A divergent trend was witnessed on the bourses. The barometer index, the S&P BSE Sensex, closed with mild gains while the 50-unit CNX Nifty closed a tad lower. Both these key benchmark indices trimmed intraday gains in what was a choppy trading session. The Sensex closed below the psychological 20,000 mark, having alternately moved above and below that level in intraday trade. The market breadth, indicating the overall health of the market, was positive. The Sensex advanced 13.88 points or 0.07%, off close to 135 points from the day's high and up close to 80 points from the day's low.
The Sensex gained for the third day in a row today, 4 October 2013. The Sensex has garnered 536.18 points or 2.76% in three trading sessions from a recent low of 19,379.77 on 30 September 2013. The Sensex has gained 489.24 points or 2.51% in calendar 2013 so far (till 4 October 2013). From a 52-week high of 20,739.69 on 19 September 2013, the Sensex has declined 823.74 points or 3.97%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 2,467.24 points or 14.14%.
Coming back to today's trade, index heavyweights ITC and Reliance Industries, both, gained. Auto stocks rose on renewed buying, with Tata Motors scaling record high. Realty stocks gained for the third day in a row. Sobha Developers jumped after the company said its new sales rose 6.38% to 1 million square feet in Q2 September 2013 over Q2 September 2012. Metal stocks edged higher in choppy trade. Shares of public sector oil marketing companies (PSU OMCs) rose as a firm rupee helped eased concerns of high cost of crude oil imports.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.55, compared with its close of 61.735/745 on Thursday, 3 October 2013.
The S&P BSE Sensex advanced 13.88 points or 0.07% to 19,915.95, its highest closing level since 24 September 2013. The index jumped 149.93 points at the day's high of 20,052 in mid-afternoon trade, its highest level since 23 September 2013. The index fell 68.90 points at the day's low of 19,833.17 in mid-morning trade.
The CNX Nifty shed 2.40 points or 0.04% to 5,907.30. The index hit a high of 5,950.45 in intraday trade, its highest level since 23 September 2013. The index hit a low of 5,885 in intraday trade.
The BSE Mid-Cap index rose 0.27% and the BSE Small-Cap index gained 0.49%. Both these indices outperformed the Sensex.
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The total turnover on BSE amounted to Rs 1867 crore, lower than Rs 1893.76 crore on Thursday, 3 October 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,223 shares rose and 1,139 shares fell. A total of 136 shares were unchanged.
Among the 30-share Sensex pack, 15 stocks rose and rest fell. HDFC Bank (up 0.66%), Bharti Airtel (up 1.2%) and Coal India (up 2.46%), edged higher from the Sensex pack.
Most IT stocks declined as rupee edged higher against the dollar. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports.
HCL Technologies shed 0.75% to Rs 1095.65. The stock reversed direction after hitting record high of Rs 1,119.35 in intraday trade today, 4 October 2013.
Wipro declined 0.33%, with the stock reversing intraday gain. The company after market hours on Thursday, 3 October 2013, announced the changes in the top deck of the organisation. The company announced the appointment of Senior Vice President Shaji Farooq as the global head of its Banking, Finance Services and Insurance (BFSI) strategic business unit. Shaji, who is currently leading the company's Advanced Technologies Service Line and Go-To-Market transformation initiatives, will take over from Senior Vice President Soumitro Ghosh, who will now head Wipro Infotech, the India and Middle East business.
With the growth momentum picking up in the US and European economies, the financial services industry presents significant opportunities. Shaji's long experience with the BFSI sector in the past stands him in good stead to shape Wipro's strategy for this vertical and help seize emerging opportunities. He will continue to be based in New York.
A Wipro veteran of 25 years, Soumitro Ghosh has played varied roles including his current position as the global head of BFSI. A founding member of the BFSI Strategic Business Unit, he has played a significant role in building this vertical and making it the largest BU of the company today. Soumitro will now power the India & Middle East businesses to maintain Wipro's leadership position in these markets. Soumitro will continue to operate from Bangalore.
