Key benchmark indices edged lower as weakness in European markets weighed on sentiment adversely. Weak Q4 results announced during market hours today, 22 May 2013 by engineering and construction major, L&T also dampened sentiment. L&T tumbled nearly 6% after reporting poor Q4 results. The barometer index, the S&P BSE Sensex and the 50-unit CNX Nifty, both, trimmed losses after hitting their lowest level in over a week. The Sensex was provisionally down 32.78 points or 0.16%, off close to 140 points from the day's high and up about 75 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Indian stocks fell for the third straight day today, 22 May 2013.
Index heavyweight and cigarette major ITC edged higher. Another index heavyweight Reliance Industries (RIL) declined. Most bank stocks declined. Zee Entertainment Enterprises declined after Q4 results.
The market edged higher in early trade on firm Asian stocks. It hovered in positive terrain in morning trade. It continued to hover in positive terrain in mid-morning trade. It regained strength after trimming intraday gains to hit fresh intraday low in early afternoon trade. Key benchmark indices pared further gains to slide to intraday low in afternoon trade as European markets edged lower in early trade. It slipped into the red to hit fresh intraday low in mid-afternoon trade. It trimmed losses after hitting fresh intraday low in late trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 679.44 crore on Tuesday, 21 May 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was down 32.78 points or 0.16% to 20,078.83. The index gained 108.74 points at the day's high of 20,220.35 in early trade. The index declined 110.75 points at the day's low of 20,000.86 in late trade, its lowest level since 15 May 2013.
The CNX Nifty was down 13.75 points or 0.22% to 6,100.35, as per provisional figures. The index hit a high of 6,147.60 in intraday trade. The index hit a low of 6,074.45 in intraday trade, its lowest level since 15 May 2013.
The total turnover on BSE amounted to Rs 2051 crore, higher than Rs 1966.84 crore on Tuesday, 21 May 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,443 shares declined and 872 shares rose. A total of 101 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks fell and the rest of them rose. Tata Power Company, Hero MotoCorp and GAIL (India) shed by 1.34% to 2.16%.
Index heavyweight Reliance Industries (RIL) fell 1.25% to Rs 817. The stock hit high of Rs 834.20 and low of Rs 813.50.
Index heavyweight and cigarette major ITC rose 1.61% to Rs 336.90. The stock hit high of Rs 337 and low of Rs 329.65. The stock had hit record high of Rs 355 in intraday trade on 11 May 2013. The company's net profit rose 19.43% to Rs 1927.98 crore on 19.12% growth in total income to Rs 8511.38 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 17 May 2013. ITC's net profit rose 20.38% to Rs 7418.39 crore on 18.74% growth in total income to Rs 30839.97 crore in the year ended March 2013 over the year ended March 2012.
On a consolidated basis, ITC's net profit rose 21.57% to Rs 7608.07 crore on 19.02% growth in total income to Rs 32505.14 crore in the year ended March 2013 over the year ended March 2012.
ITC's board of directors at its meeting held on Friday, 17 May 2013, recommended a dividend of Rs 5.25 per share for the financial year ended 31 March 2013.
India's largest engineering and construction firm by sales, L&T lost 5.83% on poor Q4 results. The stock was the top loser from the Sensex pack. The company during market hours today, 22 May 2013 reported 6.9% fall in net profit to Rs 1787.94 crore on 10.08% rise in total income to Rs 20668.21 crore in Q4 March 2013 over Q4 March 2012.
L&T said that to commemorate the occasion of the platinum jubilee of the company, its board of directors in its meeting held today, 22 May 2013, recommended issue of bonus shares in the ratio of 1:2 (i.e. one bonus equity share each for every two held).
The company successfully garnered fresh orders worth Rs 88035 crore during the year ended 31 March 2013 (FY 2013), recording a healthy growth of 25% over FY 2012. The order Inflow rose 32% to Rs 27929 crore in Q4 March 2013 over Q4 March 2012, despite challenging economic environment. International order inflow constituted 17% of the total order inflow for the year 2012-13. The major orders during the year came from Building & Factories, Power Transmission & Distribution, Infrastructure Transportation and Power sectors. The order book stood at Rs 153604 crore as at 31 March 2013. International order book constituted 13% of the total order book.
The company in its outlook said challenges in the growth path of Indian economy are still persisting in the form of infrastructure bottlenecks, resource availability, high fiscal and current account deficits. Moreover, constraints to the speedy implementation of the reform process is adversely impacting the investment climate in India. High domestic savings and improved channelization of risk capital are expected to provide impetus to growth in the medium term.
Improvement in the fortunes of the power sector, privatization and indigenisation of defence manufacturing and resolution of issues relating to mining, gas pricing, land acquisition etc will boost the company's prospects. The infrastructure development is an irreversible process for reviving growth momentum in India and the company, with its proven execution capabilities, is well positioned to harness the potential opportunities. The international business environment provides opportunities but is highly competitive. The countries in the Middle East, select markets in CIS Region, Africa and South Asia, however, hold good prospects. The company is investing in business development efforts in these select international markets. The company is optimistic in sustaining its growth momentum on the back of order book and healthy strong balance sheet, company added.
