Key benchmark indices edged lower on the first trading session of the week as the Reserve Bank of India (RBI) is expected to raise its main lending rate viz. the repo rate by 25 basis points after a monetary policy review tomorrow, 29 October 2013, on rein in inflation. The market breadth, indicating the overall health of the market, was negative. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest level in more than a week. The Sensex was provisionally down 104.17 points or 0.5%, off close to 190 points from the day's high and up about 30 points from the day's low.
Indian stocks fell for the fifth straight session in a row today, 28 October 2013.
Realty stocks edged lower ahead of the Reserve Bank of India's (RBI) Second Quarter Review of Monetary Policy 2013-14 tomorrow, 29 October 2013. Index heavyweight and cigarette major ITC extended Friday's losses as the company's top line growth in Q2 September 2013 disappointed investors. Metal and mining stocks edged lower. FMCG major Hindustan Unilever (HUL) edged lower in choppy trade after the company reported Q2 results on Saturday, 26 October 2013.
The market trimmed initial gains triggered by firm Asian stocks. A bout of volatility was witnessed as key benchmark indices recovered from lower level after giving almost entire initial gains in morning trade. Intraday volatility continued as key benchmark indices recovered from lower level after giving away almost entire intraday gains in mid-morning trade. Key benchmark indices were off the day's high in early afternoon trade. Key benchmark indices hit fresh intraday low in afternoon trade. Key benchmark indices extended intraday losses in mid-afternoon trade. It extended losses and hit fresh intraday low in late trade.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2013 series to November 2013 series. The near month October 2013 derivatives contract expire on Thursday, 31 October 2013.
As per provisional figures, the S&P BSE Sensex was down 104.17 points or 0.5% to 20,579.35. The index fell 132.88 points at the day's low of 20,550.64 in late trade, its lowest level since 18 October 2013. The index rose 87.84 points at the day's high of 20,771.36 in early trade.
The CNX Nifty was down 42 points or 0.68% to 6,102.90, as per provisional figures. The index hit a low of 6,094.10 in intraday trade, its lowest level since 18 October 2013. The index hit a high of 6,168.75 in intraday trade.
The total turnover on BSE amounted to Rs 1651 crore, lower than Rs 1744.49 crore on Friday, 25 October 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,403 shares dropped and 1,006 shares advanced. A total of 164 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks fell and rest of them rose. SBI (down 2.54%), Hero MotoCorp (down 2.04%), and Tata Power Company (down 1.25%), edged lower from the Sensex pack.
Index heavyweight and cigarette major ITC extended Friday's losses as the company's top line growth in Q2 September 2013 disappointed investors. The stock was off 3.87%. The company's net profit jumped 21.46% to Rs 2230.53 crore on 9.42% growth in total income to Rs 8108.72 crore in Q2 September 2013 over Q2 September 2012. The company declared Q2 result at fag end of the day's trading session on Friday, 25 October 2013.
Metal and mining stocks edged lower. Sesa Sterlite (down 3.56%), Hindustan Zinc (down 2.87%), Tata Steel (down 3.11%), Jindal Steel & Power (down 0.59%), NMDC (down 0.33%), Sail (down 1%), and Hindalco Industries (down 1.69%), declined.
FMCG major Hindustan Unilever (HUL) edged lower in choppy trade after the company reported Q2 results on Saturday, 26 October 2013. The stock was off 0.61% at Rs 590.60. The stock hit high of Rs 619.95 and low of Rs 587. The company's net profit rose 13.24% to Rs 913.80 crore on 9.04% increase in total income to Rs 7043.63 crore in Q2 September 2013 over Q2 September 2012. HUL announced Q2 results on Saturday, 26 October 2013. HUL said its recurring profit after tax before exceptional items rose 10% to Rs 883 crore in Q2 September 2013 over Q2 September 2012. Despite a sharp increase in advertising and promotion (A&P) spends, Profit before Interest and Tax (PBIT) grew by 11% with PBIT margin improving 20 basis points (bps), HUL said.
The company said operating context during the quarter was challenging given the volatile cost environment, led by the rupee depreciation, and heightened competitive intensity. Overall industry media spend was up to its highest levels in over 18 quarters, with a particularly sharp increase in Oral Care. HUL's domestic consumer business grew at 10% in Q2 September 2013, driven by 5% underlying volume growth, the company said in a statement.
HUL's Chairman Harish Manwani said: "We have delivered another quarter of competitive and profitable growth. The consistency and resilience of our performance, in what has been a challenging market environment for some quarters now, is a reflection of the discipline with which we are managing our business and executing our strategy. We continue to strengthen our business for the long term by driving innovation, investing behind our brands and further building organizational capabilities."
Realty stocks edged lower ahead of the Reserve Bank of India's (RBI) Second Quarter Review of Monetary Policy 2013-14 tomorrow, 29 October 2013. DLF (down 3.53%), D B Realty (down 5.63%), Unitech (down 2.91%) and HDIL (down 2.55%), declined.
Meanwhile, the Securities and Exchange Board of India (SEBI) Chairman U.K. Sinha reportedly said on Monday that SEBI will ask tax authorities to consider incentives for real estate investment trusts. "For REITs to be successful, they have to be tax efficient. There's no question about it," he told media reporters on the sidelines of a conference. "We'll talk to the I-T department to make it happen," he added, referring to the income tax department.
The capital markets regulator had issued draft guidelines for launching real estate investment trusts (REITs) in India earlier this month. Investors have said the success of these investments would likely depend to a large extent on the tax incentives provided. REITs are tax-efficient listed entities that mainly invest in income producing real estate assets from which most of the earnings are distributed to their shareholders.