G K Prasanna, will take charge as the Senior Vice President & Global Head for Global Infrastructure Services (GIS) in addition to his current role as SVP & Global Head for Product Engineering Solutions (PES). GKP, who has been with Wipro for more than 25 years, is an acknowledged authority on the IT Infrastructure Services business. He was the head of Wipro's Technology Infrastructure Services business between 2000 through 2009 and is credited with launching several innovative service delivery models.
Jeffrey (Jeff) Heenan Jalil, who has held several leadership roles including Head of Sales for Manufacturing in Europe, Chief Sales & Operations Head for Europe, and most recently, Vice President and Global Head for Telecom Equipment Vendor and Media Verticals will assume the position of Vice President & Global Head of Advanced Technologies.
Commenting on the organizational re-alignment, T K Kurien, CEO & Executive Director, Wipro said, "Our strategy of driving a significantly higher degree of customer engagement and hyper growth has been paying dividends. In order to sustain this momentum, our leadership team has spent considerable time reviewing market opportunities, and sharply defining the focus areas that would fuel our growth ambition. The exercise reaffirmed our conviction in our chosen strategy. We are committed to better aligning our internal organization with our clients' needs and to make investments in driving predictability and automation in our delivery."
Shaji, Soumitro, G K Prasanna and Jeff will report into Chief Executive Officer and Executive Director, T.K. Kurien, Wipro. These appointments will be effective 1 January 2014.
After a sterling career of over 24 years with Wipro, Anand Sankaran, currently Senior Vice President for Global Infrastructure Services and Wipro Infotech, has decided to pursue a career outside of Wipro. Anand has played a significant role in growing these businesses and Wipro thanks Anand for his contribution and wishes him the very best in his future endeavors, Wipro said in a statement.
Infosys fell 0.77%.
But, TCS rose 0.97%.
Shares of three PSU OMCs rose as rupee firmed up against the dollar. BPCL (up 2.38%), Indian Oil Corporation (up 1.68%) and HPCL (up 0.76%), edged higher. A strong rebound in rupee against the dollar recently has eased concerns of higher cost of crude oil imports. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
Most shares of power generation and power distribution companies edged lower. GVK Power & Infrastructure, Tata Power Company, NHPC, NTPC, Adani Power, Power Grid Corporation of India, and JSW Energy shed 0.25% to 2.53%.
Capital goods pivotals were mixed. L&T fell 0.97%. Bhel rose 0.14%.
FMCG major Hindustan Unilever (HUL) extended recent losses triggered by its parent company Unilever Plc issuing a warning early this week that it now expects underlying sales growth of just 3% to 3.5% in the period as against estimates of 6% as a slowdown in its emerging markets accelerated in the July-September quarter. The stock was off 0.21%.
Unilever attributed the emerging markets slowdown to a significant currency weakening. Unilever said developed markets remained 'flat to down,' representing no change to its previous forecast.
In April-June quarter, Unilever had reported underlying sales growth of 5% with volume growth of 3%, while Hindustan Unilever's (HUL) domestic consumer business grew at 7% with 4% underlying volume growth.
Shares of PSU banks reversed intraday gain while most two-wheeler makers and consumer durables makers rose after the finance ministry on Thursday, 3 October 2013, said that the government will provide additional amount of capital to state-run banks (PSU banks) to enable them to lend to borrowers in selected sectors such as two wheelers, consumer durables etc., at lower rates in order to stimulate demand. While this will bring relief to the consumers, especially the middle class, it is also expected to give a boost to capacity addition, employment and production, the finance ministry said in a statement. This decision is based on the discussions between Dr. Raghuram Rajan, Governor, Reserve Bank of India (RBI), and the Union Finance Minister, Mr. P. Chidambaram. At the end of September 2013, growth of gross bank credit stood at about 18%, year-on-year. However, credit growth is sluggish in some sectors leading to the conclusion that demand in these sectors remains subdued, the finance ministry said. It may be recalled that in the Union Budget for 2013-14, a sum of Rs 14000 crore was provided for capital infusion in PSU banks. This amount will be enhanced sufficiently, the finance ministry said.
