After a firm first half, key benchmark indices trimmed gains in second half of the day's trading session as European stocks dropped as investors turned cautious ahead of the key US nonfarm payroll data due later in the global day. The Sensex was up 84.98 points or 0.44%, off 144.45 points from the day's high and up 18.08 points from the day's low. The market breadth, indicating the overall health of the market, was positive. Indian stocks held positive zone as trading in US index futures indicated a firm opening of US stocks on Friday, 5 July 2013.
Indian stocks gained for second day in a row today, 5 July 2013. The Sensex gained 318.06 points or 1.66% from a recent low of 19,177.76 on 3 July 2013. The Sensex has gained 100.01 points or 0.52% in first week of July 2013 (till 5 July 2013). The Sensex has gained 69.11 points or 0.36% in calendar 2013 so far (till 5 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 947.80 points or 4.64%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 2,897.34 points or 17.46%.
Coming back to today's trade, index heavyweight and cigarette major ITC pared gains in late trade. Many FMCG stocks rose. Shares of FMCG giant Hindustan Unilever (HUL) scaled a record high after Anglo-Dutch parent Unilever on Thursday, 4 July 2013, said it has raised its stake in HUL to 67.28% from 52.48% through a voluntary open offer for HUL shareholders. Reliance Industries edged higher. NTPC was almost unchanged after a block deal of 10 lakh shares was struck on the counter on BSE. Telecom stocks were mostly lower. In pharma pack, Wockhardt tumbled in volatile trade.
Metal and mining stocks were mostly higher amid expectations for easy monetary conditions at global central banks. Realty stocks declined in volatile trade. Sugar shares gained on reports the government has decided to hike import duty on sugar to 15% from the current 10% in order to curb shipments. UB group shares were mostly higher after United Spirits said that Diageo has completed the acquisition of additional 14.98% stake in United Spirits. Bank stocks were mixed.
The rupee weakened on Friday, 5 July 2013, following other Asian currencies, as dollar rallied on indications from central banks in Europe that ultra-low rates will continue in the region. The rupee was hovering at 60.30, weaker than Thursday's close of 60.13. The rupee had hit record low of 60.76 in intraday deals on 26 June 2013.
Prices of government bonds fell. The yield on the most traded 08.2% GS 2025 was hovering at 7.6781%, higher than Thursday's close at 7.625%. Bond yield and bond prices are inversely related.
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Key benchmark indices edged higher in early trade on firm Asian stocks. The barometer index, S&P BSE Sensex, hit four-week high. Key benchmark indices pared gains in morning trade. Key benchmark indices hovered in positive zone in mid-morning trade. Key benchmark indices extended intraday gains in early afternoon trade. Key benchmark indices pared gains to hit intraday low in mid-afternoon trade. Key benchmark indices pared gains in late trade as European stocks dropped as investors turned cautious ahead of the key US nonfarm payroll data due later in the global day. The barometer index, the S&P BSE Sensex, hit intraday low in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 164.56 crore on Thursday, 4 July 2013, as per provisional data from the stock exchanges.
The S&P BSE Sensex was up 84.98 points or 0.44% to 19,495.82, its highest closing level since 1 July 2013. The index jumped 229.43 points at the day's high of 19,640.27 in early trade, its highest level since 7 June 2013. The index rose 66.90 points at the day's low of 19,477.74 in late trade.
The CNX Nifty was up 30.95 points or 0.53% to 5,867.90, its highest closing level since 1 July 2013. The index hit a high of 5,900.45 in intraday trade, its highest level since 1 July 2013. The index hit a low of 5,858.45 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,222 shares gained and 1,156 shares fell. A total of 156 shares were unchanged.
The total turnover on BSE amounted to Rs 1621 crore, lower than Rs 1865 crore on Thursday, 4 July 2013.
The BSE Mid-Cap index rose 0.18% and the BSE Small-Cap index gained 0.26%. Both these indices underperformed the Sensex.
