The Reserve Bank of India's (RBI) statement after a monetary policy review that its assessment of the growth-inflation dynamic provides little space for further monetary easing pulled the market lower in choppy trade. The barometer index, the S&P BSE Sensex, lost 160.13 points or 0.81%, off close to 170 points from the day's high and up about 35 points from the day's low. Index heavyweight and cigarette major ITC edged lower in choppy trade. Another index heavyweight Reliance Industries (RIL) also edged lower in volatile trade. The market breadth, indicating the overall health of the market, was negative.
Indian stocks today, 3 May 2013, snapped three-day winning streak. The Sensex had jumped 449.05 points or 2.33% in three trading sessions to settle at 19735.77 on 2 May 2013 from a recent low of 19,286.72 on 26 April 2013. The Sensex has gained 148.93 points or 0.76% in calendar 2013 so far (till 3 May 2013). From a 52-week high of 20,203.66 on 29 January 2013, the Sensex has declined 628.02 points or 3.1%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 3,826.66 points or 24.29%.
Coming back to today's trade, interest rate sensitive bank, auto and realty stocks fell after the RBI said after a monetary policy review that that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing.
The market edged lower in early trade. The market hovered in the negative terrain in morning trade. The market trimmed losses after hitting fresh intraday day low in mid-morning trading after RBI's announcement of repo rate cut after monetary policy review. The Sensex cut almost the entire intraday losses in early afternoon trade. Trading was quite volatile in afternoon trade as key benchmark indices declined after a brief intraday recovery in early afternoon trade. The market trimmed losses after weakening once again in mid-afternoon trade.
The RBI today, 3 May 2013, cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The central bank said that with upside risks to inflation still significant in the near term in view of sectoral demand supply imbalances, ongoing correction in administered prices and pressures stemming from MSP increases, monetary policy cannot afford to lower its guard against the possibility of resurgence of inflation pressures. The RBI said that recent monetary policy action, by itself, cannot revive growth. It needs to be supplemented by efforts towards easing the supply bottlenecks, improving governance and stepping up public investment, alongside continuing commitment to fiscal consolidation.
The RBI said WPI inflation is expected to be range-bound around 5.5% during 2013-14, with some edging down in the first half on account of past policy actions, although there could be some increase in the second half, largely reflecting base effects. By March 2013, WPI inflation at 6% turned out to be lower than the RBI's indicative projection of 6.8%, mainly due to a sharp deceleration in non-food manufactured products inflation in the second half of the year. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
During 2013-14, economic activity is expected to show only a modest improvement over last year, with a pick-up likely only in the second half of the year. Accordingly, the baseline GDP growth for 2013-14 is projected at 5.7%, RBI said.
The RBI said a high current account deficit (CAD) poses the biggest risk "by far" to the Indian economy. A large CAD, appreciably above the sustainable level year after year, will put pressure on servicing of external liabilities, RBI said.
The S&P BSE Sensex lost 160.13 points or 0.81% to 19,575.64, its lowest closing level since 30 April 2013. The index rose 9.08 points at the day's high of 19,744.85 in early afternoon trade. The index declined 193.14 points at the day's low of 19,542.63 in late trade.
The CNX Nifty lost 55.35 points or 0.92% to settle at 5,944, its lowest closing level since 30 April 2013. The index hit a high of 6,000.30 in intraday trade. The index hit a low of 5,930.15 in intraday trade.
The BSE Mid-Cap index fell 0.26% and the BSE Small-Cap index declined 0.39%. Both these indices outperformed the Sensex.
The total turnover on BSE amounted to Rs 2224 crore, higher than Rs 2113.22 crore on Thursday, 2 May 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,334 shares fell and 1,027 shares rose. A total of 136 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks fell while rest of them rose.
Index heavyweight Reliance Industries (RIL) fell 0.19% to Rs 801.20. The scrip hit high of Rs 815.40 and a low of Rs 798. The Securities Exchange Board of India (Sebi) on Thursday, 2 May 2013, imposed a penalty of Rs 11 crore on Reliance Petroinvestments (RPIL), a subsidiary of Reliance Industries, for insider trading in IPCL shares in 2007. According to the Sebi order, RPIL made profit of about Rs 3.82 crore through these trades. IPCL, which RIL bought in 2002 under a government disinvestment programme, was a separately listed firm before being merged with RIL.
