Key benchmark indices surged as data on Tuesday, 14 May 2013, showed a sharp fall in wholesale price inflation in April 2013, raising hopes that the Reserve Bank of India (RBI) may further cut policy rates to perk up economic growth. Gains in Asian and European stocks also lifted sentiment. The S&P BSE Sensex attained its highest closing level in over 28 months above the psychological 20,000 mark. The 50-unit CNX Nifty attained its highest closing level in over 28 months above the psychological 6,000 mark. The Sensex jumped 490.67 points or 2.49%, up about 415 points from the day's low and off close to 30 points from the day's high. The market breadth, indicating the overall health of the market, was strong. All the 13 sectoral indices on BSE were in the green.
From a recent low of 19,691.67, the Sensex has gained 521.29 points or 2.64% in two trading sessions. The Sensex has gained 708.78 points or 3.63% in this month so far (till 15 May 2013). The Sensex has gained 786.25 points or 4.04% in calendar 2013 so far (till 15 May 2013). From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 4,463.98 points or 28.34%.
Coming back to today's trade, index heavyweights ITC and Reliance Industries (RIL), both, edged higher. Banking and realty stocks rose as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Kotak Mahindra Bank and HDFC Bank hit record high. Housing finance major HDFC also scaled record high.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 14 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 468.70 crore from the secondary equity markets on Tuesday, 14 May 2013, as per data from Securities & Exchange Board of India.
The S&P BSE Sensex jumped 490.67 points or 2.49% to settle at 20,212.96, its highest closing level since 5 January 2011. The index jumped 518.67 points at the day's high of 20,241.96 in late trade. The index gained 75.89 points at the day's low of 19,798.18 in opening trade.
The CNX Nifty jumped 151.35 points or 2.52% to 6,146.75, its highest closing level since 3 January 2011. The index hit a high of 6,157.10 in intraday trade. The index hit a low of 6,018.85 in intraday trade.
The BSE Mid-Cap index rose 1,58% and the BSE Small-Cap index gained 0.98%. Both these indices underperformed the Sensex.
The BSE Realty index (up 4.04%), BSE Bankex (up 3.95%), and BSE Capital Goods index (up 3%), outperformed the Sensex.
The BSE IT index (up 0.36%), BSE Teck index (up 0.64%), BSE FMCG index (up 1.46%), BSE Power index (up 1.62%), BSE Consumer Durables index (up 1.62%), BSE Metal index (up 1.62%), BSE HealthCare index (up 2.04%), BSE Oil & Gas index (up 2.19%) BSE Auto index (up 2.29%), and BSE PSU index (up 2.36%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 2269 crore, higher than Rs 1671.47 crore on Tuesday, 14 May 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,466 shares advanced and 963 shares declined. A total of 160 shares were unchanged.
From the 30-share Sensex pack, 29 stocks rose and only one of them fell.
Index heavyweight Reliance Industries (RIL) gained 2.65% to Rs 818.80. The stock hit a high of Rs 820.25 and low of Rs 802.35.
Index heavyweight and cigarette major ITC rose 2.01% to Rs 342.65. The stock hit a high of Rs 344 and low of Rs 336. The stock had hit record high of Rs 355 in intraday trade during the special trading session held on 11 May 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.
Cipla gained 2.87%. The company said during market hours today, 15 May 2013, that shareholders of Cipla Medpro South Africa have approved Cipla's cash offer to acquire 100% of Cipla Medpro through itself or through its nominated subsidiary.
Glenmark Pharmaceuticals gained 1.94% to Rs 559.25. The stock hit 52-wwek high of Rs 563.45 in intraday trade today, 15 May 2013. The company said before market hours today, 15 May 2013, that Glenmark Generics Inc., USA, a subsidiary of Glenmark Generics has been granted final abbreviated new drug approvals (ANDAs) from the USFDA for two generic drugs for the treatment of migraine headache in adults. Glenmark will commence distribution of the products immediately. According to IMS Health data, the products garnered annual sales of $176 million in the United States for the 12 months ended 31 December 2012.
Reliance Communications rose 2.64% to Rs 114.80. The stock hit 52-week high of Rs 116.70 in intraday trade today, 15 May 2013.
Zee Entertainment Industries rose 1.72% to Rs 252. The stock hit 52-week high of Rs 255.20 in intraday trade today, 15 May 2013.
