Key benchmark indices edged higher for the third in a row as firm European stocks boosted sentiment. The market sentiment was also boosted by provisional data showing that foreign fund turned net buyers of Indian stocks on Friday, 28 June 2013. The S&P BSE Sensex attained its closing highest level in four weeks. The 50-unit CNX Nifty attained 3-1/2 week closing high. The Sensex advanced 181.58 points or 0.94%, up about 230 points from the day's low and off close to 20 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap index jumped 1.95% and the BSE Mid-Cap index advanced 1.81%, with both these indices outperforming the Sensex.
Indian stocks gained for the third straight day today, 1 July 2013. From a recent low of 18,552.12 on 26 June 2013, the Sensex has risen 1,025.27 points or 5.52% in three trading sessions. The Sensex had lost 364.49 points or 1.84% in June 2013. The Sensex has gained 150.68 points or 0.77% in calendar 2013 so far (till 1 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 866.23 points or 4.23%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 2,978.91 points or 17.94%.
Coming back to today's trade, index heavyweight and cigarette major, ITC, rose. Reliance Industries (RIL) edged higher for second day in a row after the government on Thursday, 27 June 2013, decided to raise natural gas prices sharply to help fund investment in exploration and reverse declining domestic gas output. Capital goods stocks gained on renewed buying. Larsen and Toubro (L&T) advanced after the company said it has won new orders worth of Rs 3057 crore across various business segments in June 2013. Realty stocks edged higher. Among pharma stocks, Dr Reddy's Laboratories hit record high.
The market sentiment was boosted by provisional data showing that foreign fund turned net buyers of Indian stocks on Friday, 28 June 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 1124.31 crore on Friday, 28 June 2013, as per provisional data from the stock exchanges.
The S&P BSE Sensex advanced 181.58 points or 0.94% to 19,577.39, its highest closing level since 3 June 2013. The index jumped 202.62 points at the day's high of 19,598.43 in late trade. The index fell 48.24 points at the day's low of 19,347.57 in early trade.
The CNX Nifty was up 56.65 points or 0.97% to 5,898.85, its highest closing level since 6 June 2013. The index hit a high of 5,904.35 and a low of 5,822.20 in intraday trade.
The BSE Mid-Cap index rose 1.81% and the BSE Small-Cap index gained 1.95%. Both these indices outperformed the Sensex.
The BSE Realty index (up 5.26%), BSE Power index (up 2.77%), BSE Capital Goods index (up 2.77%), BSE FMCG index (up 2.11%), BSE Metal index (up 1.97%), BSE Auto index (up 1.86%), BSE Oil & Gas index (up 1.56%), BSE PSU index (up 1.46%), BSE Healthcare index (up 1.23%), and BSE Consumer Durables index (up 1.21%), outperformed the Sensex. The BSE Bankex rose 09.4%, matching with Sensex's performance. The BSE IT index (down 1.6%) and BSE Teck index (down 0.44%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 1680 crore, lower than Rs 1985.62 crore on Friday, 28 June 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,611 shares gained and 768 shares fell. A total of 127 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 0.51% to Rs 326.05.
Reliance Industries (RIL) edged higher for second day in a row after the government on Thursday, 27 June 2013, decided to raise natural gas prices sharply to help fund investment in exploration and reverse declining domestic gas output. The stock rose 2.43%.
The government on Thursday, 27 June 2013, agreed to double natural gas prices to industrial and retail consumers to help fund investment in exploration and reverse declining domestic gas output. The price of gas could go up to $8.4 per million metric British thermal units (mmBtu), effective 1 April next year, from current $4.2 mmBtu.
Capital goods stocks gained on renewed buying. ABB (up 2.3%), Bhel (up 2.58%), Crompton Greaves (up 3.09%) and BEML (up 4.99%), gained.
Larsen and Toubro (L&T) gained 3.26% after the company said it has won new orders worth of Rs 3057 crore across various business segments in June 2013. The announcement was made during trading hours today, 1 July 2013.
Siemens rose 3.56% after the company said that its consortium with Siemens AG bagged an order worth Rs 248 crore from Delhi Metro Rail Corporation. The announcement was made during trading hours today, 1 July 2013.
A consortium comprising Siemens and Siemens AG has bagged an order worth Rs 248 crore from Delhi Metro Rail Corporation (DMRC) for the electrification of phase III of the Delhi Mass Rapid Transit System (MRTS). Out of the total order value, the value for Siemens is Rs 176 crore and for Siemens AG it is Rs 72 crore.
