Intraday recovery witnessed in early afternoon trade proved short lived as the market weakened again in afternoon trade. Investors turned cautious ahead of the Reserve bank of India's (RBI) first quarter review of Monetary Policy 2013-14 tomorrow, 30 July 2013, after the central bank announced measures this month to tighten liquidity in the banking system to arrest slide in rupee against the dollar. The S&P BSE Sensex was down 113.46 points or 0.57%, off 116.30 points from the day's high and up 9.47 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
IT major Wipro surged as the company issued upbeat revenue guidance for Q2 September 2013 at the time of announcing Q1 June 2013 results after trading hours on Friday, 26 July 2013. Private sector aluminium maker Hindalco Industries extended intraday slide. Power generation major NTPC edged higher after the Ministry of Coal on Friday, 26 July 2013, said that state-run coal miner Coal India has signed fuel supply agreements (FSAs) until 25 July 2013 for 16 power stations belonging to NTPC and its joint venture companies (JVs).
Cement pivotals Ambuja Cements and ACC edged lower. Bharti Infratel fell after declaring Q1 result. Colgate Palmolive (India) dropped in volatile trade after declaring Q1 results.
The market edged lower in early trade on weak Asian stocks. The market extended initial losses to hit fresh intraday low in morning trade. The market weakened further to hit fresh intraday low in mid-morning trade. The S&P BSE Sensex hit 2-1/2-week low. The 50-unit CNX Nifty hit its lowest level in almost three weeks. The market trimmed losses in early afternoon trade. Intraday recovery witnessed in early afternoon trade proved short lived as the market weakened again in afternoon trade.
At 13:20 IST, the S&P BSE Sensex was down 113.46 points or 0.57% to 19,634.73. The index declined 122.93 points at the day's low of 19,625.26 in mid-morning trade, its lowest level since 11 July 2013. The index rose 2.84 points at the day's high of 19,751.03 in early trade.
The CNX Nifty was down 38.25 points or 0.65% to 5,847.95. The index hit a low of 5,843.95 in intraday trade, its lowest level since 10 July 2013. The index hit a high of 5,886 in intraday trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,294 shares declined and 799 shares rose. A total of 114 shares were unchanged.
The total turnover on BSE amounted to Rs 1030 crore by 13:20 IST.
Among the 30-share Sensex pack, 17 stocks fell and rest of them rose.
Colgate Palmolive (India) lost 3.42% to Rs 1390.60 in volatile trade after announcing Q1 results during market hours today, 29 July 2013. The stock hit a high of Rs 1,457 and low of Rs 1,383 so far during the day. The company's net profit rose 57.74% to Rs 185.22 crore on 14.27% rise in total income to Rs 876.81 crore in Q1 June 2013 over Q1 June 2012.
Private sector aluminium maker Hindalco Industries lost 4.5% to Rs 90.15, with the stock extending intraday slide. It was the top loser from the Sensex pack.
Power generation major NTPC rose 0.92% to Rs 142.55, with the stock extending intraday gain. The stock rose after the Ministry of Coal on Friday, 26 July 2013, said that state-run coal miner Coal India has signed fuel supply agreements (FSAs) until 25 July 2013 for 16 power stations belonging to NTPC and its joint venture companies (JVs). Eleven more FSAs are ready to be signed shortly with NTPC or its JVs, while another 23 FSAs with state and private sector entities are in the pipeline, the coal ministry said.
Shares of Coal India (CIL) were off 3.05% at Rs 273.80. CIL has signed a total of 82 fuel supply agreements (FSAs) until 25 July 2013 with power stations of various power generation companies with a capacity of 34,793 megawatts (MW). These FSAs were part of the 131 FSAs for a capacity of 60,678 MW which CIL was directed to sign in February 2012. This will substantially increase the power generation during the current and subsequent years, the coal ministry said.
In yet another fillip to the power sector, the Ministry of Coal has issued another Presidential Directive to CIL on 17 July 2013 for signing of FSAs for a capacity of 78,000 MW, higher than the earlier 60,678 MW. This will not only increase the power generation further but will also fast track several power projects which are under development, the coal ministry said.
IT major Wipro surged 5.17% to Rs 402.60 and was the top gainer from the Sensex pack. The company issued upbeat revenue guidance for Q2 September 2013 at the time of announcing Q1 June 2013 results after trading hours on Friday, 26 July 2013. Wipro expects 1.99% to 3.88% growth in revenue from IT services business at between $1.62 billion to $1.65 billion in Q2 September 2013 over Q1 June 2013.
The company's consolidated net profit rose 3% to Rs 1623.30 crore on 1% growth in revenue to Rs 9734.60 crore in Q1 June 2013 over Q4 March 2013. The results are as per International Financial Reporting Standards. The results are after adjusting for the spinoff of its non-technology businesses, completed in April.
IT services revenue rose 0.2% to $1.58 billion in Q1 June 2013 over Q4 March 2013. Non-GAAP constant currency IT services revenue in dollar terms was $1.60 billion, which was within the company's guidance range of $1.575 billion to $1.61 billion.