The BSE Oil & Gas index (up 1.49%), BSE FMCG index (up 0.89%), BSE Metal index (up 0.62%), BSE Capital Goods index (up 0.49%), BSE PSU index (up 0.47%), outperformed the Sensex.
The BSE IT index (down 0.29%), BSE Teck index (down 0.54%), BSE Auto index (up 0.02%), BSE Power index (up 0.05%), BSE Consumer Durables index (up 0.09%), BSE Healthcare index (up 0.13%), BSE Bankex (up 0.24%), BSE Realty index (up 0.15%) underperformed the Sensex.
Among the 30-share Sensex pack, 16 shares gained and six of them declined.
Index heavyweight and cigarette major ITC gained 0.8% to Rs 341.20, off day's high of Rs 345. The stock had jumped 3.7% on Thursday, 4 July 2013, on reports that the company has raised the price of its Gold Flake Regular Filter cigarettes from Rs 55 to Rs 58 for a pack of 10 cigarettes.
FMCG giant Hindustan Unilever (HUL) gained 1.44% to Rs 609.40 after scaling a record high of Rs 631.95 in intraday trade today, 5 July 2013. Unilever PLC on 4 July 2013 announced that, pursuant to the voluntary open offer to increase its stake in Hindustan Unilever (HUL), shareholders of HUL tendered 31.96 crore shares during the tender period for the open offer which commenced on 21 June 2013 and closed on 4 July 2013. The offer price of Rs 600 per share values the transaction at approximately at Rs 19181 crore. Based on the shares tendered, which represent 14.8% of HUL, Unilever would increase its stake from 52.48% to 67.28%.
Paul Polman, CEO, Unilever, said: "We are pleased to have received such a good response to our voluntary open offer and that - as a result - we will significantly increase our stake in Hindustan Unilever, an excellent Indian business with a proud heritage and the potential for attractive long-term growth."
On completion of the verification of shares tendered, the details of the final acceptance will be communicated by Unilever PLC on 11 July 2013. The payment for shares tendered and accepted will be completed on or before 18 July 2013, at which point Unilever PLC will acquire full beneficial ownership of the shares tendered and accepted in the open offer, Unilever said in a statement.
Many other FMCG stocks rose. Colgate-Palmolive (India) (up 2.22%), Tata Global Beverages (up 1.15%), Nestle India (up 0.43%) and Godrej Consumer Products (up 0.61%), gained.
Pidilite Industries fell 1.38%. The stock turned ex-dividend today, 5 July 2013, for dividend of Rs 2.60 per share for the year ended 31 March 2013 (FY 2013).
Reliance Industries (RIL) rose 1.97% to Rs 878.65. The stock hit a high of Rs 884.40 and low of Rs 865.35. The government on 27 June 2013 agreed to double natural gas prices to industrial and retail consumers to help fund investment in exploration and reverse declining domestic gas output. The price of gas could go up to $8.4 per million metric British thermal units (mmBtu), effective 1 April next year, from current $4.2 mmBtu.
NTPC rose 0.03% to Rs 144 on volume of 10.99 lakh shares. A block deal of 10 lakh shares was struck on the counter at Rs 144 per share at 12:45 IST on BSE.
Mahindra & Mahindra (M&M) shed 0.99%. The company after market hours on Thursday, 4 July 2013, said it has allotted 5,000, 9.55% senior unsecured redeemable non-convertible debentures of the face value of Rs 10 lakh each for cash at par aggregating Rs 500 crore to Yes Bank.
Metal and mining stocks were mostly higher amid expectations for easy monetary conditions at global central banks. Sterlite Industries (India) (up 1.08%), JSW Steel (up 0.84%), National Aluminium Company (up 0.85%), Hindustan Zinc (up 0.69%), Jindal Steel & Power (up 3.28%) edged higher.
Tata Steel (down 0.23%), Sail (down 0.41%) and Hindalco Industries (down 0.15%) declined.