RIL on Tuesday, 30 April 2013, that its telecom unit Reliance Jio Infocomm (India) has joined a consortium of telecom companies building an 8,000 kilometre submarine cable system to link Malaysia and Singapore with the Middle East. The Bay of Bengal Gateway (BBG) cable system, which will have connections to India and Sri Lanka, is expected to carry commercial traffic by end of 2014, RIL said.
At the time of announcement of its Q4 results, RIL in mid-April 2013 said that the company is working towards next wave of projects to exploit the undeveloped discovered resources in KG-D6 gas field targeted over the next 3-5 years. RIL has submitted an Integrated Block Development Plan (IBDP) for four discoveries in NEC -25 block (D-32, D-40, D-9 and D-10) proposing for a phased manner development. First gas is expected by mid-2019 subject to timely approvals.
Index heavyweight and cigarette major ITC fell 0.81% to Rs 330.75 on profit booking. The scrip hit high of Rs 333.30 and a low of Rs 329. The stock had hit record high of Rs 335.90 in intraday on Tuesday, 30 April 2013. The Centre 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.
Bank stocks fell after the RBI said after a monetary policy review that that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing.
Shares of India's biggest commercial bank in terms of branch network, State Bank of India (SBI), fell 3.6%.
Canara Bank dropped 4.21%, with the stock declining for the second straight on weak Q4 results. The bank's net profit fell 12.51% to Rs 725.38 crore on 4.81% increase in total income to Rs 9471.57 crore in Q4 March 2013 oveQ4 March 2012. The result was announced during trading hours on Thursday, 2 May 2013.
Among other PSU bank stocks, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed by 1.59% to 2.94%.
HDFC Bank dropped 1.6%. HDFC Bank's net profit rose 30.06% to Rs 1889.84 crore on 21.08% increase in total income to Rs 11127.54 crore in Q4 March 2013 over Q4 March 2012. Net profit rose 30.18% to Rs 6726.28 crore on 24.54% increase in total income to Rs 41917.49 crore in the year ended March 2013 over the year ended March 2012. The result was announced on 23 April 2013.
ICICI Bank declined 3.57%. The bank's net profit rose 21% to Rs 2304 crore on 10.26% rise in total income to Rs 12573.52 crore in Q4 March 2013 over Q4 March 2012. Net interest income increased 22% to Rs 3803 crore in Q4 March 2013 from Rs 3105 crore in Q4 March 2012. The cost-to-income ratio reduced to 40% in Q4 March 2013 from 41.6% in Q4 March 2012. The bank announced Q4 results on 26 April 2013.
Kotak Mahindra Bank rose 0.84% to Rs 722.95. The stock hit record high of Rs 726 in intraday trade today, 3 May 2013. The bank's net profit rose 46.9% to Rs 436.21 crore on 28.67% rise in total income to Rs 2572.23 crore in Q4 March 2013 over Q4 March 2012. The bank announced its Q4 results during market hours on Thursday, 2 May 2013.
JSW Energy declined 5.06% after Q4 results. The company's consolidated net profit rose 48.98% to Rs 335.69 crore on 12.13% rise in total income to Rs 2362.73 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results during market hours today, 3 May 2013.
Consolidated net profit surged 431.40% to Rs 903.65 crore on 46% increase in total income to Rs 9147.73 crore in the year ended March 2013 over the year ended March 2012.
The board of JSW Energy has recommended a dividend of Rs 2 per share for the year ended 31 March 2013.
Ambuja Cements dropped 0.95% as the company's operating profit declined 27.8% to Rs 553 crore in Q1 March 2013 over Q1 March 2012. Ambuja Cements' net profit surged 56.3% to Rs 488 crore on 3.3% decline in net sales to Rs 2545 crore in Q1 March 2013 over Q1 March 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 27.8% to Rs 553 crore in Q1 March 2013 over Q1 March 2012. The company announced its Q1 results during market hours today, 3 May 2013.
Despite lower EBITDA, net profit increased by 56.3% year on year in Q1 March 2013 due to exceptional item representing additional depreciation charge of Rs 279 crore in Q1 March 2012 and write back of income tax provision of Rs 117 crore in Q1 March 2013, Ambuja Cements said.
With regard to its future business prospects, Ambuja Cements said that presently cement industry is facing subdued demand on account of continuing economic slowdown. In an environment of over capacity, realizations are under pressure, the company said. However, with continuously improving operational efficiency and productivity, the company is poised to sustain these pressures, Ambuja Cements said in a statement.
