RIL hits 52-week high

Key benchmark indices recovered from lower level soon after trimming intraday gains in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 61.38 points or 0.27%, up about 35 points from the day's low and off close to 85 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap and Mid-Cap indices were up more than 1% each. Gains in Asian stocks and overnight upmove in US stocks underpinned sentiment on the domestic bourses.

Index heavyweight and cigarette major ITC slipped. Another index heavyweight Reliance Industries (RIL) rose to hit 52-week high after the company on Tuesday, 1 April 2014, said that the Supreme Court has appointed an international arbitrator in the KG D6 issue. Among auto component makers, Motherson Sumi Systems hit record high. Among other side counters, ABB India and Bharat Forge also hit 52-week high.

Key benchmark indices edged higher and hit fresh record high at the onset of the trading session. The Sensex and the 50-unit CNX Nifty, both, hit fresh record high. Key benchmark indices retained positive zone in morning trade. Key benchmark indices moved in a narrow range in positive terrain in mid-morning trade. Key benchmark indices recovered from lower level soon after trimming intraday gains in early afternoon trade.

The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained net buyers of Indian stocks on Tuesday, 1 April 2014. FIIs bought shares worth a net Rs 385.66 crore on Tuesday, 1 April 2014, as per provisional data from the stock exchanges.

Asian stocks rose on Wednesday, 2 April 2014, as increase in US manufacturing boosted optimism about growth in the world's biggest economy.

At 12:20 IST, the S&P BSE Sensex was up 61.38 points or 0.27% to 22,507.62. The index jumped 145.66 points at the day's high of 22,592.10 in early trade, a record high for the barometer index. The index rose 27.32 points at the day's low of 22,473.76 in early afternoon trade.

The CNX Nifty was up 18.85 points or 0.28% to 6,739.90. The index hit a high of 6,763.50 in intraday trade, a record high for the index. The index hit a low of 6,726.30 in intraday trade.

The BSE Mid-Cap index was up 72.25 points or 1.02% at 7,158.25. The BSE Small-Cap index was up 71.95 points or 1.01% at 7178.67. Both these indices outperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,570 shares gained and 819 shares fell. A total of 114 shares were unchanged.

Among the 30-share Sensex pack, 20 stocks gained and rest of them declined. Tata Motors (up 2.46%) and ICICI Bank (up 1.68%) edged higher from the Sensex pack.

Index heavyweight and cigarette major ITC slipped 3.01% to Rs 341.80. The stock hit high of Rs 352.40 and low of Rs 341.50 so far during the day.

Index heavyweight Reliance Industries (RIL) edged higher after the company on Tuesday, 1 April 2014, said that the Supreme Court has appointed an international arbitrator in the KG D6 issue. The stock was up 1.25% at Rs 952.50. The stock hit 52-week high of Rs 954 in intraday trade. Australia's Justice Mr. James Spigelman will be the third arbitrator and shall be the Chairman of the Arbitration Tribunal, RIL said. The Government of India had opposed the appointment of an international arbitrator, whereas RIL had submitted that the third arbitrator can be an International Arbitrator not being from India, Britain or Canada, where the three stakeholder companies are based. RIL has a 60% stake in the KG D6 block, Britain's BP has a 30% stake and Canada's Niko has a 10% stake.

India's Supreme Court has accepted RIL's argument and appointed Justice Mr. Spigelman, a former Chief Justice of New South Wales in Australia from 1998 to 2011. Poland-born Justice Spigelman has rich experience in the field of corporate affairs, insurance, arbitration and international law, the company said.

According to the Production Sharing Contract (PSC) signed between the Government of India and RIL, the Arbitration Tribunal must comprise three arbitrators. Of these, contractor (RIL, BP and Niko) and the Government of India are allowed to appoint one Arbitrator each, while the third arbitrator must be mutually appointed by both appointed arbitrators. However, the two appointed arbitrators were unable to reach an agreement on the appointment of the third arbitrator and hence RIL had to approach the Supreme Court, the company said.

With the constitution of the Arbitration Tribunal, the path has been cleared for a speedy resolution of various disputes relating to the KG D6 block, RIL said. The dispute arose when the recoverable gas from the field was found to be lesser than the initial estimates. Post this development, the central government had wrongfully sought to disallow recovery of full costs incurred by RIL in the block. As a result, RIL was compelled to proceed with arbitration. But since there was no consensus on the appointment of the third arbitrator, RIL had to approach the Supreme Court, the company said.