Bank stocks were mixed. Among private sector banks, HDFC Bank (up 1.6%) and Kotak Mahindra Bank (up 0.18%), edged higher. Yes Bank (down 1.3%), ICICI Bank (down 1.17%) declined.
Axis Bank advanced 1.24%. The stock turned ex-dividend today, 5 July 2013, for dividend of Rs 18 per share for the year ended 31 March 2013 (FY 2013).
Among PSU bank stocks, Union Bank of India (up 0.61%), Punjab National Bank (up 0.82%) and Bank of Baroda (up 2.04%) gained. State Bank of India shed 0.59%.
Canara Bank rose 1.15%. The state-run bank after market hours on Thursday, 4 July 2013, said it has reduced the base rate by 30 basis points (bps) from 10.25% to 9.95% for all loans/advances viz. agriculture, MSME sector, retail, export credit with effect from 8 July 2013. The bank has also reduced rate of interest on deposits on few maturity slabs.
Bank of India rose 0.22%. The bank on 3 July 2013 said it has decided to reduce its base rate from the existing 10.25% per annum to 10% per annum with effect from 8 July 2013.
The Reserve Bank of India (RBI) on Tuesday, 2 July 2013, issued draft guidelines that would require banks to make higher provisions and increase risk weights on exposure to companies that have unhedged foreign-currency exposure. Starting 1 October 2013, banks will have to monitor unhedged foreign currency exposure of borrowers at monthly intervals.
The draft guidelines advised banks to ensure that their policies and procedures for management of credit risk factor their exposure to currency-induced credit risks and are calibrated towards borrowers whose capacity to repay is sensitive to changes in the exchange rate and other market variables.
Realty stocks edged lower in volatile trade. Unitech (down 0.48%), D B Realty (down 2.55%), DLF (down 0.7%), Godrej Properties (down 0.77%), Orbit Corporation (down 0.58%) declined.
Sobha Developers rose 2.03%, with the stock extending Thursday's 1.43% gains triggered by the company reporting good sales in Q1 June 2013. The company during trading hours on Thursday, 4 July 2013, said its new sales rose 10.2% to 0.92 million square feet in Q1 June 2013 over Q1 June 2012. The stock had risen 1.43% to settle at Rs 340.10 on Thursday, 4 July 2013.
Sobha Developers said that its sales value surged 25.7% to Rs 602.80 crore in Q1 June 2013 over Q1 June 2012. The average price realization rose 14.1% to Rs 6,548 per sq. ft in Q1 June 2013 over Q1 June 2012.
During Q1 June 2013, the company had launched two projects in Bangalore viz. Sobha Landscape, a plotted development project admeasuring 0.20 million sq. ft and a commercial project at St. Mark's Road, Bangalore admeasuring total developable area of 0.35 million sq. ft (super built-up area of 0.20 million sq. ft).
UB group shares were mostly higher after United Spirits said that Diageo has completed the acquisition of additional 14.98% stake in United Spirits. United Spirits (USL) fell 1.54% to Rs 2,517, with the stock reversing direction after striking a record high of Rs 2,625.95 in intraday trade today, 5 July 2013. United Breweries (Holdings) was locked at 10% upper circuit. Kingfisher Airlines was locked in 10% upper circuit filter. United Breweries rose 1.87%.
USL after market hours on Thursday, 4 July 2013, said that Diageo has completed the acquisition of a 14.98% stake in USL at Rs 1,440 per share. The shares were bought from United Breweries (Holdings) and other UB group companies. Following the acquisition, Diageo holds 25.02% stake in USL. Diageo and the UB Group are now co-promoters of USL.
On 27 May 2013, Diageo subscribed for a preferential allotment of new shares in USL amounting to 10% of the post-issue enlarged share capital. Separately, Diageo acquired 58,668 additional USL shares via a mandatory open offer to the shareholders of USL.