Auto stocks rose as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.
Tata Motors rose 2%. The company's British luxury car unit Jaguar Land Rover (JLR) reported 12% increase in sales to 28,503 units in April 2013 over April 2012. During the first four months of the year, Jaguar Land Rover sold 143,974 vehicles, up 16%.
April sales were up for Jaguar Land Rover in every major region: with Asia Pacific up 37%, the UK up 32%, the China Region up 10%, North America up 6%, Europe up 2% and other overseas markets up 11% (including India which is up 6%). The same trend is reflected in the first four months of the year with sales up 21% in Asia Pacific, 20% in the UK, 18% in the China Region, 13% in North America, 8% in Europe and 22% in other overseas markets, JRL said.
Phil Popham, Jaguar Land Rover's Director of Group Sales Operations said: "This is a positive start to our second quarter sales and continues the growth trend seen in the first three months of the year. Sales of the Jaguar XF remain buoyant across many of our key markets and we are seeing the positive impact of the all new Range Rover with approaching 15,000 cars sold in the first four months of this year".
Mahindra & Mahindra (M&M) jumped 3.6% to Rs 984.65. The stock hit record high of Rs 992.50 in intraday trade today, 15 May 2013.
Maruti Suzuki India rose 2.07% to Rs 1739 on weaker yen against the dollar. The stock hit record high of Rs 1756 in intraday trade today, 15 May 2013. Weak yen could boost earnings of Maruti Suzuki as it imports raw materials from its Japanese parent Suzuki Motor Corporation. It also pays annual royalty on sales to the Japanese parent.
Two wheeler markers also gained. Bajaj Auto rose 2.14% ahead of its Q4 results tomorrow, 16 May 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 the sales figures on 2 May 2013.
India's largest motorcycle maker by sales, Hero MotoCorp gained 1.89%. The company said on 1 May 2013 its total sales fell 9.5% to 4.99 lakh in April 2013 over April 2012.
PSU OMCs rose after the Reserve Bank of India Deputy Governor H.R. Khan on Tuesday said that that the central bank has allowed oil marketing companies to raise a part of their short-term capital requirements through overseas borrowings. HPCL, BPCL and Indian Oil Corporation rose by 1.52% to 2.09%.
Oil market companies had hiked diesel prices by Rs 1.02 per litre effective Saturday, 11 May 2013. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Most aviation stocks rose after the RBI Deputy Governor H.R. Khan on Tuesday said that the RBI has extended the time by a few more months for civil aviation firms to make foreign borrowings. In early 2012, the government permitted companies in the aviation sector to raise a total of $1 billion to help tide over their capital shortages. These borrowings were to be made in the last year ended 31 March 2013.
Jet Airways (India) gained 1.18%. The company said after market hours on Tuesday, 14 May 2013, that Securities and Exchange Board of India has permitted the company and relaxed the requirement of 12 week cool off period after the proposed inter se transfer of shares to enable the company to undertake the Offer for Sale through Stock Exchange Mechanism (OFS) for the purpose of achieving the minimum level of public shareholding as required under the Securities Contracts Regulations, 1957.
SpiceJet jumped 4.14%. Kingfisher Airlines fell 1.94%.
Metal stocks gained on renewed buying. Sterlite Industries (India), JSW Steel, Tata Steel, Sail and Hindustan Zinc rose by 0.77% to 1.94%.
Hindalco Industries advanced 2.7% after the company's US subsidiary Novelis reported Q4 results after trading hours in Indian on Tuesday, 14 May 2013. Novelis reported net income attributable to its common shareholders of $202 million for the year ended 31 March 2013 (FY 2013). Excluding tax-effected certain items, net income for FY 2013 was $241 million, compared to a net income of $218 million for the year ended 31 March 2012 (FY 2012). Net sales declined 11% to $9.8 billion in FY 2013 over FY 2012. This decline was due to lower average aluminum prices and lower shipments when compared to last year, Novelis said.
Adjusted EBITDA for FY 2013 was $961 million, compared to $1.053 billion for FY 2012. The year-over-year decrease was mostly due to disruptions related to the ERP implementation in two North American plants in the third quarter, pricing pressures in several operating regions, lower average aluminum prices, an impact from a fire at a North American plant in the fourth quarter and higher pension expense.
