Key benchmark indices extended intraday gains to hit fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, hit its highest level in more than 7 weeks. The 50-unit CNX Nifty hit its highest level in more than 12 weeks above the psychological 6,000 mark. The Sensex was up 222.77 points or 1.14%, up close to 300 points from the day's low and off about 20 points from the day's high. Index heavyweight and cigarette major ITC reversed intraday losses. Another index heavyweight Reliance Industries (RIL) was slightly higher. The market breadth, indicating the overall health of the market, was strong.
PSU OMCs rose after the Ministry of Petroleum and Natural Gas on Wednesday, 1 May 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for first fortnight of May 2013, effective from 1 May 2013, has declined to Rs 3.80 per litre from Rs 6.42 per litre during the second fortnight of April 2013. IT stocks gained on renewed buying.
The market moved into the positive terrain after opening lower. The Sensex extended initial gains to hit fresh intraday high in morning trade. The market strengthened further to hit fresh intraday high in mid-morning trade.
The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 30 April 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 876.93 crore on Tuesday, 30 April 2013, as per provisional data from the stock exchanges.
At 11:20 IST, the S&P BSE Sensex was up 222.77 points or 1.14% to 19,726.95. The index jumped 246.38 points at the day's high of 19,750.56 in mid-morning trade, its highest level since 11 March 2013. The index fell 52.92 points at the day's low of 19,451.26 in early trade.
The CNX Nifty was up 70.10 points or 1.18% to 6,000.30. The index hit a high of 6,007.25 in intraday trade, its highest level since 4 February 2013. The index hit a low of 5,910.95 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,063 shares advanced and 669 shares declined. A total of 96 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks rose while rest of them fell.
Index heavyweight Reliance Industries (RIL) rose 0.34% to Rs 790.85. The scrip hit high of Rs 796.45 and a low of Rs 783.25 so far during the day. The company said 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 rose 0.66% to Rs 331.15. The scrip hit high of Rs 331.75 and a low of Rs 325.10 so far during the day. 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.
PSU OMCs rose after the Ministry of Petroleum and Natural Gas on Wednesday, 1 May 2013, said that the under-recovery on High Speed Diesel (HSD) applicable for first fortnight of May 2013, effective from 1 May 2013, has declined to Rs 3.80 per litre from Rs 6.42 per litre during the second fortnight of April 2013. Indian Oil Corporation (IOC), HPCL and BPCL rose by 1.01% to 2.26%.
In the case of PDS Kerosene, the under-recovery for the month of May 2013 stands at Rs 27.93 per litre. In case of domestic LPG, the under-recovery for May 2013 stands at Rs 378.38 per cylinder. The under-recovery for diesel is calculated on fortnightly basis whereas the under-recovery for both PDS Kerosene and domestic LPG is calculated on monthly basis. PSU OMCs are currently incurring daily under-recovery of about Rs 256 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices.
Further, PSU OMC have reported gross under-recoveries of Rs 161029 crore for the fiscal 2012-13, which was significantly higher than the under-recoveries of Rs 138541 crore during previous fiscal 2011-12.
Meanwhile, PSU OMCs on Tuesday, 30 April 2013, announced cut in petrol price by Rs 3 a litre, marking the fourth - and the steepest - reduction since December 2008, on the back of a continuous fall in international oil prices and a strengthening rupee. The government has already freed pricing of petrol.
IT stocks gained on renewed buying. HCL Technologies rose 1.23% to Rs 729.90. 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.
Wipro gained 1.25%. 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.
Infosys rose 1.74%. Infosys has forecast a tepid 6% to 10% growth in revenue in both rupee terms and dollar terms for the year ending 31 March 2014 (FY 2014) as the company says that global economic uncertainties remain challenging for the IT industry. The revenue growth outlook is lower than industry body Nasscom's projection of 12% to 14% growth in IT exports in the current fiscal year. Infosys has not given full year earnings guidance this time. Infosys had earlier stopped offering quarterly guidance in July 2012.
