Market ekes out small gains

Key benchmark indices closed marginally higher, with the market recovering after over 2% slide on Monday, as the latest data showing sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. The S&P BSE Sensex advanced 30.62 points or 0.16%, off close to 110 points from the day's high and up about 70 points from the day's low. The 50-unit CNX Nifty settled below the psychological 6,000 mark, having alternately swung above and below that level in intraday trade. Index heavyweight and cigarette major ITC ended almost unchanged for the day after seeing intraday volatility. Another index heavyweight Reliance Industries (RIL) dropped. The market breadth, indicating the overall health of the market, was negative.

The Sensex has gained 218.11 points or 1.11% in this month so far (till 14 May 2013). The Sensex has gained 295.58 points or 1.52% in calendar 2013 so far (till 14 May 2013). From a 52-week high of 20,203.66 on 29 January 2013, the Sensex has declined 481.37 points or 2.38%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 3,973.31 points or 25.22%.

Coming back to today's trade, Dr Reddy's Laboratories declined on profit booking after strong Q4 results. Metal stocks were mixed. Reliance Infrastructure rose on strong Q4 results. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. Tata Steel declined in choppy trade after the company said on Monday that it expects non-cash write down of the goodwill and assets of around $1.6 billion in the consolidated financial statements for the year ended 31 March 2013 due to weak economic and market conditions in Europe, its main market.

The S&P BSE Sensex advanced 30.62 points or 0.16% to settle at 19,722.29, its highest closing level since 11 May 2013. The index rose 140.12 points at the day's high of 19,831.79 in mid-morning trade. The index declined 38.98 points at the day's low of 19,652.69 in early trade, its lowest level since 6 May 2013.

The CNX Nifty advanced 14.95 points or 0.25% to 5,995.40, its highest closing level since 11 May 2013. The index hit a high of 6,026.20 in intraday trade. The index hit a low of 5,970.05 in intraday trade, its lowest level since 6 May 2013.

The BSE Mid-Cap index rose 0.27% and outperformed the Sensex. The BSE Small-Cap index gained 0.04% and underperformed the Sensex.

The BSE HealthCare index (up 0.67%), BSE Teck index (up 0.64%), BSE PSU index (up 0.48%), BSE Power index (up 0.4%), BSE Oil & Gas index (up 0.33%) and BSE IT index (up 0.23%), outperformed the Sensex.

The BSE Capital Goods index rose 0.16% and matched with Sensex's performance. The BSE Consumer Durables index (down 1.16%), BSE Realty index (down 0.38%), BSE Auto index (down 0.2%), BSE FMCG index (down 0.09%), BSE Metal index (was unchanged) and BSE Bankex (up 0.1%), underperformed the Sensex.

The total turnover on BSE amounted to Rs 1634 crore, lower than Rs 2176.19 crore on Monday, 13 May 2013.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,194 shares declined and 1,140 shares advanced. A total of 132 shares were unchanged.

Among the 30-share Sensex pack, 15 stocks rose while rest of them fell.

Index heavyweight Reliance Industries (RIL) fell 0.68% to Rs 797.70. The stock hit a high of Rs 808.90 and low of Rs 795.50.

Index heavyweight and cigarette major ITC was flat at Rs 335.90, after Monday's 5.31% slide. The stock hit a high of Rs 339.90 and low of Rs 333.10. The stock had hit record high of Rs 355 in intraday trade during the special trading session held on Saturday, 11 May 2013. The Uttar Pradesh state government on 7 May 2013 slashed VAT on cigarette/cigar from existing 50% to 25%. The state government had last year increased VAT on cigarette/cigar and tobacco products from 12.5% to 50%.

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.

United Breweries declined 0.93%. The company during market hours today, 14 May 2013, confirmed that it has received notice of service tax demand. The company said it has always been tax compliant and has been paying service tax inter alia on sponsorship of sports activity, as applicable from the effective date of its applicability. The show cause is fastened with valuation errors and requires thorough scrutiny, United Breweries said. The company is in the process of filing its detailed reply and explanations shortly, it added. The company issued this clarification after media reports said that the Directorate General of Central Excise Intelligence (DGCEI) has issued show-cause-cum-demand notices to Vijay Mallya-owned firms United Breweries and United Spirits for allegedly evading service tax of Rs 91 crore. Shares of United Spirits fell 1.98%.