India's largest power equipment maker by sales Bhel shed 1.51% ahead of its Q4 results tomorrow, 23 May 2013.
Zee Entertainment Enterprises fell 1.45%. The company's consolidated net profit rose 12.13% to Rs 179.60 crore on 10.65% rise in total income to Rs 1018.11 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results during market hours today, 22 May 2013.
Th company's board of directors at its meeting held today, 22 May 2013, approved enhancement of FII investments in the company beyond the current limit of 49% up to the maximum sectoral limit allowed under applicable FDI regulations, subject to appropriate approvals. In addition, as a special reward to shareholders on completion of 20 years of broadcasting business of the company, the board has considered and approved distribution of about Rs 2000 crore, by way of bonus issue of 6% Redeemable Preference Shares (RPS). Based on this decision, the company will issue 21 RPS of Re 1 each for every share of Re 1 each held in the company, through a court approved scheme of arrangement and such issuance shall be subject to other statutory and regulatory approvals/exemptions.
Most bank stocks declined. HDFC Bank declined 0.65% to Rs 703.40. The stock had hit a record high of Rs 724 hit in intraday trade on 20 May 2013.
Shares of India's biggest commercial bank in terms of branch network, State Bank of India (SBI), rose 0.14% ahead of its Q4 results tomorrow, 23 May 2013..
But, other PSU bank stocks declined. Canara Bank, Union Bank of India, Bank of Baroda and Punjab National Bank shed by 0.25% to 2.88%.
ICICI Bank was flat at Rs 1,210.10. The stock had hit 52-week high of Rs 1,234 in intraday trade on Monday, 21 May 2013. The bank after trading hours on 16 May 2013, said it has received an aggregate equity capital repatriation of Canadian dollar 75 million from ICICI Bank Canada, its wholly owned banking subsidiary in Canada. Post the repatriation, the share capital of ICICI Bank Canada is Canadian dollar 857 million and its capital adequacy ratio continues to be strong, ICICI Bank said in a statement.
ICICI Bank said it already has a strong capital adequacy ratio, and the return of capital by the subsidiary will enhance the bank's ability to optimise capital deployment and return on equity. .
As per the Q4 results calendar, Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results tomorrow, 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, Power Grid Corporation of India, DLF, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, Cipla, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
Global credit rating agency Standard & Poor's (S&P) on 17 May 2013, affirmed India's sovereign rating at BBB-minus with a negative outlook, reiterating there was a one-in-three chances of a ratings downgrade over the next 12 months. S&P said the government's ability to prop up investment growth remains uncertain. The ratings agency, however, said there was scope to upgrade the sovereign ratings if the government unleashes public and private investments to spur economic growth.
The monsoon rains may arrive on the southern coast around 3 June 2013, the weather office forecast on 15 May 2013. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The India Meteorological Department (IMD) has predicted normal rains this year.
The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. RBI Governor D Subbarao on 14 May 2013 said that the central bank will take note of falling inflation when discussing potential interest rate cuts. 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.
European stock markets nudged lower on Wednesday, pausing after climbing to multiyear highs in the prior day's session, as investors stayed cautious ahead of comments from the US Federal Reserve Chairman Ben Bernanke. Key benchmark indices in UK, France and Germany were down by 0.21% to 0.63%.
Asian stocks rose on Wednesday after the Bank of Japan maintained its plan to expand the monetary base. Key benchmark indices in Indonesia, Japan, Singapore, Taiwan and South Korea rose by 0.19% to 1.6%. Key benchmark indices in China and Hong Kong fell by 0.12% to 0.45%.
The Bank of Japan affirmed a plan to double the monetary base over two years after a jump in bond yields highlighted risks associated with Prime Minister Shinzo Abe's campaign to revive the economy. The central bank will expand the supply of money in the economy by 60 to 70 trillion yen ($683 billion) a year, as pledged in April, the BOJ said in Tokyo today after the conclusion of two-day policy meeting.
Japan's exports missed estimates in April and the trade deficit swelled, highlighting weakness in global demand that may weigh on efforts to revive the world's third-biggest economy. Overseas shipments rose 3.8% from a year earlier, the Finance Ministry said in Tokyo today.
Australia's consumer confidence slumped by the most in 17 months as a government announcement last week that the budget would remain in deficit overshadowed record low interest rates.
Trading in US index futures indicated that the Dow could gain 10 points at the opening bell on Wednesday, 22 May 2013. US stocks rose on Tuesday, with the Dow Jones Industrial Average and the S&P 500 closing at new all-time highs as Federal Reserve officials' comments eased some concerns that the central bank could start reducing its stimulus program.
New York Federal Reserve President William Dudley said he cannot be sure whether policymakers will next reduce or increase the amount of purchases, due to the "uncertain" economic outlook. Earlier, James Bullard, president of the Federal Reserve Bank of St. Louis, had urged the European Central Bank to consider employing a U.S.-style quantitative easing program to counter slowing inflation and recession in the euro zone.
Markets will be looking for more clues on the Federal Reserve's next move when Chairman Ben Bernanke testifies before Congress later on Wednesday. His remarks will be followed by the release of minutes of the last Fed meeting, which is widely expected to give further details of how it will eventually manage the exit from ultra-easy policy.
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