Key benchmark indices closed near the flat line after witnessing intraday volatility. The market, which jumped in early trade, wiped off intraday gains in late trade after weak Q1 results from engineering & construction major L&T sent capital goods shares tumbling. The barometer index, S&P BSE Sensex, rose 9.27 points or 0.05%, off about 106 points from the day's high and up close to 93 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
Indian stocks gained for the fourth straight day today, 22 July 2013. From a recent low of 19,851.23 on 16 July 2013, the Sensex has gained 307.89 points or 1.55% in four trading sessions. The Sensex has risen 763.31 points or 3.94% so far in July 2013 (till 22 July 2013). The Sensex has gained 732.41 points or 3.77% in calendar 2013 so far (till 22 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 284.50 points or 1.39%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 3,560.64 points or 21.45%.
Engineering & construction major L&T tumbled over 7% after reporting weak Q1 results. Weak Q1 results from L&T had ripple effect on shares of power equipment major Bharat Heavy Electricals (Bhel), which also fell sharply. Reliance Industries (RIL) declined after Q1 results. Asian Paints dropped after the company reported weak Q1 result at the fag end of the trading session. IT major TCS scaled record high. Housing Development Finance Corporation (HDFC) edged higher after the company reported good Q1 results on Friday, 19 July 2013. Among metal stocks, Tata Steel hit 52-week low.
The market may remain volatile this week as traders roll over positions in the futures & options (F&) segment from the July 2013 series to August 2013 series. The near month July 2013 derivatives contracts expire on Thursday, 25 July 2013.
The S&P BSE Sensex rose 9.27 points or 0.05% to 20,159.12, its highest closing level since 30 May 2013. The index rose 115.05 points at the day's high of 20,264.90 in early afternoon trade, its highest level since 21 May 2013. The index fell 84.16 points at the day's low of 20,065.69 in early trade, its lowest level since 18 July 2013.
The CNX Nifty rose 2.60 points or 0.04% to 6,031.80, its highest closing level since 18 July 2013. The index hit a high of 6,064.15 in intraday trade. The index hit a low of 6,004.25 in intraday trade, its lowest level since 18 July 2013.
The BSE Mid-Cap index rose 0.04%. The BSE Small-Cap index fell 0.32%. Both these indices underperformed the Sensex.
Among sectoral indices on BSE, the S&P BSE Auto index (up 1.06%), the S&P BSE Bankex index (up 0.98%), the S&P BSE IT index (up 0.73%) and the S&P BSE Teck index (up 0.71%), outperformed the Sensex.
The S&P BSE Capital Goods index (down 5.57%), the S&P BSE Oil & Gas index (down 1.65%), the S&P BSE Power index (down 0.91%), the S&P BSE PSU index (down 0.62%), the S&P BSE Realty index (down 0.53%), the S&P BSE Consumer Durables index (down 0.40%), the S&P BSE Metal index (down 0.26%), the S&P BSE Healthcare index (down 0.23%) and the S&P BSE FMCG index (down 0.08%), underperformed the Sensex.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,233 shares declined and 1,031 shares rose. A total of 154 shares were unchanged.
The total turnover on BSE amounted to Rs 1643 crore, lower than Rs 1929.18 crore on Friday, 19 July 2013.
Among the 30-share Sensex pack, 19 stocks rose and rest of them fell.
Tata Steel fell 2.95% to Rs 233.95. The stock hit 52-week low of Rs 233.35 in intraday trade today, 22 July 2013. A slowdown in the global economy has pulled down global steel prices this year.
Reliance Industries (RIL) declined 1.59% after Q1 results. The company's net profit rose 18.9% to Rs 5352 crore on 4.6% decline in revenue to Rs 90589 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Friday, 19 July 2013.
RIL's operating profit before other income and depreciation rose 3.9% to Rs 7075 crore in Q1 June 2013 over Q1 June 2012. Other income rose 33.14% to Rs 2535 crore in Q1 June 2013 over Q1 June 2012, mainly on account of profit on sale of investments in the fixed income instruments and higher average liquid investments. RIL's revenue from exports rose 3.2% to Rs 57026 crore in Q1 June 2013 over Q1 June 2012.
