Key benchmark indices further pared gains in mid-afternoon trade after the latest data showed wholesale inflation quickened in October raising worries central bank may hike rates to tame inflation. The S&P BSE Sensex was up 171.76 points or 0.85%, off close to 200 points from the day's high and up about 20 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Tata Motors jumped after the company reported its global wholesales for October 2013. Sun Pharmaceutical Industries declined after the company reported Q2 results. Gujarat State Petronet fell on weak Q2 result.
European and Asian stocks climbed on Thursday after Federal Reserve chairman nominee Janet Yellen signaled stimulus will be maintained until the US economy improves. Back home, Reserve Bank of India (RBI) governor, Raghuram Rajan, expressed comfort on Wednesday about core inflation and highlighted the narrowing current account deficit in his efforts to boost sentiments after recent sell off in financial markets.
Foreign institutional investors (FIIs) bought shares worth a net Rs 299.70 crore on Wednesday, 13 November 2013, as per provisional data from the stock exchanges.
At 14:47 IST, the S&P BSE Sensex was up 171.76 points or 0.85% to 20,366.16. The index surged 374.59 points at the day's high of 20,568.99 in morning trade, its highest level since 12 November 2013. The index gained 153.87 points at the day's low of 20,348.27 in early trade.
The CNX Nifty was up 72.20 points or 1.28% to 6,066.10. The index hit a high of 6,101.65 in intraday trade, its highest level since 12 November 2013. The index hit a low of 6,036.65 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,367 shares gained and 1,002 shares fell. A total of 152 shares were unchanged.
Among the 30-share Sensex pack, 24 stocks gained and rest of them declined.
Sun Pharmaceutical Industries declined 1.1% after the company reported Q2 results. The company's consolidated net profit surged 325.63% to Rs 1362 crore on 58% increase in net sales to Rs 4192 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Wednesday, 13 November 2013.
Sun Pharmaceutical Industries (Sun Pharma) said net profit for Q2 September 2012 included a provision of Rs 584 crore towards the generic Protonix litigation in the US. Adjusted for that provision, net profit for Q2 September 2013 is up by 51% over Q2 September 2012.
Consolidated EBITDA (Earnings Before Interest, Taxes, Depreciation and Amortization) rose 57% to Rs 1828 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin was at 44% in Q2 September 2013, same as in Q2 September 2012.
Branded generic sales in India rose 17% at Rs 949 crore in Q2 September 2013 over Q2 September 2012.
US finished dosage sale grew by 74% at $419 million in Q2 September 2013 over Q2 September 2012.
International formulation sales grew by 17% at $79 million in Q2 September 2013 over Q2 September 2012.
Overall international revenues accounted for more than 75% of total revenues in Q2 September 2013.
Dilip Shanghvi, Managing Director of the company said, "The performance of all our businesses exceeded our plans. We continue to develop a differentiated and specialty driven product basket. We also continue to review opportunities to expand and strengthen our global footprint."
Sun Pharma revised upwards its consolidated fiscal year ending March 2014 (FY14) revenue growth guidance to 25% compared to previous guidance of 18-20%.
The company said the revised guidance takes into account the performance achieved in the half year ended September 2013 (H1FY14) as well the risks associated with increase in competition for some products. Guidance is at constant exchange rate, the company added.
In a separate announcement, Sun Pharma said its board approved the scheme of arrangement to spin off the specified therapeutic and investment business undertakings of Sun Pharma Global FZE into the company without any consideration with effect from 1 May 2013. Sun Pharma Global FZE is a wholly-owned subsidiary of Sun Pharma Global Inc., which is a wholly-owned subsidiary of Sun Pharmaceutical Industries.
Gujarat State Petronet fell 2.79% on weak Q2 result. The company's net profit fell 14.11% to Rs 114.06 crore on 1.60% fall in total income to Rs 291.03 crore in Q2 September 2013 over Q2 September 2012. The result was announced after market hours on Wednesday, 13 October 2013.
Tata Motors jumped 4.65% after the company reported its global wholesales for October 2013. The Tata Motors Group global wholesales in October 2013, including Jaguar Land Rover, were 88,881 units. Global wholesales of all commercial vehicles - Tata and Tata Daewoo range -- were 38,067 units.
Global wholesales of all passenger vehicles in October 2013 were 50,814 units. Global wholesales of Tata passenger vehicles in October 2013 were 14,657 units.
Global wholesales for Jaguar Land Rover were 36,157 vehicles. Jaguar wholesales for the month were 7,006 vehicles while Land Rover wholesales for the month were 29,151 vehicles.
As per a circular issued evening Wednesday, 13 November 2013, stock markets will remain closed tomorrow, 15 November 2013 on account of Moharram. Bourses had previously declared 14 November 2013 as trading holiday.