In a statement, Diageo said that its 25.02% shareholding in USL, together with the voting and other governance arrangements agreed with the UB group, including Dr. Vijay Mallya's continued role as Chairman of USL, will give Diageo control and enable Diageo to fully reflect the results of USL in its consolidated accounts, which it expects to do from 1 January 2014. Prior to this, Diageo will equity account its shareholding in USL, Diageo said.
Wockhardt tumbled 9.39% to Rs 900 in volatile trade. The stock hit a high of Rs 1,011 and a low of Rs 895.10.
Telecom stocks were mostly lower. Bharti Airtel lost 2.14% to Rs 294.80 and was the top loser from the Sensex pack. The company during market hours on Thursday, 4 July 2013, announced that it has subscribed to an additional 2% equity share capital in all the four India Broadband Wireless Access (BWA) entities of Qualcomm AP. With this, all four entities are now subsidiaries of Bharti Airtel. On 24 May 2012, Bharti Airtel and Qualcomm had announced an agreement under which Bharti had acquired 49% interest in Qualcomm AP's India entities that hold BWA licenses in Delhi, Mumbai, Haryana and Kerala.
Reliance Communications (RCom) rose 1.04% to Rs 135.50. The stock had hit 52-week high of Rs 137.30 in intraday trade on Thursday, 4 July 2013. RCom after market hours today said that a meeting of the board of directors of the company will be held on 7 July 2013, to consider proposals for unlocking value from the real estate properties held by the RCom and its subsidiaries.
RCom during market hours on 1 July 2013 announced that it has completed full repayment of two Syndicated ECB loan facilities of $500 million each, aggregating $1 billion, during the quarter ended 30 June 2013. These loans were availed in the year 2007 from a group of international banks.
In addition, RCom has made scheduled repayments of another $207 million (Rs 1200 crore) in respect of other foreign currency loans, on the respective due dates during the quarter ended 30 June 2013. The repayments have been from RCom's rupee resources.
RCom's foreign currency debt is steadily declining every year, and the interest outgo on such debt is fully covered by dollar denominated earnings from the Reliance Globalcom business.
Idea Cellular (down 3.03%), and Tata Teleservices (Maharashtra) (down 0.28%) declined. MTNL rose 2.02%.
MMTC declined by the maximum permissible level of 5% for the day at Rs 79.75, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake in the firm at a huge discount to the stock's ruling market price. 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.
Sugar shares gained on reports the government has decided to hike import duty on sugar to 15% from the current 10% in order to curb shipments.
Bajaj Hindusthan (up 1.84%), Dhampur Sugar Mills (up 3.13%), Sakthi Sugars (up 2.73%), Balrampur Chini Mills (up 0.25%), Shree Renuka Sugars (up 2.41%), Simbhaoli Sugar Mills (up 0.56%) and Dwarikesh Sugar Industries (up 1.9%) gained.
Indian mills import sugar despite a surplus local production, as the sweetener is cheaper in the global market due to a bumper sugar output in Brazil. The imports are putting pressure on domestic prices and thereby preventing millers from clearing sugarcane arrears to farmers. Sugarcane arrears, or the amount sugar mills owe to farmers, has reportedly risen to Rs 9000 crore, as mills are struggling due to a drop in local sugar prices, reports added.
Shares of diamond jewellery maker Gitanjali Gems declined by the maximum permissible level of 5% for the day at Rs 183.15, also its 52-week low. The stock has witnessed a steep slide recently.
Strides Arcolab lost 2.7%. The company after market hours on Thursday, 4 July 2013 said that its board of directors has approved the increase in the limit of investments by foreign institutional investors (FIls) in the equity share capital of the company from 49% to 74%, subject to approval of the members, Reserve Bank of India and any other approvals as may be required. Earlier on that day, the company had said that the intermediate ceiling for investment by FIIs capped at 49% limit of its paid up equity capital which was confirmed by the Reserve Bank of India vide its letter dated 8 December 2005 has been crossed and the company is taking necessary steps to increase the cap to a higher limit.
