IT stocks nudge higher

Key benchmark indices snapped their 8-day losing trend and registered small gains as European stocks rose. The S&P BSE Sensex advanced 18.24 points or 0.1%, up 40.58 points from the day's low and off 124.25 points from the day's high. The market breadth, indicating the overall health of the market, was negative. Coal India reversed initial losses triggered by weak Q1 result. Bharat Heavy Electricals (Bhel) tumbled after the company reported weak Q1 results on Saturday, 3 August 2013. Telecom stocks dropped. Some metal stocks rose on bargain hunting after recent losses.

Indian stocks snapped their 8-day declining trend today, 5 August 2013. The Sensex had fallen 1,138.11 points or 5.6% in eight trading sessions to 19,164.02 on Friday, 2 August 2013, from a recent high of 20,302.13 on 23 July 2013. The Sensex has declined 163.44 points in August so far (till 5 August 2013). The Sensex has declined 244.45 points or 1.26% in calendar 2013 so far (till 5 August 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,261.36 points or 6.17%. From a 52-week low of 17,026.97 on 3 August 2012, the Sensex has surged 2,155.29 points or 12.66%.

Coming back to today's trade, IT stocks rose on recent weakness of rupee against the dollar, with TCS and HCL Technologies hitting record high and Wipro and Infosys hitting 52-week high. Power Finance Corporation (PFC) galloped after strong Q1 June 2013 results. Bank stocks rose in volatile trade. Interest rate sensitive realty stocks also recovered in volatile trade. Shares of Jaypee Group companies edged higher after it said in a corporate advertisement in a newspaper that the Group has embarked upon a focused plan of deleveraging across businesses, which will yield results in the coming twelve months.

The S&P BSE Sensex advanced 18.24 points or 0.1% to 19,182.26, its highest closing level since 1 August 2013. The index jumped 142.49 points at the day's high of 19,306.51 in mid-morning trade. The index fell 22.34 points at the day's low of 19,141.68 in early trade.

The CNX Nifty was up 7.50 points or 0.13% to 5,685.40, its highest closing level since 1 August 2013. The index hit a high of 5,721 in intraday trade. The index hit a low of 5,661.50 in intraday trade.

The total turnover on BSE amounted to Rs 1752 crore, lower than Rs 1855.70 crore on Friday, 2 August 2013.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,123 shares fell and 1,084 shares rose. A total of 132 shares were unchanged.

The BSE Mid-Cap index rose 0.27% and the BSE Small-Cap index gained 0.3%. Both the indices outperformed the Sensex.

Among the sectoral indices on BSE, the S&P BSE Metal index (up 2.67%), the S&P BSE Bankex (up 0.97%), the S&P BSE IT index (up 0.9%), the S&P BSE PSU index (up 0.61%), the S&P BSE FMCG index (up 0.58%), the S&P BSE Teck index (up 0.51%) and the S&P BSE Realty index (up 0.23%) outperformed the Sensex.

The S&P BSE Oil & Gas index (down 0.03%), the S&P BSE Auto index (down 0.45%), the S&P BSE Healthcare index (down 0.48%), the S&P BSE Consumer Durables index (down 0.72%), the S&P BSE Power index (down 1.02%) and the S&P BSE Capital Goods index (down 3.58%) underperformed the Sensex.

Among the 30-share Sensex pack, 17 stocks rose and rest of them fell.

Index heavyweight Reliance Industries (RIL) rose 0.4% to Rs 860.90.

Index heavyweight and cigarette major ITC rose 0.86% to Rs 335.90.

Godrej Consumer Products lost 0.09%. The company's consolidated net profit without exceptional items and one time tax reversal rose 7% to Rs 130 crore on 24% growth in net sales to Rs 1720 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced on Saturday, 3 August 2013.

Godrej Consumer Products (GCPL) said that Q1 June 2013 had an exceptional gain of Rs 2.20 crore arising from profit on sale of Simba brand (Indonesia food business). Meanwhile, Q1 June 2012 had a positive one time tax reversal impact of Rs 16.50 crore (Rs 8 crore after minority interest).

GCPL's consolidated revenue in constant currency terms grew 27% year on year (YoY) in Q1 June 2013. Organic business in constant currency terms rose 19%. India business grew 19%, with strong growth across core categories. International organic business at constant currency grew 19%.