Siemens said it won the order through an international competitive bidding. This is the first major rail electrification contract awarded by DMRC to the Smart Grid division of Siemens Infrastructure and Cities Sector. The project will be delivered in various phases starting with the Central Secretariat-to-Mandi House phase.
Auto stocks rose across the board. Maruti Suzuki India surged 4.37%. The company reported 12.6% fall in total sales to 84,455 units in June 2013 over June 2012. The company's domestic sales fell 7.8% to 77,002 units in June 2013 over June 2012. Exports declined 43% to 7,453 units in June 2013 over June 2012. The announcement was made during market hours today, 1 July 2013.
M&M gained 1.64%. The company said during market hours today, 1 July 2013, its domestic tractor sales rose 19% to 26,723 units in June 2013 over June 2012. M&M's total tractor sales rose 17% to 27,749 units in June 2013 over June 2012. Exports declined 19.33% to 1,026 units in June 2013 over June 2012.
M&M's total automobile sales fell 7.81% to 38,092 units in June 2013 over June 2012. Sales of the company's passenger vehicle segment (which includes UVs and Verito) declined 12.93% to 17,232 units in June 2013 over June 2012. The company's domestic sales declined 7.04% to 36,207 units in June 2013 over June 2012. Exports fell 20% to 1,885 units in June 2013 over June 2012.
Tata Motors rose 2.91%. Tata Motors said after market hours today, 1 July 2013, that that total sales (including exports) of Tata commercial and passenger vehicles in June 2013 were 52,708 vehicles. The company's domestic sales of Tata commercial and passenger vehicles for June 2013 were 48,712 units. The company's sales from exports were 3,996 units in June 2013.
Hero MotoCorp (HMC) rose 2.18%. The company before market hours today, 1 July 2013, said it has incorporated a wholly owned subsidiary in USA by the name of HMCL (NA), Inc. (HMCL (NA)) inter alia for the purpose of investing in Erik Buell Racing, Inc. (EBR). HMCL (NA) has agreed to invest $25 million in EBR for a total stake of 49.2% in the share capital of EBR. The first tranche of $15 million has been invested by HMCL (NA) on 28 June 2013. The second tranche of $10 million is proposed to be invested within the next 9 months.
Bajaj Auto rose 0.29%. The company on 25 June 2013 said workmen at its Chakan plant in Pune have stopped coming to work. Bajaj Auto said the workers had earlier given a notice for a stoppage of work at the plant from the morning shift of 28 June 2013. The reason for the strike was that management had refused to concede their demand that all the workmen working in Bajaj Auto should each be given an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 per share, Bajaj Auto added. The workmen have, however, stopped coming to the Chakan plant from 25 June 2013, itself, without assigning any reason for this stoppage, the company said in a filing.
Dr Reddy's Laboratories gained 2.39% to Rs 2,268.45 after striking a record high of Rs 2,285 in intraday trade today, 1 July 2013.
Realty stocks rallied. HDIL (up 11.39%), Unitech (up 9.93%), D B Realty (up 4.93%) and DLF (up 4.59%), edged higher.
Godrej Properties rose 0.88%. The company before market hours today, 1 July 2013, said that it has given exit to HDFC PMS by purchasing its 49% stake in the equity share capital of its subsidiary Godrej Estate Developers (GEDPL) by exercising the company's buy out option under the agreement. The exit was as per terms of the agreement with HDFC Asset Management Company (acting in its capacity as portfolio manager of its product called HDFC Asset Management Company Portfolio Management Services Real Estate Portfolio -1) (HDFC PMS) for the project Godrej Eternia at Chandigarh.
Godrej Properties also gave exit to HDFC PMS by purchasing the latter's 49.9% stake in the equity share capital of its subsidiary Godrej Sea View Properties (GSVPPL) by exercising the company's buy out option under the agreement. The exit was as per terms of the agreement with HDFC Asset Management Company (acting in its capacity as portfolio manager of its product called HDFC Asset Management Company Portfolio Management Services real estate portfolio -1) for the project Godrej Palm Grove at Chennai.
Godrej Properties further informed that following the transactions, GEDPL and GSVPPL have become the wholly owned subsidiaries of the company with effect from 28 June 2013 and 1 July 2013, respectively.
Telecom stocks were in demand on renewed buying. Bharti Airtel (up 1.36%), Idea Cellular (up 1.98%), Tata Teleservices (Maharashtra) (up 4.91%), and MTNL (up 5.49%), gained.