RIL's outstanding debt as on 30 June 2013 was Rs 80307 crore, as against Rs 72427 crore as on 31 March 2013. The company had cash and cash equivalents of Rs 93066 crore as on 30 June 2013. These were in bank deposits, mutual funds, CBLO, CDs and Government securities/bonds. RIL is debt free on a net basis as on 30 June 2013.
The net addition to fixed assets for Q1 June 2013 was Rs 10523 crore, including exchange rate difference capitalisation. Capital expenditure (capex) was principally on account of ongoing expansion projects in the petrochemicals and refining businesses at Jamnagar, Dahej, Silvassa and Hazira, RIL said.
RIL's gross refining margin (GRM) edged up to $8.4 per barrel in Q1 June 2013 from $7.6 a barrel in Q1 June 2012. It fell from $10.1 a barrel in Q4 March 2013.
Commenting on the company's Q1 results, Mukesh D. Ambani, CMD, RIL said: "Reliance achieved strong results during the first quarter of FY 2013-14, while investing in projects that will provide sustainable advantage for a longer period. Our performance this quarter reflects higher operating rates and embedded options in crude sourcing and product placement, given the size and scale of the refining business. Robust growth in petrochemical products demand augurs well for our biggest ever expansion programme. Retail business continues to make remarkable progress and registered a 53% growth in revenues during the first quarter".
Production from RIL's KG-D6 field was 0.5 million barrels of crude oil, 0.06 million barrels of condensate and 49.2 BCF of natural gas in Q1 June 2013, a reduction of 41%, 58% and 53% respectively on a year on year (YoY) basis. RIL attributed the fall in production to geological complexity, natural decline in the fields and higher than envisaged water ingress.
RIL's shale gas business in the United States comprises of three upstream joint ventures (JVs), each with Chevron, Pioneer Natural Resources and Carrizo Oil & Gas and a midstream JV with Pioneer. Aggregate investments since inception of these JVs stood at around $6 billion, as of 30 June 2013, RIL said.
RIL said its retail business continued to grow in Q1 June 2013 despite challenging macroeconomic environment. A mix of strong same store sales growth and new store openings helped increase the turnover by 53% to Rs 3474 crore in Q1 June 2013 over Q1 June 2012, RIL said. The business continued with store expansion across all format sectors and added 45 stores to its portfolio in Q1 June 2013. The business witnessed strong same store sales growth ranging from 10% to 22% across format sectors during the quarter over corresponding period last year, RIL said.
RIL's subsidiary, Reliance Jio Infocomm (RJIL), which is the only private player with broadband wireless access spectrum in all the 22 telecom circles of India, plans to provide reliable fast internet connectivity and rich digital services on a pan India basis, RIL said.
RIL said it has retained its domestic credit ratings of AAA from CRISIL and FITCH and an investment grade rating for its international debt from Moody's as Baa2. S&P has raised the long term corporate credit rating to BBB+ from BBB.
Lupin fell 0.92%. The company announced at the fag end of the trading session today, 22 July 2013, that its US-based unit, Lupin Pharmaceuticals Inc. has received final approval from the US Food and Drug Administration for marketing generic version of Santarus Inc's Glumetza tablets in 500 mg and 1000 mg strengths in the US market. These two strengths of the drug had US sales of approximately $144 million in the twelve months ended March 2013. The drug is indicated as an adjunct to diet and exercise to improve glycemic control in adults with type-2 diabetes mellitus.
Lupin said it believes that it is the first applicant to file an Abbreviated New Drug Application (ANDA) for the generic drug in 500 mg and 1000 mg strengths and as such will be entitled to 180 days of marketing exclusivity.
Asian Paints declined 1.69% after the company reported weak Q1 result. The company's consolidated net profit fell 4.57% to Rs 275.20 crore on 11.6% growth in income from operations to Rs 2841.10 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 22 July 2013. Profit before depreciation, interest and taxes (PBDIT) rose 4% to Rs 464.70 crore in Q1 June 2013 over Q1 June 2012. The result was announced during trading hours today, 22 July 2013.
Commenting on the first quarter results, K.B.S. Anand, Managing Director & CEO, Asian Paints, said: "The decorative paints business in India did well considering the challenging and uncertain macro environment. Paints volume grew in double digits. Raw material prices were by and large stable with a softening bias, but were affected by the depreciation of rupee. Industrial paints segment continues to be affected by the economic slowdown. Automotive coatings growth was subdued due to lower demand in the auto sector. International business registered good growth. Middle East and Asia have done well even though some countries continued to be affected by political events and macro economic uncertainty".