GCPL's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) rose 11% to Rs 225 crore in Q1 June 2013 over Q1 June 2012. EBITDA margin stood at 13.1%. Advertisement and Publicity expenses grew 54% during the quarter.

GCPL said it has adopted the notification issued by the Ministry of Corporate Affairs on 29 December 2011, on amortization of foreign exchange (forex) impacts. The total forex loss for the quarter, including mark to market impact at consolidated level aggregates to Rs 15.40 crore. GCPL said it has a forex committee that monitors all the exposures and takes calls on hedging the exposures.

Tata Chemicals lost 2.32% after consolidated net profit declined 30.09% to Rs 75.21 crore on 7.06% growth in total income to Rs 3331.65 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours today, 5 August 2013.

IT stocks rose on recent weakness of rupee against the dollar.

IT major TCS rose 1.15% to Rs 1,866.65 after hitting a record high of Rs 1,876 in intraday trade today, 5 August 2013. The company announced during market hours today, 5 August 2013, that it has been selected by Australian Pharmaceutical Industries (API), a leading beauty and health retail company in Australia to deliver a major IT and business transformation program whereby TCS will deliver SAP technology to unify and enhance mission critical IT systems across API's retail and wholesale operations.

Infosys was almost unchanged at Rs 3,007.45 after hitting a 52-week high of Rs 3,025 in intraday trade today, 5 August 2013.

Wipro gained 2.48% to Rs 449.65 after hitting a 52-week high of Rs 453.40 in intraday trade today, 5 August 2013.

HCL Technologies advanced 1.39% to Rs 949 after striking a record high of Rs 960.75 in intraday trade today, 5 August 2013.

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 60.93 today, 5 August 2013, after closing at a record low of 61.10/11 per dollar on Friday, 2 August 2013.

Tech Mahindra rose 2.93% to Rs 1,269.10 after the company signed a five-year managed services agreement with BASE Company for the operations and roll out of the BASE network in Belgium. The stock hit 52-week high of Rs 1,276 in intraday trade today, 5 August 2013. With this agreement BASE Company is broadening its partnership with Tech Mahindra, creating highly efficient network operations, where a managed service partner is responsible for both network and IT, the two companies said in a joint statement.

Shares of Financial Technologies surged 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 jumped a staggering 30.88% to Rs 197.95. 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, also its record low, 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.

Redington (India) fell 3.31% after consolidated net profit fell 4.1% to Rs 60.85 crore on 12.1% increase in net sales to Rs 6020.09 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Friday, 2 August 2013.

Bank stocks recovered in volatile trade. HDFC Bank rose 0.23%.

ICICI Bank rose 1.76% to Rs 902.65. The stock reversed direction after hitting a 52-week low of Rs 869.35 in intraday trade today, 5 August 2013.

State Bank of India rose 0.06% to Rs 1,682.35. The stock reversed direction after hitting a 52-week low of Rs 1,656 in intraday trade today, 5 August 2013.

Bank of Baroda gained 3.3%, with the stock reversing direction after hitting hit 52-week low of Rs 471.85 in intraday trade today, 5 August 2013. The stock had tumbled recently after the bank reported an increase in sticky loans. The bank's ratio of gross non-performing assets (NPA) to gross advances increased to 2.99% as on 30 June 2013, from 2.4% as on 31 March 2013 and 1.84% as on 30 June 2012. The ratio of net NPA to net advances increased to 1.69% as on 30 June 2013, from 1.28% as on 31 March 2013 and 0.65% as on 30 June 2012.

The bank's net profit rose 2.54% to Rs 1167.87 crore on 14.89% rise in total income to Rs 10717.49 crore in Q1 June 2013 over Q1 June 2012. The bank announced Q1 result on 1 August 2013.

Grasim Industries dropped 0.07% to Rs 2560 on weak Q1 result. The stock recouped almost the entire intraday losses after hitting 52-week low of Rs 2477.75 in intraday trade today, 5 August 2013. The company's consolidated net profit fell 15% to Rs 610.01 crore on 1.5% growth in net sales to Rs 6895.08 crore in Q1 June 2013 over Q1 June 2012. The result was announced on Saturday, 3 August 2013.

Grasim Industries said that the performance of the company during the quarter has been satisfactory considering the prolonged subdued economic environment in India and across the world.

