Key benchmark indices regained strength after paring initial gains to hit fresh intraday low in morning trade. Firmness in Asian stocks boosted sentiment. The barometer index, the S&P BSE Sensex, was up 88.83 points or 0.48%, off close to 90 points from the day's high and up about 35 points from the day's low. Index heavyweight and cigarette maker ITC edged higher. Another index heavyweight Reliance Industries (RIL) reversed initial gains. The market breadth was strong. IT stocks edged higher ahead of IT major Infosys' Q4 results tomorrow, 12 April 2013.
The market pared gains after a firm start triggered by higher Asian stocks. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit one-week high. The market regained strength after paring initial gains to hit fresh intraday low in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 40.22 crore on Wednesday, 10 April 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 88.83 points or 0.48% to 18,503.28. The index jumped 180.67 points at the day's high of 18,595.12 in early trade, its highest level since 4 April 2013. The index rose 55.38 points at the day's low of 18,469.83 in early trade.
The CNX Nifty was up 19 points or 0.34% to 5,577.70. The index hit a high of 5,610.60 in intraday trade, its highest level since 4 April 2013. The index hit a low of 5,566.85 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 982 shares rose and 521 shares fell. A total of 70 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) fell 0.54% at Rs 774.50. The scrip hit high of Rs 785.85 and a low of Rs 772.55 so far during the day. Shares of Reliance Communications rose 2.94%. RIL's telecom unit Reliance Jio Infocomm and Reliance Communications (RCom) on 2 April 2013 announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC rose 1.34% to Rs 287.75. The scrip hit high of Rs 289 and a low of Rs 284.10 so far during the day. The stock had hit record high of Rs 310.75 on 4 February 2013. The government 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.
IT stocks edged higher ahead of IT major Infosys' Q4 results tomorrow, 12 April 2013. Infosys gained 1.28%. Infosys on 2 April 2013 said that it has signed an agreement with RWE Supply & Trading (RWEST), a leading European energy trading house to provide technology services to transform RWEST's trading operations to create business efficiencies and drive growth from new markets and commodities.
Infosys on 15 March 2013 announced that it has been selected by India Post to implement and manage a platform that will transform its rural operations. With this new agreement, Infosys will facilitate India Post's Rural Systems Integration (RSI) program.
HCL Technologies gained 1.36%. The company on 3 April 2013 said that it is collaborating with North Carolina New Schools -- a statewide public-private catalyst for education innovation -- to create and promote science, technology, engineering and math (STEM) programs and get college students ready for the 21st century workforce. HCL will design an online technology hub which will serve as a central gathering place for featured content and discussion between teachers, principals, school staff, students, counselors, college liaisons, district office superintendents and NC New Schools administration staff. NC New Schools will leverage HCL's services for content creation and management of its collaborative, online community offering access to tools and resources required to accelerate systemic, sustainable innovation in schools. NC New Schools will move approximately 3,000 NC New Schools intranet users to the new technology hub.
Wipro gained 0.83%, with the stock gaining for the second straight day. Wipro is now a company focused on the IT business following the demerger of non-IT businesses, including consumer care products, the infrastructure engineering business and medical diagnostic product and services business. Following the demerger, which took effect on the bourses this week, the non-IT business of the company will be transferred to a separate company to be called Wipro Enterprises.
Wipro had offered different options to the shareholders of the company as a part of the demerger scheme. One such option is that Wipro shareholders would get one equity shares of Rs 10 each of Wipro Enterprises for every five Wipro shares. Under second option, Wipro shareholders would get one 7% redeemable preference share with a face value of Rs 50 of Wipro Enterprises for every five Wipro shares. The preference shares will be redeemable at a price of Rs 235.20 after twelve months from the date of issue. Wipro shareholders also have the option to exchange the equity shares of Wipro Enterprises and receive as consideration equity shares of Wipro held by the promoter. The exchange ratio will be one equity share of Wipro for every 1.65 equity shares in Wipro Enterprises. Wipro Enterprises will not be separately listed on the bourses.
