Key benchmark indices edged higher on the first trading session of the week, with market sentiment boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 17 April 2014. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit record high on intraday basis as well as on closing basis. The Sensex garnered 135.99 points or 0.6%, off close to 30 points from the day's high and up about 130 points from the day's low. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap index rose more than 1%.
Investors are betting that the Bharatiya Janata Party (BJP) led National Democratic Alliance (NDA) will be able to form the next government at the centre with support from some regional parties after Lok Sabha elections which conclude in mid-May this year. Various opinion polls have forecast that the NDA with Narendra Modi as its prime ministerial candidate is leading the race to Parliament. Most opinion polls have forecast that the NDA will be unable to form the government on its own and that it will have to rely on support from smaller regional parties to form the government. A party will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. In mid-April, a poll for the private TV news channel NDTV showed the NDA winning a narrow majority of 275 seats.
The BJP in its Lok Sabha polls manifesto has promised more business-friendly policies if the party comes to power after elections.
Indian stocks edged higher for the second day in a row today, 21 April 2014. From a recent low of 22,277.23 on 16 April 2014, the Sensex has risen 487.60 points or 2.18% in two trading sessions. The Sensex has risen 378.56 points or 1.69% in this month so far (till 21 April 2014). The Sensex has gained 1,594.15 points or 7.52% in calendar year 2014 so far (till 21 April 2014). From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 5,316.12 points or 30.46%.
Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged lower in choppy trade after announcing its Q4 results on Friday, 18 April 2014, the day when the stock market was closed on account of Good Friday. Wipro edged lower after announcing revenue guidance for Q1 June 2014 at the time of announcement of its Q4 March 2014 result after market hours on Thursday, 17 April 2014. Shares of PSU OMCs edged higher.
Among metal stocks, Hindustan Zinc dropped after reporting weak Q4 results. Shares of iron ore miner Sesa Sterlite edged higher after Supreme Court today, 21 April 2014, allowed iron ore miners to resume operations in Goa after imposing a ban 18 months ago for environmental breaches.
Key benchmark indices edged higher in early trade after provisional data released by the stock exchanges showed that foreign funds were net buyers of Indian stocks on Thursday, 17 April 2014. The Sensex and the 50-unit CNX Nifty, both, hit their highest level in almost a week. Key benchmark indices moved in a narrow range in positive zone in morning trade. Key benchmark indices retained positive zone in mid-morning trade. A bout of volatility was witnessed as the key benchmark indices recovered from lower level after trimming intraday gains in early afternoon trade. Key benchmark indices retained positive zone in mid-afternoon trade. Immense volatility was witnessed as key benchmark indices trimmed gains in late trade after extending intraday gains.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 17 April 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 434.50 crore from the secondary equity markets on Thursday, 17 April 2014, as per data from Securities & Exchange Board of India. The stock market was closed on Friday, 18 April 2014, on account of Good Friday.
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The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month April 2014 series to May 2014 series. The April 2014 F&O contracts expire on Wednesday, 23 April 2014. The stock market remains closed on Thursday, 24 April 2014, on account of Parliamentary elections in Mumbai constituency.
The S&P BSE Sensex was up 135.99 points or 0.6% to 22,764.83, a record closing high for the index. The index jumped 166.74 points at the day's high of 22,795.58 in late trade, a lifetime high for the barometer index. The index rose 7.91 points at the day's low of 22,636.75 in early trade.
The CNX Nifty was up 38.25 points or 0.56% to 6,817.65, a record closing high for the index. The index hit a high of 6,825.45 in intraday trade, a lifetime high for the index. The index hit a low of 6,786.90 in intraday trade.
The BSE Mid-Cap index was up 58.12 points or 0.79% at 7,397.41. The BSE Small-Cap index was up 103.96 points or 1.38% at 7,627.97. Both these indices outperformed the Sensex.
The S&P BSE IT index (down 0.66%), the S&P BSE Teck index (down 0.18%), the S&P BSE Realty index (down 0.28%), the S&P BSE FMCG index (down 0.39%), the S&P BSE Oil & Gas index (up 0.19%), the S&P BSE Consumer Durables index (up 0.42%), the S&P BSE Power index (up 0.37%), and the S&P BSE Healthcare index (up 0.04%) underperformed the Sensex.