L&T fell 7.46% to Rs 901.95 after company reported weak Q1 results. The company's net profit declined 12.46% to Rs 756.03 crore on 3.69% growth in total income to Rs 13027.66 crore in Q1 June 2013 over Q1 June 2012. L&T attributed the decline in net profit to unfavorable job mix, lower margin accruals and lower other income. The Q1 result was announced during trading hours today, 22 July 2013.
L&T's order inflow jumped 28% to Rs 25159 crore in Q1 June 2013 over Q1 June 2012. International order inflow jumped 2.28 times at Rs 3617 crore in Q1 June 2013 over Q1 June 2012. International orders constituted 14% of the total order inflow in Q1 June 2013. The major orders during the year came from Building & Factories, Transportation Infrastructure, Hydrocarbon and Heavy Civil Infrastructure businesses, L&T said.
L&T's order book stood at Rs 165393 crore as on 30 June 2013, with year-on-year (YoY) growth of 8%. International order book rose 16% on YoY basis and constituted 12% of the total order book.
With a healthy order book, strong balance sheet, wide ranging capabilities and international presence, the company is optimistic about its prospects as both the Indian and global economies work towards their recovery, L&T said. On the international front, the company continues to focus on good prospects in various countries in the Middle East and select markets in CIS region, Africa and South Asia, L&T said.
Bhel slumped 7.05%, with the stock extending Friday's 8.02% losses.
Among other capital goods shares, Punj Lloyd (down 3.33%), BEML (down 2.97%), Siemens (down 2.75%), ALSTOM India (down 2.64%), Alstom T&D India (down 2.45%), Havells India (down 1.85%), AIA Engineering (down 1.63%), SKF India (down 1.38%), Bharat Electronics (down 0.58%) and ABB (down 0.22%), edged lower.
Housing Development Finance Corporation (HDFC) rose 3.17%, with the stock extending intraday gains. The housing finance major reported 17.08% rise in net profit to Rs 1173.10 crore on 12.59% growth in total income to Rs 5564.94 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours on Friday, 19 July 2013.
As at 30 June 2013, the loan book (net of loans sold) stood at Rs 176993 crore, as against Rs 148262 crore in the previous year. Loans sold during the preceding 12 months amounted to Rs 6310 crore. As at 30 June 2013, the total borrowings stood at Rs 163269 crore, as against Rs 143812 crore in the previous year.
HDFC's consolidated net profit surged 33.79% to Rs 1707.10 crore on 14.81% growth in total income to Rs 8482.85 crore in Q1 June 2013 over Q1 June 2012.
IT major TCS rose 0.23% to Rs 1745.85, with the stock extending Friday's 4.92% gain triggered by the company's strong Q1 results. The stock pared gains after striking a record high of Rs 1,758.60 in intraday trade today, 22 July 2013. TCS' net profit rose 5.9% to Rs 3831 crore on 9.5% growth in revenue to Rs 17987 crore in Q1 June 2013 over Q4 March 2013. Operating profit rose 12% to Rs 4847 crore in Q1 June 2013 over Q4 March 2013. The company reported Q1 results after trading hours on Thursday, 18 July 2013.
TCS said growth in Q1 June 2013 was seen across all industry segments, led by life sciences, retail, telecom and BFSI. There was balanced growth across IT and other service lines led by Assurance, EiS, Global Consulting and Asset Leveraged Solutions. Major markets grew smartly led by USA, Europe and UK alongside growth in emerging markets like Latin America and Asia Pacific, TCS said in a statement. The company added two new $100 million clients in Q1 June 2013.
During the quarter, TCS closed the acquisition of Alti, one of the top 5 system integrators of SAP solutions in France with several top French corporations in the banking, financial services, luxury, manufacturing and utilities sectors as its key customers.
Dabur India rose 1.82% to Rs 170.95. The stock hit record high of Rs 173.70 in intraday trade today, 22 July 2013.