Dabur India lost 3.29% to Rs 176.50 on profit booking after company reported good Q2 result. The company's consolidated net profit rose 23.4% to Rs 249.74 crore on 14.49% growth in total income to Rs 1776.79 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours today, 28 October 2013. Shares of Dabur India had witnessed a pre-result rally. The stock had rallied 9.47% to settle at Rs 182.50 on Friday, 25 October 2013 from Rs 166.70 on 17 October 2013.
Dabur India said that strong demand from the hinterland following the mega initiative to double the company's rural distribution footprint helped Dabur India sail through a challenging business environment and moderation in consumption expenditure in Q2 September 2013. A combination of innovative consumer-connect initiatives and relentless market development drive helped Dabur India report stronger growth across key categories like Home Care, Health Supplements, Shampoos, Foods, Skin Care and Oral Care, the company said in a statement.
Dabur India's operating profit margin (OPM) edged higher at 18.76% in Q2 September 2013, from 17.02% in Q2 September 2012.
Dabur India Chief Executive Officer Mr. Sunil Duggal said: "The rising cost pressures were managed through a mix of judicious price increases and improved buying efficiencies. There are signs of an economic downturn, but Dabur maintained its strong growth momentum and continues to register sales growth ahead of the market in several key categories. With our rural expansion programme, we have laid the foundation for strong and profitable growth in the future and this initiative started yielding positive results. We are seeing demand from rural India outpacing the urban markets".
The Home Care business for Dabur, led by the air freshener brand Odonil, continued to move forward on its growth trajectory and ended the quarter with a 25.3% growth. The Foods business also reported another strong quarter with a 22% growth, while the Oral Care category ended the three-month period with a near 19% growth and the Health Supplements business grew by around 17%. The Skin Care business grew by over 17% while the Shampoo business reported an over 13% growth. The quarter saw Dabur launch a host of new products and variants across geographies, all of which have received good response, Dabur India said in a statement.
Dabur's International Business recorded a growth of 25.8% during the second quarter, led by robust performance in Middle East & North Africa (MENA) markets and Bangladesh. "Hair Care and Toothpastes were the key growth drivers for Dabur in the international markets," Dabur India Group Director Mr. P D Narang said.
Ajanta Pharma spurted 15.37% to Rs 844.30 on good Q2 result. The stock hit record high of Rs 858.95 in intraday trade. The company's net profit surged 155% to Rs 56 crore on 50% growth in revenue from operations to Rs 280 crore in Q2 September 2013 over Q2 September 2012. The Q2 result was announced during trading hours today, 28 October 2013.
Ajanta Pharma's EBITDA (earnings before interest, taxation, depreciation and amortization) jumped 95% to Rs 84 crore in Q2 September 2013 over Q2 September 2012. EBITDA margin increased to 30% from 23% a year ago.
Exports contributed 64% of the total operating income in Q2 September 2013.
Commenting on the company's Q2 performance, Mr. Yogesh Agrawal, Managing Director, Ajanta Pharma said, "we are pleased with healthy results for the quarter driven by India and emerging markets. We remain focused on select speciality therapeutic segments in India and select geographies in overseas market. We continue to stretch boundaries of excellence and building quality business on the already laid strong foundation with focus on growing sales and profitability consistently".
Ajanta Pharma filed 3 more abbreviated new drug applications (ANDAs) during the quarter taking total tally to 18 ANDAs (2 approved and 16 awaiting approval).
In the foreign exchange market, the rupee was almost unchanged against the dollar on caution ahead of the Reserve Bank of India's (RBI) monetary policy review tomorrow, 29 October 2013. The partially convertible rupee was hovering at 61.47, compared with its close of 61.46/47 on Friday, 25 October 2013.
Bond prices fell ahead of the Reserve Bank of India's (RBI) monetary policy review tomorrow, 29 October 2013. The yield on the federal benchmark paper 7.16% GS 2023 was hovering at 8.6395%, higher than its close of 8.5795% on Friday, 25 October 2013. Bond yield and bond prices are inversely related.
The Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy 2013-14 tomorrow, 29 October 2013. Market men expect RBI to hike its main lending rate viz. the repo rate by 25 basis points to rein in inflation. The wholesale price (WPI) and consumer price inflation, both, accelerated in September 2013. WPI inflation accelerated to 6.46% in September 2013, from 6.1% in August 2013. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India rose 9.84% in September 2013, from 9.52% in August 2013.
The RBI will release its macroeconomic policy review at about 17:00 IST today, 28 October 2013, a day ahead of the Second Quarter Review of Monetary Policy 2013-14.
European stocks pared gains on Monday, 28 October 2013, as automakers fell and investors awaited US data on industrial production and housing for signs of the health of the world's largest economy. Key benchmark indices in Germany and UK were up 0.04% to 0.09%. France's CAC 40 fell 0.31%.
Asian stocks rose on Monday, 28 October 2013, after weaker than forecast US consumer confidence spurred bets the Federal Reserve will maintain stimulus. Key benchmark indices in China, Taiwan, Hong Kong, Singapore, Japan, Indonesia and South Korea rose 0.04% to 2.19%.
There are expectations that China's government will unveil economic reforms at a Communist Party meeting next month.
A Bank of Korea survey showed consumer sentiment rose this month to the highest level since May 2012.
Trading in US index futures indicated that the Dow could gain 41 points at the opening bell on Monday, 28 October 2013. US stocks rose on Friday, 25 October 2013, sending the Standard & Poor's 500 Index to a record, as Amazon.com Inc. and Microsoft Corp. sales beat estimates while a drop in consumer confidence added to speculation the Federal Reserve will delay scaling back monetary stimulus.
Data on US industrial production for September 2013 is due for release later in the global day today, 28 October 2013.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting tomorrow, 29 October and Wednesday, 30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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