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Sensex regains positive zone

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Last Updated : Apr 30 2013 | 3:35 PM IST

Key benchmark indices regained positive terrain in mid-afternoon trade after Finance bill was passed in Lok Sabha. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, was up 62.03 points or 0.32%, off about 170 points from the day's high and up close to 130 points from the day's low. Index heavyweight and cigarette major ITC held firm. Index heavyweight Reliance Industries (RIL) edged lower in choppy trade.

FMCG major Hindustan Unilever (HUL) surged over 17% to hit record high after the company's foreign parent Unilever PLC announced open offer to acquire 48.70 crore shares, or 22.52% stake in Hindustan Unilever at substantial premium to the ruling market price. Cement stocks edged lower. Godrej Consumer Products (GCPL) declined after reporting its Q4 results.

The Finance Bill 2013 was passed by Lok Sabha today, 30 April 2013. The bill now go to Rajya Sabha and then to the President for his assent for it to become a law. Finance Minister P Chidambaram today told Lok Sabha that the UPA government never intended to impose any wealth tax on farm land even if it exists in the vicinity of an urban region. Earlier, the minister had proposed to impose 1 percent wealth tax on the value of farm land falling within an 8-kilometre radius of urban areas.

Coming back stocks, the market surged in early trade. The barometer index, the S&P BSE Sensex hit its highest level in 16-1/2 weeks. The 50-unit CNX Nifty hit its highest level in over 17 weeks. The market held firm in morning trade. Key benchmark indices trimmed intraday gains to hit fresh intraday low in mid-morning trade after the Supreme Court said that sharing information by the Central Bureau of Investigation (CBI) with the government on coal block allocation scam has shaken the entire process. Key benchmark indices alternately moved between gains and losses near the flat line in early afternoon trade after Finance bill was tabled in the Lok Sabha. The Sensex regained positive terrain in mid-afternoon trade.

Foreign institutional investors (FIIs) bought shares worth a net Rs 620.38 crore on Monday, 29 April 2013, as per provisional data from the stock exchanges.

At 14:20 IST, the S&P BSE Sensex was up 62.03 points or 0.32% to 19,449.53. The index surged 235.18 points at the day's high of 19,622.68 in early trade, its highest level since 15 March 2013. The index fell 70.12 points at the day's low of 19,317.38 in afternoon trade.

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The CNX Nifty was up 12.65 points or 0.21% to 5,916.75. The index hit a high of 5,962.30 in intraday trade, its highest level since 11 March 2013. The index hit a low of 5,867.80 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,274 shares declined and 860 shares rose. A total of 132 shares were unchanged.

Among the 30-share Sensex pack, 17 stocks fell while rest of them rose.

Index heavyweight Reliance Industries (RIL) declined 1.2% to Rs 783.05. The scrip hit high of Rs 796.70 and a low of Rs 778 so far during the day. The company said today, 30 April 2013, said that its telecom unit Reliance Jio Infocomm (India) has joined a consortium of telecom companies building an 8,000 kilometre submarine cable system to link Malaysia and Singapore with the Middle East. The Bay of Bengal Gateway (BBG) cable system, which will have connections to India and Sri Lanka, is expected to carry commercial traffic by end of 2014, RIL said.

At the time of announcement of its Q4 results, RIL in mid-April 2013 said that the company is working towards next wave of projects to exploit the undeveloped discovered resources in KG-D6 gas field targeted over the next 3-5 years. RIL has submitted an Integrated Block Development Plan (IBDP) for four discoveries in NEC -25 block (D-32, D-40, D-9 and D-10) proposing for a phased manner development. First gas is expected by mid-2019 subject to timely approvals.

Index heavyweight and cigarette major ITC rose 2.65% to Rs 332.95. The stock hit record high of Rs 335.90 in intraday today, 30 April 2013. The stock hit low of Rs 325 in intraday today, 30 April 2013. West Bengal chief minister Mamata Banerjee on 24 April 2013, announced a 10% hike in the value-added tax (VAT) on cigarettes to 25% from 15% to raise money for a relief fund for those depositors who have lost money in the Saradha chit fund scam.