Grasim Industries declined 0.25%. The company announced after market hours on Thursday, 2 May 2013 that with the commissioning of 20 megawatts (MW) power plant at the company's Viscose Staple Fibre (VSF) plant at Harihar (Karnataka), the brownfield expansion of 36,500 tonnes per annum (TPA) of VSF capacity at Harihar unit has since been completed by the company. The Phase I of 18,250 TPA capacity of VSF had become operational in September 2012. The company announces its Q4 results tomorrow, 4 May 2013.
Titan Industries declined 1.17%. The company's net profit rose 28.2% to Rs 184.97 crore on 14.54% growth in total income from operations (net) to Rs 2613.24 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results after market hours today, 3 May 2013.
IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. Infosys gained 0.91%. The company said during market hours on Thursday, 2 May 2013, that Golomt Bank, Mongolia's largest private banking and financial services provider, has selected Infosys Finacle to power its technology transformation.
Wipro gained 0.88%. Wipro issued weak revenue outlook at the time of announcement of Q4 March 2014 results on 19 March 2013. Wipro expects a between 0.63% fall to a growth of 1.57% in revenue from IT services business at between $1.575 billion to $1.61 billion in Q1 June 2013 over Q4 March 2013. At a post-result conference call, Wipro's management indicated that Q1 for Wipro will be the traditionally weak quarter on account of softness from the India business. The management expects Q2 September 2013 to be better than Q1 June 2013 for the company.
Wipro's IT services revenue rose 0.5% to $1.585 billion in Q4 March 2013 over Q3 December 2012. On year on year basis, IT services revenue rose 3.2% to $1.585 billion in Q4 March 2013 over Q4 March 2012.
HCL Technologies rose 1.72% to Rs 750.15. The stock had hit a record high of Rs 809 in intraday trade on 17 April 2013 after the company reported strong Q3 results. Consolidated net profit as per US accounting standards rose 7.8% to Rs 1040 crore on 2.4% growth in revenue at Rs 6425 crore in Q3 March 2013 over Q2 December 2012.
Tata Consultancy Services (TCS) fell 0.72%. TCS posted good Q4 results on 17 April 2013. Its consolidated net profit rose 1.9% to Rs 3616 crore on 2.2% growth in revenue to Rs 16430 crore in Q4 March 2013 over Q3 December 2012. Net profit jumped 33.6% to Rs 13917 crore on 28.8% growth in revenue to Rs 62989 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). The company clocked volume growth of 16.8% in FY 2013 over FY 2012.
At a post result conference call held on 17 April 2013, TCS' management said it expects FY 2014 to be better year than FY 2013 and anticipates defending the margins in narrow band despite the headwinds from the wage hikes through other levers.
L&T advanced 1.09%, with the stock extending Thursday's 2.61% gains. The company announcing during trading hours that day that its Malaysia-based switchgear subsidiary, Tamco Switchgear, has secured its largest single order of $85 million from Qatar General Electricity and Water Corporation.
Metal stocks were in demand. Jindal Steel & Power, Sterlite Industries, JSW Steel, Hindalco Industries, Tata Steel and Sail rose by 1.01% to 4.22%. Bhushan Steel and Hindustan Zinc fell by 0.34% to 0.66%,
Auto stocks were mostly lower after the RBI said after the monetary policy review that that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Tata Motors declined 3.76%, with the stock declining for the second straight day after the company reported weak April sales. The company's total sales fell 15% to 51,160 in April 2013 over April 2012. Total domestic sales fell 17% to 47,595 in April 2013 over April 2012. Exports rose 28% to 3,565 during the period.
Car maker Maruti Suzuki India shed 0.87%. The company's total sales fell 3.1% to 97,302 units in April 2013 over April 2012. The company's domestic sales rose 0.3% to 90,523 units in April 2013 over April 2012. Exports fell 33.3% to 6,779 units in April 2013 over April 2012. The company announced its sales figures on 1 May 2013.
Mahindra & Mahindra (M&M) rose 0.43%. The company's automobile division reported a 2% rise in total sales to 41,432 in April 2013 over April 2012. Total domestic sales rose 2% to 39,902 in April 2013 over April 2012. Exports rose 8% to 1,530 during the period.
M&M's Farm Equipment Sector (FES) reported 38% rise in total sales to 23,202 units in April 2013 over April 2012. Total domestic sales rose 38% to 22,196 in April 2013 over April 2012. Exports rose 34% to 1,006 during the period.
