Key benchmark trimmed gains after hitting fresh intraday high in mid-afternoon trade. The S&P BSE Sensex was up 81.78 points or 0.43%, off close to 40 points from the day's high and up about 175 points from the day's low. Gains in world stocks supported Indian bourses. Asian and European stocks rose on speculation the Federal Reserve will hold off on tapering its monetary stimulus program after a monetary policy review this week. The market breadth, indicating the overall health of the market, was almost even. HDFC extended intraday gain. ICICI Bank reversed intraday losses. Capital goods stocks extended intraday gains.
Shares of Mahindra Group companies gained after the Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announced the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal). PSU OMCs dropped after Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas today, 17 June 2013, said that the under-recovery on high speed diesel (HSD) has increased sharply.
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening higher. Key benchmark indices trimmed intraday losses amid range bound trade as investors awaited the outcome of Reserve Bank of India's mid-quarter monetary policy review. Key benchmark indices edged lower to hit fresh intraday low in mid-morning trade after the Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy. The market reversed intraday losses to hit fresh intraday high in early afternoon trade. Key benchmark indices strengthened further to hit fresh intraday high in afternoon trade as European markets edged higher in early trade. The market trimmed gains after hitting fresh intraday high in mid-afternoon trade.
At 14:20 IST, the S&P BSE Sensex was up 81.78 points or 0.43% to 19,259.71. The index rose 121.46 points at the day's high of 19,299.39 in mid-afternoon trade, its highest level since 11 June 2013. The index fell 93.25 points at the day's low of 19,084.68 in mid-morning trade.
The CNX Nifty was up 23.70 points or 0.41% to 5,832.10. The index hit a high of 5,845.20 in intraday trade, its highest level since 11 June 2013. The index hit a low of 5,770.25 in intraday trade.
The market breadth, indicating the overall health of the market, was almost even. On BSE, 1,067 shares rose and 1,060 shares fell. A total of 111 shares were unchanged.
Among the 30-share Sensex pack, 17 stocks rose and the rest of them fell. Sun Pharmaceutical Industries (up 3.02%), Maruti Suzuki India (up 2.21%) and Hero MotoCorp (up 2.1%), edged higher.
PSU OMCs dropped after Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas today, 17 June 2013, said that the under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective from 16 June 2013 has increased sharply to Rs 6.31 per litre from Rs 4.87 per litre during the first fortnight of June 2013. HPCL (down 1.18%) and BPCL (down 0.83%) edged lower. Indian Oil Corporation rose 0.36%.
PSU OMCs are currently incurring daily under-recovery of about Rs 286 crore on the sale of diesel, PDS kerosene and domestic LPG. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers.
Meanwhile, PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013, the second increase in rates this month as devaluation of rupee against US dollar made imports costlier. The hike is excluding local sales tax or VAT and actual increase for consumers will be higher. Petrol price in Delhi was hiked by Rs 2.40 a litre to Rs 66.39 from Rs 63.99 previously. Petrol has been deregulated by the government.
Capital goods stocks extended intraday gain. L&T (up 1.04%) and Bhel (up 2.24%), edged higher.
ICICI Bank gained 0.22%, with the stock reversing intraday losses.
HDFC rose 2.42%, with the stock extending intraday gain.
Mahindra & Mahindra (M&M) was up 4.69%, with the stock exteding intraday gain. Mahindra Ugine Steel Company was locked at 10% upper circuit at Rs 71.70. Mahindra Forgings rose 0.15%. Mahindra Composites was locked at 5% upper circuit at Rs 34.45. The Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announced the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal). The agreement will see the formation of a global automotive component supply network with combined annual sales of approximately Rs 15000 crore or $3 billion with operations in North America, South America, Europe and Asia held through listed businesses in Spain, Brazil and India.
As part of the transaction, CIE Automotive, through one of its subsidiaries, will acquire from Mahindra Group a stake in its listed and unlisted companies belonging to Systech Automotive Component business and CIE Automotive will contribute its forging businesses in Spain and Lithuania and together consolidate all companies under Mahindra Forgings (MFL) which will be rechristened Mahindra CIE. Mahindra CIE will continue to be listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
The share sale by Mahindra group will trigger open-offer provisions under the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011. The proposed business transaction will be carried out in a series of steps over the next year that will culminate in Mahindra & Mahindra (M&M) taking a stake of 13.5% in CIE Automotive and CIE Automotive taking a majority stake in a single listed entity in India which will continue to operate the current Systech automotive component businesses globally and include CIE's European forgings operations. Post acquisition of 13.5% stake, M&M will be second largest shareholder in CIE. M&M will nominate 2 directors to the CIE board.
The Mahindra Systech business consists of five companies viz. Mahindra Forgings, Mahindra Ugine Steel Company, Mahindra Composites, Mahindra Hinoday Industries and Mahindra Gears.
Shares of Cinemax India were locked at 5% upper circuit at Rs 150.70 due to favourable swap ratio for the company's merger with PVR. Shares of PVR were up 1.23% at Rs 328. The board of directors of PVR on Saturday, 15 June 2013, approved the Scheme of Amalgamation for the merger of Cine Hospitality and Cinemax India with PVR. As per the swap ratio, shareholders of Cinemax India will get 4 shares of PVR for every 7 shares held in Cinemax India. PVR holds 93.19% stake in Cinemax India through its wholly owned subsidiary Cine Hospitality (as per the shareholding patter as on 31 March 2013).