Earlier, 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, which was unveiled on 28 February 2013.

FMCG major Hindustan Unilever (HUL) surged 17.21% to Rs 583.25. The stock hit record high of Rs 597 in intraday trade today, 30 April 2013. The company's foreign parent Unilever PLC today, 30 April 2013, announced open offer to acquire additional 48.70 crore shares, or 22.52% stake in Hindustan Unilever at Rs 600 per share.

As on 31 March 2013, foreign promoters held 52.48% stake in HUL. After the open offer, holding of foreign promoters will rise to 75% in HUL.

HUL stock had vaulted 6.98% to Rs 497.60 on Monday on good Q4 results. HUL's net profit before exceptional items rose 18% to Rs 781 crore on 12.13% growth in total income from operations to Rs 6465.81 crore in Q4 March 2013 over Q4 March 2012. The company announced the Q4 results during market hours on Monday, 29 April 2013.

Godrej Consumer Products (GCPL) declined 2.43% after Q4 results. The company's consolidated net profit after minority interest without exceptional income rose 19% to Rs 205 crore on 30% growth in net sales to Rs 1716 crore in Q4 March 2013 over Q4 March 2012. The company announced the Q4 results during market hours on today, 30 April 2013. Consolidated net profit after minority interest surged 73% to Rs 334 crore in Q4 March 2013 over Q4 March 2013. Earnings before interest, taxation, depreciation and amortization (EBITDA) rose 12% to Rs 279 crore in Q4 March 2013 over Q4 March 2012.

Commenting on the company's performance, Adi Godrej, Chairman, GCPL said, "We delivered another quarter with robust operating performance. Our sales growth remains healthy and we continue to carry forward the strong momentum from the earlier quarters. We continue to intensify our focus on innovation. Over the last few quarters, we have had several major launches, which have been backed with strong marketing investments. The response to our new launches has been very encouraging. Our EBITDA growth has been lower than sales growth during this quarter on the back of high marketing investments for the new launches. As these launches scale up in subsequent quarters, we will see further improvement to our bottom line. While the macroeconomic and socio-political environment continues to be challenging in some of the countries in which we operate, I believe our strong performance is a reflection of clear strategic focus, superior execution and our top notch team. Going forward, we remain optimistic of continuing the strong sales growth momentum and expect our profit performance to improve on the back of stronger traction from our launches and favourable input prices".

NHPC declined 0.23%. The company said during market hours today, 30 April 2013, that consequent upon successful trial run and demonstration of peaking capability corresponding to installed capacity of 33 MW (megawatts), Unit 4 of Teesta Low Dam - III HE Project have been declared under commercial operation from 1 May 2013.

Cement stocks edged lower. ACC, Ambuja Cement and UltraTech Cement shed by 0.83% to 2.04%.

The stock market remains closed tomorrow, 1 May 2013, on account of Maharashtra Day.

The focus of the market is on Q4 results. IDFC announces Q4 results tomorrow, 1 May 2013. Bharti Airtel and Kotak Mahindra Bank unveil Q4 results on Thursday, 2 May 2013. ACC and Ambuja Cements announce Q1 March 2013 results on Friday, 3 May 2013. Grasim and Jaiprakash Associates unveil Q4 results on Saturday, 4 May 2013. HDFC and Lupin unveil Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Asian Paints and Punjab National Bank unveil Q4 results on 9 May 2013. NTPC announces Q4 results on 10 May 2013. Dr Reddys Laboratories announces Q4 results on 14 May 2013. Bajaj Auto announces Q4 results on 16 May 2013. BPCL announces Q4 results on 29 May 2013. M&M announces Q4 results on 30 May 2013.

The Supreme Court today, 30 April 2013, said that the details in the CBI affidavit on the coal scam are very disturbing. There has been a massive breach of trust that has shaken our foundation, the apex court said. The court said sharing information with the government has shaken the entire process. The Supreme Court also said that the CBI must not be influenced by its political masters. The CBI's independent position must be restored, the court said.

