Key benchmark indices surged after IT major Infosys kicked off the Q1 earnings season by reiterating its revenue guidance for the current year. Also aiding the rally on the bourses in late trade was data showing a reduction in trade deficit on a month-on-month basis in June 2013. Gains in European stocks also aided gains on the domestic bourses as the barometer index, the S&P BSE Sensex, reached its highest closing level in more than 6 weeks. The 50-unit CNX Nifty hit over 6-week high above the psychological 6,000 mark. The Sensex was up 282.41 points or 1.44%, up close to 170 points from the day's low and off about 35 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
Indian stocks gained for the second straight day today, 12 July 2013. From a recent low of 19,294.12 on 10 July 2013, the Sensex has gained 664.35 points or 3.44% in two trading sessions. The Sensex has risen 562.66 points or 2.9% so far in July 2013 (till 12 July 2013). The Sensex has gained 531.76 points or 2.73% in calendar 2013 so far (till 12 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 485.15 points or 2.37%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 3,359.99 points or 20.24%.
Coming back to today's trade, Infosys surged in volatile trade after the company retained its guidance of 6% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014) after announcing Q1 June 2013 results before trading hours. Other stocks from the IT pack also gained after Infosys' Q1 results, with TCS and HCL Technologies hitting record high. Tech Mahindra hit 52-week high after the company said it has completed the process of allocating shares of the company to the shareholders of erstwhile Mahindra Satyam. Dr Reddy's Laboratories scaled record high after the company announced the launch of a generic drug in the United States. Reliance Industries (RIL) extended intraday gain in late trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Thursday, 11 July 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 657.70 crore from the secondary equity markets on Thursday, 11 July 2013, as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex jumped 282.41 points or 1.44% to settle at 19,958.47, its highest closing level since 30 May 2013. The index jumped 315.88 points at the day's high of 19,991.94 in late trade. The index gained 109.53 points at the day's low of 19,785.59 in morning trade.
The CNX Nifty jumped 73.90 points or 1.25% to 6,009, its highest closing level since 30 May 2013. The index hit a high of 6,019 and a low of 5,951.15 in intraday trade.
The BSE Mid-Cap index ended almost unchanged for the day. The BSE Small-Cap index fell 0.19%. Both these indices underperformed the Sensex.
The BSE IT index (up 6.46%), BSE Teck index (up 5.13%), BSE Capital Goods index (up 1.95%), and outperformed the Sensex. The BSE Consumer Durables index (down 0.96%), BSE Realty index (down 0.58%), BSE PSU index (down 0.4%), BSE FMCG index (down 0.21%) BSE Auto index (down 0.12%), BSE Metal index (up 0.17%), BSE Bankex (up 0.55%), BSE Oil & Gas index (up 0.66%), BSE Power index (up 0.71%), and BSE Healthcare index (up 1.08%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 1552 crore, higher than Rs 1433.15 crore on Thursday, 11 July 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,223 shares fell and 1,076 shares rose. A total of 148 shares were unchanged.
From the 30-share Sensex pack, 22 stocks rose and rest of them fell.
Reliance Industries (RIL) rose 2.21%, with the stock extending intraday gain in late trade. The Cabinet Committee on Economic Affairs (CCEA) on 27 June 2013 approved new gas pricing formula from 1 April 2014. The price of gas as per the formula is likely to be about $8.4 mmBtu as opposed to $4.2 mmBtu currently.
Infosys surged 10.92% to Rs 2,802.75. The stock had jumped as much as 14.96% at the day's high of Rs 2,905 in initial trade. It hit low of Rs 2749 in intraday trader. On BSE, 8.45 lakh shares changed hands on the counter, compared with average daily volume of 1.36 lakh shares in the past one quarter. Infosys retained its guidance of 6% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result before market hours today, 12 July 2013. The company has raised the guidance in rupee terms due to a steep depreciation of the rupee against the dollar. The company has forecast 13% to 17% growth in revenue in rupee terms for FY 2014, higher than its earlier guidance of 6% to 10% growth which the company had given at the time of announcement of Q4 March 2013 results.
The company's consolidated net profit declined 0.8% to Rs 2374 crore on 7.8% growth in revenue to Rs 11267 crore in Q1 June 2013 over Q4 March 2013. The results are as per International Financial Reporting Standards (IFRS).
Infosys Chief Financial Officer (CFO) Rajiv Bansal said that the company has announced compensation increases for FY 2014 effective July which will affect the company's profit margins in the future quarters. Infosys CEO and Managing Director S. D. Shibulal said that the management is cautiously optimistic about rest of the year. Despite facing an uncertain macro environment, changing regulatory regime and a volatile currency environment, the company has done well in Q1 June 2013, he said.
