Key benchmark indices eked out small gains as index heavyweight and cigarette major ITC extended intraday gains in late trade and as another index heavyweight Infosys rose. The market was range bound as investors refrained from building large positions ahead of the outcome of the two-day meeting of the Federal Open Market Committee which begins today, 17 September 2013, and also ahead of the mid-quarter monetary policy review by the Reserve Bank of India (RBI) later this week. The barometer index, the S&P BSE Sensex, was provisionally up 66.19 points or 0.34%, off close to 10 points from the day's high and up about 175 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Some metal and mining stocks rose. IT stocks gained on weak rupee. Wipro jumped ahead of its entry in the 50-unit CNX Nifty next week. Dr Reddy's Laboratories rose after the company said it will launch Azacitidine for injection 100 mg/vial, a bioequivalent generic version of VIDAZA (azacitidine for injection), in the United States in the near future. Index heavyweight and cigarette maker ITC edged higher after its hospitality arm ITC Hotels on Monday, 16 September 2013, said it has tied up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai, under ITC Hotels' 5-star 'WelcomHotel' brand and the group's mid-market to upscale 'Fortune' brand.
In the foreign exchange market, the rupee trimmed intraday losses against the dollar. The partially convertible rupee was hovering at 62.96, weaker than its close of 62.83/84 on Monday, 16 September 2013. The rupee hit a low of 63.6450 early in the session.
The domestic currency has declined against the dollar this year due to fears that India will struggle to fund its current account gap if the US starts to wind down its easy-money policies that have fueled global liquidity in recent years. The rupee has, however, made a strong rebound after hitting record low of 68.85 in intraday deals on 28 August 2013. The recovery in the rupee materialized after new Reserve Bank of India Governor Raghuram Rajan on 4 September 2013 announced plans to bolster the financial industry and stabilize the rupee.
Rupee depreciation fuels inflation, increases import bill and current account deficit. It also increases the government's spending on fuel subsidies, potentially widening the fiscal deficit.
As per provisional figures, the S&P BSE Sensex was up 66.19 points or 0.34% to 19,808.66. The index rose 76.63 points at the day's high of 19,819.10 in late trade. The index declined 107.03 points at the day's low of 19,635.44 in morning trade.
The CNX Nifty was up 10.40 points or 0.18% to 5,850.95, as per provisional figures. The index hit a high of 5,857.80 in intraday trade. The index hit a low of 5,804.90 in intraday trade.
The total turnover on BSE amounted to Rs 1446 crore, lower than Rs 1990.61 crore on Monday, 16 September 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,235 shares fell and 1,120 shares rose. A total of 129 shares were unchanged.
Among the 30-share Sensex pack, 16 stocks declined and rest of them rose. Coal India (up 1.83%), Hindustan Unilever (up 1.34%) and Bhel (up 1.33%), gained.
Dr Reddy's Laboratories rose 3.6% after the company announced during market hours today, 17 September 2013, that Azacitidine for injection 100 mg/vial, a bioequivalent generic version of VIDAZA (azacitidine for injection), is approved by the USFDA on 16 September 2013. The launch of product in the US market is planned in the near term, the company said. The VIDAZA brand had US sales of approximately $378.5 million for the twelve months ended July 2013, according to IMS Health data.
Some metal and mining stocks rose. Jindal Steel & Power (2.23%), Hindalco Industries (up 0.84%), JSW Steel (up 1.09%), Sail (up 1.96% and Sesa Goa (up 1.64%), gained.
IT stocks rose on weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. TCS (up 2.27%), and Infosys (up 1.03%), gained.
Wipro jumped 5.11% to Rs 474, with the stock surging ahead of its entry in the 50-unit CNX Nifty next week. Wipro becomes a part of the Nifty with effect from 27 September 2013. The IT major replaces Reliance Infrastructure in Nifty.
HCL Technologies rose 4.36%. HCL Infosystems declined 2.33%. HCL Technologies and HCL Infosystems on Monday, 16 September 2013, clarified that no proposal to merge HCL Infosystems or its systems integration and services business with HCL Technologies is under consideration. The two companies issued the clarification after media reports suggested that HCL Infosystems is working towards the goal of merging its system integration and services business with HCL Technologies. HCL Tech and HCL Infosystems have been teaming on specific opportunities in India and for this purpose the two companies have been cross selling each other's services over the last 2 years, HCL Tech said after trading hours on Monday, 16 September 2013. HCL Tech said that the company derived about 5% of its revenue from India during FY 2013. It is expected that the revenue from India during FY 2014 would remain at similar level, the company said. The arrangement with HCL Infosystems did not have any impact on the margins in the past and it is not expected to have any impact on the margins going forward, HCL Technologies said. HCL Technologies is a software firm.
HCL Infosystems also said that HCL Infosystems and HCL Technologies have been collaborating together under teaming agreements to address business opportunities in India. These agreements are on arms length basis in the best interest of HCL and its customers and not margin dilutive to HCL Infosystems, the company said.
A bulk of HCL Infosystems' revenues comes from selling computing hardware to government and by acting as a national distributor for mobile phones, computers, laptops and printers.
Zensar Technologies gained 3.86% after the company after market hours on Monday, 16 September 2013, announced a unique initiative to encourage product start-ups in India and to help take their products global. These start-ups are in the new age technology area of SMAC (Social, Mobility, Analytics and Cloud).