The S&P BSE Capital Goods index (up 2.91%), the S&P BSE Auto index (up 1.33%), the S&P BSE Bankex (up 1.34%), and the S&P BSE Metal index (up 2.23%), outperformed the Sensex.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,761 shares gained and 1,029 shares fell. A total of 107 shares were unchanged.
The total turnover on BSE amounted to Rs 2353 crore, lower than Rs 2957.30 crore on Thursday, 17 April 2014.
Bank stocks extended their recent gains triggered by private sector bank IndusInd Bank reporting strong Q4 results on 16 April 2014. Among private sector banks, Yes Bank (up 4.47%), Federal Bank (up 1.54%), and Axis Bank (up 2.57%), gained.
ICICI Bank rose 1.55% to Rs 1,281.55. The stock hit 52-week high of Rs 1,291.15 in intraday trade.
IndusInd Bank rose 1.42%. The bank's net profit rose 28.83% to Rs 396.05 crore on 23.35% rise in total income to Rs 2702.19 crore in Q4 March 2014 over Q4 March 2013. The result was announced on 16 April 2014. IndusInd Bank said that the bank is targeting 25% to 30% annual loan growth during 2014-17.
HDFC Bank fell 0.27%. HDFC Bank announces its audited financial results for the quarter and year ended 31 March 2014 tomorrow, 22 April 2014.
Kotak Mahindra Bank declined 0.11%.
Among PSU bank stocks, State Bank of India (SBI) (up 2.62%), Canara Bank (up 1.87%), Union Bank of India (up 1.58%), Bank of India (up 3.64%), Bank of Baroda (up 1.82%) and Punjab National Bank (up 3.24%) gained.
Reliance Industries (RIL) fell 0.24% to Rs 956.45. The stock was volatile. The stock hit a high of Rs 970 and low of Rs 956. RIL on Friday, 18 April 2014, said its net profit rose 0.8% to Rs 5631 crore on 12.9% growth in turnover to Rs 97807 crore in Q4 March 2014 over Q4 March 2013. RIL's non-operational income dropped 9.22% to Rs 2036 crore in Q4 March 2014 over Q4 March 2013.
RIL's net profit rose 2.2% to Rs 5631 crore on 8.1% decline in turnover to Rs 97807 crore in Q4 March 2014 over Q3 December 2013. RIL's non-operational income dropped 11.67% to Rs 2036 crore in Q4 March 2014 over Q3 December 2013.
RIL's gross refining margin (GRM) dropped to $9.3 a barrel in Q4 March 2014, from $10.1 a barrel in Q4 March 2013. The GRM, however, rose on sequential basis from $7.6 a barrel in Q3 December 2013.
RIL's net profit rose 4.7% to a record Rs 21984 crore on 8.1% growth in turnover to a record Rs 401302 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013). Non-operational income rose 11.72% to Rs 8936 crore in FY 2014 over FY 2013. RIL said that the increase in non-operational income in FY 2014 was mainly on account of higher liquid investments.
The company's outstanding debt as on 31 March 2014 was Rs 89968 crore, higher than Rs 72427 crore as on 31 March 2013. RIL had cash and cash equivalents of Rs 88190 crore as on 31 March 2014. These were in bank deposits, mutual funds, CDs and Government securities/bonds.
The net addition to fixed assets for the year ended 31 March 2014 was Rs 35210 crore including exchange rate difference capitalization. Capital expenditure was principally on account of ongoing expansions projects in the petrochemicals and refining business at Jamnagar, Dahej, Silvassa and Hazira, RIL said in a statement.
RIL's consolidated net profit rose 7.7% to Rs 22493 crore on 9.3% growth in revenue to Rs 446339 crore in FY 2014 over FY 2013.