Among two-wheeler makers, Hero MotoCorp (up 0.13%) and TVS Motor Company (up 8.81%), gained. Bajaj Auto fell 0.03%.
Among PSU bank stocks, State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank declined 0.03% to 0.95%.
Among consumer durables makers, Hitachi Home & Life Solutions (India), Blue Star, Panasonic Appliances India Company and Whirlpool of India rose 0.21% to 4.23%.
Sun Pharmaceutical Industries rose 0.01% to Rs 600.60 after hitting record high of Rs 609.70 in intraday trade. The company, through its subsidiary, announced the formation of a joint venture with Intrexon Corporation after market hours on Tuesday, 1 October 2013, to develop controllable gene-based therapies for the treatment of ocular diseases that cause partial or total blindness in millions of people worldwide. Initial targets are dry age-related macular degeneration (AMD), glaucoma and retinitis pigmentosa. The joint venture will leverage Sun Pharma's global capabilities and experience in developing and manufacturing complex dosage forms and specialty pharmaceuticals for niche therapy areas. Intrexon and Sun Pharma will share in both the financing of, and the revenues from, the joint venture.
Through an Exclusive Channel Collaboration (ECC), the joint venture will have access to Intrexon's full suite of proprietary synthetic biology technologies, including the RheoSwitch Therapeutic System (RTS) platform. RTS is a clinically validated method for controlling the location, concentration and timing of protein expression. RTS may address a long-standing limitation of current approaches by enabling patients to receive a targeted biologic therapy without having to endure a lifetime of injections. In addition to the initial targets, the companies intend to further expand the future pipeline of targeted ocular diseases to potentially include wet AMD, macular edema, non-infectious uveitis and diabetic retinopathy.
Shares of ONGC fell 0.62%. Oil India gained 1.4%. Videocon Industries fell 0.17%, with the stock reversing intraday gain. The Cabinet Committee on Economic Affairs has approved the proposal of the Ministry of Petroleum and Natural Gas to authorize ONGC Videsh (OVL) and Oil India (OIL) to acquire 20% Participating Interest (PI) in Rovuma Area 1 Offshore Block in Mozambique (Area 1). The transaction comprises acquisition of 100% of shares in Videocon Mozambique Rovuma 1, the company holding a 10% PI in Area 1, from Videocon Mauritius Energy, a subsidiary of Videocon Industries, jointly by OVL and OIL for $2.475 billion. Closing is expected before 31st December 2013. The transaction includes acquisition of another 10% PI in Area 1 from Anadarko Mozambique Area 1 Limitada, a subsidiary of Anadarko Petroleum Corporation solely by OVL for $2.64 billion, with closing in February, 2014.
Area 1 covers approximately 2.6 million acres in the deep-water Rovuma Basin and the acquisition would mark the entry of OVL and OIL into the largest gas discovery in offshore East Africa with estimated recoverable resources of 35 to 65 trillion cubic feet (tcf). Partners in Area 1 include Anadarko, operator of the project, BNT-T (National Oil Company of Mozambique), Mitsui (Japan), BPRL (Subsidiary of BPCL), Videocon and PTTEP (National Oil Company of Thailand). Area 1 has the potential to be one of the world's largest LNG producing hubs as discovered gas resources are to be monetized through the construction of a LNG hub in Mozambique. It is also ideally suited to supply LNG to India at a competitive price due to its location. Participation of OVL and OIL in the project will facilitate access of LNG to the growing Indian gas market. As the asset is near to India the shipping cost would be low compared to other LNG sources from the USA, Canada and Russia.
