IT stocks gain

Key benchmark indices further trimmed intraday gains in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 21.53 points or 0.11%, up close to 30 points from the day's low and off about 80 points from the day's high. Index heavyweight and cigarette major ITC edged lower in choppy trade. Index heavyweight Reliance Industries (RIL) also edged lower in volatile trade. The market breadth, indicating the overall health of the market, was positive.

IT stocks rose on renewed buying. Jindal Steel and Power (JSPL) extended Friday's losses triggered by weak Q4 results. Some FMCG stocks rose after the India Meteorological Department (IMD) on Friday, 26 April 2013, forecast normal southwest monsoon seasonal rainfall during 2013.

The market edged higher amid initial volatility. The market pared gains after hitting fresh intraday high in morning trade. It further trimmed intraday gains in mid-morning trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 224.75 crore on Friday, 26 April 2013, as per provisional data from the stock exchanges.

At 11:20 IST, the S&P BSE Sensex was up 21.53 points or 0.11% to 19,308.25. The index rose 101.18 points at the day's high of 19,387.90 in morning trade, its highest level since 25 April 2013. The index gained 7.88 points at the day's low of 19,294.60 in early trade.

The CNX Nifty was up 3.30 points or 0.06% to 5,874.75. The index hit a high of 5,899.15 in intraday trade. The index hit a low of 5,871.15 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 943 shares advanced and 736 shares declined. A total of 102 shares were unchanged.

Among the 30-share Sensex pack, 18 stocks rose while rest of them fell.

Index heavyweight Reliance Industries (RIL) declined 0.06% to Rs 792.70. The scrip hit high of Rs 799 and a low of Rs 789, so far during the day. At the time of announcement of its Q4 results, RIL in mid-April 2013 said that the company is working towards next wave of projects to exploit the undeveloped discovered resources in KG-D6 gas field targeted over the net 3-5 years. RIL has submitted an Integrated Block Development Plan (IBDP) for four discoveries in NEC -25 block (D-32, D-40, D-9 and D-10) proposing for a phased manner development. First gas is expected by mid-2019 subject to timely approvals.

Index heavyweight and cigarette major ITC fell 0.05% to Rs 318.80. The scrip hit high of Rs 320.50 and a low of Rs 316.70, so far during the day. The stock had hit record high of Rs 323.85 in intraday trade on 25 April 2013. West Bengal chief minister Mamata Banerjee on 24 April 2013, announced a 10% hike in the value-added tax (VAT) on cigarettes to 25% from 15% to raise money for a relief fund for those depositors who have lost money in the Saradha chit fund scam.

Earlier, the Centre 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.

Some FMCG stocks rose after the India Meteorological Department (IMD) on Friday, 26 April 2013, forecast normal southwest monsoon seasonal rainfall during 2013. FMCG firms derive substantial sales from rural India. Marico, Godrej Consumer Products, Nestle India and Tata Global Beverages rose by 0.49% to 2.14%. But, FMCG major, Hindustan Unilever dropped 0.7%.

The year 2013 will most likely have a normal southwest monsoon seasonal rainfall for the country as a whole i.e. 96 to 104% of Long Average during June to September, the Union Minister of Earth Sciences & Science and Technology Mr. S. Jaipal Reddy announced on Friday, 26 April 2013. Quantitatively, the monsoon seasonal rainfall is likely to be 98% of the Long Period Average with a model error of 5%. Also, the probability for normal rainfall is 46%, as against the climatological value of 33%.

The IMD will issue the update forecast in June 2013 as a part of the second stage forecast. Along with the update forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over the four geographical regions of India will be issued.

IT stocks rose on renewed buying. Wipro gained 1.51%. Wipro issued weak revenue outlook at the time of announcement of Q4 March 2014 results on 19 March 2013. Wipro expects a between 0.63% fall to a growth of 1.57% in revenue from IT services business at between $1.575 billion to $1.61 billion in Q1 June 2013 over Q4 March 2013. At a post-result conference call, Wipro's management indicated that Q1 for Wipro will be the traditionally weak quarter on account of softness from the India business. The management expects Q2 September 2013 to be better than Q1 June 2013 for the company.

Wipro's IT services revenue rose 0.5% to $1.585 billion in Q4 March 2013 over Q3 December 2012. On year on year basis, IT services revenue rose 3.2% to $1.585 billion in Q4 March 2013 over Q4 March 2012.

Infosys gained 1.09%. Infosys has forecast a tepid 6% to 10% growth in revenue in both rupee terms and dollar terms for the year ending 31 March 2014 (FY 2014) as the company says that global economic uncertainties remain challenging for the IT industry. The revenue growth outlook is lower than industry body Nasscom's projection of 12% to 14% growth in IT exports in the current fiscal year. Infosys has not given full year earnings guidance this time. Infosys had earlier stopped offering quarterly guidance in July 2012.

HCL Technologies rose 2% to Rs 697.35. The stock had hit a record high of Rs 809 in intraday trade on 17 April 2013 after the company reported strong Q3 results. Consolidated net profit as per US accounting standards rose 7.8% to Rs 1040 crore on 2.4% growth in revenue at Rs 6425 crore in Q3 March 2013 over Q2 December 2012.

Tata Consultancy Services (TCS) advanced 0.94%. TCS posted good Q4 results on 17 April 2013. Its consolidated net profit rose 1.9% to Rs 3616 crore on 2.2% growth in revenue to Rs 16430 crore in Q4 March 2013 over Q3 December 2012. Net profit jumped 33.6% to Rs 13917 crore on 28.8% growth in revenue to Rs 62989 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The company clocked volume growth of 16.8% in FY 2013 over FY 2012.

At a post result conference call held on 17 April 2013, TCS' management said it expects FY 2014 to be better year than FY 2013 and anticipates defending the margins in narrow band despite the headwinds from the wage hikes through other levers.