Commenting on the company's financial performance, Mukesh D. Ambani, Chairman and Managing Director, RIL said: "FY 2013-14 was a satisfying year for RIL. Refining business delivered the highest ever profits with a sharp recovery in GRMs towards the end of the year. Petrochemical earnings grew sharply with margin expansion across polymers and downstream polyester products. While we continue to face technical challenges in growing domestic upstream production, the US shale gas business grew significantly during the year and has become a material contributor to our earnings. Retail business has turned around and is now India's largest retail chain. We have also accelerated efforts to roll-out our state-of-the-art 4G services across the country which will add an exciting new dimension to our consumer facing service offerings".
In a separate announcement, RIL before market hours today, 21 April 2014, said that its telecom unit Reliance Jio Infocomm (Reliance Jio) has signed a tower sharing agreement with ATC India, one of the leading independent tower companies in India. Under the agreement, Reliance Jio would utilize the telecom tower infrastructure of ATC India to launch its services across the country, RIL said. ATC has a portfolio of 11,000 towers in India.
Sanjay Mashruwala, Managing Director, Reliance Jio said: "We at Reliance Jio, want to provide innovative and empowering products, services and content to every Indian. To this end, we are committed to creating a cutting edge network for high speed 4G. Our relationship with ATC will accelerate the rollout of these services across India".
ATC's Chief Operating Officer, B. Ramanand said: "There is considerable pent up demand for data and 4G has tremendous growth potential. We, at ATC India, are delighted to offer our countrywide network infrastructure to help Reliance Jio in its aggressive nationwide roll-out. This master contract recognizes ATC's high level of customer service and operational efficiency. We believe this will strengthen our foothold as the leading independent tower company in India".
In another separate announcement on Sunday, 20 April 2014, RIL said that its synthetic rubber business group -- Relflex Elastomers -- inaugurated a elastomers customer support center (ECSC) at its petrochemicals complex in Vadodara. This initiative is in line with RIL's endeavor to become not only a significant synthetic rubber supplier but also to provide intangible technical support to its customers and play a catalytic role in helping them grow their business, increase value additions and reduce import dependence, RIL said in a statement.
Relflex ECSC would serve as a springboard for mutual collaborative efforts, value additions and joint product development between Relflex Elastomers and its customers. The facility will service tyre as well non tyre industry. Reliance Elastomer supplies polybutadiene rubber (PBR) to the tyre industry and enjoys excellent relationship with Indian tyre manufacturers across all segments, RIL said.
PSU OMCs were in demand. BPCL (up 3.31%), HPCL (up 2.17%) and Indian Oil Corporation (up 0.49%) gained.
Hindustan Zinc shed 0.04% to Rs 131.55. The stock turned volatile after declaring result during trading hours today, 21 April 2014. The stock hit high of Rs 134 and low of Rs 129.75.
Hindustan Zinc's net profit fell 13.14% to Rs 1881.20 crore on 1.81% decline in total income to Rs 4231.34 crore in Q4 March 2014 over Q4 March 2013. The decline in Q4 revenue was mainly due to no sale of MIC and lower silver sales, partly offset by rupee depreciation, Hindustan Zinc said in a statement. EBITDA declined 18% in Q4 March 2014 over Q4 March 2013, mainly due to lower volume and metal prices, Hindustan Zinc said in a statement.
Hindustan Zinc's net profit rose 0.07% to Rs 6904.62 crore on 5.66% growth in total income to Rs 15535.43 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
The revenue growth during FY 2014 was driven by higher zinc sales volume and premium supported by rupee depreciation, partially offset by lower metal prices. EBITDA rose 7% to Rs 6974 crore in FY 2014 over FY 2013. The increase in EBITDA was driven by higher integrated metal volumes and rupee depreciation, partially offset by lower metal prices, Hindustan Zinc said in a statement.
Commenting on the company's financial performance, Mr. Agnivesh Agarwal, Chairman, Hindustan Zinc said, We achieved record production and mine development in a year, which marked the beginning of our transition from open cast to underground mining at Rampura Agucha. We continue to maintain our cost leadership and create value for our shareholders.
As on 31 March 2014, the company had cash and cash equivalents of Rs 25535 crore, out of which Rs 20527 crore was invested in debt mutual funds, Rs 1977 crore in bonds and Rs 3020 crore were in fixed deposits with banks. The company follows a conservative investment policy and invests in high quality debt instruments, Hindustan Zinc said in a statement.