Reliance Communications (RCom) surged 12.19% to Rs 132.50 after striking a 52-week high of Rs 133.25 in intraday trade today, 1 July 2013. RCom during market hours today, 1 July 2013 announced that it has completed full repayment of two Syndicated ECB loan facilities of $500 million each, aggregating $1 billion, during the quarter ended 30 June 2013. These loans were availed in the year 2007 from a group of international banks.
In addition, RCom has made scheduled repayments of another $207 million (Rs 1200 crore) in respect of other foreign currency loans, on the respective due dates during the quarter ended 30 June 2013. The repayments have been from RCom's rupee resources.
RCom's foreign currency debt is steadily declining every year, and the interest outgo on such debt is fully covered by dollar denominated earnings from the Reliance Globalcom business.
Shares of major private banks declined. ICICI Bank (down 0.01%) and HDFC Bank (down 0.19%), edged lower.
Shares of PSU banks gained. State Bank of India, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 2.7% to 6.7%.
IT stocks declined. Tata Consultancy Services (TCS) (down 1.76%), Infosys (down 1.83%), HCL Technologies (down 2.2%), and Tech Mahindra (down 2.35%), declined. But, Wipro rose 0.4%
The US Senate last week approved plan to rewrite its immigration laws. The plan, aimed at overhauling US immigration laws, includes proposals such as limiting the number of foreign workers in the US and raising visa fees significantly. Indian IT companies get more than half of their revenue from the US and the bill could impact these companies' cost structures.
Construction shares were in demand on renewed buying. Patel Engineering (up 19.86%), IVRCL (up 13.62%), NCC (up 12.94%), Gammon India (up 5.12%), Valecha Engineering (up 4.57%), Hindustan Construction Company (up 2.84%), edged higher.
Shares of public sector oil marketing companies (PSU OMCs) were slightly higher after these companies raised petrol price by Rs 1.82 a litre, excluding local sales tax or VAT, with effect from midnight of Friday, 28 June 2013. BPCL (up 2.02%), HPCL (up 1.54%), and Indian Oil Corporation (up 0.77%) gained.
Actual increase will be higher and will vary from city to city depending on local taxes. Petrol price in Delhi was hiked by Rs 2.19 per litre to Rs 68.58 as against Rs 66.39 earlier. In Mumbai, petrol price has been increased by Rs 2.30 to Rs 76.90 while in Kolkata rates went up from Rs 73.79 to Rs 76.10 per litre. In Chennai, prices were hiked by Rs 2.32 to Rs 71.72. The price hike was mainly due to depreciation of rupee against the dollar.
The Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas today, 1 July 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for 1st fortnight of July effective 1 July.2013 went up by Rs 2.29 per litre to Rs 8.60 per litre from Rs 6.31 per litre during 2nd fortnight of June 2013. In the case of PDS Kerosene, the under-recovery has increased to Rs 30.68 per litre for July 2013 from Rs 27.75 per litre for June 2013. For domestic LPG, the under-recovery has increased to Rs 368.58 per cylinder from Rs 335.14 per cylinder in June 2013.
PSU OMCs are currently incurring combined daily under-recovery of about Rs 358 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices.
Tata Power Company rose 2.73% after Maharashtra Electricity Regulatory Commission (MERC), the electricity regulatory commission in Maharashtra, on Friday, 28 June 2013, approved 25% increase in average tariff for Tata Power's residential consumers for the year ending 31 March 2014 (FY 2014), which will be effective from 1 July 2013. MERC has approved the multi-year tariff plan till 2016 of Tata Power and allowed an increase of 25% for FY 2014, 15% for FY 2015 and 11% for FY 2016 for residential consumers.
For commercial and industrial consumers, the tariff hike would range from 22% to 39% in the current financial year, 9% to 13% in FY 2015, and 4% to 8% in FY 2016.
Reliance Infrastructure (RInfra) jumped 5.07%. Reliance Infrastructure (RInfra) through its special purpose vehicle (SPV) Delhi Airport Metro Express (DAMEPL) has intimated the take over of the line by Delhi Metro Railway Corporation (DMRC) with effect from 1 July 2013. The announcement was made before market hours today, 1 July 2013.
RInfra said that due to the defects in the civil structure designed and built by DMRC, DAMEPL after deliberations and consultations with all stakeholders was forced to suspend the operations of the project, with effect from 8 July 2012, in paramount interest of safety of commuters and public at large. In view of the fact that DMRC failed to cure the defects within the period prescribed under the concession agreement, and on account of material breach and DMRC Event of Default having arisen as a result thereof, DAMEPL terminated the concession agreement vide its termination notice dated 8 October 2012.
