Key benchmark indices fell for second day in a row as Asian and European stocks fell on concerns US monetary policy will soon become less accommodative after two Federal Reserve officials on Tuesday, 6 August 2013, said a reduction in Fed's asset purchases is likely later this year. The market was volatile. The S&P BSE Sensex settled at 6-week low. The CNX Nifty finished at its lowest level in more than 17 weeks. The Sensex lost 68.16 points or 0.36%, up 113.53 points from the day's low and off 146.58 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
Indian stocks fell for second day in a row today, 7 August 2013. The Sensex has lost 517.38 points or 2.7% in two trading days from a recent high of 19,182.26 on Monday, 5 August 2013. Indian stocks had slumped on Tuesday, 6 August 2013, as better-than-expected US service industries data fueled speculation the US Federal Reserve will reduce stimulus to the US economy soon. The Sensex has declined 761.83 points or 3.92% in calendar 2013 so far (till 7 August 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,778.74 points or 8.7%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has surged 1,414.08 points or 8.2%.
Coming back to today's trade, Tata Power Company recovered after Tuesday's steep losses triggered by the company reporting reverse turnaround in Q1. L&T hit 52-week low. Lupin declined after reporting strong Q1 results. Index heavyweight Reliance Industries (RIL) gained. Another index heavyweight and cigarette maker ITC declined. Tata Motors declined in choppy trade after weak Q1 result.
Metal and mining stocks gained in choppy trade. NMDC shrugged off weak Q1 result. Auto stocks declined. Realty stocks edged higher on bargain hunting after recent steep losses.
The rupee dropped amid high intraday volatilty after two Federal Reserve officials on Tuesday, 6 August 2013, said a reduction in Fed's asset purchases is likely later this year. The partially convertible rupee was hovering at 61.30, weaker than its close of 60.77/78 on Tuesday, 6 August 2013. The rupee had staged a strong intraday rebound on Tuesday after hitting record low of 61.80.
The S&P BSE Sensex lost 68.16 points or 0.36% to settle at 18,664.88, its lowest closing level since 26 June 2013. The index fell 181.69 points at the day's low of 18,551.35 in mid-morning trade. The index rose 78.42 points at the day's high of 18,811.46 in late trade.
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The CNX Nifty was down 23.15 points or 0.42% to 5,519.10, its lowest closing level since 9 April 2013. The index hit a low of 5,486.85 in intraday trade. The index hit a high of 5,561.45 in intraday trade.
The total turnover on BSE amounted to Rs 1874 crore, higher than Rs 1682.11 crore on Tuesday, 6 August 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,248 shares rose and 1,043 shares fell. A total of 101 shares were unchanged.
The BSE Mid-Cap index rose 0.67% and the BSE Small-Cap index gained 1.27%. Both these indices outperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE Bankex (up 0.51%), the S&P BSE Consumer Durables index (up 1.04%), the S&P BSE PSU index (up 2.40%), the S&P BSE Oil & Gas index (up 2.76%), the S&P BSE Power index (up 2.82%), the S&P BSE Metal index (up 3.31%), the S&P BSE Realty index (up 5.04%) outperformed the Sensex.
The S&P BSE IT index (down 1.60%), the S&P BSE Auto index (down 1.46%), the S&P BSE FMCG index (down 1.37%), the S&P BSE Teck index (down 1.16%), the S&P BSE Capital Goods index (down 0.48%), the S&P BSE Healthcare index (down 0.40%) underperformed the Sensex.
Among the 30-share Sensex pack, 16 stocks fell and rest of them rose.
Index heavyweight and cigarette maker ITC dropped 2.51%.
Emami lost 3.92%. The company's consolidated net profit surged 30.18% to Rs 60.68 crore on 12.7% growth in total income to Rs 398.77 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours today, 7 August 2013.
Shalimar Paints lost 2.01% after net profit fell 41.85% to Rs 1.82 crore on 10.81% decline in total income from operations to Rs 109.20 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced after market hours on Tuesday, 6 August 2013.
Index heavyweight Reliance Industries (RIL) rose 3.28% to Rs 868.
Oil and Natural Gas Corporation (ONGC) rose 1.7% after two foreign brokerage firms upgraded the state-run refiner, citing attractive valuation and upside to earnings.
IT stocks reversed initial gains. Wipro shed 0.73%. HCL Technologies dropped 4.6%.
Infosys fell 0.67%. The company announced during market hours today, 7 August 2013, the launch of the latest version of its Finacle wealth management solution. The new offering from Finacle allows banks to quickly introduce new products and services, such as financial planning and investment products, along with traditional retail banking services.
IT major TCS fell 2.86% to Rs 1,817, with the stock reversing direction after hitting a record high of Rs 1,890.30 in intraday trade today, 7 August 2013. The company announced during market hours today, 7 August 2013, the successful deployment of its core banking solution TCS BaNCS at Panzhihua (PZH) Commercial Bank, China, in a record time of 10 months. To date, TCS BaNCS has won 16 core banking deals in Greater China.
