A bout of volatility was witnessed in early trade as key benchmark indices regained positive zone and hit fresh intraday high after slipping into the red for a brief period after opening higher. The barometer index, the S&P BSE Sensex, was up 40.27 points or 0.22%, up about 55 points from the day's low and off close to 5 points from the day's high. Index heavyweight and cigarette maker ITC edged lower in early trade. Another index heavyweight Reliance Industries (RIL) edged higher. The market breadth was strong.
Power Grid Corporation of India rose after the company after trading hours on Friday, 5 April 2013, said that the company's board of directors at a meeting held on 28 March 2013 has approved 7 new projects with a total cost of Rs 3450.81 crore. Bank of Baroda declined after the bank announced revision of interest rates on some term deposits of less than Rs 1 crore with effect from 6 April 2013. Idea Cellular declined on reports that the Income Tax Department has slapped a Rs 3900-crore notice on Idea Cellular and its subsidiary, Aditya Birla Telecom, over transfer of assets and licences between the two companies in 2009.
Foreign institutional investors (FIIs) sold shares worth a net Rs 203.18 crore on Friday, 5 April 2013, as per provisional data from the stock exchanges.
At 9:30 IST, the S&P BSE Sensex was up 40.27 points or 0.22% to 18,490.50. The index rose 44.52 points at the day's high of 18,494.75 in early trade. The index fell 16.73 points at the day's low of 18,433.50 in early trade.
The CNX Nifty was up 8.60 points or 0.15% to 5,561.85. The index hit a high of 5,564.70 in intraday trade. The index hit a low of 5,546.80 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 554 shares rose and 248 shares fell. A total of 21 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) gained 0.72% at Rs 786. Shares of Reliance Communications rose 2.3%. Reliance Jio Infocomm and Reliance Communications (RCom) on 2 April 2013 announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC declined 0.81% to Rs 289.10 on profit booking. The stock had hit record high of Rs 310.75 on 4 February 2013. The government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14, which was unveiled on 28 February 2013.
Power Grid Corporation of India rose 0.67% after the company after trading hours on Friday, 5 April 2013, said that the company's board of directors at a meeting held on 28 March 2013 has approved 7 new projects with a total cost of Rs 3450.81 crore.
Bank of Baroda declined 1.09%. The bank has decided to revise interest rates on some term deposits of less than Rs 1 crore with effect from 6 April 2013. Interest rates on term deposits of some shorter maturity period of up to 1 year have been raised while those on deposits of above 1 year have been cut.
Aditya Birla Nuvo declined 0.03%. The company said before market hours today, 8 April 2013, that the committee of directors of the company held a meeting on Saturday, 6 April 2013, to review the carbon black business scenario both in the Indian and the global context. The committee of directors of the company at its meeting held on 6 April 2013 has, subject to the approval of shareholders and other requisite approvals, decided to divest the company's carbon black business, on a going concern basis, by way of slump sale to SKI Carbon Black (India), an Aditya Birla Group company, for a lumpsum consideration of Rs 1451 crore as enterprise value. This is on the basis of an independent valuation carried out by Deloitte Touche Tohmatsu India, Mumbai.
The cash inflow from the divestment of the carbon black business will reduce debt and strengthen the company's balance sheet. This will support growth plans and ensure greater focus on the other businesses of the company, Aditya Birla Nuvo said.
Given that multi-national tyre manufacturers prefer to engage with carbon black players that have global delivery capabilities, scale and global positioning in the carbon black sector has become increasingly important. Aditya Birla Nuvo's carbon black business, by itself, accounts for merely 2% of the global industry capacity. Moreover, in view of the company's capital commitment towards funding the growth of its other businesses, it is extremely challenging for the company to become a global carbon black player, the company said in a statement.
Essar Ports was flat. The company said before market hours today, 8 April 2013 that Securities and Exchange Board of India (Sebi) has permitted the conversion of Global Depository Securities (GDSs) issued by the company into equity shares for the purpose of meeting the minimum public shareholding requirement.
Idea Cellular declined 1.53%. The Income Tax Department has reportedly slapped a Rs 3900-crore notice on Idea Cellular and its subsidiary, Aditya Birla Telecom, over transfer of assets and licences between the two companies in 2009. Idea Cellular said on Friday, 5 April 2013, that it believed the demands were unjustified and based on erroneous interpretation of current tax laws. Idea is evaluating options including challenging the tax demand, the company added.
The upside on the bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The next major trigger for the market is Q4 March 2013 results. The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on 12 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank announces Q4 results on 26 April 2013.
On the macro front, the government will unveil industrial production data for February 2013 on 12 April 2013. Industrial production had risen 2.4% in January 2013, as against a contraction of 0.5% in December 2012.
The government will unveil data on the combined consumer price index for urban and rural India for March 2013 on 12 April 2013. Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013.
The government will unveil data on the wholesale price index (WPI) for March 2013 on 15 April 2013. The annual rate of inflation, based on the monthly wholesale price index (WPI), edged up to 6.84% in February 2013 from 6.62% in January 2013.
The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.
Reserve Bank of India Governor D. Subbarao said Saturday, 6 April 2013, said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The Reserve Bank of India (RBI) will announce the Monetary Policy Statement 2013-14 on 3 May 2013. The RBI cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on 19 March 2013. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
Asian stocks outside Japan dropped, led by Chinese shares on Monday after the country reported more infections from a deadly new strain of bird flu. Key benchmark indices in China, Indonesia, Singapore, Taiwan and South Korea shed by 0.12% to 2.26%. Japan's Nikkei Average rose 2.05%. Hong Kong's Hang Seng gained 0.11%.
China tried to ease concerns that a new strain of bird influenza will spark an epidemic as authorities reported three more infections of the deadly H7N9 virus that's killed six people since March.
Japan rebounded to a current-account surplus in February as a depreciating yen and record monetary stimulus boost the outlook for a revival in the world's third-biggest economy. The surplus, the first in four months, was 637.4 billion yen ($6.5 billion), the Ministry of Finance said in Tokyo today.
US stocks fell on Friday after the government reported a sharp slowdown in hiring last month that was far worse than economists had expected. US employers added just 88,000 jobs in March, the Labor Department reported. That's half the average of the previous six months.
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