Tata Consultancy Services (TCS) rose 2.74%. 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.
The focus of the market is on Q4 results. ACC and Ambuja Cements announce Q1 March 2013 results tomorrow, 3 May 2013. Grasim and Jaiprakash Associates unveil Q4 results on Saturday, 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. Dr Reddys 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 announces Q4 results on 30 May 2013.
The Finance Bill for the 2013-14 fiscal year was passed by Lok Sabha on Tuesday, 30 April 2013, with some amendments and without debate after Opposition walkout. The bill now go to Rajya Sabha and then to the President for his assent. Among a key amendment, Finance Minister P Chidambaram cut the withholding tax on interest payments to foreigners on government and corporate debt to 5% from up to 20% for a two-year period from 1 June 2013 to 31 May 2015. The finance minister also clarified that a tax residency certificate issued by a foreign government would be an accepted proof of residency for tax purposes. The government, in its budget proposals, had created confusion with a proposal stating that a tax residency certificate "shall be necessary but not a sufficient condition" to take advantage of double taxation avoidance agreements.
Slowing wholesale price inflation has raised expectations that the Reserve Bank of India (RBI) will cut its key policy rate viz. the repo rate to boost economic growth. The (RBI) will announce the Monetary Policy Statement 2013-14 tomorrow, 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.
Inflation based on the monthly wholesale price index (WPI) eased to the lowest level in 40 months at 5.96% in March 2013, and sharply lower than 6.84% in February 2013, data released by the government on 15 April 2013 showed. Non-food manufacturing inflation or core inflation slowed further to 3.41% in March 2013, the data showed. In Europe, the European Central Bank's (ECB) Governing Council meets in Bratislava on Thursday, 2 May 2013, to review euro area interest rates. The ECB is seen cutting euro area interest rates by 25 basis points to a record low of 0.5% as economic conditions continue to deteriorate across the euro zone and as inflation remains well below the bank's target.
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.
Asian shares edged lower on Thursday, weighed by a fall in US equities overnight and caution before the European Central Bank's interest rate decision later in the session. Key benchmark indices in China, Hong Kong, Indonesia, Japan and South Korea fell by 0.27% to 1.14%. Key benchmark indices in Taiwan and Singapore rose by 0.53% to 0.81%.
China's factory-sector growth eased in April as new export orders fell for the first time this year, a private survey showed on Thursday, suggesting the euro zone recession and sluggish US demand may be reining in China's economic recovery. The final HSBC Purchasing Managers' Index (PMI) dropped to 50.4 in April from March's 51.6 and was largely in line with a flash reading last week of 50.5. China's official PMI on Wednesday painted a similar picture, falling to 50.6 in April from an 11-month high of 50.9 in March as new export orders fell.
Trading in US index futures indicated that the Dow could gain 24 points at the opening bell on Thursday, 2 May 2013. US stocks dropped on Wednesday after the latest economic data in the United States and China cast doubts about the strength of the global economy. The ADP National Employment Report on Wednesday said the US private sector added 119,000 jobs in April, far fewer than forecast, raising apprehension over the key government nonfarm payrolls data for April due on Friday, 3 May 2013. Also on Wednesday, the US Institute for Supply Management said its index of national factory activity fell to 50.7 from 51.3 in March and its employment index fell to 50.2 from 54.2.
The Federal Reserve gave few indications of any new response to worsening economic data in a statement released after its two-day meeting that ended on Wednesday. The US central bank cited risks to growth from recent budget tightening in Washington and reiterated that unemployment is still too high for policymakers' comfort.
In Europe, the European Central Bank's (ECB) Governing Council meets in Bratislava later in the global day today, 2 May 2013, to review euro area interest rates. The ECB is seen cutting euro area interest rates by 25 basis points to a record low of 0.5% as economic conditions continue to deteriorate across the euro zone and as inflation remains well below the bank's target.
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