Infosys and its subsidiaries added 66 clients in Q1 June 2013. There was a gross addition of 10,138 employees and net addition of 575 employees by Infosys and its subsidiaries in Q1.
TCS rose 2.94% to Rs 1606.10. The stock hit record high of Rs 1,622.75 in intraday trade today, 12 July 2013.
HCL Technologies gained 2.46% to Rs 860.10. The stock hit record high of Rs 863 in intraday trade today, 12 July 2013.
Wipro rose 3.34%.
Tech Mahindra rose 5.19% to Rs 1122.20. The stock hit 52-week high of Rs 1128 in intraday trade today, 12 July 2013.Tech Mahindra today, 12 July 2013, announced that it has completed the process of allocating shares of the company to the shareholders of erstwhile Mahindra Satyam. The issued capital of the company has gone up from earlier 12.9 crore shares to 23.2 crore shares. Subsequent to the scheme of amalgamation between Tech Mahindra and Mahindra Satyam becoming effective, the board of directors fixed 5 July 2013 as record date for Mahindra Satyam shareholders. The share swap has since been completed and the stock exchanges have accorded their approval for trading the new shares from today, 12 July 2013.
Capital goods pivotals edged higher for the second straight day. L&T (up 0.36%) and Bhel (up 0.86%), edged higher.
Auto stocks were mixed. Mahindra & Mahindra (M&M) fell 1.38%. M&M announced on Thursday, 11 July 2013, that it would be observing 'No Production Days' at its automotive plants for a period ranging from 1 to 8 days during the remaining period of July 2013 with a view to align production with sales requirements. M&M also said that its wholly owned subsidiary viz. Mahindra Vehicle Manufacturers would also be observing 'No Production Days' for about 8 days during the remaining period of July 2013 at its plant situated at Chakan in Maharashtra. The company said that the scheduled production cut this month is unlikely to have an adverse impact on availability of vehicles in the market due to adequate inventory.
Shares of car major Maruti Suzuki India fell 3.58%. The company on 8 July 2013 said its production fell 25.36% to 61,668 vehicles in June 2013 over June 2012. Earlier, the company had reported 12.6% fall in total sales to 84,455 units in June 2013 over June 2012. The company's domestic sales fell 7.8% to 77,002 units in June 2013 over June 2012. Exports declined 43% to 7,453 units in June 2013 over June 2012. The company announced the monthly sales data on 1 July 2013.
Tata Motors rose 2.31% after the company's British luxury car unit, Jaguar Land Rover (JLR), on Thursday, 11 July 2013, said its sales rose 7% to 33,739 vehicles in June 2013 over June 2012. Sales of the Jaguar brand jumped 34% to 6,574 vehicles in June 2013 over June 2012. Land Rover sales rose 2% to 27,165 units in June 2013 over June 2012 despite the run out of Range Rover Sport, JLR said.
During the first six months of 2013, JLR sold 210,190 vehicles, an increase of 14% versus the same period last year.
Commenting on the half year performance Phil Popham, Jaguar Land Rover Group Sales Operations Director said "It is very encouraging to see both our Jaguar and Land Rover brands delivering strong sales performances across our 178 markets. New model introductions have been incredibly well received with the all-new Range Rover retailing more than 22,000 units since launch. The F-TYPE which received a rapturous reception from media during its global launch last month is off to an excellent start with new customers and will go on sale in China this month".
Two wheeler stocks were mixed. Bajaj Auto fell 0.4%. Hero MotoCorp rose 0.5%.
Car sales in India fell an annual 9% to 1,39,632 units in June 2013 over June 2012, an industry body said on Friday, as demand continued to suffer due to rising ownership costs and sluggish economic growth. Sales of motorcycles fell 9.2% in June to 799,139 vehicles, Society of Indian Automobile Manufacturers (SIAM) said, while truck and bus sales were down 13.5% at 56,197 vehicles.
Hindustan Petroleurn Corporation (HPCL) rose 0.93% after the company signed a joint venture agreement with the Rajasthan state government (GOR) for setting up a 9 million metric tonnes per annum (MMTPA) grass root refinery cum petrochemical complex at Pachpadra in Barmer district in Rajasthan. The estimated cost of the project is Rs 37230 crore. HPCL will hold 74% stake and the Rajasthan state government will hold 26% in the refinery. A Memorandum of understanding has already been signed between HPCL and Government of Rajasthan on 14 March 2013 stipulating broad parameters for the implementation of the project. Detailed Feasibility Study, Financial appraisal, Economic Impact assessment study, etc have been completed.