The CBI had on Friday, 26 April 2013, filed its affidavit on the coal block allocation scam report with the Supreme Court, in which agency director Ranjit Sinha had said that the draft report was shared with the Law Minister and senior officials of PMO and Coal ministry "as desired by them".

In March, the CBI had said in its status report that many companies were given coal blocks through false representations and that there was no rationale for allocation of the blocks.

On the macro front, the Prime Minister's Economic Advisory Council (PMEAC) in a report released on 23 April 2013 projected 6.4% growth in India's GDP for the current fiscal year 2013/14, higher than an estimated 5% growth for the fiscal year 2012/13. The net FDI inflow is expected at $24 billion in 2013-14 from an estimated $18 billion in 2012-13, the PMEAC said. In contrast, FII inflows are seen sliding to $18 billion in 2013-14 from an estimated $24 billion in 2012-13, the PMEAC said.

Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for April 2013 tomorrow, 1 May 2013. The HSBC India Manufacturing PMI fell to 52 in March 2013, after a surge to 54.2 in February 2013. Markit Economics will unveil the result of a monthly survey on the performance of India's services sector for April 2013 on Friday, 3 May 2013. The HSBC Services Purchasing Managers' Index, based on a survey of around 400 companies, fell to a 17-month low of 51.4 in March from 54.2 in February. Services make up over 60% of India's economy.

Slowing wholesale price inflation has raised expectations that the Reserve Bank of India (RBI) will cut its key policy rate viz. the repo rate to boost economic growth. The (RBI) will announce the Monetary Policy Statement 2013-14 on Friday, 3 May 2013. The RBI cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on 19 March 2013.

Inflation based on the monthly wholesale price index (WPI) eased to the lowest level in 40 months at 5.96% in March 2013, and sharply lower than 6.84% in February 2013, data released by the government on 15 April 2013 showed. Non-food manufacturing inflation or core inflation slowed further to 3.41% in March 2013, the data showed. In Europe, the European Central Bank's (ECB) Governing Council meets in Bratislava on Thursday, 2 May 2013, to review euro area interest rates. The ECB is seen cutting euro area interest rates by 25 basis points to a record low of 0.5% as economic conditions continue to deteriorate across the euro zone and as inflation remains well below the bank's target.

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.

Most European markets edged higher on Tuesday. Key benchmark indices in UK and Germany were up by 0.04% to 0.69%. France's CAC 40 fell 0.12%.

The European Central Bank's (ECB) Governing Council meets in Bratislava on Thursday, 2 May 2013, to review euro area interest rates. The ECB is seen cutting euro area interest rates by 25 basis points to a record low of 0.5% as economic conditions continue to deteriorate across the euro zone and as inflation remains well below the bank's target.

Asian stocks rose on Tuesday after US housing sales gained and amid speculation central banks will keep stimulating growth. Key benchmark indices in Hong Kong, Taiwan, Singapore and South Korea rose by 0.21% to 1.20%. Key benchmark index in Japan and Indonesia fell by 0.07% to 0.17%. Stock markets in mainland China were closed for a holiday.

Japanese and South Korean industrial output was less than estimates in March and Taiwan's first-quarter growth was half the forecast pace as weakness in global demand limits recoveries in Asian economies. In Japan, production climbed 0.2% from the previous month, the trade ministry said in Tokyo today. South Korea's output fell 2.6%, a separate report showed. Taiwan's gross domestic product rose 1.54%.

Trading in US index futures indicated a flat opening of US stocks on Tuesday, 30 April 2013. US stocks gained on Monday with S&P 500 index ending at an all-time high led by gains as growth-oriented stocks, including energy and technology. A report showed contracts to buy previously owned homes rose last month to their highest level since April 2010, showing underlying strength in the housing market recovery, even though the pace of sales growth has cooled in recent months.

A two-day meeting of the Federal Open Market Committee on US interest rates begins today, 30 April 2013.

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First Published: Apr 30 2013 | 2:22 PM IST

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