Throwing light on its expansion projects, Hindustan Zinc said that the Kayad and Rampura Agucha underground mine projects commenced commercial production during the year and after initial difficulties, are now ramping up well. Sindesar Khurd expansion project is ahead of schedule, the company said. During the year, total mine development increased by over 75%, marking the beginning of transition from open-cast to underground mining, Hindustan Zinc said in a statement.
Capital expenditure is expected to be around $250 million in FY 2015, Hindustan Zinc said in a statement.
With regard to its future business outlook, Hindustan Zinc said that Rampura Agucha will continue to provide majority of mined metal in FY 2015. The Rampura Agucha underground mine is now starting to ramp up in line with expectation. In FY 2015, mined metal and integrated refined metals production including silver is expected to be marginally higher from FY 2014, the company said. The cost of production is expected to remain stable, Hindustan Zinc said in a statement.
Shares of iron ore miner Sesa Sterlite edged higher after Supreme Court today, 21 April 2014, allowed iron ore miners to resume operations in Goa after imposing a ban 18 months ago for environmental breaches. The stock rose 3.87%. The state can produce a maximum 20 million metric tonnes of iron ore a year, a three-judge Supreme Court panel headed by Justice A.K. Patnaik said in its order today, 21 April 2014. The limit will cut output to the lowest since the year ended 31 March 2005. The court asked a panel to submit an environmental impact report in six months and give its assessment on increasing the output limit. All mining in the state after 2007 is deemed illegal, the court said in its order. It ordered that 10% of the ore sale proceeds be used for welfare programs and asked the Goa government to prepare a report on how it plans to use the fund.
NMDC rose 1.21%. The company said after market hours that the Government of India has appointed Shri Narendra Kothari, CEO, SAIL as Chairman-cum-Managing Director (CMD) on the board of NMDC for a period of five years with effect from the date of assumption of charge of the post or till the date of his superannuation or until further orders, whichever is earlier. In terms of the above Government Order, Shri Narendra Kothari has assumed charge of the post of CMD of NMDC on 21 April 2014.
Tata Power Company declined 0.3% to Rs 83.45. The company after market hours today, 21 April 2014, said its rights issue has been oversubscribed 1.96 times, wherein the company collected an amount of Rs 3916.41 crore on application. The company had offered up to 33.22 crore shares of face value of Rs 1 each at a price of Rs 60 per share for an amount aggregating Rs 1993.38 crore on a rights basis to the existing shareholders.
Tech Mahindra rose 0.17%. Tech Mahindra before market hours today, 21 April 2014, said that the company has entered into an agreement to acquire 75% stake in Fix Stream Networks Inc., (FSNI), a technology startup company subject to necessary regulatory approvals, at a consideration of $10 million. FSNI is going to develop emerging technology which will benefit Tech Mahindra's customer base, the company said in a statement.
Tata Consultancy Services (TCS) rose 0.14%. TCS before market hours today, 21 April 2014, announced that it has signed definitive agreements with Mitsubishi Corporation (MC), one of Japan's largest integrated business enterprises to merge ICS Japan, ITF and NTSC. TCS will hold 51% in the merged entity, MC to hold 49%. The merged entities to be operational from July 2014.
Commenting on the transaction N Chandrasekaran, CEO and Managing Director, TCS, said: "This strategic transaction signifies our serious commitment to the Japan market. TCS will now have the scale, strong local presence and our full range of global capabilities to serve the Japanese corporations effectively and accelerate our growth in Japan market. He added: "We deeply value the partnership with Mitsubishi Corporation and look forward to leveraging our mutual strengths in the Japan market."
The transaction will create a new IT Services company of significant scale in the Japanese market. ITF brings its long standing relationships with Japanese corporations, talented workforce and competencies in industries like retail, distribution and trading. This will complement TCS' deep domain knowledge, technology expertise and strong execution track record. TCS' Global Network Delivery Model (GNDM) capabilities will also enable the Japanese corporations' globalization ambitions. The company will provide tremendous additional value to clients in Japan; while employees will secure the advantages of building their careers in a global organization, TCS said in a statement.