Wockhardt declined on high volumes after the company on Saturday, 20 July 2013, said it has received a warning letter from the United States Food and Administration (USFDA), listing the observations made by it during its earlier inspection of Wockhardt's Waluj facility near Aurangabad. The stock tumbled 9.12% to Rs 808.30. On BSE, 11.42 lakh shares changed hands in the counter, a 8.93-fold surge over two-week average daily volume of 1.28 lakh shares. Wockhardt had on 24 May 2013 said that the company received an 'import alert' from USFDA on one of its manufacturing unit located at Waluj. The company at that time said that the impact of the import alert on the revenues is estimated to be in the range of $100 million on an annualised basis.
Wockhardt said that the company continues to cooperate with USFDA to resolve the issues at the earliest. If any additional measures are necessary, the company would take them to squarely address all concerns, Wockhardt said.
Financial Technologies (India) 6.32% to Rs 591.30. The stock declined on high volumes. On BSE, 2.18 lakh shares changed hands in the counter, a 3.01-fold rise over two-week average daily volume of 72,000 shares.
Anil Dhirubhai Ambani-controlled telecom company Reliance Communications (RCom) fell 2.69% to Rs 141.25 after a Delhi court on Friday, 19 July 2013 asked Reliance ADA Group Chairman Anil Ambani and his wife Tina to appear as prosecution witnesses in ongoing 2G scam case.
A Delhi court on Friday, 19 July 2013, asked Reliance ADA Group Chairman Anil Ambani and his wife Tina to appear as prosecution witnesses in the ongoing trial of former telecom minister A Raja and a number of businessmen and executives who are accused of conspiring with the former minister to improperly obtain telecom licences. Ambani and his wife will be questioned on the alleged investment of over Rs 990 crore by Reliance ADAG companies in Swan Telecom. CBI has alleged that Reliance Telecom used Swan Telecom, an ineligible firm, as its front company to get 2G licences and spectrum. CBI has chargesheeted three executives of Reliance ADAG - Gautam Doshi, Surendra Pipara and Hari Nair - for the alleged fraud. The defence counsel for the three executives had opposed CBI's plea asking for the Ambanis to appear as witnesses, saying the delay on the agency's part in moving this application shows it wasn't genuine.
Meanwhile, Reliance Telecom, a unit of RCom, reportedly said today, 22 July 2013, that it has appealed in the Supreme Court challenging a lower court order to call new witnesses in the 2G case.
L&T clocked a highest turnover of Rs 112.19 crore on BSE. Wockhardt (Rs 93.18 crore), Infotech Enterprises (Rs 79.50 crore), HDFC (Rs 77.27 crore) and State Bank of India (Rs 44.96 crore), were the other turnover toppers on BSE in that order.
Cals Refineries reported a highest volumes of 1.09 crore shares on BSE. Birla Cotsyn (51.52 lakh shares), Birla Cotsyn (44.16 lakh shares), Unitech (43.11 lakh shares), and MMTC (32.63 lakh shares), were the other volume toppers on BSE in that order.
European stocks rose for a fourth day on Monday, 22 July 2013, extending a seven-week high ahead of data on house sales in the US. Key benchmark indices in Germany and UK were down 0.05% to 0.31%. France's CAC 40 was up 0.03%.
Asian markets edged higher on Monday, 22 July 2013, after China removed a floor on banks' lending rates and after Japan's ruling government regained control of the parliament's upper house, raising hopes for further reforms in both economies. Key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore, and Taiwan rose by 0.25% to 0.66%. Indonesia's Jakarta Composite fell 0.96%.
A day after his party won a resounding victory in national upper-house elections, Japanese Prime Minister Shinzo Abe on Monday, 22 July 2013, said that the government's top priority remains rebuilding the economy. Calling the Liberal Democratic Party's (LDP) win "a supportive push" from voters for his economic policies of easy money, massive government spending and deregulatory reforms, Mr. Abe said he would continue to implement growth policies, including tax cuts on capital investments.
Meanwhile, the People's Bank of China removed a floor on banks' lending rates, according to a July 19 statement. China currently caps the interest rates that banks pay on deposits, a factor that often pushes savers toward riskier investments in search of higher returns.
Trading in US index futures indicated that the Dow could see a flat opening on Monday, 22 July 2013. US stocks closed mixed on Friday, 19 July 2013. The S&P 500 index eked out gains to end at another all-time high on Friday, 19 July 2013 while losses for the technology sector weighed on the Dow Jones Industrial Average and the Nasdaq Composite after disappointing earnings from Advanced Micro Devices Inc. and Microsoft Corp.
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