Jindal Steel and Power (JSPL) slumped 3.23%, with the stock extending Friday's 4.29% losses triggered by weak Q4 results. The company's consolidated net profit after tax and before minority interest and share of profit/loss of associates declined 35% to Rs 752.75 crore on 3% growth in income from operations to Rs 5648.44 crore in Q4 March 2013 over Q4 March 2012. The company announced the results after market hours on 25 April 2013.

JSPL's consolidated net profit after exceptional item declined 27.25% to Rs 2911.62 crore on 9% growth in income from operations to Rs 19806.78 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). Net profit before exceptional item declined 14% to Rs 3485.74 crore in FY 2013 over FY 2012.

JSPL said that it has maintained a double digit growth in its steel business despite a global economic slowdown and subdued steel market. The company with its relentless commitment to operational excellence achieved 100% utilization of steel and pelletisation capacity, JSPL said in a statement. Several new countries and customers were added to expand the market share of JSPL, the company said. New sources of raw material were established and made operational, it added. The company, which hitherto focused mainly on B to B business, made an impressive foray into the retail market for its standard products, JSPL said. The company said it has also reorganized its operations to bring more focus on individual business segments and business units. Specific attention has been paid to strengthen the internal process and systems, the company added. As the organizations steps into 2013-14, it is ready and well poised for an orbital jump to a much larger volume of activity as envisaged in the company's Vision 2020 plan, JSPL said in a statement. JSPL's number of customers increased to 2,758 in FY 2013 from 2,139 in FY 2012.

JSPL said its pallet production has reached its full capacity. Exports by value surged 30% in FY 2013. The company said that it has achieved impressive gain in market share particularly in long products segment. The production of coking coal started in Mozambique.

The company said it has achieved 100% liquid steel capacity. Production of steel rose 11% in FY 2013. Sales by value rose 12.2% in FY 2013.

JSPL said that the company is all set to increase its steel capacity from 3.5 MTPA to 7 MTPA in 2013-14. The company also said it plans to double its power production capacity to 4,969 megawatts (MW) during 2013-14.

JSPL's board of directors at a meeting held on Thursday, 25 April 2013, recommended dividend of Rs 1.60 per share for FY 2013.

The stock market remains closed on Wednesday, 1 May 2013, on account of Maharashtra Day.

The focus of the market is on Q4 results. IDFC announces Q4 results on Wednesday, 1 May 2013. Bharti Airtel and Kotak Mahindra Bank unveil Q4 results on Thursday, 2 May 2013. ACC and Ambuja Cements announce Q1 March 2013 results on Friday, 3 May 2013. Grasim and Jaiprakash Associates unveil Q4 results on Saturday, 4 May 2013. HDFC unveils Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Asian Paints announces Q4 results on 9 May 2013. NTPC announces Q4 results on 10 May 2013. Dr Reddys Laboratories announces Q4 results on 14 May 2013. Bajaj Auto announces Q4 results on 16 May 2013. BPCL announces Q4 results on 29 May 2013. M&M announces Q4 results on 30 May 2013.

The Prime Minister's Economic Advisory Council (PMEAC) in a report released on 23 April 2013 projected 6.4% growth in India's GDP for the current fiscal year 2013/14, higher than an estimated 5% growth for the fiscal year 2012/13. The net FDI inflow is expected at $24 billion in 2013-14 from an estimated $18 billion in 2012-13, the PMEAC said. In contrast, FII inflows are seen sliding to $18 billion in 2013-14 from an estimated $24 billion in 2012-13, the PMEAC said.

Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for April 2013 on Wednesday, 1 May 2013. The HSBC India Manufacturing PMI fell to 52 in March 2013, after a surge to 54.2 in February 2013. Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for April 2013 on Friday, 3 May 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 over 60% of India's economy.

Slowing wholesale price inflation has raised expectations that the Reserve Bank of India (RBI) will cut its key policy rate viz. the repo rate to boost economic growth. The (RBI) will announce the Monetary Policy Statement 2013-14 on Friday, 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.

Inflation based on the monthly wholesale price index (WPI) eased to the lowest level in 40 months at 5.96% in March 2013, and sharply lower than 6.84% in February 2013, data released by the government on 15 April 2013 showed. Non-food manufacturing inflation or core inflation slowed further to 3.41% in March 2013, the data showed.

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 government needs to pass many crucial bills, including the finance Bill in the last two weeks of the Budget Session which ends on 10 May 2013. Neither House transacted any business last week after Parliament reconvened for the rest of the Budget session that saw adjournments and uproar over various issues such as 2G scam, coal scam and the Delhi minor rape.

Most Asian stocks rose on Monday. Key benchmark indices in Taiwan, Indonesia and Singapore rose by 0.14% to 0.31%. Key benchmark indices in Hong Kong and South Korea fell by 0.18% to 0.25%. Markets in China and Japan were closed today, 29 April 2013 for a holiday.

Trading in US index futures indicated a flat opening of US stocks on Monday, 29 April 2013. Most US stocks dipped in thin volume on Friday amid a mixed bag of earnings and weak economic figures. Gross domestic product expanded at a 2.5% rate in the first quarter, below estimates of 3%, heightening fears the US economy could struggle to cope with deep government spending cuts and higher taxes that kicked in earlier this year.

A two-day meeting of the Federal Open Market Committee on US interest rates begins tomorrow, 30 April 2013.

In Europe, the European Central Bank's (ECB) Governing Council meets in Bratislava on Thursday, 2 May 2013, to review euro area interest rates. The ECB is seen cutting euro area interest rates by 25 basis points to a record low of 0.5% as economic conditions continue to deteriorate across the euro zone and as inflation remains well below the bank's target.

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