Multiplex cinema chain operator PVR in November 2012 acquired promoters' entire stake in rival Cinemax India. PVR later raised its stake in Cinemax India via a mandatory open offer.
Emami Paper was locked at 5% upper circuit at Rs 26.25 after the company's board approved raising Rs 120 crore by issuing preference shares to finance its expansion project at Balasore in Orissa. The board of directors of the company at its meeting held on 14 June 2013 has considered and approved the issue of 30 lakh cumulative redeemable non-convertible preference shares of Rs 100 each at a premium of Rs 300 each aggregating to Rs 120 crore, Emami Paper Mills said in a statement. The shares will be issued on preferential basis to the promoters of the company in one or more tranches, it said.
The funds will be utilised for part finance of the expansion project at Balasore for manufacturing 1 lakh tonnes per annum (TPA) multi-layer coated board paper.
The Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy today, 17 June 2013. The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4%. The RBI said in a statement that the inflation outlook going forward will be determined by suppressed inflation being released through revisions in administered prices, including the minimum support prices (MSP) as well as the recent depreciation of the rupee. The rupee declined 6.6% during the period from 22 May 2013 to 11 June 2013 due to sell-off by foreign institutional investors, reflecting risk-off sentiment triggered by apprehensions of possible tapering off of quantitative easing by the US Federal Reserve.
The RBI's monetary policy stance will be determined by how growth and inflation trajectories and the balance of payments situation evolve in the months ahead, the central bank said. It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth, the RBI said. While several measures have been taken to contain the current account deficit, we need to be vigilant about the global uncertainty, the rapid shift in risk perceptions and its impact on capital flows, the central bank said. The RBI stands ready to use all available instruments and measures to respond rapidly and appropriately to any adverse developments, it said.
India's exports declined 1.11% to $24.505 billion in May 2013 over May 2012, as per latest data released by the government. Imports rose 6.99% to $44.649 billion. Oil imports rose 3.05% to $15.022 billion and non-oil imports rose 9.1% to $29.627 billion. The trade deficit widened sharply to $20.143 billion in May 2013 from $16.953 billion in May 2012.
The India Meteorological Department (IMD) said on 14 June 2013 that cumulative seasonal rainfall for the country as a whole during the period between 1-13 June 2013 was 28% above the Long Period Average (LPA).
On the political front, the 17-year long relationship between the BJP and Janata Dal (United) ended on Sunday, 16 June 2013, as Bihar Chief Minister Nitish Kumar remained adamant against elevation of Narendra Modi to the BJP's election campaign committee. The BJP on 9 June 2013 appointed Modi as the Chairman of BJP's Election Campaign Committee for 2014 Lok Sabha polls which could make him the party's candidate for Prime Minister.
Janata Dal (United) rules in Bihar state in a coalition with the BJP. The split is unlikely to bring down Bihar's state government. Mr. Kumar said on Sunday he had asked the state's governor to sack the BJP's ministers. He said his party would seek a vote of confidence in Bihar's state assembly on June 19 to show it has a majority even without the BJP.
European stock markets rose on Monday, 17 June 2013, tracking Asia stocks higher and with investors speculating whether the US Federal Reserve will make any changes to its monetary policy when it meets later this week. Key benchmark indices in UK, France and Germany were up by 0.65% to 1.15%.
Asian stocks rose for a second day on Monday, 17 June 2013, as investors await this week's Federal Reserve meeting. Key benchmark indices in Hong Kong, Indonesia, Japan, Taiwan and Singapore rose by 0.12% to 2.73%. Key benchmark indices in China and South Korea shed by 0.27% to 0.32%.
Singapore's exports fell more than economists estimated in May as manufacturers shipped fewer electronics after an uneven global recovery hurt demand. Non-oil domestic exports slid 4.6% from a year earlier, after falling 1% in April, the trade promotion agency said in a statement today.
Trading in US index futures indicated that the Dow could gain 114 points at the opening bell on Monday, 17 June 2013. US stocks fell on Friday as the International Monetary Fund cut its 2014 outlook for the US and urged the central bank to carefully manage its exit from stimulus plans. The Washington-based IMF lowered its US growth forecast for 2014 to 2.7%, from 3% predicted in April. It left its predication for growth this year unchanged at 1.9%. The IMF sees the Federal Reserve maintaining large monthly bond purchases until at least the end of this year and urged the central bank to carefully manage its exit plan to avoid disrupting financial markets.
The Thomson Reuters/University of Michigan June preliminary index of consumer sentiment fell to 82.7 from a final reading of 84.5 the prior month. Other reports showed US industrial production was unchanged in May and wholesale prices climbed for the first time in three months.
The Federal Open Market Committee, the Fed's interest-rating setting body, is due to begin its two-day meeting on interest rates in the United States tomorrow, 18 June 2013. As per reports last week, Fed Chairman Ben Bernanke this week will try to calm fears that the central bank plans to end its bond-buying program all at once. The Fed's monthly bond purchases of $85 billion a month is aimed at encouraging US economic growth. Uncertainty about whether the Fed will curtail the pace of its bond purchases has triggered volatility in global stocks over the past few weeks. Bernanke said last month that the bank could start scaling back its aggressive easing program in coming months if data continue to improve.
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