Cognizant on Tuesday said it had earned a profit of $300 million for the June quarter, beating street expectations and surpassing its own guidance. The profit is up 5.7% sequentially and 19.2% compared to the year-ago quarter. The revenue stood at $2.16 billion, up 7% quarter on quarter and 20.4% compared to the same quarter a year ago. Teaneck, New Jersey-based Cognizant, which has most of its employees in India, said it expects 2013 earnings of at least $3.96 per share on revenue growth of at least 19% to $8.74 billion. It had previously forecast earnings of at least $3.95 per share on revenue growth of at least 17% to $8.60 billion.
Metal stocks gained in choppy trade. Sterlite Industries (up 4.2%), Sesa Goa (up 4.16%), Jindal Steel & Power (up 3.94%), Bhushan Steel (up 0.24%), Hindustan Zinc (up 2.2%) and JSW Steel (up 1.17%), gained.
Steel major Tata Steel gained 4.83% to Rs 208.20, with the stock reversing direction after hitting a 52-week low of Rs 195.40 in intraday trade today, 7 August 2013.
Sail rose 0.92% to Rs 38.50, with the stock reversing direction after hitting a 52-week low of Rs 37.65 in intraday trade today, 7 August 2013.
Hindalco Industries rose 0.99% to Rs 86.40, with the stock reversing direction after hitting a 52-week low of Rs 83.05 in intraday trade today, 7 August 2013.
Hindustan Copper jumped 18.79% to Rs 56.90
NMDC jumped 5.48% after Q1 result. The company's net profit fell 17.51% to Rs 1572.19 crore on 0.02% decline in total income to Rs 3391.53 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 7 August 2013.
NMDC's selling expenses including freight jumped 706.28% to Rs 291.07 crore in Q1 June 2013 over Q1 June 2012. During Q1 June 2013, the company exported 4.92 lakh tons (against nil in Q1 June 2012) due to which the selling expenditure on exports has gone up by Rs 255 crore. Further, on account of the Supreme Court judgment dated 18 April 2013 on illegal mining cases at Karnataka, 10% of sale proceeds of Donimalai sector amounting to Rs 66 crore (previous corresponding period nil) has been accounted in other expenses in the current quarter, towards contribution of Special Purpose Vehicle to be formed in Karnataka.
NMDC's total outgo under the head 'other expenses' spurted 124.52% to Rs 212.49 crore in Q1 June 2013 over Q1 June 2012.
L&T lost 1.96% to Rs 779.75 after hitting a 52-week low of Rs 771.35 in intraday trade today, 7 August 2013.
Bank stocks were mixed. ICICI Bank shed 0.13%.
HDFC Bank declined 1.26%. The private sector bank has increased the minimum interest rate it charges to borrowers or the base rate by 20 basis points to 9.8% with effect from 3 August 2013.
State Bank of India advanced 4.4% to Rs 1,712.90. The stock had hit a 52-week low of Rs 1,633.15 in intraday trade on Tuesday, 6 August 2013.
PTC India Financial Services tumbled 4.27% as the stock turned ex-dividend today, 7 August 2013, for dividend of 40 paise per share for the year ended 31 March 2013.
Auto stocks declined. M&M (down 1.74%), Maruti Suzuki India (down 0.45%), Bajaj Auto (down 2.18%), and Hero MotoCorp (down 0.74%), edged lower.
Tata Motors declined 2.96% to Rs 278.85 on weak Q1 result. Nevertheless, the stock trimmed losses after tumbling 5.16% at the day's low of Rs 272.50 soon after the result hit the market in late trade. The company's consolidated net profit fell 23.11% to Rs 1726 crore on 8% growth in revenue (net of excise) to Rs 46785 crore in Q1 June 2013 over Q1 June 2012. The company said that strong demand, growth in volumes, richer product mix and favourable foreign exchange movement at Jaguar Land Rover (JLR) helped offset weak operating environment in Tata Motors' standalone business.
JLR's revenues grew 12.6% to GBP 4097 million in Q1 June 2013 over Q1 June 2012. JLR's operating profit jumped 28.1% to GBP 675 million in Q1 June 2013 over Q1 June 2012, reflecting wholesales volume increase, favourable exchange rate, richer product mix supported by the launch of all-new Range Rover and F-TYPE, Tata Motors said. JLR's profit before tax jumped 24.6% to GBP 415 million in Q1 June 2013 over Q1 June 2012, due to higher operating profit partially offset by higher depreciation and amortisation as well as higher finance expense, net of more favourable exchange revaluation. JLR's profit after tax (PAT) jumped 28.8% to GBP 304 million in Q1 June 2013 over Q1 June 2012. JLR financials are as per International Financial Reporting Standards (IFRS).
