Key benchmark indices slipped into the red and hit fresh intraday low in morning trade. Weakness in most Asian stocks weighed on sentiment. The barometer index, the S&P BSE Sensex, was down 11.28 points or 0.06%, up about 10 points from the day's low and off close to 65 points from the day's high. Index heavyweight and cigarette maker ITC extended initial losses. Another index heavyweight Reliance Industries (RIL) pared initial gains. The market breadth was strong. IT stocks edged lower on weak US economic data.
A bout of volatility was witnessed in early trade as key benchmark indices regained positive zone and hit fresh intraday high after slipping into the red for a brief period after opening higher. The Sensex once again slipped into the red and hit fresh intraday low in morning trade.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Friday, 5 April 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 203.18 crore on Friday, 5 April 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was down 11.28 points or 0.06% to 18,438.95. The index fell 23.62 points at the day's low of 18,426.61 in morning trade. The index rose 54.25 points at the day's high of 18,504.48 in early trade.
The CNX Nifty was down 4.70 points or 0.08% to 5,548.55. The index hit a low of 5,544.90 in intraday trade. The index hit a high of 5,569.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 734 shares rose and 487 shares fell. A total of 56 shares were unchanged.
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Among the 30-share Sensex pack, 20 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) gained 0.33% at Rs 782.90. The scrip hit high of Rs 786.55 and a low of Rs 778 so far during the day. Shares of Reliance Communications jumped 4.21%. Reliance Jio Infocomm and Reliance Communications (RCom) on 2 April 2013 announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC declined 1.3% to Rs 287.65 on profit booking. The scrip hit high of Rs 293 and a low of Rs 287.10 so far during the day. The stock had hit record high of Rs 310.75 on 4 February 2013. The government 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.
Other FMCG stocks gained. Hindustan Unilever, Godrej Consumer Products, Marico and Dabur India gained by 0.68% to 1.43%.
IT stocks edged lower on weak US economic data. The United States is the biggest outsourcing market for the Indian IT firms. Infosys shed 0.73%. Infosys announces Q4 results on Friday, 12 April 2013. Infosys said during market hours on 2 April 2013, that it has signed an agreement with RWE Supply & Trading (RWEST), a leading European energy trading house to provide technology services to transform RWEST's trading operations to create business efficiencies and drive growth from new markets and commodities.
Infosys on 15 March 2013 announced that it has been selected by India Post to implement and manage a platform that will transform its rural operations. With this new agreement, Infosys will facilitate India Post's Rural Systems Integration (RSI) program.
Software major TCS declined 0.8%. The company on 26 March 2013 said that it has bagged a contract from Southern Water to implement a customer services and revenue transformation programme for the latter. The programme will combine front and back-end technology deployments with internal process redevelopment. Southern Water will benefit from enhanced customer service capabilities, improved cash collection and debt management, and will see a reduction in operating expenditure, TCS said a statement.
Wipro dropped 0.76%.
HCL Technologies declined 0.34%. The company on 3 April 2013 said that it is collaborating with North Carolina New Schools -- a statewide public-private catalyst for education innovation -- to create and promote science, technology, engineering and math (STEM) programs and get college students ready for the 21st century workforce. HCL will design an online technology hub which will serve as a central gathering place for featured content and discussion between teachers, principals, school staff, students, counselors, college liaisons, district office superintendents and NC New Schools administration staff. NC New Schools will leverage HCL's services for content creation and management of its collaborative, online community offering access to tools and resources required to accelerate systemic, sustainable innovation in schools. NC New Schools will move approximately 3,000 NC New Schools intranet users to the new technology hub.
The upside on the bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The next major trigger for the market is Q4 March 2013 results. The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on Friday, 12 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank announces Q4 results on 26 April 2013.
On the macro front, the government will unveil industrial production data for February 2013 on Friday, 12 April 2013. Industrial production had risen 2.4% in January 2013, as against a contraction of 0.5% in December 2012.
The government will unveil data on the combined consumer price index for urban and rural India for March 2013 on 12 April 2013. Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013.
The government will unveil data on the wholesale price index (WPI) for March 2013 on 15 April 2013. The annual rate of inflation, based on the monthly wholesale price index (WPI), edged up to 6.84% in February 2013 from 6.62% in January 2013.
The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.
Reserve Bank of India Governor D. Subbarao said Saturday, 6 April 2013, said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The Reserve Bank of India (RBI) will announce the Monetary Policy Statement 2013-14 on 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. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
On the political front, the Congress led UPA government has been reduced to a minority government, with DMK removing support to the government in March this year citing differences on the issue of atrocities on Tamils in Sri Lanka. Earlier, the Trinamool Congress withdrew support to the government in September last year as it opposed economic reforms. The Samajwadi Party (SP) along with its regional rival in Uttar Pradesh Bahujan Samaj Party (BSP) provide outside support to the UPA government. SP has 22 MPs in Lok Sabha and BSP has 21 MPs.
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 second half of the Budget session of the Parliament begins on 22 April 2013. The Budget Session of the Parliament ends on 10 May 2013. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
Assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.
Most Asian stocks dropped on Monday after China reported more infections from a deadly new strain of bird flu. Key benchmark indices in China, Indonesia, Singapore and Taiwan shed by 0.11% to 2.07%. Key benchmark indices in South Korea. Japan and Hong Kong rose by 0.06% to 2.51%.
China tried to ease concerns that a new strain of bird influenza will spark an epidemic as authorities reported three more infections of the deadly H7N9 virus that's killed six people since March.
Japan rebounded to a current-account surplus in February as a depreciating yen and record monetary stimulus boost the outlook for a revival in the world's third-biggest economy. The surplus, the first in four months, was 637.4 billion yen ($6.5 billion), the Ministry of Finance said in Tokyo today.
Trading in US index futures indicated a flat opening of US stocks on Monday, 8 April 2013. US stocks fell on Friday after the government reported a sharp slowdown in hiring last month that was far worse than economists had expected. US employers added just 88,000 jobs in March, the Labor Department reported. That's half the average of the previous six months.
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