Both RIL and the Government of India are bound by the PSC. According to the PSC, any dispute between the parties can be resolved only through the process of arbitration. "We are hopeful that the constitution of the Arbitration Tribunal will silence the vested interest groups which are unreasonably raising this issue across the country," RIL said.

Bharti Airtel rose 2.96%. With reference to a news item appearing in a leading financial daily titled "Bharti plants to raise $2 billion via Bond Issue", Bharti Airtel clarified that the company and/or its subsidiaries keep evaluating opportunities on an ongoing basis to refinance the debt portfolio at efficient cost and maturity. The company further confirms that it has not released any specific information pertaining to the news report and if required, will make necessary disclosures at an appropriate time, Bharti Airtel said.

Coal India declined 1.17%. The company said during market hours that as per provisional basis the actual production of the company and its subsidiary companies was 101% of targeted production at 53.40 million tonnes in March 2014. The actual offtake of the company and its subsidiary companies was 94% of targeted offtake at 44.80 million tonnes in March 2014.

Motherson Sumi Systems rose 4.3% to Rs 267.80 after hitting record high of Rs 277 in intraday trade.

ABB India rose 2.04% to Rs 864.40 after hitting 52-week high of Rs 869.90 in intraday trade

Bharat Forge gained 3.08% to Rs 429.90 after hitting 52-week high of Rs 430.30 in intraday trade

IL&FS Engineering and Construction Company rose 3.97% after the company said it bagged a Rs 176 crore order to construct a luxury residential project in Gurgaon. The company made the announcement after trading hours on Tuesday, 1 April 2014.

IL&FS Engineering and Construction Company said it has received a Letter of Intent (LoI) from Ireo for construction of its luxury residential project 'Gurgaon Hills' located at Sec-02, Gurgaon, Haryana.

The Rs 175.80 crore contract is to be completed in 39 months. The 'Gurgoan Hills' luxury residential project has Six Towers (20 to 26 Storey) with total built-up area of around 1.77 million square feet, according to a statement.

IL&FS Engineering is currently executing building projects worth more than Rs 850 crore in National Capital Region (NCR) for clients that include Emaar MGF Land, Unitech, Ansal Properties & Infrastructure, Parsvnath Developers, and Puri Constructions.

In the foreign exchange market, the rupee edged higher against the dollar as bunched-up dollar inflows and record high domestic shares aided sentiment. The partially convertible rupee was hovering at 59.65, compared with its close of 59.91/92 on Friday, 28 March 2014. Trading in the rupee resumed after a two-day break due to a local holiday and annual closing of bank accounts.

Indian government bond prices dropped on concern demand for existing securities will fall as the government starts its annual borrowing program this week. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.9461%, higher than its close of 8.8035% on Friday, 28 March 2014. Trading in the government bond market resumed after a two-day break due to a local holiday and annual closing of bank accounts.

The next major trigger for the stock market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.

The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on Tuesday, 1 April 2014, to gauge whether the country's high inflation rates are easing back to acceptable levels.

A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

Asian stocks rose on Wednesday, 2 April 2014, as increase in US manufacturing boosted optimism about growth in the world's biggest economy. Key benchmark indices in Hong Kong, South Korea, China, Singapore, Indonesia, Japan and Taiwan were up 0.07% to 1.04%.

Trading in US index futures indicated that the Dow could advance 17 points at the opening bell on Wednesday, 2 April 2014. US stocks rose on Tuesday, 1 April 2014, as consumer and technology shares pushed the Standard & Poor's 500 Index to an all-time high, after an increase in a manufacturing index boosted optimism the economy withstood severe winter weather.

US manufacturing companies expanded in March at a slightly faster pace compared to the prior month, a survey of executives found. The Institute for Supply Management manufacturing index edged up to 53.7%, slightly below the consensus forecasts. Any number over 50% means more companies are seeing an expansion of business instead of a contraction. Separately, the final Markit PMI for the US in March was unchanged at 55.5, down from 57.1 in February. Any reading over 50 in the purchasing managers index indicates growth.

US car sales surged to an annualized rate of 16.4 million in March the highest rate since November.

ADP is due to release US private-sector employment numbers for March 2014 today, 2 April 2014.

The influential US non-farms payroll data for March 2014 will be released this Friday, 4 April 2014.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.

Lawmakers in the US on Tuesday, 1 April 2014, endorsed an aid package for Ukraine.

In Europe, a policy meeting of the Governing Council of the European Central Bank (ECB) will be held tomorrow, 3 April 2014, in Frankfurt to decide euro zone interest rates. ECB President Mario Draghi has consistently reassured listeners that the euro zone isn't heading for deflation, but that the central bank stands ready to act if needed.

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