The proposed 9 MMTPA grass root refinery cum petrochemical complex will source crude from Rajasthan oil fields and other imported crudes. This refinery js expected to be completed in 4 years and will have substantial positive impact on the economy of Rajasthan state, HPCL said. This refinery will produce various petroleum and petro-chemical products. The project is expected to bring accelerated growth to the region and provide huge opportunity for downstream petrochemical industries which in turn will further boost the economy of the state.
DLF fell 1.63%. The company said today, 12 July 2103, that it has entered into definitive Business Transfer Agreement with Goyal MG Gases for transferring of an unit comprising of 11.2 megawatts (MW) capacity wind turbines situated at Gadag, Karnataka on 'as is where is basis' by way of slump-sale for a lump sum consideration of Rs 29.52 crore subject to adjustment for net working capital. Upon fulfilment of the terms and conditions by both the parties in accordance with the said agreement, the entire unit, including related assets and liabilities along with relevant long term loans would be vested to Goyal MG Gases. The shareholders of the company had approved the sale of the unit on 20 July 2012.
The transaction is expected to be consummated by 31 December 2013, subject to regulatory approvals. The transaction is in line with the DLF's objective of divesting its non core assets.
Some metal stocks reversed intraday losses. Sterlite Industries, Tata Steel, and Jindal Steel & Power rose by 0.2% to 0.68%. Hindalco Industries fell 1.12%.
Pharma stocks gained on renewed buying. Cipla, Lupin, and Wockhardt rose by 0.32% to 1.88%. Ranbaxy Laboratories fell 1.13%
Sun Pharmaceutical Industries rose 1.2% to Rs 1108.25 after the company announced before market hours today, 12 July 2013, that USFDA has granted its subsidiary final approval for its Abbreviated New Drug Applications (ANDA) for generic version of Prandin, Repaglinide tablets. The stock hit record high of Rs 1112 in intraday trade today, 12 July 2013. Repaglinide tablets, 1 mg and 2 mg are therapeutic equivalents of Novo Nordisk's Prandin tablets. These tablets have annual sales of approximately $200 million in the US. Repaglinide tablets are indicated as an adjunct to diet and exercise to improve glycemic control in adults with type-2 diabetes mellitus. Sun Pharma's subsidiary, being the first-to-file an ANDA for generic Prandin with a para IV certification, is eligible for a 180-day marketing exclusivity in the US.
Dr Reddy's Laboratories rose 2.57% to Rs 2349.90. The stock hit record high of Rs 2357 in intraday trade today, 12 July 2013. The company announced during market hours today, 12 July 2013, that it has launched Decitabine for Injection (50 mg), a therapeutic equivalent generic version of Dacogen (Decitabine for Injection), in the US market on 11 July 2013, following the approval by the United States Food & Drugs Administration (USFDA) of Dr Reddy's ANDA for Decitabine for Injection. The Dacogen brand had sales of approximately $260 million for twelve months ending July 2013 in the US according to IMS Health data.
Shares of Dr Reddy's Lab turned ex-dividend today, 12 July 2013, for final dividend of Rs 15 per share for the year ended 31 March 2013 (FY 2013).
Index heavyweight and cigarette maker ITC fell 0.95%
United Spirits rose 0.92% to Rs 2666.45. The stock hit record high of Rs 2,712.80 in intraday trade today, 12 July 2013. United Spirits (USL) on 4 July 2013 said that Diageo has completed the acquisition of a 14.98% stake in USL at Rs 1,440 per share. The shares were bought from United Breweries (Holdings) and other UB group companies. Following the acquisition of additional 14.98% stake, Diageo now holds 25.02% stake in USL. Diageo and the UB Group are now co-promoters of USL. In a statement, Diageo said that its 25.02% shareholding in USL, together with the voting and other governance arrangements agreed with the UB group, including Dr. Vijay Mallya's continued role as Chairman of USL, will give Diageo control and enable Diageo to fully reflect the results of USL in its consolidated accounts, which it expects to do from 1 January 2014. Prior to this, Diageo will equity account its shareholding in USL, Diageo said.
On 27 May 2013, Diageo subscribed for a preferential allotment of new shares in USL amounting to 10% of the post-issue enlarged share capital. Separately, Diageo acquired 58,668 additional USL shares via a mandatory open offer to the shareholders of USL.
State Trading Corporation of India (STC) fell 3.31%, with the stock extending Thursday's 5.23% losses. The Cabinet Committee on Economic Affairs on Thursday, 11 July 2013. approved the disinvestment of 1.02% stake of State Trading Corporation (STC) to make the company compliant with the public shareholding norms under the Securities Contract (Regulation) Rules (SCRR). Under these rules every listed public sector company has to maintain a public shareholding of atleast 10% of the total paid up equity capital. The Government of India (GoI) currently owns 91.02% stake in STC.