On future business outlook, Grasim said that given the prevailing global economic conditions, coupled with the surplus capacity in China, the VSF industry continues to face a challenging environment in the immediate term. In cement, the demand is expected to grow by 6% in FY 2014 due to the slowdown in GDP growth rate, the company said. It has the potential to recover to over 8% with the improvement in the economic environment, it added. Capacity expansions in VSF and cement will provide additional volumes, driving growth and further consolidate the company's leadership, Grasim said. This will enable Grasim to move forward rapidly, with the recovery in the market, the company added. Grasim said it will continue to focus on cost reduction measures, improving asset productivity to maintain its position as the lowest cost producer and expanding specialty products portfolio for sustained shareholder value creation.

Shares of motorcycle maker Hero MotoCorp rose 3.41% to Rs 1,858 after two bulk deals aggregating 11.25 lakh shares were executed on BSE at Rs 1,800 per share at 13:14 IST. One block deal was of 4 lakh shares while the other was of 7.25 lakh shares. The two block deals constitute 0.56% of Hero MotoCorp's equity.

The company said on 1 August 2013, its total sales rose 0.68% to 4.87 lakh units in July 2013 over July 2012.

Maruti Suzuki India rose 0.58%. The car maker announced during market hours today, 5 August 2013, that its total production rose 31.07% to 99,236 units in July 2013 over July 2012.

Maruti Suzuki India's total sales rose 1.3% to 83,299 units in July 2013 over July 2012. The company's domestic sales rose 5.8% to 75,145 units in July 2013 over July 2012. Export sales declined 27.3% to 8,154 units in July 2013 over July 2012. The company announced the monthly sales data on 1 August 2013.

Coal India gained 4.03% to Rs 264.80, with the stock reversing initial losses triggered by weak Q1 result. The stock reversed direction after hitting record low of Rs 248 in intraday trade today, 5 August 2013. The company's consolidated net profit fell 16.51% to Rs 3731.04 crore on 0.64% rise in total income to Rs 18692.03 crore in Q1 June 2013 over Q1 June 2012. The result was announced on Saturday, 3 August 2013.

Bharat Heavy Electricals (Bhel) tumbled 19.41% to Rs 120.40 on weak Q1 results. The stock hit 52-week low of Rs 120.05 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 1.98% to Rs 813.80 after hitting a 52-week low of Rs 810.50 in intraday trade today, 5 August 2013.

Power Finance Corporation (PFC) galloped 11.62% to Rs 102.35 after net profit rose 23.29% to Rs 1198.24 crore on 27.18% growth in total income to Rs 5017.10 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Friday, 2 August 2013.

Shares of Jaypee Group companies edged higher after it said in a corporate advertisement in a newspaper that the Group has embarked upon a focused plan of deleveraging across businesses, which will yield results in the coming twelve months.

Jaiprakash Associates surged 5.72% to Rs 31.40. The stock reversed direction after hitting a 52-week low of Rs 28.70 in intraday trade today, 5 August 2013.

Jaiprakash Power Ventures spurted 13.24% to Rs 11.55. Jaypee Infratech rose 2.25%.

Punj Lloyd surged 8.15% after the company reported consolidated net profit of Rs 40.41 crore in Q1 June 2013, as against net loss of Rs 13.37 crore in Q1 June 2012. The Q1 result was announced after market hours on Friday, 2 August 2013. Punj Lloyd's consolidated net sales rose 10.8% to Rs 3000.26 crore in Q1 June 2013 over Q1 June 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 1% to Rs 293 crore in Q1 June 2013 over Q1 June 2012.

The company said it has a strong order backlog of Rs 20868 crore. The Group's strategy has been to expand its footprint outside India and today over 65% of orders represent the growing regions of Middle East, Africa, and Asia Pacific. While revenues show a reasonable increase in challenging global macro environment, margins have been impacted due to financial charges and the depreciating rupee, Punj said. In the coming months, the group is actively looking at retiring high interest debt, Punj said in a statement.

Some metal stocks rose on bargain hunting. Jindal Steel & Power jumped 8.35% to Rs 202.50. The stock had hit a 52-week low of Rs 181.55 in intraday trade on Friday, 2 August 2013.

Steel major Tata Steel rose 2.52% to Rs 207.40. The stock reversed direction after hitting a 52-week low of Rs 198.50 in intraday trade today, 5 August 2013.

Sterlite Industries gained 4.7%. Sail rose 1.01%.