SJVN rose 3.35% after the company announced the acquisition of Buxar Bijlee Company. The announcement was made during trading hours today, 5 July 2013. SJVN has acquired Buxar Bijlee Company by acquisition of 100% of its equity shares in terms of the memorandum of understanding (MoU) signed with Bihar Government on 17 January 2013 for setting up a green field 1,320 megawatts (MM) supercritical technology thermal power project at Buxar district of Bihar.
SJVN also informed that the Ministry of Coal in a communication dated 3 July 2013 has allocated 486 MT of coal reserves in the 2102 MT Deocha-Pachami Coal Block located in West Bengal to SJVN for the purpose of Buxar thermal project.
Neyveli Lignite Corporation shed 2.29%. The company during market hours today said its lignite production stood at 66.36 lakh tonne in Q1 June 2013 as against the target of 65.60 lakh tonne, which resulted in growth of 6.4% over the corresponding period previous year. The overburden removal resulted a growth of 24.46% by removing 451.16 lakh cubic metres as against the target of 412.75 lakh cubic metres.
During the month of June, the production targets were achieved in all areas of production. The overburden production was 150.13 lakh cubic metres as against the target of 136.95 lakh million cubic metres resulting in 13.09% growth over corresponding period. The power generation also showed a growth of 6.12% by generating 1,726.13 million units as against 1,605 million units.
In an another announcement, Neyveli Lignite Corporation said after market hours on Thursday, 4 July 2013 that the recognized trade unions and other registered trade unions have resorted to an indefinite strike commencing from night shift of Wednesday, 3 July 2013 in protest against the Government of India's decision to disinvest 5% of equity shares of the company. The Officers and Engineers' Associations have withdrawn from the strike and are attending duties. The lignite production and power generation are being presently maintained at the same level as of the previous day, company said in a statement.
Firstsource Solutions jumped 7.14% to Rs 12.45 after high-net worth investor Rakesh Jhunjhunwala picked up 3.79% stake in the company through bulk deals on Thursday, 4 July 2013. A total of 2.50 crore shares of Firstsource Solutions were acquired by Jhunjhunwala, as per the bulk deal information with stock exchanges. The shares were purchased at an average price of Rs 10 each, amounting to Rs 25 crore. Two shareholders of Firstsource Solutions, ICICI Bank and Aranda Investments Mauritius, offloaded a total of 3.31 crore shares for Rs 33.18 crore.
European stocks were mostly lower on Friday, 5 July 2013, as investors turned cautious ahead of the key US nonfarm payroll data due later in the global day. Key benchmark indices in France and Germany were down 0.14% to 0.3%. However, UK's FTSE 100 was up 0.48%.
The European Central Bank (ECB), as expected, kept its main lending rate at a record low 0.5% on Thursday, the same level it's been at since it was cut from 0.75% back in May. ECB president Mario Draghi said rates wouldn't rise for "an extended period."
The Bank of England (BOE) decided to keep its key lending rate at a record low 0.5% and to leave the size of its bond-buying program unchanged at 375 billion pounds ($572 billion). The Bank of England on Thursday signaled it won't be raising interest rates anytime soon, saying in a statement that the recovery is on track but it "remains weak by historical standards and a degree of slack is expected to persist for some time."
Asian markets edged higher on Friday, 5 July 2013, after the two most important central banks in Europe on Thursday, 4 July 2013, said after monetary policy review that they are in no hurry to wind down stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Singapore and Japan were up 0.05% to 2.08%. South Korea's KOSPI Composite fell 0.32%.
Trading in US index futures indicated that the Dow could gain 129 points at the opening bell on Friday, 5 July 2013. The US government will unveil the influential nonfarm payrolls data for June 2013 today, 5 July 2013, which the Federal Reserve is monitoring as it decides when it will slow the pace of its bond purchases. Fed Chairman Ben Bernanke said last month that bond purchases, currently at $85 billion a month, may be tapered down this year if the economy improves in line with the central bank's projections. The Fed is looking for the unemployment rate to fall toward 6.5% by next year.
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