Wipro announces Q4 results on 19 April 2013.
Tata Consultancy Services (TCS) rose 1.02%. TCS on Tuesday, 9 April 2013, said that it has signed definitive agreements for the acquisition of 100% equity shares in Alti SA, an IT services company in France, for a value of euro 75 million in an all cash transaction. The transaction will strengthen TCS's ability to service its customers in France and other regions in Europe. Alti SA is a privately held company owned by its management and two private equity funds, CM-CIC LBO Partners and IDI, which supported its growth from a revenue base of euro 64 million in 2007 to euro 126 million in 2012.
TCS announces Q4 results on 17 April 2013.
The upside on the domestic bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The Q4 March 2013 corporate earnings season begins this week. Infosys announces Q4 results tomorrow, 12 April 2013. Reliance Industries (RIL) announces Q4 results on 16 April 2013. TCS announces Q4 results on 17 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Wipro announces Q4 results on 19 April 2013. Cairn India announces Q4 results on 22 April 2013. UltraTech Cement announces Q4 results on the same day.
HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank and Maruti Suzuki unveil Q4 results on 26 April 2013. IDFC announces Q4 results on 1 May 2013. HDFC announces Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Dr. Reddys Laboratories announces Q4 results on 14 May 2013.
On the macro front, the government will unveil industrial production data for February 2013 tomorrow, 12 April 2013. Industrial production is seen declining 1.5% in February 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had risen 2.4% in January 2013, as against a contraction of 0.5% in December 2012.
The government will unveil data on the combined consumer price index for urban and rural India for March 2013 on 12 April 2013. Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013.
The government will unveil data on the wholesale price index (WPI) for March 2013 on 15 April 2013. WPI inflation is projected to ease to 6.4% in March 2013 from 6.84% in February 2013, as per the median estimate of a poll of economists carried out by Capital Market. WPI inflation had edged up to 6.84% in February 2013 from 6.62% in January 2013.
The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.
The Reserve Bank of India (RBI) Governor D. Subbarao on 6 April 2013 said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The RBI will announce the Monetary Policy Statement 2013-14 on 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. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
On the political front, the Congress led UPA government has been reduced to a minority government, with DMK removing support to the government in March this year citing differences on the issue of atrocities on Tamils in Sri Lanka. Earlier, the Trinamool Congress withdrew support to the government in September last year as it opposed economic reforms. The Samajwadi Party (SP) along with its regional rival in Uttar Pradesh Bahujan Samaj Party (BSP) provide outside support to the UPA government. SP has 22 MPs in Lok Sabha and BSP has 21 MPs.
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.
The second half of the Budget session of the Parliament begins on 22 April 2013. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008. The Budget Session of the Parliament ends on 10 May 2013.
Assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.
Asian stocks rose for a fourth day on Thursday, the longest winning streak in three months, as the yen neared 100 to the dollar after the Bank of Japan said it will maintain stimulus and loan growth in China topped estimates. Key benchmark indices in China, Hong Kong, Indonesia, South Korea, Japan, Singapore and Taiwan rose by 0.14% to 1.16%.
Bank of Japan Governor Haruhiko Kuroda said the central bank will take all steps necessary to meet a 2% inflation target even as he indicated policy adjustments are unlikely every month.
Australia's unemployment rate climbed in March to the highest level in more than three years as employers shed more workers than economists estimated, sending the local dollar and bond yields lower. The jobless rate rose to 5.6% from 5.4%, the statistics bureau said in Sydney today.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 11 April 2013. US stocks climbed on Wednesday after minutes from the last Federal Reserve meeting quelled fears that the central bank will slow its monthly bond purchases. The Dow Jones Industrial Average and the S&P 500 both ended at record high levels.
The Fed minutes showed several Fed members advocated that the central bank start to taper its quantitative-easing program later in the year, with the goal of halting it altogether by year-end. Federal Reserve Chairman Ben S. Bernanke said on April 8 that economic conditions were far from where he would like them to be.
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