Two wheeler makers also declined. Bajaj Auto declined 2.86%, with the stock declining for the second straight day after the company reported fall in sales in April 2013. The company's total sales fell 10% to 3.44 lakh units in April 2013 over April 2012. Motorcycle sales fell 12% to 3 lakh units in April 2013 over April 2012. Commercial vehicle sales rose 10% to 43,351 units in April 2013 over April 2012. Exports fell 23% to 1.30 lakh units in April 2013 over April 2012. The company announced its sales figures during market hours on Thursday, 2 April 2013.
Hero MotoCorp fell 0.18%. The company said on 1 May 2013, its total sales fell 9.5% to 4.99 lakh in April 2013 over April 2012.
Interest rate realty stocks declined after the RBI said after the monetary policy review that that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. Purchases of both residential and commercial property are largely driven by finance. DLF, HDIL, D B Realty and Sobha Developers shed by 0.01% to 3.18%.
Bharti Airtel advanced 0.32% after the company before market hours today, 3 May 2013, announced that it has entered into a binding agreement with Qatar Foundation Endowment (QFE), under which Bharti will issue 19.98 crore of its new shares to QFE representing a shareholding of 5% in the company, post issuance of the new shares. As per the agreement, QFE will subscribe to 19.98 crore new shares of Bharti at a price of Rs 340 per share amounting to a total consideration of $1.26 billion (Rs 6796 crore). The investment will further strengthen the capital structure and provide further flexibility for the company to deliver on its growth strategy, Bharti said in a statement.
Reliance Infrastructure gained 0.3%. The company announced after market hours on Thursday, 2 May 2013, that the company through its special purpose vehicle (SPV) -- Mumbai Metro One (MMOPL) -- has successfully conducted Mumbai Metro's first trial run. The project is at the advance stage of completion and metro is expected to commence commercial operation by the end of this year.
MMOPL is a SPV created to develop, implement and operate Mumbai's first Metro Line on a public-private-partnership (PPP) model. It is a consortium formed by Reliance Infrastructure, MMRDA and Veolia Transport SA of France. The project was awarded to MMOPL for the concession period of 35 years. Mumbal Metro One corridor is 11.40 km long, providing connectivity from Versova (Western Mumbai) to Ghatkopar (Eastern Mumbai).
The focus of the market is on Q4 results. Grasim and Jaiprakash Associates will unveil their Q4 results tomorrow, 4 May 2013. HDFC and Lupin unveil Q4 results on 8 May 2013. Ranbaxy announces Q1 March 2013 results on the same day. Asian Paints and Punjab National Bank unveil Q4 results on 9 May 2013. NTPC announces Q4 results on 10 May 2013. Bank of Baroda unveils Q4 results on 13 May 2013. Dr Reddy's Laboratories announces Q4 results on 14 May 2013. Bajaj Auto announces Q4 results on 16 May 2013. BPCL announces Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
India's factories lost momentum in April as output grew at its weakest pace in over four years, but a jump in export orders augured well for the coming months, a survey showed on Thursday, 2 May 2013. The HSBC Manufacturing Purchasing Managers' Index (PMI), fell for the second straight month in April, dipping to 51 from 52 in March. The reading for April was the lowest since November 2011.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017.
European shares rose on Friday ahead of US non-farm payroll data due later, amid expectations the data will show jobs growth. Key benchmark indices in France, UK and Germany were up by 0.08% to 0.23%.
The European Central Bank lowered its benchmark rate to a record low yesterday and President Mario Draghi signaled another reduction is possible. European policy makers cut the main refinancing rate to a record-low 0.5% yesterday from 0.75%, and reduced the marginal lending rate to 1% from 1.5%.
Asian stocks rose for the first time in three days on Friday as Macquarie Group reported higher earnings and investors awaited the release of US job data. Key benchmark indices in China, Hong Kong, Taiwan and South Korea rose by 0.08% to 1.44%. Key benchmark indices in Japan, Indonesia and Singapore fell by 0.76% to 1.37%.
China's service industries expanded at a slower pace last month, adding to the drag on growth in the world's second-biggest economy after manufacturing lost momentum. The non-manufacturing Purchasing Managers' Index fell to 54.5 from 55.6 in March, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in a statement today in Beijing.
Trading in US index futures indicated a flat opening of US stocks on Friday, 3 May 2013. US stocks rose on Thursday, sending the Standard & Poor's 500 index to a record high, as the European Central Bank cut its key interest rate and American jobless claims unexpectedly fell. Applications for US unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, Labor Department figures showed yesterday.
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