RInfra said it has requested DMRC for payment of termination payment. As per the terms of the concession agreement, for the termination due to DMRC's Event of Default, DMRC is to pay the termination payment equivalent to 130% of the adjusted equity and 100% of the debt-due. The total investment of RInfra towards project capital expenditure is to the tune of Rs 2800 crore, RInfra said.
MMTC hit maximum permissible 5% lower circuit at Rs 97.75, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake in the firm at a huge discount to the stock's ruling market price. On 13 June 2013, the Government of India (GoI) sold 9.33% stake in MMTC via Offer for Sale (OFS) through stock exchanges mechanism at an indicative price of Rs 60.86 per share, at a discount of 71.21% to the closing price of the stock of Rs 211.45 on 12 June 2013.
Shares of diamond jewellery maker Gitanjali Gems hit maximum permissible 5% lower circuit at Rs 224.70, also its 52-week low. The stock has witnessed a steep slide recently.
Indian factory activity remained weak in June as output contracted for the second month running and order books shrank for the first time in over four years, a survey showed on Monday. The HSBC Manufacturing Purchasing Managers' Index (PMI), compiled by Markit, edged up to 50.3 in June from 50.1 in May. While export orders came in at a faster pace last month, domestic demand took a hit from the faltering economy. The latest PMI showed inflationary pressures, which eased in the previous few months, have started to pick up again with input and output costs both rising in June.
European stock markets edged higher on Monday, 1 July 2013, as euro-area factory output contracted in June less than initially estimated. Key benchmark indices in France, Germany and UK rose by 0.31% to 0.74%.
The euro-zone manufacturing purchasing managers index rose to a 16-month high in June, final data showed Monday according to Markit. PMIs rose in all nations except Germany, where the final number was revised down to 48.6 from a preliminary 48.7. The overall euro-zone number was 48.8 in June, up from 48.7 reported previously. In France, the PMI rose to 48.4 from a prior 48.3.
The pace of the UK's manufacturing sector expansion accelerated in June in a further sign that the economic recovery is gaining momentum as Mark Carney begins his new role as governor of the Bank of England. The monthly manufacturing PMI, which is compiled by Markit and the Chartered Institute of Purchasing & Supply rose to 52.5 in June, the highest level since May 2011 and up from 51.5 in May. The May index was revised from an originally reported 51.3.
Asian stocks dropped on Monday, 1 July 2013, as a further slowdown in manufacturing activity in China, South Korea and Taiwan raised concerns about the health of those economies. Key benchmark indices in Indonesia, Taiwan, Singapore and South Korea were down 0.3% to 0.86%. China's Shanghai Composite rose 0.81%. The Hong Kong markets were closed to mark the anniversary of the territory's handover from the UK to China.
Two separate surveys in China showed a further loss of momentum in factory activity. An officially sponsored reading of the manufacturing Purchasing Managers' Index for June dropped to 50.1 from 50.8 in May. Another survey by HSBC showed the monthly PMI falling to 48.2 in June from 49.2 in May. A reading below 50 shows a deterioration in activity, while one above signals an improvement.
Meanwhile, separate HSBC surveys in South Korea and Taiwan also indicated weakened conditions for local manufacturers, with both affected by the slowdown in China. In South Korea, the June PMI dropped to 49.4, down from 51.1 in May, while in Taiwan, the June PMI came in at 49.5, up sharply from 47.1 in May but still below the 50-point threshold.
In Japan, the Nikkei 225 index rose 1.28%. The Bank of Japan's quarterly tankan survey showed an improvement in sentiment at both large manufacturers and non-manufacturers, with the former showing positive sentiment for the first time since mid 2011.
Trading in US index futures indicated that the Dow could jump 74 points at the opening bell on Monday, 1 July 2013. US stocks ended mostly weaker on Friday, 28 June 2013, but posted their strongest first half of any year since 1998 after reaching record highs in May supported by the Federal Reserve's massive monetary stimulus.
In recent weeks, investors have been preoccupied with when the Federal Reserve may start pulling back monetary stimulus as the economy improves further. Federal Reserve Gov. Jeremy Stein on Friday suggested that the central bank's first tapering move could come in September, although he only used the month as a hypothetical start date in a speech to the Council on Foreign Relations. Jeffrey Lacker, president of the Richmond Fed, said there's likely to be more market volatility over the outlook for monetary policy in coming months, but these moves shouldn't interfere with a modest economic recovery. John Williams, president of the San Francisco Fed Bank, said it's better to "wait a bit" before tapering asset purchases. Their comments follow relatively soothing Fed speeches on Thursday, 27 June 2013, in which three officials chastised markets for overreacting to the central bank's statement. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
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