Key benchmark indices provisionally 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 was provisionally up 33.60 points or 0.17%, off close to 105 points from the day's high and up about 70 points from the day's low. The 50-unit CNX Nifty provisionally 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.
Dr Reddy's Laboratories declined on profit booking after reporting 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.
As per provisional figures, the S&P BSE Sensex was up 33.60 points or 0.17% to 19,725.27. 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 was up 16.65 points or 0.28% to 5,997.10, as per provisional figures. 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 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, 1,214 shares declined and 1,129 shares advanced. A total of 122 shares were unchanged.
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Among the 30-share Sensex pack, 15 stocks rose while rest of them fell. ONGC, Sun Pharmaceutical Industries and Bharti Airtel rose by 1.78% to 2.03%. Coal India, Bajaj Auto and M&M shed by 0.67% to 1.87%.
Index heavyweight Reliance Industries (RIL) fell 0.75% to Rs 797. 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 335.85, 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.
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.
Dr Reddy's Laboratories declined 2.88% to Rs 2021 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.
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 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 0.1% to 0.35%.
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 25 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.
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