Financial Technologies is one of the two promoters of the National Spot Exchange. The stock was up 6.51% to Rs 161.10. The stock had witnessed steep slide recently after NSEL's decision on 31 July 2013 to suspend trading of all contracts, other than e-Series contracts, till further notice.
In a clarification to the stock exchanges, Mr. Jignesh Shah, Chairman & Managing Director of Financial Technologies (India) (FTIL) had on 1 August 2013, said that this action of NSEL does not entail any financial liability on FTIL and that the business of FTIL is as usual.
The National Spot Exchange (NSEL) on Sunday, 4 August 2013, proposed two options for settlement of trades on the exchange in the aftermath of NSEL's decision on 31 July 2013 to suspend trading in most one-day forward contracts and to defer the settlement of all pending contracts for 15 days. NSEL said that there are eight members/processors, who are willing to pay as per the scheduled due date or even earlier. The total amount pertaining these 8 members is Rs 2181 crore. NSEL said that there are 13 members/processors, who have offered to pay 5% of their total dues every week, if this proposal is agreed upon by the exchange. Total amount pertaining to these 13 members is about Rs 3107 crore. There are 3 processors with whom negotiation is still going on, NSEL said. The amount pertaining to these parties comes to Rs 311 crore.
As per the second option for settlement of trades, NSEL said that the exchange is in possession of post dated cheques (PDC) from various processors amounting to Rs 4900 crore against their settlement obligation and balance parties have confirmed payment regularly. While PSCs are a commitment, the payout process may not roll out smoothly in a month's time, NSEL said. Hence, the market participants have proposed the first option as a safer alternative, NSEL said.
Shares of Multi Commodity Exchange of India (MCX), a commodity futures exchange promoted by Financial Technologies, were locked at 10% lower circuit at Rs 368.70, with the stock extending recent steep slide. MCX had on 1 August 2013 said that there will not be any impact of NSEL's circular on the operations and financials of MCX.
Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for July 2013 today, 5 August 2013.
The monsoon session of the Parliament begins today, 5 August 2013. The session ends on 30 August 2013. Prime Minister Manmohan Singh reached to the Opposition parties on Saturday asking to let Parliament function smoothly. In its last year of office, UPA II has its task cut out; it is pushing the social sector bills, including the top priority Food Security Bill to replace the Food Security ordinance promulgated earlier.
Asian stocks were mixed on Monday, 5 August 2013. Key benchmark indices in Hong Kong, China, and Taiwan rose by 0.15% to 0.37%. Key benchmark indices in Japan, Singapore, and South Korea fell by 0.28% to 0.79%.
China's service industries showed the first pick-up in growth since March, adding to signs the world's second-largest economy may be stabilizing after a two-quarter slowdown. The non-manufacturing Purchasing Managers' Index rose to 54.1 in July from 53.9 in June, the Beijing-based National Bureau of Statistics and China Federation of Logistics and Purchasing said on Saturday. An official gauge of manufacturing released 1 August 2013 showed an unexpected expansion.
The HSBC Hong Kong Purchasing Managers Index rose to 49.7 in July from 48.7 in June, but remained in contraction mode as new orders fell amid China's economic slowdown, HSBC Holdings PLC said on Monday, 5 August 2013.
Trading in US index futures indicated that the Dow could fall 10 points at the opening bell on Monday, 5 August 2013. US stocks rose on Friday, 2 August 2013, as data showing employers added fewer workers than anticipated in July signaled the Federal Reserve will continue its stimulus efforts. The 162,000 increases in payrolls last month was the smallest in four months and followed a revised 188,000 rise in June that was less than initially estimated, Labor Department figures showed on Friday in Washington. Workers spent fewer hours on the job and hourly earnings fell for the first time since October. The unemployment rate dropped to 7.4% from 7.6%.
Consumer spending rose in line with forecasts in June as Americans' incomes grew, while orders placed with factories increased, pointing to further stabilization in manufacturing that may help lift second-half growth, separate reports showed.
In Europe, the results of two surveys on Monday, 5 August 2013, showed that UK's economic growth this year is expected to be stronger than originally forecast, and that confidence among smaller firms has picked up.
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