Tata Daewoo Commercial Vehicles Co. registered net revenues of South Korean Won (KRW) 240 billion and recorded profit after tax of KRW 8 billion in the quarter ended 30 June 2013.
Bosch rose 1.6% after net profit rose 1.7% to Rs 251.68 crore on 5.2% increase in net sales to Rs 2269.19 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 6 August 2013. Bosch's profit before tax (PBT) increased by 7.1% to Rs 366 crore in Q1 June 2013 over Q1 June 2012. Exports increased by 14% during the period under review.
Tata Power Company jumped 7.78% to Rs 76.90, with the stock reversing intraday losses. The stock came off the day's low of Rs 68.60. The scrip had tumbled 14.76% in a single trading session on Tuesday, 6 August 2013, after the company reported reverse turnaround in Q1. The stock had hit 52-week low of Rs 68.25 in intraday trade on Tuesday. The company reported a consolidated net loss of Rs 114.70 crore in Q1 June 2013, compared with net profit of Rs 145.93 crore in Q1 June 2012. The company's total income rose 24.53% to Rs 9111.57 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours on Tuesday, 6 August 2013.
Tata Power said that the company's performance at the operational front was strong in Q1 June 2013. The company said net loss in Q1 June 2013, as against net profit in Q1 June 2012 was due to higher forex loss on realignment of liabilities due to weakening of rupee against the dollar and due to higher finance cost related to the Mundra ultra mega power project (UMPP). Tata Power said that Central Electricity Regulatory Commission (CERC) has notified Coastal Gujarat Power (CGPL) which is the special purpose vehicle which operates the 4,000 megawatts Mundra UMPP of its decision for a compensatory tariff to be paid till the fuel situation stabilizes. CERC has set up a committee to evaluate the decision. Tata Power said that this decision of CERC is an important step in resolving the major impasse affecting imported coal based power plants in the country. Tata Power said that CGPL has approached regulatory authorities to seek tariff revision and it is eagerly awaiting early resolution.
Lupin lost 7.03% to Rs 823. The company's consolidated net profit rose 43.03% to Rs 401.06 crore on 9.1% growth in net sales to Rs 2420.70 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 7 August 2013. The earnings before interest, taxation, depreciation and amortization (EBITDA) jumped 43.5% to Rs 690.50 crore in Q1 June 2013 over Q1 June 2012. EBITDA margin expanded to 28.5% of net sales in Q1 June 2013, from 21.7% in Q1 June 2012.
Commenting on the results, Dr. Kamal K. Sharma, Managing Director, Lupin, said, "We have had a good quarter fuelled by strong business performance in the US as well as improved operational efficiencies that have led to stronger margins. We continue on the road to growth in EBIDTA."
During the period under review, Lupin's revenue expenditure on R&D stood at 8.1% of net sales at Rs 195.60 crore. Lupin's debt-equity ratio as on 30 June 2013 was 0.07.
Earlier during the day, Lupin announced that it has signed a strategic licensing agreement with US pharmaceutical company Romark Laboratories, L.C. (Romark) which grants Lupin exclusive rights to promote, distribute and market Alinia (nitazoxanide) for Oral Suspension in the US. Alinia (nitazoxanide) is the first thiazolide approved by the USFDA for the treatment of diarrhea caused by Cryptosporidium and Giardia and is the only USFDA-approved treatment for Cryptosporidium. Alinia for Oral Suspension is indicated for the treatment of diarrhea caused by Giardia lamblia or Cryptosporidium parvum in patients 1 year of age and older. These are the two most common protozoal causes of diarrhea in the developed and developing world, Lupin said.
Ranbaxy Laboratories rose 4.58%. The company after market hours today, 7 August 2013, reported consolidated net loss of Rs 524.24 crore in Q2 June 2013, lower than net loss of Rs 585.72 crore in Q2 June 2012. Total income fell 18.32% to Rs 2718.83 crore in Q2 June 2013 over Q2 June 2012.
Cadila Healthcare rose 0.09%. The company after market hours today, 7 August 2013, reported 0.42% rise in consolidated net profit to Rs 195.62 crore on 2.84% rise in total income to Rs 1649.58 crore in Q1 June 2013 over Q1 June 2012.
Apollo Hospitals Enterprise dropped 4.29%. The company after market hours today, 7 August 2013, reported 13.19% rise in net profit to Rs 78.94 crore on 15.32% rise in total income to Rs 901.20 crore in Q1 June 2013 over Q1 June 2012.
Sun Pharmaceuticals Industries declined 2.11%. The company unveils Q1 results on Friday, 9 August 2013.
Cipla declined 0.34%.
Wockhardt was locked at 5% lower circuit at Rs 362.25, also its 52-week low, with the stock extending its steep recent slide.