Dr. Ganesh Natarajan, Vice Chairman and CEO, Zensar Technologies said: "This initiative is a reiteration of our commitment to building an ecosystem for technology innovation, by helping program manage and showcase quality assured solutions from India's best start-ups."
Mr. Kumar Gaurav, Head of Consulting & SMAC Portfolio, Zensar Technologies said: "With the emergence of new technologies across the areas of Cloud, Social Media, Mobile and Analytics, organizations today are looking at integrating applications across the enterprise seamlessly, with the ability to dashboard and allow for easy anywhere-anytime accessibility. The move from systems of record to systems of engagement is now imminent. The customer is the centre of focus across the enterprise, constantly driving demand for intelligence, insights, ideas and collaboration across organizational boundaries. Digital Transformation will also focus around experience creation through a combination of efforts across customer intimacy, product innovation, organizational agility and intelligence driven processes."
Mr. Kumar added, "This initiative of partnering with SMAC product companies is in sync with our strategy of delivering integrated and innovative SMAC solutions to our clients. We are delighted to be a part of this initiative and look forward to partner with these final few SMAC product start-up companies and take their offerings across globally to our clients."
Mindtree rose 1.69% after the company after market hours on Monday, 16 September 2013, announced a partnership with SAP America to enable customers execute their Cloud strategies on SAP's cloud applications like SuccessFactors and mobile platforms.
Arun Rangaraju, Head, Package Solutions, Mindtree said: "Customers success spells success for us. They want more and more options in how they take advantage of cloud and mobility platforms to address their IT needs. Our partnership with SAP reinforces our commitment to deliver innovative solutions to our customers. This ties back to our mission to engineer meaningful technology solutions to help businesses and societies.
Index heavyweight and cigarette maker ITC rose 1.34%. ITC Hotels on Monday, 16 September 2013, said it has tied up with RP Group Hotels & Resorts to manage 5 hotels in India and Dubai, under ITC Hotels' 5-star 'WelcomHotel' brand and the group's mid-market to upscale 'Fortune' brand. The tie-up has been firmed up through a Memorandum of Understanding between ITC Hotels and RP Groups Hotels & Resorts. While the two WelcomHotels are already under a management contract and will be flagged off immediately, the three Fortune hotels are a part of the signed MOU and will be launched subsequently, ITC Hotels said in a statement. As part of its expansion drive, ITC Hotels proposes to add several managed hotels to its brand portfolio, it said. On the anvil are an ITC super-premium luxury hotel in Mahabalipuram, a WelcomHotel in Jodhpur, Patna and Chandigarh and more than 30 hotels under the Fortune brand.
Redington (India) rose 1.77% to Rs 57.45 after the company said it has tied up with 3M India (3M) as a national distributor for distribution of 3M Cogent Biometric & Security systems products. This partnership with 3M will enable the company to enhance its product portfolios and would provide access to the attractive opportunity in the biometric & security systems segment though a strong and established MNC brand, Redington (India) said.
3M Corporation is a $25.3 billion diversified technology driven company known for its innovation across the world with leading positions in a broad range of important markets. 3M markets approximately 50,000 products worldwide in about 200 countries and owns more than 45 technology platforms. The 3M technology solutions expertise has been tried and tested for performance, safety, value & productivity in markets that include construction, transportation, hospitals, general industry, aerospace, railways, highways, defense, security, mining, health, oil & gas, telecom, marine and homes in India and across the globe.
At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.
European stock markets pulled back from multi-year highs on Tuesday, 17 September 2013, ahead of the US Federal Reserve kicking of its two-day policy meeting, at which the central bank could decide to scale back its stimulus program. Key benchmark indices in UK, France and Germany were down by 0.17% to 0.33%.
UK inflation slowed in August as transport costs and prices for new autumn clothing ranges rose less than a year earlier. Consumer prices increased 2.7% from a year earlier, the least in three months, compared with 2.8% in July, the Office for National Statistics said in London.
German investor confidence rose to the highest level in more than three years, signaling optimism that Europe's largest economy will continue to grow amid a global recovery. The ZEW Center for European Economic Research in Mannheim said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, rose to 49.6 in September from 42 in August. That's the highest level since April 2010.
Asian stocks fell on Tuesday, 17 September 2013, as the Federal Reserve begins a two-day policy meeting at which it is forecast to reduce the pace of its US bond buying. Key benchmark indices in China, Japan, Taiwan, Hong Kong, Indonesia and South Korea fell by 0.07% to 2.05%. Singapore's Straits Times rose 0.05%.
Trading in US index futures indicated a flat opening of US stocks on Tuesday, 17 September 2013. Most US stocks rose on Monday, 16 September 2013, after former US Treasury secretary Larry Summers removed himself from consideration to run the Federal Reserve. Summers was seen as relatively hawkish.
Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States begins today, 17 September 2013. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years. Investors are also eyeing Fed's forward guidance on policy.
UN chemical investigators on Monday confirmed the use of sarin nerve agent in an August 21 poison gas attack outside the Syrian capital in a long-awaited report that the United States, Britain and France said proved government forces were responsible. Syria and Russia have blamed the August 21 attack on the rebels. The rebels, the United States and other Western powers blame forces loyal to Assad for the Ghouta attack. The UN confirmation of sarin gas use on August 21 comes as France, Britain and the United States agreed in Paris to seek a strong and robust UN resolution that sets binding deadlines on removal of chemical weapons. Those talks followed a weekend deal on Syria's chemical weapons reached by the United States and Russia that could avert US military action.
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