The headline inflation accelerated to an eight-month high of 7% in October, mainly driven by higher fuel and manufactured goods prices, government data showed on Thursday. Wholesale prices, India's main inflation measure, had risen 6.46% in September. Food prices rose 18.19% year-on-year in October, slower than an annual rise of 18.4% in September. The WPI inflation reading for August was revised to 6.99% from 6.1%.
Reserve Bank of India (RBI) governor, Raghuram Rajan, expressed comfort on Wednesday about core inflation and highlighted the narrowing current account deficit as he sought to reassure investors worried the country would be hit hard in a global market sell-off. Most immediately, he pledged to move slowly if needed in winding down an oil window that provides dollars directly to state-run oil companies, while announcing a bond purchase of 80 billion rupees on Monday to inject liquidity in markets. Both had been key concerns in markets.
The news briefing, announced earlier on that day, was an unprecedented departure for the traditionally cautious central bank. Since taking the helm of the RBI in September, Rajan has pledged to be more communicative and has so far been warmly welcomed by investors.
"It's important that the RBI clarifies interpretation of economic events and the likely direction of economic policies at times of uncertainty so that the market worries about the right things and does not get into a tizzy about the wrong ones. That is my quote today," Rajan told reporters.
"There is no fundamental reason for volatility in value of the rupee," he also said. "At some time, it makes sense to take a deep breath and examine the fundamentals. I hope you all will do that."
Rajan addressed reporters after stronger-than-expected U.S. jobs data last week had sparked concerns about an early end to the Federal Reserve's stimulus, hitting the rupee and sending Indian bonds and shares tumbling, although markets remain well above the levels of the summer lows.
At his briefing, Rajan called food inflation "worryingly high", but said he was comforted by a downward trend in the core consumer price index. Rajan also surprised marketmen by saying the RBI's estimate for the current account deficit for the fiscal year ending in March was $56 billion, the first time in recent memory the central bank has given such a forecast. Rajan also sought to reassure investors worried about the rupee's stability after the RBI has allowed oil companies to source dollars directly in markets instead of a special window provided by the central bank.
That window was opened as an emergency measure by the RBI in late August and was cited as a key reason behind the recovery in the rupee, which is still up 8.8% since its record low in late August. Rajan said the RBI had flexibility in managing the return of oil companies to markets, and would go slow if needed.
In the foreign exchange market, the rupee edged higher against the dollar as comments from nominee for Federal Reserve chair Janet Yellen and Reserve Bank of India governor Raghuram Rajan delivered a two-dose boost of optimism for a currency that had fallen to a two-month low. The partially convertible rupee was hovering at 63.13, stronger compared with its close of 63.30 on Wednesday, 13 November 2013.
European stocks advanced on Thursday, rebounding from two days of losses, after Janet Yellen, nominated to be the next chairman of the Federal Reserve, said the US economy must improve before monetary stimulus is pared. Key benchmark indices in France, Germany and UK rose 0.86% to 1.11%.
Germany's economy lost momentum in the third quarter and France unexpectedly contracted, adding to evidence that the euro region's recovery is flagging. German GDP rose 0.3% from the second quarter, when it increased by 0.7%. The French economy unexpectedly contracted 0.1%. The European Union's statistics office in Luxembourg is due to publish third-quarter data for the euro area today.
Asian stocks climbed the most in a month on Thursday while metals gained after Federal Reserve chairman nominee Janet Yellen signaled stimulus will be maintained until the U.S. economy improves. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan, Singapore, and South Korea rose by 0.2% to 2.12%.
Trading in US index futures indicated that the Dow could rise 37 points at the opening bell on Thursday, 14 November 2013. US stocks rose on Wednesday, sending benchmark indexes to records, as Macy's Inc. led a rally among retailers and investors speculated the Federal Reserve's Janet Yellen will continue the central bank's stimulus policy as chairman.
Janet Yellen, nominated to be the next chairman of the Federal Reserve, said the economy and labor market are performing "far short of their potential" and must improve before the Fed can begin reducing monetary stimulus. A strong recovery will ultimately enable the Fed to reduce its monetary accommodation and reliance on unconventional policy tools such as asset purchases," Yellen, the Fed's vice chairman, said in testimony prepared for her nomination hearing tomorrow before the Senate Banking Committee. "I believe that supporting the recovery today is the surest path to returning to a more normal approach to monetary policy." The remarks show Yellen is committed to the central bank's strategy of attempting to boost the economy and lower 7.3% unemployment, more than four years after the economy began to recover from the longest and deepest recession since the Great Depression. She also signaled support for capital and liquidity rules to help reduce the perception that some banks are too big to fail.
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