Volatility continued as key benchmark indices trimmed losses after weakening once again in mid-afternoon trade. The barometer index, the S&P BSE Sensex, was down 82.82 points or 0.42%, off close to 90 points from the day's high and up about 100 points from the day's low. Index heavyweight and cigarette major ITC edged lower in choppy trade. Another index heavyweight Reliance Industries (RIL) retained positive zone. The market breadth, indicating the overall health of the market, was negative. Most IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms.
The market edged lower in early trade. The market hovered in the negative terrain in morning trade. The market trimmed losses after hitting fresh intraday day low in mid-morning trading after RBI's announcement of repo rate cut after monetary policy review. The Sensex cut almost the entire intraday losses in early afternoon trade. Trading was quite volatile in afternoon trade as key benchmark indices declined after a brief intraday recovery in early afternoon trade. The market trimmed losses after weakening once again in mid-afternoon trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1429.94 crore on Thursday, 2 May 2013, as per provisional data from the stock exchanges.
The RBI today, 3 May 2013, cut the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The central bank said that with upside risks to inflation still significant in the near term in view of sectoral demand supply imbalances, ongoing correction in administered prices and pressures stemming from MSP increases, monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. The RBI said that recent monetary policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards easing the supply bottlenecks, improving governance and stepping up public investment, alongside continuing commitment to fiscal consolidation.
The RBI said WPI inflation is expected to be range-bound around 5.5% during 2013-14, with some edging down in the first half on account of past policy actions, although there could be some increase in the second half, largely reflecting base effects. By March 2013, WPI inflation at 6% turned out to be lower than the RBI's indicative projection of 6.8%, mainly due to a sharp deceleration in non-food manufactured products inflation in the second half of the year. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
During 2013-14, economic activity is expected to show only a modest improvement over last year, with a pick-up likely only in the second half of the year. Accordingly, the baseline GDP growth for 2013-14 is projected at 5.7%, RBI said.
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The RBI said a high current account deficit (CAD) poses the biggest risk "by far" to the Indian economy. A large CAD, appreciably above the sustainable level year after year, will put pressure on servicing of external liabilities, RBI said.
At 14:20 IST, the S&P BSE Sensex was down 82.82 points or 0.42% to 19,652.95. The index rose 9.08 points at the day's high of 19,744.85 in early afternoon trade. The index declined 183.22 points at the day's low of 19,552.55 in mid-morning trade.
The CNX Nifty was down 32.75 points or 0.55% to 5,966.60. The index hit a high of 6,000.30 in intraday trade. The index hit a low of 5,930.15 in intraday trade.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,257 shares fell and 922 shares rose. A total of 126 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks fell while rest of them rose. Tata Motors, State Bank of India (SBI) and ICICI Bank shed by 2.86% to 3.05%. Jindal Steel & Power, Hindalco Industries and Tata Steel rose by 2.15% to 3.83%.
Index heavyweight Reliance Industries (RIL) rose 0.59% to Rs 807.50. The scrip hit high of Rs 815.40 and a low of Rs 798 so far during the day. The Securities Exchange Board of India (Sebi) on Thursday, 2 May 2013, imposed a penalty of Rs 11 crore on Reliance Petroinvestments (RPIL), a subsidiary of Reliance Industries, for insider trading in IPCL shares in 2007. According to the Sebi order, RPIL made profit of about Rs 3.82 crore through these trades. IPCL, which RIL bought in 2002 under a government disinvestment programme, was a separately listed firm before being merged with RIL.
RIL on Tuesday, 30 April 2013, that its telecom unit Reliance Jio Infocomm (India) has joined a consortium of telecom companies building an 8,000 kilometre submarine cable system to link Malaysia and Singapore with the Middle East. The Bay of Bengal Gateway (BBG) cable system, which will have connections to India and Sri Lanka, is expected to carry commercial traffic by end of 2014, RIL said.
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 next 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 0.73% to Rs 331 on profit booking. The scrip hit high of Rs 333.30 and a low of Rs 329 so far during the day. The stock had hit record high of Rs 335.90 in intraday on Tuesday, 30 April 2013. 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.
IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. Infosys gained 1.29%. The company said during market hours on Thursday, 2 May 2013, that Golomt Bank, Mongolia's largest private banking and financial services provider, has selected Infosys Finacle to power its technology transformation.
Wipro gained 0.77%. 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.
HCL Technologies rose 2.04% to Rs 752.50. 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) fell 1.09%. 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.
JSW Energy declined 3.35% after Q4 results. The company's consolidated net profit rose 48.98% to Rs 335.69 crore on 12.13% rise in total income to Rs 2362.73 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results during market hours today, 3 May 2013.
Ambuja Cements dropped 1.15% after Q1 results. The company's net profit jumped 56.26% to Rs 487.90 crore on 3.53% decline in total income from operations to Rs 2557.02 crore in Q1 March 2013 over Q1 March 2012. The company announced its Q1 results during market hours today, 3 May 2013.
The focus of the market is on Q4 results. Grasim and Jaiprakash Associates will unveil their Q4 results tomorrow, 4 May 2013. HDFC and Lupin unveil Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Asian Paints and Punjab National Bank unveil Q4 results on 9 May 2013. NTPC announces Q4 results on 10 May 2013. Bank of Baroda unveils Q4 results on 13 May 2013. Dr Reddy's 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.
India's factories lost momentum in April as output grew at its weakest pace in over four years, but a jump in export orders augured well for the coming months, a survey showed on Thursday, 2 May 2013. The HSBC Manufacturing Purchasing Managers' Index (PMI), fell for the second straight month in April, dipping to 51 from 52 in March. The reading for April was the lowest since November 2011.
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.
European shares were slightly higher on Friday ahead of US non-farm payroll data due later, amid expectations the data will show jobs growth. Key benchmark indices in UK and Germany were up by 0.03% to 0.09%. France's CAC 40 fell 0.04%.
The European Central Bank lowered its benchmark rate to a record low yesterday and President Mario Draghi signaled another reduction is possible. European policy makers cut the main refinancing rate to a record-low 0.5% yesterday from 0.75%, and reduced the marginal lending rate to 1% from 1.5%.
Asian stocks rose for the first time in three days on Friday as Macquarie Group reported higher earnings and investors awaited the release of US job data. Key benchmark indices in China, Hong Kong, Taiwan and South Korea rose by 0.08% to 1.44%. Key benchmark indices in Japan, Indonesia and Singapore fell by 0.76% to 1.44%.
China's service industries expanded at a slower pace last month, adding to the drag on growth in the world's second-biggest economy after manufacturing lost momentum. The non-manufacturing Purchasing Managers' Index fell to 54.5 from 55.6 in March, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing.
Trading in US index futures indicated that the Dow could fall 8 points at the opening bell on Friday, 3 May 2013. US stocks rose on Thursday, sending the Standard & Poor's 500 index to a record high, as the European Central Bank cut its key interest rate and American jobless claims unexpectedly fell. Applications for US unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, Labor Department figures showed yesterday.
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