Jet Airways (India) declined 0.55%. The company said after market hours today, 14 May 2013, said that Securities and Exchange Board of India has permitted the company and relaxed the requirement of 12 week cool off period after the proposed inter se transfer of shares to enable the company to undertake the Offer for Sale through Stock Exchange Mechanism (OFS) for the purpose of achieving the minimum level of public shareholding as required under the Securities Contracts Regulations, 1957.

Sebi has mandated minimum public shareholding of 25% for private companies and 10% for state-run firms. 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.

Realty stocks declined. HDIL, Unitech and D B Realty dropped by 0.01% to 0.72%.

Realty major DLF fell 0.73% to Rs 230.30. The company undertakes an institutional placement programme through the stock exchanges mechanism today, 14 May 2013. The company will issue up to 8.1 crore shares to eligible qualified institutional buyers. As at 15:30 IST, the investors bid for a total quantity of 3.99 crore shares under the programme. The floor price for the qualified institutional placement is Rs 222 per equity share, with price band of Rs 222 to Rs 233 per share.

Auto stocks extended recent losses triggered by oil market companies hiking diesel prices by Rs 1.02 per litre effective Saturday, 11 May 2013. Mahindra & Mahindra (M&M) declined 0.67%. The company announced after market hours on Friday, 10 May 2103, the launch of a new H-Series Xylo, powered by the refined and world class mHawk engine. The power packed H-Series offers a range of variants starting with the H4 (with ABS option), H8 (with ABS & Airbag option) and fully loaded feature packed H9 version which includes several unique features like Voice Command Technology (VCT), Cruise Control, Digital Drive Assist System, etc. The new H-Series starts at an attractive price of Rs 8.23 lakh (ex showroom Mumbai, BSIV variant).

Maruti Suzuki India shed 0.04% to Rs 1703.70. The stock had hit record of Rs 1,742 in intraday trade on Monday, 13 May 2013.

Tata Motors rose 0.96%. The company's total sales fell 15% to 51,160 in April 2013 over April 2012. Total domestic sales fell 17% to 47,595 in April 2013 over April 2012. Exports rose 28% to 3,565 during the period. The company announced the monthly sales data on 1 May 2013.

Two wheeler markers dropped. Bajaj Auto declined 1.87%. The company announces Q4 results on Thursday, 16 May 2013. The company's total sales fell 10% to 3.44 lakh units in April 2013 over April 2012. Motorcycle sales fell 12% to 3 lakh units in April 2013 over April 2012. Commercial vehicle sales rose 10% to 43,351 units in April 2013 over April 2012. Exports fell 23% to 1.30 lakh units in April 2013 over April 2012. The company announced the sales figures on 2 May 2013.

Hero MotoCorp dropped 0.55%. The company said on 1 May 2013 its total sales fell 9.5% to 4.99 lakh in April 2013 over April 2012.

Telecom stocks gained. Tata Teleservices (Maharashtra), Reliance Communications, Idea Cellular and Bharti Airtel gained by 0.68% to 5.77%. But, MTNL fell 3.21%.

Bank stocks were mixed. Shares of India's biggest commercial bank in terms of branch network, State Bank of India (SBI), gained 0.57%.

Bank of Baroda gained 1.62%. The bank's net profit fell 32.23% to Rs 1028.85 crore on 13.82% rise in total income to Rs 10262.50 crore in Q4 March 2013 over Q4 March 2012. The bank announced the results during market hours on Monday, 13 May 2013.

Bank of Baroda's net profit fell 10.51% to Rs 4480.72 crore on 17.32% growth in total income to Rs 38827.28 crore in the year ended 31 March 2013 over the year ended 31 March 2012. On a consolidated basis, the state-run bank's net profit fell 8.47% to Rs 4804.23 crore on 18.4% growth in total income to Rs 40952.68 crore in the year ended 31 March 2013 over the year ended 31 March 2012.