Net income for Q4 March 2013, excluding tax-effected certain items, was $80 million, representing a $55 million increase when compared to the same period in the prior year, Novelis said. For the fourth quarter, sales were $2.5 billion compared to $2.6 billion reported for the fourth quarter of fiscal 2012. Adjusted EBITDA for the fourth quarter of fiscal 2013 was $240 million, representing a 3% increase when compared to the $233 million reported for the same period a year ago, due primarily to stronger demand and good cost control.
Phil Martens, Novelis President and Chief Executive Officer said: "This is a heavy investment period for us that is necessary to maintain and grow our leadership position in the industry. Fiscal 2013 was a transitional year much like fiscal 2014 will be. We are very pleased with the execution on all of our expansion projects and are looking forward to capitalizing on the significant growth we see ahead in our key end-markets of can, automotive and specialties".
Jindal Steel and Power (JSPL) rose 2.49% to Rs 312.50 on bargain hunting after recent slide. Shares of JSPL had declined 8.43% in six trading sessions to settle at Rs 304.90 on Tuesday, 14 May 2013, from a recent high of Rs 333 on 7 May 2013.
Construction stocks rose. Hindustan Construction Company, IVRCL, NCC, Valecha Engineering, Patel Engineering, Unity Infra, IRB Infrastructure Developers, L&T and Jaiprakash Associates gained by 1.29% to 6.6%.
United Spirits rose 0.49% to Rs 2303.75. UK-based alcohol giant Diageo PLC has received muted response for its open offer for acquiring additional 3.77 crore shares of the company. Diageo PLC acquired a total of 58,668 shares for Rs 8.44 crore from the public in a mandatory open offer to acquire an additional 26% in United Spirits at an offer price of Rs 1,440 per share. The offer started on 10 April 2013 and ended on 26 April 2013. As per an agreement reached between Diageo and the UB group in November 2012, Diageo agreed to acquire a 27.4% stake in USL -- partly by acquiring shares directly from the promoter entities of the UB group and partly by way of subscribing to a preferential share issue of USL. The agreement triggered a mandatory open offer from Diageo to acquire additional 26% shares in USL as per the Securities & Exchange Board of India's takeover norms.
IT stocks were mixed. Infosys and Tata Consultancy Services (TCS) rose by 0.37% to 0.79%. HCL Technologies dropped 0.05%.
Wipro fell 0.53%. The stock was the lone loser from the Sensex pack. The company on 9 May 2013 said that the Securities & Exchange Board of India (Sebi) has approved its proposal to meet the minimum public shareholding requirement through a transfer of equity shares by the promoter group to an 'Irrevocable Independent Trust' with trustees either from public sector banks or public financial institutions for advancing philanthropic activities through its beneficiaries. Wipro said that the company and the promoter group have undertaken multiple steps to fulfill the minimum public shareholding requirement including Offer for Sale (OFS). The demerger of the 'diversified' business is also expected to increase public shareholding. Any shortfall to meet public shareholding prior to due date of meeting the minimum public shareholding requirement would be transferred to the 'Irrevocable Independent Trust' and the trust shall effect a sale of such equity shares forming part of the trust funds within a period of two years from the date of such settlement, Wipro said.
Adani Ports and Special Economic Zone rose 1.53%. The company's consolidated net profit jumped 196.63% to Rs 710.31 crore on 53.7% growth in total income to Rs 1081.69 crore in Q4 March 2013 over Q4 March 2012. The Q4 result was announced after market hours today, 15 May 2013.
Bajaj Finserv declined 0.89%. The company's consolidated net profit rose 3.64% to Rs 912.86 crore on 15.17% growth in total income from operations (net) to Rs 2017.29 crore in Q4 March 2013 over Q4 March 2012. Bajaj Finserv's consolidated gross revenue rose 2.6% to Rs 5116.82 crore in Q4 March 2013 over Q4 March 2012. The Q4 result was announced after market hours today, 15 May 2013.
Bajaj Finserv's consolidated net profit rose 17.63% to Rs 1573.64 crore on 29.96% growth in total income from operations (net) to Rs 5072.43 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). Gross revenue rose 9% to Rs 15814 crore in FY 2013 over FY 2012. Bajaj Finserv said that the company has performed well in FY 2013 in a challenging economic environment.