Wipro lost 6.93% to Rs 545. Wipro's consolidated net profit from continuing operations surged 41% to Rs 2230 crore on 22% growth in revenue from continuing operations to Rs 11700 crore in Q4 March 2014 over Q4 March 2013. The results are as per International Financial Reporting Standards (IFRS). The result was announced after market hours on Thursday, 17 April 2014.
Non-GAAP adjusted net profit from continuing operations rose 42% to Rs 2230 crore in Q4 March 2014 over Q4 March 2013.
IT Services revenue in rupee terms rose 24% to Rs 10620 crore in Q4 March 2014 over Q4 March 2013. IT Services earnings before interest and tax (EBIT) rose 51% to Rs 2610 crore in Q4 March 2014 over Q4 March 2013. IT Services operating margins improved 150 basis points (bps) sequentially to 24.5% in Q4 March 2014.
Wipro's consolidated net profit from continuing operations rose 27% to Rs 7800 crore on 16% growth in revenue from continuing operations to Rs 43760 crore in the year ended 31 March 2014 (FY 2014) over the year ended 31 March 2013 (FY 2013).
Non-GAAP adjusted net profit from continuing operations rose 28% to Rs 7800 crore in FY 2014 over FY 2013.
IT Services revenue in rupee terms rose 18% to Rs 39950 crore in FY 2014 over FY 2013. IT Services EBIT rose 29% to Rs 9030 crore in FY 2014 over FY 2013. IT Services operating margins expanded 195 bps to 22.6% in FY 2014.
Commenting on the company's financial performance, Azim Premji, Chairman of Wipro said: "The steady improvement in global economy, coupled with the exciting pace of technological advancements, presents us with opportunities to create innovative solutions to help our customers differentiate, compete and succeed in their respective markets".
T K Kurien, Executive Director & Chief Executive Officer of Wipro said: "Our focus on process simplification, automation and platform-based delivery continues to deliver results and we are seeing the benefits through improved productivity, reduced timelines in execution and greater business agility. It is also gratifying to see that this focus has enabled improved win ratios and has also enhanced customer satisfaction".
Suresh Senapaty, Executive Director & Chief Financial Officer of Wipro said: "We continue to systematically work on improving our operational efficiencies resulting in expansion of full year IT Services operating margins by 195 basis points".
Wipro has given a forecast of between 0.3% decline to a growth of 2.02% in revenue from IT Services business at between $1.715 billion to $1.755 billion in Q1 June 2014 over Q4 March 2014.
Maruti Suzuki India gained 2.16% to Rs 1,988.35 after hitting record high of Rs 1,999.30 in intraday trade.
In the foreign exchange market, the rupee edged lower against the dollar on the back of dollar demand from oil importers. The partially convertible rupee was hovering at 60.60, compared with its close of 60.29/30 on Thursday, 17 April 2014. The foreign exchange market was closed on Friday, 18 April 2014, on account of Good Friday.
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 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the upcoming Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude on 12 May 2014. The results will be declared on 16 May 2014 after which India will get a new government. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Key European stock markets were closed on Monday, 21 April 2014, for a holiday.
Mainland Chinese markets led decline in Asian markets on Monday, 21 April 2014. Key benchmark indices in Japan, Indonesia, South Korea and Taiwan were off 0.03% to 0.25%. Singapore's Straits Times rose 0.08%. Markets in Hong Kong, Australia and New Zealand were closed for a holiday.
China's Shanghai Composite Index (SHCOMP) dropped 1.52%, its biggest decline since 10 March 2014, amid concern initial public offerings will draw funds away from existing equities.
Japan's trade deficit widened to 1.45 trillion yen ($14.1 billion) in March, from 802.5 billion yen the previous month, the Ministry of Finance said today, 21 April 2014.
Trading in US index futures indicated that the Dow could advance 15 points at the opening bell on Monday, 21 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 decided after the conclusion of a monetary policy review to trim its monthly bond purchases by $10 billion to $55 billion.
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