Among other PSU bank stocks, Canara Bank, and Punjab National Bank rose by 0.48% to 0.9%.

Bank of India declined 0.74%, with the stock extending Monday's 4.35% slide triggered by weak Q4 results. The bank's net profit fell 20.58% to Rs 756.57 crore on 5.55% rise in total income to Rs 9265.55 crore in Q4 March 2013 over Q4 March 2012. The bank announced the results during market hours on Monday, 13 May 2013.

ICICI Bank declined 0.56%. Axis Bank rose 1.11%.

HDFC Bank dropped 0.56% to Rs 689.15. The stock had hit record high of Rs 711.55 in intraday trade on Monday, 13 May 2013.

Dr Reddy's Laboratories declined 2.88% to Rs 2,021 on profit booking after strong Q4 results. The stock had hit record high of Rs 2,150.90 in intraday trade on Monday, 13 May 2013, ahead of the results. The company during market hours today, 14 May 2013, reported 66.58% surge in consolidated net profit to Rs 570.89 crore on 30.79% rise in total income to Rs 3503.04 crore in Q4 March 2013 over Q4 March 2012.

Ranbaxy Laboratories rose 3.63%, with the stock reversing initial losses. The company said after market hours on Monday, 13 May 2013, that a previously disclosed investigation by the US Department of Justice (DOJ) of data integrity and manufacturing processes at certain Ranbaxy facilities in India has been concluded. The investigation related to conduct which occurred several years ago, and Ranbaxy's current management team fully cooperated with the DOJ, Ranbaxy said.

On 20 December 2011, Ranbaxy announced that it had signed a consent decree with the US Food and Drug Administration (USFDA), under which Ranbaxy had committed to further strengthen procedures and policies to ensure data integrity and to comply with Current Good Manufacturing Practice (cGMP). In anticipation of the settlement agreement with the DOJ, Ranbaxy had announced at that time its intention to make a financial provision of $500 million related to expected costs associated with resolving the DOJ investigation.

Under the terms of the final settlement agreement, Ranbaxy and its affiliates have agreed to settle alleged civil violations of the False Claims Act with the US, all 50 states and the District of Columbia. Separately, a US subsidiary, Ranbaxy USA, Inc., has agreed to plead guilty to a criminal information charging violations of the Food, Drug and Cosmetic Act and other criminal statutes. Ranbaxy's payments related to both the civil and criminal settlements total $500 million in aggregate. The financial provision Ranbaxy established in December 2011 will be sufficient to cover all material financial obligations under the agreement, Ranbaxy said.

Mr. Arun Sawhney, CEO & Managing Director, Ranbaxy, stated, "Today's announcement marks the resolution of this past issue. We are pleased to continue bringing safe, effective and quality medicines to market for the benefit of consumers in the US and other parts of the world. While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy's stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance. Ranbaxy has successfully launched several generic products recently and is well-positioned for future growth in the US and around the world with a robust pipeline of important products as it continues to build a strong global portfolio of branded and generic prescription and OTC pharmaceuticals. Our conduct is guided by our philosophy of 'Quality and Patients First'."

IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. Infosys, Tech Mahindra, and Tata Consultancy Services (TCS) rose by 0.26% to 0.44%. But, HCL Technologies fell 1.47%.

Wipro gained 0.06%. The company on 9 May 2013 said that the Securities & Exchange Board of India (Sebi) has approved its proposal to meet the minimum public shareholding requirement through a transfer of equity shares by the promoter group to an 'Irrevocable Independent Trust' with trustees either from public sector banks or public financial institutions for advancing philanthropic activities through its beneficiaries. Wipro said that the company and the promoter group have undertaken multiple steps to fulfill the minimum public shareholding requirement including Offer for Sale (OFS). The demerger of the 'diversified' business is also expected to increase public shareholding. Any shortfall to meet public shareholding prior to due date of meeting the minimum public shareholding requirement would be transferred to the 'Irrevocable Independent Trust' and the trust shall effect a sale of such equity shares forming part of the trust funds within a period of two years from the date of such settlement, Wipro said.