Wipro said that the pricing environment was largely stable during the quarter, and the growth was largely volume led. Effective from 1 June 2013, Wipro gave annual wage hike of between 6-8% for offshore employees and 2-3% for onsite employees.
Wipro added 28 new customers in Q1 June 2013.
Ambuja Cements dropped and ACC declined. Ambuja Cements lost 4.52%. ACC shed 1.09%.
Swiss cement major Holcim had on 24 July 2013 announced a major restructuring of its India operations -- currently, Holcim owns a little over 50% stake in its two cement subsidiaries in India viz. ACC and Ambuja Cements. The board of directors of Ambuja Cements on 24 July 2013 approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. The intra-group transaction will result in Ambuja holding 50.01% stake in ACC. The merger swap ratio proposed by two independent accounting firms and approved by Ambuja's board, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share, Ambuja said in a statement. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
In addition, Ambuja's board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to Rs 3000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer.
Ambuja said that this restructuring exercise is expected to be EPS accretive from year one post completion of the transaction. There is synergy potential of about Rs 900 crore through supply chain and fixed cost optimization expected to be realised in a phased manner over two years post completion of the transaction.
Bharti Infratel fell 2.82%. The company reported 68% rise in consolidated net profit to Rs 358 crore on 9% rise in revenue to Rs 2622 crore in Q1 June 2013 over Q1 June 2012. The result was announced during market hours today, 29 July 2013.
Financial Technologies (India) (FTIL) recovered after Friday's near 9% slide. The stock was up 3.74% to Rs 588.05. The stock recovered after the company after trading hours on Friday, 26 July 2013, said bear cartels are working against the interest of the company by spreading a number of malicious rumours and warned that the company reserves its rights to take necessary legal action, including complaining to stock market regulator Securities & Exchange Board of India (Sebi) and all other relevant authorities to investigate and take necessary action into this malicious campaign against the company. The series of rumours that are spread in the market have a pattern more particularly to spread on Friday and such rumours are spread by some unscrupulous elements with a design to depress the share price of FTIL and damage its reputation, the company said.
Prime Minister Dr. Manmohan Singh will meet the captains of Indian industry today, 29 July 2013, to review steps to revive the economy. The discussion will cover measures to correct the Current Account Deficit, measures to revive industrial growth, depreciation of the rupee and its impact on trade and industry, skill development and ways of accelerating it and development of the Delhi-Mumbai Industrial Corridor (DMIC), the Chennai-Bangalore Industrial Corridor (CBIC), and the Amritsar-Delhi-Kolkata Industrial Corridor (ADKIC).
European stock markets climbed in early trade on Monday, 29 July 2013, with shares of Danone SA on the rise after a well-received earnings report and Elan Corporation PLC rallying after a takeover deal. Key benchmark indices in UK, Germany and France were up 0.12% to 0.82%.
The European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions on Thursday, 1 August 2013.
Asian stocks retreated on Monday, 29 July 2013, with Japanese equities skidding as a firm yen further dragged on the nation's exporters, while Chinese shares lost ground amid economic worries. Key benchmark indices in South Korea, Singapore, Indonesia and Taiwan were off 0.2% to 1.71%
Mainland Chinese and Hong Kong stocks retreated amid lingering economic worries, with sentiment weighed by official data released over the weekend showing profits at Chinese industrial firms slowed in June. The Shanghai Composite index lost 1.72%. In Hong Kong, the Hang Seng was off 0.42%. Data released over the weekend by the National Bureau of Statistics showed profits at industrial companies rose 6.3% in June from the year-earlier month, slowing sharply from a 15.5% increase in May, according to reports.
The drop in Chinese equities also came after Beijing ordered China's National Audit Office to conduct an urgent review of overall public debt.
In Japan, the Nikkei 225 Average lost 3.32%. The benchmark had retreated 3% on Friday, 26 July 2013.
Japanese retail sales rose 1.6% from a year earlier in June, figures today showed, which was below the market expectations.
Bank of Japan Governor Haruhiko Kuroda indicated little concern that a planned sales-tax rise would derail the nation's economic rebound. A two-step sales tax increase won't give major damage to growth in Japan's economy, Kuroda said in a speech today in Tokyo, referring to the BOJ's growth forecasts. We consider a downturn in overseas economies to be the largest risk factor to the outlook for economic activity and prices.
Trading in US index futures indicated that the Dow could fall 31 points at the opening bell on Monday, 29 July 2013. US stocks inched higher on Friday, 26 July 2013, to end the week virtually flat, as investors digested earnings reports and prepared for a busy economic calendar in the week ahead.
On the economic front, US consumer confidence unexpectedly rose at the end of this month, according to the Thomson-Reuters/University of Michigan's consumer-sentiment index.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting on Tuesday (30 July 2013) and Wednesday (31 July 2013), after which it will release a statement on central bank policy. In his two-day testimony to Congress, which concluded on 18 July 2013, Federal Reserve Chairman Ben Bernanke said plans to taper asset purchases were not on a preset path and stressed intentions to be very responsive to data. Additionally, Bernanke said recent data have been "mixed" and it was "way too early" to make a judgment on when the central bank will slow down the pace of its asset purchases. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
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