Key benchmark indices surged after IT major Infosys kicked off the Q1 earnings season by reiternating its revenue guidace for the current year. Gains in European stocks also aided gains on the domestic bourses the barometer index, the S&P BSE Sensex, hit 6-week high. The 50-unit CNX Nifty hit 6-week high above the psychological 6,000 mark. The Sensex was provisionally up 303.39 points or 1.54%, up close to 195 points from the day's low and off about 10 points from the day's high. The market breadth, indicating the overall health of the market, was negative.
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.
The 50-unit CNX Nifty fell below the psychological 6,000 level soon after a firm opening took the index above that level at the onset of the trading session. The market further pared gains to hit fresh intraday low in morning trade. The market regained strength in mid-morning trade. Firmness continued in early afternoon trade. Key benchmark indices pared gains in a range bound market in afternoon trade. The market remained firm in mid-afternoon trade. The Nifty hit 6-week high above the psychological 6,000 level as the market surged 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 638.26 crore on Thursday, 11 July 2013, as per provisional data from the stock exchanges.
As per provisional figures, the S&P BSE Sensex was up 303.39 points or 1.54% to 19,979.45. The index jumped 315.88 points at the day's high of 19,991.94 in late trade, its highest level since 31 May 2013. The index gained 109.53 points at the day's low of 19,785.59 in morning trade.
The CNX Nifty was up 82.60 points or 1.39% to 6,017.70, as per provisional figures. The index hit a high of 6,019 in intraday trade, its highest level since 31 May 2013. The index hit a low of 5,951.15 in intraday trade.
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, 1,229 shares fell and 1,084 shares rose. A total of 134 shares were unchanged.
From the 30-share Sensex pack, 22 stocks rose and rest of them fell.
Reliance Industries (RIL) rose 2.71%, with the stock extending intraday gain. 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 10.85% to Rs 2,801. 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, 8.44 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 2.93% to Rs 1606. The stock hit record high of Rs 1,622.75 in intraday trade today, 12 July 2013.
HCL Technologies gained 2.63% to Rs 861.50. The stock hit record high of Rs 863 in intraday trade today, 12 July 2013.
Wipro jumped 4.16%.
Tech Mahindra rose 5.05% to Rs 1120.70. 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.
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.
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).
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 $23.785 billion in June 2013 over June 2012, data released by the government today, 12 July 2013, showed. Imports rose 0.37% to $36.034 billion. Oil imports jumped 13.74% to $12.767 billion. Non-oil imports declined 6.71% to $23.267 billion.
The trade deficit rose to $12.249 billion in June 2013 from $11.244 billion in June 2012. The trade deficit for April-June, 2013-14 was estimated at $50.180 billion which was higher than the deficit of $42.216 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 0.34% to 0.87%.
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 June 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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