Telecom stocks dropped. Bharti Airtel (down 2.05%), Idea Cellular (down 2.49%), MTNL (down 3.84%) and Reliance Communications (down 1.9%) declined.

Interest rate sensitive realty stocks rose in volatile trade. HDIL (up 0.49%), Unitech (up 3.62%) and Indiabulls Real Estate (up 0.68%), edged higher.

Realty major DLF rose 0.82% to Rs 129.35. The stock reversed direction after hitting a 52-week low of Rs 124.35 in intraday trade today, 5 August 2013.

T.V. Today Network rose by maximum permissible limit of 20% at Rs 65.50 after the company reported net profit of Rs 11.98 crore in Q1 June 2013 as against net loss of Rs 0.35 crore in Q1 June 2012. The result was announced after market hours on Friday, 2 August 2013. Net sales rose 25.90% to Rs 88.85 crore in Q1 June 2013 over Q1 June 2012.

Divi's Laboratories rose 2.3% after net profit rose 4.4% to Rs 174.71 crore on 10.1% growth in net sales to Rs 515.88 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced on Saturday, 3 August 2013. Divi's Laboratories' tax provision rose 14.89% to Rs 54 crore in Q1 June 2013 over Q1 June 2012. The company reported a foreign exchange (forex) gain of Rs 43 crore during the quarter, as against forex gain of Rs 30 crore in corresponding quarter last year.

Strides Arcolab rose 5.12% 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.

PI Industries spurted 14.24% after net profit jumped 107% to Rs 48.54 crore on 69.8% growth in total income from operations to Rs 406.07 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced on Saturday, 3 August 2013.

PI Industries said that contributions from both the domestic Agri Input and custom synthesis exports to the revenue showed remarkable enhancement during the quarter. Revenue growth is mainly driven by volume growth. In the domestic market, PI's differentiated model demonstrated its ability to maximize the benefit from a conducive monsoon where sowing was higher in key cropping areas for the Kharif season, the company said. Custom synthesis exports reflect the uniqueness and advantages of its IPR allied model, resulting in sustained revenue momentum and deep engagement style that has potential to scale-up in a consistent manner. Stabilization of the Jambusar facility has also helped revenue scale up at an attractive pace, P I Industries said in a statement.

Companies in India's vast services sector suffered a fall-off in activity for the first time in nearly two years in July, according to a survey released on Monday, 5 August 2013. The HSBC Markit Services Purchasing Managers' Index fell to 47.9 in July from 51.7 in the previous month. The latest PMI is the first time since October 2011 the headline index has fallen below the 50 mark that divides growth from contraction, and the lowest since April 2009, dashing hopes of a quick turnaround for Asia's third-largest economy. The service sector accounts for nearly 60% of an economy that grew at a decade low of 5% in the last fiscal year.

European markets edged higher on Monday, 5 August 2013, as investors welcomed a rise in euro-zone services PMI data. Key benchmark indices in UK and France were up 0.04% to 0.10%. Germany's DAX shed 0.03%.

Euro-area services output shrank at a slower pace than initially estimated in July, adding to evidence the economy is gathering strength to pull out of a record-long recession. An index of activity in the services industry based on a survey of purchasing managers rose to 49.8 from 48.3 in June, London-based Markit Economics said in a report today. That's above an initial estimate of 49.6 on July 24. A reading below 50 indicates contraction.

The composite index for the euro zone rose to 50.5, above a preliminary reading of 50.4 and better than June's 48.7. The July reading marked the first time since January 2012 the index has climbed above the 50 level that separates expansion from contraction.

UK services growth accelerated more than economists forecast to the fastest pace in more than six years, adding to evidence Britain's economic recovery is gathering momentum. A gauge of activity rose to 60.2 from 56.9 in June, Markit Economics and the Chartered Institute of Purchasing and Supply said in a statement today in London.

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.

Asian stocks were mixed on Monday, 5 August 2013. Key benchmark indices in Hong Kong, China, and Taiwan rose by 0.14% to 1.04%. Key benchmark indices in Japan, Singapore, and South Korea fell by 0.37% to 1.44%.

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 a flat opening of US stocks 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 increase 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%, partly due to more people leaving the labor force.

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.

The US Federal Reserve is watching for progress in the US economy as it shapes its outlook for monetary policy. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data.

Powered by Capital Market - Live News