Pipavav Defence and Offshore Engineering Company jumped 4.2% after the company said that Ministry of Defence has lifted the hold on the company's joint venture with Mazagon Dock to build the warships for Indian Navy. Pipavav Defence and Offshore Engineering Company (Pipavav) said that the joint venture (JV) can go ahead and carry on the business on open and transparent basis. The JV will focus on working on large and complex projects both meant for Indian Navy and friendly navies of the world, the company said.
Reliance Capital rose 0.77%. The company said during market hours today, 12 July 2013, that Reliance General Insurance Company (RGIC) has registered 25% increase in its Gross Written Premium at Rs 706 crore during Q1 June 2013 over Q1 June 2012. The company recorded 110% growth in health insurance premium at Rs 169 crore in Q1 June 2013 over Q1 June 2012.
Reliance General Insurance has already posted net profits in the last two quarters of 2012-13 through sourcing of quality business, better pricing in the motor and health segments, and enhanced retail agent force. RGIC expects to achieve a positive bottom line in Q1 June 2013 as well, as against the loss in the corresponding quarter last financial year.
During the first quarter, Reliance General Insurance enrolled more than 10 million lives in Kerala under the state government's prestigious Rashtriya Swasthya Bima Yojana (RSBY). This is the highest in any such scheme, and with a coverage ratio at over 85% of the specified target group. The company has also started covering Kharif crop in three different states under the crop insurance scheme.
Elder Pharmaceuticals surged 4.34% after the company said its board has approved the proposal for carrying out restructuring of company's business with a view to reduce its debt. The proposed restructuring involves either raising of capital, hiving off of assets or other strategic options. The board has decided to appoint advisors for this purpose, Elder Pharma said.
On macro front, India's merchandise exports declined 4.56% to $23.78 billion in June 2013 over June 2012, data released by the government today, 12 July 2013, showed. Imports rose 0.37% to $36.03 billion. Oil imports jumped 13.74% to $12.76 billion. Non-oil imports declined 6.71% to $23.26 billion.
The trade deficit rose to $12.24 billion in June 2013 from $11.24 billion in June 2012. The trade deficit declined on month-on-month basis. The trade deficit declined from May's $20.1 billion.
The trade deficit for April-June, 2013-14 was estimated at $50.18 billion which was higher than the deficit of $42.21 billion during April-June, 2012-13, the Ministry of Commerce & Industry said in a statement.
Industrial production is seen rising a tepid 1.5% in May 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had risen 2.3% in April 2013. The government unveils industrial production data for May 2013 today, 12 July 2013.
Inflation based on the combined consumer price index (CPI) of urban and rural India is projected at 9.3% in June 2013, same as in May 2013, as per the median estimate of a poll of economists carried out by Capital Market. CPI inflation had eased to 9.31% in May 2013 from 9.39% in April 2013. The government unveils CPI data for June 2013 today, 12 July 2013.
European stock markets rose for a fifth straight day on Friday, 12 July 2013, tracking a positive sentiment in the US, where the S&P 500 index closed at an all-time high the prior day on dovish comments from Fed Chairman Ben Bernanke. Key benchmark indices in UK, France and Germany were up by 0.52% to 0.9%.
Most Asian stocks fell on Friday, 12 July 2013, as investors turned cautious ahead of Chinese data, including second-quarter growth and June industrial production which is scheduled for release next week. Key benchmark indices in China, Hong Kong, Singapore and South Korea fell by 0.4% to 1.62%. Key benchmark indices in Indonesia, Taiwan, and Japan rose by 0.23% to 0.63%.
China's finance minister on Friday, 12 July 2013, said economic growth will likely average 7% this year. The projection is lower than the government's target of 7.5%.
Singapore's economy grew at the fastest pace in more than two years last quarter as services strengthened and manufacturing rebounded, reducing pressure on the central bank to ease monetary policy. Gross domestic product rose an annualized 15.2% in the three months through June from the previous quarter, when it grew 1.8%, the Trade Ministry said in a statement today.
Trading in US index futures indicated a flat opening of US stocks on Friday, 12 July 2013. US stocks surged to an all-time high on Thursday after the Federal Reserve chairman Ben Bernanke said on Wednesday, 10 July 2013, the central bank will keep supporting the economy. In a speech late Wednesday after US markets had closed, Fed chairman Ben Bernanke said the economy needs the central bank's easy-money policy for the foreseeable future. The US economy needs help because unemployment is high, he said.
On Wednesday, 10 July 2013, the minutes of the Fed's June meeting showed that while "several members judged that a reduction in asset purchases would likely soon be warranted," many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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