Dr Reddy's Laboratories rose 2.15%.
Strides Arcolab jumped 17.35% after the finance ministry on Tuesday, 6 August 2013, said that the government has kept in abeyance decision on Strides Arcolab's proposal to sell its specialties subsidiary, Agila Specialties to US based Mylan Inc. till DIPP finalizes policy on FDI in brown field pharma projects involving transfer of control. Strides Arcolab had in February 2013 announced the sell of Agila Specialties to Mylan Inc. for a net consideration of about $1.725 billion.
Realty stocks edged higher on bargain hunting after recent steep losses. DLF gained 6.51% to Rs 130.10. The stock had hit a record low of Rs 120.25 in intraday trade on Tuesday, 6 August 2013.
Unitech jumped 14.05%. The company during market hours on Tuesday, 6 August 2013, reported 37.08% rise in consolidated net profit to Rs 62.89 crore on 35.13% rise in total income to Rs 597.67 crore in Q1 June 2013 over Q1 June 2012.
Housing Development and Infrastructure (HDIL) galloped 9.67%. HDIL after trading hours on Tuesday, 6 August 2013, said that the company's promoters have taken a mortgage loan from Indiabulls Housing Finance against their property situated at Goa for their personal use and interest on the loan has not paid. The company further said that promoters have informed the company that they will be clearing the dues shortly and matter is being sorted out and resolved with the lenders.
Shares of HDIL had tumbled 12.23% in a single trading session on Tuesday, 6 August 2013, on media reports that the company's promoters have failed to pay interest accrued on their personal loan from Indiabulls Housing Finance.
Godrej Properties lost 0.08% to Rs 458.30 after the company priced rights issue of equity shares at Rs 325 per share. The rights issue will be the ratio of 8 equity shares for every 29 equity shares held on record date which has been set as 20 August 2013. The company will raise almost Rs 700 crore from the rights issue.
Sun TV Network rose 0.34%. The stock turned ex-dividend, for interim dividend of Rs 2.25 per share for the year ending 31 March 2014.
PTC India rose 1.01%. The stock turned ex-dividend today, 7 August 2013, for dividend of Rs 1.60 per share for the year ended 31 March 2013 (FY 2013).
Opto Circuits (India) jumped 20.95%. The company said on 5 August 2013 that a meeting of the board of directors of the company will be held on 13 August 2013 to consider rights issue. The company will also announce its Q1 results on 13 August 2013.
The government on Tuesday, 6 August 2013, named Dr. Raghuram Rajan as the next Governor of the Reserve Bank of India (RBI) for a term of three years after D Subbarao's tenure ends on 4 September 2013. Rajan, who is currently Chief Economic Adviser in the finance ministry, joined the government last August, having previously been chief economist at the International Monetary Fund and a professor at the University of Chicago.
European shares edged lower on Wednesday, 7 August 2013, after Federal Reserve officials on Tuesday, 6 August 2013, said a reduction in asset purchases is likely later this year. Key benchmark indices in UK, France and Germany were down by 0.03% to 0.77%.
The Bank of England on Wednesday provided explicit forward guidance on the central bank's future monetary policy, saying its key lending rate will remain at a record low of 0.5% until the UK's unemployment rate drops to 7%. Additionally, the Monetary Policy Committee "stands ready to undertake further asset purchases while the unemployment rate remains above 7% if it judges that additional monetary stimulus is warranted," the bank said. It also noted that it doesn't intend to reduce its bond buying until the unemployment rate falls below the 7% threshold.
Most Asian stocks dropped on Wednesday, 7 August 2013, after overnight losses in the US on monetary-policy concerns, with Japan taking an especially heavy hit from gains for the yen. Key benchmark indices in China, Japan, Hong Kong, Taiwan, and South Korea were off 0.67% to 4%. Singapore's Straits Times rose 0.16%.
The Bank of Japan (BoJ) holds two-day policy meet on 7 and 8 August 2013. The BoJ is widely expected to maintain its pledge of increasing the monetary base at an annual pace of about 60 trillion to 70 trillion yen ($600 billion-$700 billion).
Trading in US index futures indicated that the Dow could fall 57 points at the opening bell on Wednesday, 7 August 2013. US stocks extended losses into a second day Tuesday after Fed Bank of Chicago President Charles Evans, who has been among the strongest proponents of the record monetary accommodation in the US said he expects the central bank to begin tapering its asset-purchase program by the end of the year. Separately, Atlanta Fed Bank President Dennis Lockhart said tapering of monetary stimulus, or quantitative easing, could be announced at any of this year's remaining policy meetings.
The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
Data yesterday showed the US trade deficit narrowed more than economists expected in June to the least since October 2009. Separately, job openings rose to 3.94 million in June from 3.91 million in May, the US Department of Labor reported.
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