Key benchmark indices pared gains after striking fresh intraday high in early afternoon trade. The barometer index, the S&P BSE Sensex, was up 399.73 points or 2.03%, up 323.84 points from the day's low and off 32.82 points from the day's high. Stock prices surged today, 15 May 2013, on expectations of a central bank interest rate cut to perk up economic growth after data released on Tuesday, 14 May 2013, showed a significant fall in inflation based on the wholesale price index in April 2013. The market breadth, indicating the overall health of the market, was strong.
Index heavyweight and cigarette major ITC held firm. Another index heavyweight Reliance Industries (RIL) also held firm. Capital goods stocks were in demand. Metal stocks gained on renewed buying. Hindalco Industries advanced after the company's US subsidiary Novelis reported Q4 results after trading hours in Indian on Tuesday, 14 May 2013. Jindal Steel and Power (JSPL) rose on bargain hunting after recent slide.
Gains in Asian stocks triggered a firm opening on the domestic bourses. The market extended initial gains to hit fresh intraday high in morning trade. The barometer index, the S&P BSE Sensex, regained the psychological 20,000 mark. The market surged to hit fresh intraday high in mid-morning trade. The 50-unit CNX Nifty hit its highest level in more than 28 month high above the psychological 6,000 level. The market held firm in early afternoon trade. The Sensex trimmed gains after hitting its highest level in more than 15 weeks in afternoon trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 14 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 420.99 crore on Tuesday, 14 May 2013, as per provisional data from the stock exchanges.
At 13:20 IST, the S&P BSE Sensex was up 399.73 points or 2.03% to 20,122.02. The index jumped 432.55 points at the day's high of 20,154.84 in afternoon trade, its highest level since 29 January 2013. The index gained 75.89 points at the day's low of 19,798.18 in opening trade.
The CNX Nifty was up 124.85 points or 2.08% to 6,120.25. The index hit a high of 6,129.50 in intraday trade, its highest level since 5 January 2011. The index hit a low of 6,018.85 in intraday trade.
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The market breadth, indicating the overall health of the market, was strong. On BSE, 1,404 shares advanced and 879 shares declined. A total of 146 shares were unchanged.
The total turnover on BSE amounted to Rs 1329 crore by 13:30 IST.
All the shares from the 30-share Sensex pack rose. HDFC (up 4.8%), ICICI Bank (up 2.56%) and Hero MotoCorp (up 2.38%) edged higher from the Sensex pack.
Index heavyweight Reliance Industries (RIL) gained 2.17% to Rs 815.05. The stock hit a high of Rs 816.75 and low of Rs 802.35 so far during the day.
Index heavyweight and cigarette major ITC rose 1.49% to Rs 341. The stock hit a high of Rs 341.65 and low of Rs 336 so far during the day. The stock had hit record high of Rs 355 in intraday trade during the special trading session held on Saturday, 11 May 2013. 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.
Capital goods stocks were in demand. ABB (up 0.82%), Bhel (up 1.03%), BEML (up 0.39%), Bharat Electronics (up 1.05%), Crompton Greaves (up 1.33%), L&T (up 3.05%), Siemens (up 1.78%) and Thermax (up 1.69%) gained.
Metal stocks gained on renewed buying. Sterlite Industries (India) (up 1.69%), JSW Steel (up 1.92%), Tata Steel (up 1.4%), Sail (up 1.94%), National Aluminium Company (up 0.28%) and Hindustan Zinc (up 1.15%), edged higher.
Hindalco Industries advanced 2.94% after the company's US subsidiary Novelis reported Q4 results after trading hours in Indian on Tuesday, 14 May 2013. The stock was up 1.57%. Novelis reported net income attributable to its common shareholders of $202 million for the year ended 31 March 2013 (FY 2013). Excluding tax-effected certain items, net income for FY 2013 was $241 million, compared to a net income of $218 million for the year ended 31 March 2012 (FY 2012). Net sales declined 11% to $9.8 billion in FY 2013 over FY 2012. This decline was due to lower average aluminum prices and lower shipments when compared to last year, Novelis said.
Adjusted EBITDA for FY 2013 was $961 million, compared to $1.053 billion for FY 2012. The year-over-year decrease was mostly due to disruptions related to the ERP implementation in two North American plants in the third quarter, pricing pressures in several operating regions, lower average aluminum prices, an impact from a fire at a North American plant in the fourth quarter and higher pension expense.
Net income for Q4 March 2013, excluding tax-effected certain items, was $80 million, representing a $55 million increase when compared to the same period in the prior year, Novelis said. For the fourth quarter, sales were $2.5 billion compared to $2.6 billion reported for the fourth quarter of fiscal 2012. Adjusted EBITDA for the fourth quarter of fiscal 2013 was $240 million, representing a 3% increase when compared to the $233 million reported for the same period a year ago, due primarily to stronger demand and good cost control.
Phil Martens, Novelis President and Chief Executive Officer said: "This is a heavy investment period for us that is necessary to maintain and grow our leadership position in the industry. Fiscal 2013 was a transitional year much like fiscal 2014 will be. We are very pleased with the execution on all of our expansion projects and are looking forward to capitalizing on the significant growth we see ahead in our key end-markets of can, automotive and specialties".
Jindal Steel and Power (JSPL) rose 3.31% to Rs 315 on bargain hunting after recent slide. Shares of JSPL had declined 8.43% in six trading sessions to settle at Rs 304.90 on Tuesday, 14 May 2013, from a recent high of Rs 333 on 7 May 2013.
UCO Bank (up 8.53%), GMR Infrastructure (up 7.96%), L&T Finance Holdings (up 6.47%), Punjab National Bank (up 6.03%) and Apollo Hospitals Enterprise (up 5.66%) edged higher from BSE's 'A' group.
The focus of the market is on Q4 results. Bajaj Auto announces Q4 results tomorrow, 16 May 2013. ITC unveils Q4 results on Friday, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government on Tuesday, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.
Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.
The consumer price inflation fell below the 10% mark in April 2013. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013, data released by the government on Monday, 13 May 2013, showed.
Reserve Bank of India Governor D Subbarao on Tuesday, 14 May 2013, said that the central bank will take note of falling inflation when discussing potential interest rate cuts.
The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The central bank said that with upside risks to inflation still significant in the near term in view of sectoral demand supply imbalances, ongoing correction in administered prices and pressures stemming from MSP increases, monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
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.
European stock markets were mixed in early action on Wednesday as gross-domestic-product data showed Germany just narrowly avoided contraction in the first quarter, while France slipped into recession. Key benchmark indices in UK and Germany were up 0.02% to 0.12%. France's CAC 40 fell 0.11%.
Data released on Wednesday showed the French economy slid into a recession, with its gross domestic product slipping 0.2% in the first quarter from the three month period ended 31 December 2012. Figures released separately also showed Germany's economy rose less than expected 0.1% during the first quarter.
Asian shares rose on Wednesday, with Japan's Nikkei Average surging to a fresh 5-1/2 year high on the back of a weaker yen and strengthening expectations for earnings growth of Japanese firms. Key benchmark indices in Indonesia, Japan, China, South Korea, Hong Kong, Taiwan, and Singapore rose by 0.12% to 2.29%.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 15 May 2013. US stocks rallied to record highs on Tuesday, continuing an ascent driven by the Federal Reserve's easy monetary policy, though investors' focus has turned to when the Fed may start to rein in its bond-purchase programme.
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