Reliance Infrastructure rose 0.56% to Rs 389.40 in volatile trade. The stock hit high of Rs 397 and low of Rs 378.20. The company during market hours today, 14 May 2013, reported 76.4% surge in consolidated net profit to Rs 725 crore on 13.29% fall in income from operations to Rs 6187 crore in Q4 March 2013 over Q4 March 2012. Net profit rose 41.59% to Rs 2247 crore on 7.57% fall in total operating income to Rs 22382 crore in the year ended 31 March 2013 over the year ended 31 March 2012. Reliance Infrastructure said it is conservatively financed with debt to equity ratio of 0.87 as on 31 March 2013.

Metal stocks were mixed. Jindal Steel & Power, Hindalco Industries and Hindustan Zinc rose by 0.13% to 1.07%. Bhushan Steel, JSW Steel, Sterlite Industries and Sail declined by 0.05% to 0.1%.

Tata Steel edged lower in choppy trade. The stock was off 0.44% at Rs 304. The scrip hit high of Rs 306.75 and low of Rs 296.70. The company said after market hours on Monday, 13 May 2013, that the company has substantially completed its year end impairment review for the consolidated financial statements for the financial year end 31 March 2013 (FY 2013) as required under the Indian Accounting Standards. This review was undertaken taking into account the external economic environment and macroeconomic conditions especially in Europe, the underlying demand-supply imbalance of the global steel industry and the prudent view of the forecast of the businesses. Following the review, the company expects non-cash write down of the goodwill and assets in the consolidated financial statements for the year ended 31 March 2013 of around $1.6 billion.

The impairment is primarily due to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in 2012-13 by almost 8% which in aggregate results in almost 30% since the emergence of the global financial crisis in 2007. This has led to a downward revision of cash flow expectations underlying the valuation of the European business. The impairment also includes the effect of write down of assets in the ferro chrome business in South Africa and the mini blast furnace in Tata Steel Thailand which has been impacted by the high cost of raw material feedstock. The final figures will be included in the full year results on 23 May 2013, Tata Steel said. The company's financial covenants are unaffected by the above non-cash write down of goodwill and assets, it added.

The focus of the market is on Q4 results. Bajaj Auto announces Q4 results on Thursday, 16 May 2013. ITC unveils Q4 results on Friday, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. ONGC, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.

The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government today, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.

Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.

The consumer price inflation fell below the 10% mark in April 2013. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013, data released by the government on Monday, 13 May 2013, showed.

India's trade deficit widened to $17.787 billion in April 2013 from $14.041 billion in April 2012, data released by the government on Monday, 13 May 2013, showed. While exports rose 1.68% at $24.164 billion, imports jumped 10.96% to $41.951 billion in April 2013 over April 2012.

Industrial production rose 2.5% in March 2013, compared with a revised growth of 0.46% in February 2013, data released by the government on Friday, 10 May 2013, showed. Industrial production rose 1% for the year ended 31 March 2013 (FY 2013).

The RBI on 3 May 2013 cut its key policy rate viz. 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 it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.

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 stock markets slipped on Tuesday, after weaker-than-expected German investor confidence data offset a surprisingly strong reading on industrial production for the euro zone. Key benchmark indices in UK, France and Germany were down by 0.16% to 0.49%.

The ZEW German economic sentiment indicator inched 0.1 point higher to 36.4 in May, missing expectations of a 40 reading. The disappointment comes after the index also fell more than expected in April. Meanwhile, industrial production in the euro zone rose 1% in March compared with the previous month, according to Eurostat, the statistical office of the European Union.

Most Asian markets rose on Tuesday. Key benchmark indices in Indonesia, Taiwan, South Korea and Singapore rose by 0.04% to 1.03%. Key benchmark indices in Japan, China and Hong Kong fell by 0.16% to 1.11%.

Trading in US index futures indicated that the Dow could fall 38 points at the opening bell on Tuesday, 14 May 2013. US stocks finished little changed on Monday as investors mulled when the Federal Reserve may begin to scale back its $85-billion-a-month bond-buying program.

US retail sales rose 0.1% in April, which was higher than forecast, signaling that central bank efforts to spur economic growth are working.

Powered by Capital Market - Live News