Intraday volatility continued as key benchmark indices regained positive zone after slipping into the red for a brief period in mid-afternoon trade. The S&P BSE Sensex was up 75.40 points or 0.38%, off close to 65 points from the day's high and up about 115 points from the day's low. The 50-unit CNX Nifty was currently above the psychological 6,000 mark, having alternately swung above and below that level in intraday trade. Index heavyweight and cigarette major ITC edged higher in choppy trade. Another index heavyweight Reliance Industries (RIL) was slightly higher. The market breadth, indicating the overall health of the market, was negative.
Dr Reddy's Laboratories declined on profit booking after reporting strong Q4 results. Metal stocks rose on renewed buying. Tata Steel declined in choppy trade after the company said on Monday that it expects non-cash write down of the goodwill and assets of around $1.6 billion in the consolidated financial statements for the year ended 31 March 2013 due to weak economic and market conditions in Europe, its main market.
The key benchmark indices were marginally higher in early trade. The Sensex regained positive terrain after slipping into the red for a brief period in morning trade. The S&P BSE Sensex and the 50-unit CNX Nifty, both, recovered after hitting their lowest level in more than a week. The market extended intraday gains to hit fresh intraday high in mid-morning trade. The Nifty regained the psychological 6,000 mark. The market trimmed gains in early afternoon trade after the government announced data on inflation based on the wholesale price index for April 2013. Key benchmark indices further pared gains in afternoon trade as European stocks dropped in early trade. Intraday volatility continued as key benchmark indices regained positive zone after slipping into the red for a brief period in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was up 75.40 points or 0.38% to 19,767.07. The index rose 140.12 points at the day's high of 19,831.79 in mid-morning trade. The index declined 38.98 points at the day's low of 19,652.69 in early trade, its lowest level since 6 May 2013.
The CNX Nifty was up 27.55 points or 0.45% to 6,008. The index hit a high of 6,026.20 in intraday trade. The index hit a low of 5,970.05 in intraday trade, its lowest level since 6 May 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,142 shares declined and 1,053 shares advanced. A total of 130 shares were unchanged.
Among the 30-share Sensex pack, 19 stocks rose while rest of them fell. ONGC, GAIL (India) and Bharti Airtel rose by 1.76% to 1.98%. Bhel, Bajaj Auto and Hero MotoCorp shed by 0.51% to 0.87%.
Index heavyweight Reliance Industries (RIL) rose 0.34% to Rs 805.75. The stock hit a high of Rs 808.90 and low of Rs 800 so far during the day.
Index heavyweight and cigarette major ITC rose 0.33% to Rs 336.95, on bargain hunting after Monday's 5.31% slide. The stock hit a high of Rs 339.90 and low of Rs 333.10 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 Uttar Pradesh state government on 7 May 2013 slashed VAT on cigarette/cigar from existing 50% to 25%. The state government had last year increased VAT on cigarette/cigar and tobacco products from 12.5% to 50%.
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.
United Breweries declined 1.8%. The company during market hours today, 14 May 2013, confirmed that it has received notice of service tax demand. The company said it has always been tax compliant and has been paying service tax inter alia on sponsorship of sports activity, as applicable from the effective date of its applicability. The show cause is fastened with valuation errors and requires thorough scrutiny, United Breweries said. The company is in the process of filing its detailed reply and explanations shortly, it added. The company issued this clarification after media reports said that the Directorate General of Central Excise Intelligence (DGCEI) has issued show-cause-cum-demand notices to Vijay Mallya-owned firms United Breweries and United Spirits for allegedly evading service tax of Rs 91 crore.
Metal stocks rose on renewed buying. JSW Steel, Sterlite Industries, Jindal Steel & Power Hindalco Industries and Hindustan Zinc rose by 0.05% to 1.15%. Sail declined 0.32%.
Tata Steel edged lower in choppy trade. The stock was off 0.08% at Rs 304.80. The scrip hit high of Rs 306.75 and low of Rs 296.70. The company said after market hours on Monday, 13 May 2013, that the company has substantially completed its year end impairment review for the consolidated financial statements for the financial year end 31 March 2013 (FY 2013) as required under the Indian Accounting Standards. This review was undertaken taking into account the external economic environment and macroeconomic conditions especially in Europe, the underlying demand-supply imbalance of the global steel industry and the prudent view of the forecast of the businesses. Following the review, the company expects non-cash write down of the goodwill and assets in the consolidated financial statements for the year ended 31 March 2013 of around $1.6 billion.
The impairment is primarily due to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in 2012-13 by almost 8% which in aggregate results in almost 30% since the emergence of the global financial crisis in 2007. This has led to a downward revision of cash flow expectations underlying the valuation of the European business. The impairment also includes the effect of write down of assets in the ferro chrome business in South Africa and the mini blast furnace in Tata Steel Thailand which has been impacted by the high cost of raw material feedstock. The final figures will be included in the full year results on 23 May 2013, Tata Steel said. The company's financial covenants are unaffected by the above non-cash write down of goodwill and assets, it added.
Dr Reddy's Laboratories declined 1.92% on profit booking after strong Q4 results. The stock had hit record high of Rs 2,150.90 in intraday trade on Monday, 13 May 2013, ahead of the results. The company during market hours today, 14 May 2013, reported 66.58% surge in consolidated net profit to Rs 570.89 crore on 30.79% rise in total income to Rs 3503.04 crore in Q4 March 2013 over Q4 March 2012.
The focus of the market is on Q4 results. Bajaj Auto announces Q4 results on Thursday, 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. ONGC 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 today, 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.
India's trade deficit widened to $17.787 billion in April 2013 from $14.041 billion in April 2012, data released by the government on Monday, 13 May 2013, showed. While exports rose 1.68% at $24.164 billion, imports jumped 10.96% to $41.951 billion in April 2013 over April 2012.
Industrial production rose 2.5% in March 2013, compared with a revised growth of 0.46% in February 2013, data released by the government on Friday, 10 May 2013, showed. Industrial production rose 1% for the year ended 31 March 2013 (FY 2013).
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 slipped on Tuesday, with investors awaiting the latest gauge of German investor confidence, the ZEW economic sentiment indicator, to outline if the euro zone's largest economy is making progress. Key benchmark indices in UK, France and Germany were down by 0.06% to 0.44%.
A report on euro-zone industrial production in March 2013 is also due for release today, 14 May 2013.
Most Asian markets rose on Tuesday. Key benchmark indices in Indonesia, Taiwan, South Korea and Singapore rose by 0.04% to 1.03%. Key benchmark indices in Japan, China and Hong Kong fell by 0.16% to 1.11%.
Trading in US index futures indicated that the Dow could fall 21 points at the opening bell on Tuesday, 14 May 2013. US stocks finished little changed on Monday as investors mulled when the Federal Reserve may begin to scale back its $85-billion-a-month bond-buying program.
US retail sales rose 0.1% in April, which was higher than forecast, signaling that central bank efforts to spur economic growth are working.
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