Key benchmark indices edged lower in early trade on weak Asian stocks. The S&P BSE Sensex was down 43.24 points or 0.21%, up 38.26 points from the day's low and off 27.40 points from the day's high. Index heavyweight Reliance Industries (RIL) edged lower in early trade. Another index heavyweight and cigarette major ITC edged higher in early trade. The market breadth, indicating the overall health of the market was negative.
State-run oil exploration major ONGC fell after the company reported sharp fall in net profit in Q4 March 2013 after market hours on Wednesday, 29 May 2013. Pharma major Cipla declined after the company declared weak Q4 result after market hours on Wednesday, 29 May 2013. Auto major Tata Motors gained after announcing Q4 earnings after market hours on Wednesday, 29 May 2013. State-run iron ore miner NMDC shrugged off weak Q4 results. Crude oil refiner BPCL rose on good Q4 result announced after market hours on Wednesday, 29 May 2013. Shares of ICICI Bank and Infosys fell after turning ex-dividend today, 30 May 2013.
The market may remain volatile today, 30 May 2013 as traders roll over positions in the futures & options (F&O) segment from the near-month May 2013 series to June 2013 series. The May 2013 derivatives contracts expire today, 30 May 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 643.81 crore on Wednesday, 29 May 2013, as per provisional data from the stock exchanges.
At 9:25 IST, the S&P BSE Sensex was down 43.24 points or 0.21% to 20,104.40. The index fell 81.50 points at the day's low of 20,066.14 in early trade. The index slipped 15.84 points at the day's high of 20,131.80 in early trade.
The CNX Nifty was down 18.55 points or 0.3% to 6,085.75. The index hit a high of 6,087.90 in intraday trade. The index hit a low of 6,072.15 in intraday trade.
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The market breadth, indicating the overall health of the market, was negative. On BSE, 503 shares rose and 418 shares fell. A total of 44 shares were unchanged.
The total turnover on BSE amounted to Rs 2213 crore by 09:30 IST.
Among the 30-share Sensex pack, 23 stocks declined and the rest of them gained.
Index heavyweight Reliance Industries (RIL) shed 0.44% to Rs 843.55. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%.
Meanwhile, ratings agency Standard & Poor's (S&P) on Wednesday, 29 May 2013, raised the long term corporate credit rating on RIL to "BBB+" from "BBB", with a "negative" outlook. RIL's articulation of its growth strategy removes the uncertainty regarding the company's use of its high cash balance, S&P said. RIL is planning to spend more than $30 billion on expansion over the next three years in core businesses such as refining, petrochemical, and exploration and production (E&P).
State-run oil exploration major ONGC fell 1.84%. The company's net profit declined 39.96% to Rs 3388.71 crore on 12.87% growth in total income from operations (net) to Rs 21829.86 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. The decline in net profit despite lower subsidy sharing burden was due to exceptional one-time expenses. ONGC said an amount of Rs 1850 crore has been provided for in Q4 March 2013 on account of difference of employer's contribution towards superannuation benefits up to 30% as per guidelines issued by Department of Public Enterprises (DPE) for the period from 1 January 2007 to 31 March 2013.
ONGC gave a subsidy discount of Rs 12312 crore in Q4 March 2013, which was lower than Rs 14170 crore in Q4 March 2012. The subsidy discount impacted the profit before tax (PBT) by Rs 10214 crore and profit after tax (PAT) by Rs 6900 crore. ONGC shares the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell.
ONGC has notified two new gas discoveries -- one in the KG shallow offshore basin and other in Western offshore basin in Kutch.
Meanwhile, the company's board has approved an investment of Rs 4124.35 crore for the integrated development of Vashishta and S-1 fields for production of natural gas from KG offshore. The project is expected to be completed in by April 2016.
Index heavyweight and cigarette major ITC gained 0.51% to Rs 344. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013.
Pharma major Cipla declined 1.56% after net profit fell 8.3% to Rs 268 crore on 4.9% growth in revenue to Rs 1982 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. Cipla's revenue from India operations rose 5.2% to Rs 793 crore in Q4 March 2013 over Q4 March 2012.