Bajaj Finserv's board of directors at a meeting held on Wednesday, 15 May 2013, recommend dividend of Rs 1.50 per share for FY 2013.
Bank stocks gained as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. A rate cut would boost credit offtake.
Shares of India's biggest commercial bank in terms of branch network, State Bank of India (SBI), jumped 4.07%.
Among other PSU bank stocks, Bank of Baroda, Bank of India, Union Bank of India, Canara Bank, and Punjab National Bank rose by 1.99% to 7.76%.
ICICI Bank rose 3.74%. Axis Bank rose 2.84%.
Kotak Mahindra Bank galloped 5.44% to Rs 767. The stock hit record high of Rs 769.90 in intraday trade today, 15 May 2013.
HDFC Bank gained 3.72% to Rs 714.80. The stock had hit record high of Rs 716.50 in intraday trade today, 15 May 2013.
HDFC jumped 4.7% to Rs 909.80. The stock hit record high of Rs 915 in intraday trade today, 15 May 2013.
Realty stocks rose as the latest data showing a sharp fall in wholesale price inflation in April 2013 raised hopes that the RBI may further cut policy rates to perk up economic growth. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance. HDIL, Unitech and D B Realty rose by 4.53% to 6.46%.
Realty major DLF jumped 4.93% to Rs 241.65 after the company received strong investor response for its institutional placement programme. Investors bid for a total quantity of 14.81 crore DLF shares under the institutional placement programme through the stock exchanges mechanism held during a single day on Tuesday, 14 May 2013. The company will issue up to 8.1 crore shares to eligible qualified institutional buyers. The floor price for the qualified institutional placement was set at Rs 222 per equity share, with price band of Rs 222 to Rs 233 per share.
Meanwhile, the Reserve Bank of India Deputy Governor H.R. Khan on Tuesday said that the RBI has allowed companies building low-cost housing projects to raise overseas loans.
The focus of the market is on Q4 results. Bajaj Auto announces Q4 results tomorrow, 16 May 2013. ITC unveils Q4 results on Friday, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel, State Bank of India and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. Tata Motors, ONGC, NMDC and BPCL unveil Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013.
The annual rate of inflation, based on monthly wholesale price index (WPI), eased sharply to 4.89% in April 2013, from 5.96% in March 2013, data released by the government on Tuesday, 14 May 2013, showed. Core inflation or non-food manufacturing inflation declined further to 2.74% in April 2013 from 3.41% in March 2013.
Meanwhile, WPI inflation for February 2013 was revised upwards to 7.28% from 6.84% reported earlier.
The consumer price inflation fell below the 10% mark in April 2013. The combined consumer price inflation for rural and urban India eased to 9.39% in April 2013 from 10.39% in March 2013, data released by the government on Monday, 13 May 2013, showed.
Reserve Bank of India Governor D Subbarao on Tuesday, 14 May 2013, said that the central bank will take note of falling inflation when discussing potential interest rate cuts.
The RBI on 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 it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
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 stock markets edged higher on Wednesday as Bank of England Governor Mervyn King predicted that a recovery for the UK economy is within sight. Key benchmark indices in UK, Germany and France rose by 0.19% to 0.21%.
Germany's Gross-domestic-product just narrowly avoided contraction in the first quarter. Germany's economy rose less than expected 0.1% during the first quarter. Another data released on Wednesday showed the French economy slid into a recession, with its gross domestic product slipping 0.2% in the first quarter from the three month period ended 31 December 2012.
UK unemployment rose in the first quarter and the number of people in work fell as the pressure on wages increased, adding to signs that the labor market is slowing. Joblessness as measured by International Labour Organisation methods rose 15,000 in the three months through March to 2.52 million, a rate of 7.8%, the Office for National Statistics said today in London.
Asian shares rose on Wednesday, with Japan's Nikkei Average surging to a fresh 5-1/2 year high on the back of a weaker yen and strengthening expectations for earnings growth of Japanese firms. Key benchmark indices in Indonesia, Japan, China, South Korea, Hong Kong, Taiwan, and Singapore rose by 0.12% to 2.29%.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 15 May 2013. US stocks rallied to record highs on Tuesday, continuing an ascent driven by the Federal Reserve's easy monetary policy, though investors' focus has turned to when the Fed may start to rein in its bond-purchase programme.
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