The resource accretion from this acquisition for 20% PI would be around 10 tcf which is about 20% of India's present proven gas reserves, and is consistent with the strategic objective of OVL and OIL of adding high quality international assets to their existing E&P portfolio.
Jet Airways (India) fell 0.54%, with the stock reversing intraday gain. The Cabinet Committee on Economic Affairs on Thursday gave its approval to the proposal of Etihad Airways PJSC, United Arab Emirates for subscribing 2.72 crore equity shares of Rs 10 each of Jet Airways (India) amounting to 24% of the post issue paid up equity share capital for an amount not exceeding Rs 2057.66 crore. The Foreign Investment Promotion Board (FIPB) has recommended the proposal. The approval would result in foreign investment amounting to Rs 2057.66 crore in the country.
Index heavyweight and cigarette maker ITC rose 0.58% to Rs 340.40. The stock hit high of Rs 341.90 and low of Rs 335.20.
Another index heavyweight Reliance Industries gained 0.7%.
Metal stocks edged higher in choppy trade. Tata Steel (up 1.05%), Sail (up 0.27%), Hindalco Industries (up 2.3%), JSW Steel (up 1.7%) and Bhushan Steel (up 0.04%), gained.
But, Jindal Steel & Power fell 1.64%.
Auto stocks rose on renewed buying. Tata Motors rose 1.7% to Rs 350.65 after hitting record high of Rs 364.70 in intraday trade. The company's British luxury car unit Jaguar Land Rover (JLR) on Wednesday, 2 October 2013, said it has appointed John Edwards into the role of Managing Director of the newly created Individual Products Division with immediate effect. The new division will be responsible for designing and creating a portfolio of brand extending products, ranging from high value halo vehicles to lifestyle merchandise products. In his new role, John will be responsible for the company's 'Engineered To Order' division, accessories, licensing & merchandise activities, vehicle operations and heritage vehicles across both brands, JLR said in statement.
M&M rose 0.98%
Ashok Leyland gained 3.99% on reports the company plans to launch a multi-utility van and a 13-seater passenger carrier. According to media reports, Ashok Leyland plans to roll out this month a multi-utility van named 'Stile' and a 13-seater people mover called 'Dost Express,' two uniquely positioned products that will have no direct competition from the market leader Maruti Suzuki and will help the manufacturer build its light commercial vehicle portfolio in the country.
Reports suggested that the seven-eight seater Stile is expected to be priced at Rs 7.5-9 lakh and targeted at the fleet and taxi operators in major cities. The Dost Express, which is meant for rural areas, could cost about Rs 6 lakh, reports added.
The Stile will be reportedly sold across 130 light commercial vehicle outlets in the northern, southern and western parts of the country while the company is still establishing its network in the east.
Maruti Suzuki India rose 1.19%. The company announced during market hours that production fell 0.55% to 92,140 units in September 2013 over September 2012. The company had said on 1 October 2013 its total sales rose 11.7% to 1.04 lakh units in September 2013 over September 2012. Maruti Suzuki's domestic sales rose 1.8% to 90,399 units in September 2013 over September 2012. Exports surged 180.8% to 14,565 units in September 2013 over September 2012.
Realty stocks gained for the third day in a row. DLF (up 0.01%), D B Realty (up 0.17%), HDIL (up 2.18%), and Unitech (up 1.53%) gained.
Sobha Developers jumped 9.18% after the company said its new sales rose 6.38% to 1 million square feet in Q2 September 2013 over Q2 September 2012. The announcement was made after market hours on Thursday, 3 October 2013.
Sobha Developers said its average price realisation rose 13.07% to Rs 6,304 per square feet in Q2 September 2013 over Q2 September 2012. Sales value grew 19.89% to Rs 632.30 crore in Q2 September 2013 over Q2 September 2012. The company's strategy to diversify into newer markets backed by a consistent launch pipeline has yielded positive results, Sobha said.
