Key benchmark indices dropped in early trade as index heavyweight and cigarette major ITC declined after turning ex-dividend. Anther index heavyweight Reliance Industries (RIL) also fell in early trade. The S&P BSE Sensex was down 133.79 points or 0.66%, off 109.68 points from the day's high and up 27.18 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Real estate developer DLF fell on weak Q4 result announced after trading hours on Thursday, 30 May 2013. Bharat Electronics surged on strong Q4 result announced after trading hours on Thursday, 30 May 2013. Shares of Apollo Hospitals Enterprise, GlaxoSmithkline Consumer Healthcare, Oil India and Wockhardt gained ahead of their inclusion in MSCI India Index from close of trading today, 31 May 2013. Bank stocks declined after the Reserve Bank of India (RBI) on Thursday, 30 May 2013, tightened rules for banks restructuring loans that are in danger of default.
Foreign institutional investors (FIIs) bought shares worth a net Rs 787.47 crore on Thursday, 30 May 2013, as per provisional data from the stock exchanges.
At 9:27 IST, the S&P BSE Sensex was down 133.79 points or 0.66% to 20,081.61. The index lost 160.97 points at the day's low of 20,054.43 in early trade. The index slipped 24.11 points at the day's high of 20,191.29 in early trade.
The CNX Nifty was down 44.30 points or 0.72% to 6,079.75. The index hit a high of 6,106.25 in intraday trade. The index hit a low of 6,072.10 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 420 shares rose and 396 shares fell. A total of 30 shares were unchanged.
The total turnover on BSE amounted to Rs 129 crore by 09:30 IST.
Among the 30-share Sensex pack, 22 stocks declined and the rest of them gained.
Index heavyweight Reliance Industries (RIL) shed 0.57% to Rs 831.15. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%.
Meanwhile, ratings agency Standard & Poor's (S&P) on Wednesday, 29 May 2013, raised the long term corporate credit rating on RIL to "BBB+" from "BBB", with a "negative" outlook. RIL's articulation of its growth strategy removes the uncertainty regarding the company's use of its high cash balance, S&P said. RIL is planning to spend more than $30 billion on expansion over the next three years in core businesses such as refining, petrochemical, and exploration and production (E&P).
Commenting on the rating upgrade, V. Srikanth, Joint CFO, RIL, said that the upgrade recognizes the value of RIL's focused capital expenditure plan in strengthening the company's profitability and competitiveness.
Index heavyweight and cigarette major ITC fell 2.43% at Rs 345.65 as the stock turned ex-dividend today, 31 May 2013 for dividend of Rs 5.25 per share for the year ended 31 March 2013. The stock hit record high of Rs 355.75 in intraday trade on Thursday, 30 May 2013.
Real estate developer DLF fell 1.72%. The company reported consolidated net loss of Rs 4 crore in Q4 March 2013 as compared to net profit of Rs 212 crore in Q4 March 2012. Revenue declined 16% to Rs 2319 crore in Q4 March 2013 over Q4 March 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 12% to Rs 819 crore in Q4 March 2013 over Q4 March 2012. The result was announced after trading hours on Thursday, 30 May 2013.
Net profit declined 41% to Rs 712 crore on 11% decline in revenue to Rs 9096 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31March 2012 (FY 2012). DLF said that the revision in the accounting guidance note on real estate issued by ICAI adversely impacted the recognition of revenue on the new projects launched during FY 2013 and as a result reduced profits. The adoption of new guidance note envisages that the revenue can be recognized after reaching certain milestones, particularly incurring 25% of budgeted project cost (excluding cost of land). Had the new accounting norms not been adopted, the company's revenue would have been higher by Rs 750 crore approximately while EBITDA would have been higher by about Rs 400 crore, DLF said.
With regard to the future business outlook, DLF said that the management envisages an uncertain and lower growth environment and hence plans to move to a risk mitigated, steady state business environment by adopting a cautions and conservative approach. With the successful completion of IPP and anticipated closure of the residual divestment of non-core assets, the company expects its net debt to come down in the current fiscal, said Mr Ashok Tyagi, Group CFO, DLF. DLF expects to double its EBITDA and reduce its debt by 50% over the next three years. The company expects to become free cash positive by FY 2015.
Sesa Goa was unchanged at Rs 157.75. The stock turned ex-dividend today, 31 May 2013 for dividend of Rs 0.10 per share for the year ended 31 March 2013.
Beer maker United Breweries rose 0.09%. The company's net profit declined 19.64% to Rs 5.85 crore on 7.06% growth in total income from operations (net) to Rs 1003.62 crore in Q4 March 2013 over Q4 March 2012. The result was announced after trading hours on Thursday, 30 May 2013.
Bharat Electronics surged 3.93% after net profit rose 77.5% to Rs 592.70 crore on 22.2% growth in net sales to Rs 2727.63 crore in Q4 March 2013 over Q4 March 2012. The result was announced after trading hours on Thursday, 30 May 2013.
Shares of Apollo Hospitals Enterprise (up 4.04%), GlaxoSmithkline Consumer Healthcare (up 4.24%), Oil India (up 4.02%) and Wockhardt (up 3.45%) gained ahead of their inclusion in MSCI India Index from close of trading today, 31 May 2013.
Bank stocks declined after the Reserve Bank of India (RBI) on Thursday, 30 May 2013, tightened rules for banks restructuring loans that are in danger of default.
State Bank of India (SBI) shed 0.09%. ICICI Bank slipped 0.49%.
HDFC Bank fell 1.14% to Rs 715.55. The stock hit a record high of Rs 727 in intraday trade on Thursday, 30 May 2013.
The central bank has raised the provision in respect of new restructured standard accounts to 5% in a phased manner by March 2016 from 2.75% at present. The RBI also said that promoters' personal guarantee should be obtained in all cases of restructuring and corporate guarantee cannot be accepted as a substitute for personal guarantee. However, corporate guarantee can be accepted in those cases where the promoters of a company are not individuals but other corporate bodies or where the individual promoters cannot be clearly identified.
On the macro front, the government will announce Q4 March 2013 gross domestic product (GDP) data today, 31 May 2013. India's GDP grew 4.5% in Q3 December 2012, sharply slower than the 5.3% expansion reported for Q2 September 2012.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on Thursday, 30 May 2013, said that the central bank is concerned about the country's wide current-account deficit and still-high retail inflation.
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 at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. 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.
Asian markets were trading mostly higher tracking gains in US markets. Key benchmark indices in South Korea, Taiwan and China were rose by 0.03% to 1.91%. Key benchmark indices in Hong Kong, Indonesia and Singapore were down by 0.06% to 0.7%.
Japan's industrial production rose 1.7% during April, the Ministry of Economy, Trade and Industry said today, 31 May 2013.
US stocks climbed Thursday, with the S&P 500 index on track for its longest monthly win streak since September 2009, as another report cast a positive light on the US housing market and as weaker-than-expected data on first-quarter economic growth and jobless claims raised hopes the Federal Reserve may keep its current level of bond purchases.
Fed Chairman Ben Bernanke said last week that an improvement in data could trigger the central bank to start tapering its asset purchases in coming months, stoking fears that the $85-billion-a-month liquidity injection will soon come to an end.
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