The growth in revenue from the domestic business was largely on account of growth in anti-asthma, anti-biotics/infectives, and cardiovascular therapy segments. Exports of formulations rose 11.5% to Rs 954 crore in Q4 March 2013 over Q4 March 2012. Exports of active pharmaceutical ingredients (APIs) fell 24% to Rs 175 crore in Q4 March 2013 over Q4 March 2012. The company attributed growth in overall export revenue to growth in anti-asthma, anti-allergic, anti-depressants, and anti-retroviral segments.
Auto major Tata Motors gained 2.75%. The company's consolidated net profit declined 36.71% to Rs 3945 crore on 10% growth in revenue to Rs 56002 crore in Q4 March 2013 over Q4 March 2012. The fall in bottom line was due to base effect. Tata Motors had accounted for a large tax credit in Q4 March 2012. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) had accounted for tax credit of 225 million pounds (Rs 1794 crore) in Q4 March 2012 for past income tax losses. Tata Motors' profit before tax (PBT) rose 6.1% to Rs 4694 crore in Q4 March 2013 over Q4 March 2012. Tata Motors attributed revenue growth to strong demand, growth in volumes and favourable market mix at JLR and favourable operating foreign exchange at the British luxury car unit. The result was announced after market hours on Wednesday, 29 May 2013.
Due to weak operating environment in the commercial vehicles and passenger car business in India, the board of Tata Motors pruned dividend to Rs 2 per share for the year ended 31 March 2013 (FY 2013) from Rs 4 per share for the year ended 31 March 2012 (FY 2012).
State-run iron ore miner NMDC rose 0.9%. NMDC's net profit declined 10.8% to Rs 1464.95 crore on 23.5% growth in turnover to Rs 3204 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013.
The company said it achieved a record production and sales of iron ore for the 4th quarter. This was accomplished inspite of the slurry pipeline not being available at all for evacuation, NMDC said.
NMDC said it has been pursuing its growth programme vigorously. NMDC, as part of its forward integration programme and value addition, is setting up a 3 million tonnes per annum (MTPA) steel plant at Nagarnar in Chhattisgarh, for which most of the major packages have been finalized and awarded. So far, cumulative orders worth Rs 13475 crore have already been placed and expenditure of over Rs 2346 crore has already been incurred. Work on some of the packages have already started and the project is expected to be completed by 2015-16, NMDC said.
NMDC said it incurred capital expenditure of Rs 1607.24 crore in the year ended 31 March 2013 (FY 2013) under various schemes. For the year ending 31 March 2014 (FY 2014), an expenditure of Rs 2720 crore is planned to be expended, NMDC said.
Crude oil refiner BPCL rose 1.03% after net profit rose 21.1% to Rs 4797.29 crore on 2.5% growth in net sales to Rs 66282.01 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013.
ICICI Bank fell 1.73% after turning ex-dividend today, 30 May 2013 for a dividend of Rs 20 per share for the year ended 31 March 2013.
Infosys slipped 0.73% after turning ex-dividend today, 30 May 2013 for a final dividend of Rs 27 per share for the year ended 31 March 2013.
On the macro front, the government will announce Q4 March 2013 gross domestic product (GDP) data tomorrow, 31 May 2013. India's GDP grew 4.5% in Q3 December 2012, sharply slower than the 5.3% expansion reported for Q2 September 2012.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on 14 May 2013 said that the central bank will take note of falling inflation when discussing potential interest rate cuts. 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 at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. 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.
Asian stocks declined on Thursday, undermined by an overnight pullback in global equities as investors assessed the implications of a potential softening of the Federal Reserve's massive monetary stimulus programme. Key benchmark indices in Hong Kong, Singapore, South Korea, Japan, China, Taiwan and Indonesia were down by 0.06% to 2.75%.
US stocks fell sharply on Wednesday, with Wall Street giving back the prior day's gains, amid worries over global-growth prospects and fears the Federal Reserve will begin to scale back its bond-buying program.
In remarks prepared for a speech in Minneapolis, Federal Reserve of Boston President Eric Rosengren on Wednesday reiterated testimony last week by Federal Reserve Chairman Ben Bernanke, saying "significant accommodation remains appropriate at this time."
The Organization for Economic Cooperation and Development on Wednesday cautioned that global growth could get hit as governments pare back easy-money programs, and it gave a bleaker forecast for the euro-zone economy this year. Also, the International Monetary Fund on Wednesday cut its estimate for China's economic growth in 2013 and 2014.
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