Sobha said that the management at the beginning of the fiscal had set a guidance of new sales area of 4.2 msf valued at Rs 2600 crore for the current fiscal (FY 2014). At the end of first half of FY 2014, the company looks poised to achieve the target, having registered new sales area of 1.92 msf valued at Rs 1235 crore, Sobha said in a statement. At the half way mark, despite the existing macroeconomic uncertainties of GDP growth, interest rates and inflation, the company remains hopeful in achieving its guidance for the current fiscal, Sobha added.
Motherson Sumi Systems rose 5.83% to Rs 240.70 after hitting record high of Rs 243.40 in intraday trade.
Shares of Just Dial jumped by the maximum permissible 20% upper limit at Rs 1,027.50.
Activity at Indian services companies shrank at the fastest pace in more than four years last month, a survey showed on Friday, 4 October 2013. The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, slipped from 47.6 in August to 44.6 in September, its weakest since April 2009. That marked its straight third reading below 50, the threshold between growth and contraction. It showed firms were less optimistic about the future and were cutting staff as new business dries up. Services sector accounts for nearly 60% of India's economy. The PMI's new business index fell to 45 in September from 46.6 in August, the weakest reading since February 2009 and the third month running that demand has declined.
An HSBC Markit manufacturing survey released early this week showed that the factory activity shrank for a second month in September.
European shares reversed iniitial losses on Friday, 4 October 2013. Key benchmark indices in France, Germany and UK were up 0.06% to 0.53%.
Asian stocks fell on Friday, 4 October 2013, as concern grew that the US political impasse could lead to the government defaulting on its debt, sparking a recession. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Indonesia fell 0.12% to 0.94%. Taiwan's Taiwan Weighted rose 0.07%. Markets in mainland China are closed till 7 October 2013 for National Day holidays.
The Bank of Japan kept its monetary policy unchanged on Friday following its meeting, and said in an accompanying statement that the economy is recovering moderately. In terms of the inflation outlook, the central bank noted that consumer prices excluding fresh food is in the range of 0.5% to 1%, and that inflation expectations appear to be rising on the whole. The Bank of Japan has set a 2% inflation target, which it aims to reach by 2015.
Trading in US index futures indicated a recovery of US stocks at the opening bell on Friday, 4 October 2013. Trading in US index futures indicated that the Dow could gain 28 points at the opening bell. US index futures rose after House Speaker John Boehner indicated on Thursday that he is willing to work with Democrats to pass an increase in the borrowing limit.
US stocks dropped on Thursday as investors worried that a budget stalemate in Congress would become entangled with much more critical legislation to raise the federal borrowing limit. The standoff between congressional Democrats and Republicans to pass an emergency funding bill, which has led to a third day of a partial US government shutdown, continued with little sign of progress toward a solution. US President Barack Obama said late Thursday he has cancelled plans for a weeklong trip to Asia amid the budget debacle.
The failure of US lawmakers to avert a government shutdown fueled concern they won't be able to agree on raising the nation's $16.7 trillion debt limit later this month. The Treasury Department warned that a federal default could lead to a recession as bad as the 2008 financial crisis or worse. "Not only might the economic consequences of default be profound, those consequences, including high interest rates, reduced investment, higher debt payments and slow economic growth could last for more than a generation," the Treasury said in its report. "In the event that a debt limit impasse were to lead to a default, it could have a catastrophic effect on not just financial markets but also on job creation, consumer spending and economic growth -- with many private-sector analysts believing that it would lead to events of the magnitude of late 2008 or worse, and the result then was a recession more severe than any seen since the Great Depression," the department said.
A report on Thursday showed fewer Americans than forecast filed applications for unemployment benefits last week. Jobless claims rose to 308,000 in the week ended Sept. 28, from a revised 307,000, the Labor Department said. US payrolls data won't be released as scheduled today because of the government shutdown. The department said that an alternative date for the September payrolls report and jobless rate hasn't been scheduled.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on 29-30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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