Key benchmark indices dropped in choppy trade after data showed that foreign funds remained net sellers of Indian stocks on Thursday, 4 April 2013. Weakness in European stocks also weighed on sentiment. The barometer index, the S&P BSE Sensex, reached its lowest closing level in more than 19 weeks. The 50-unit CNX Nifty reached its lowest closing level in more than 29 weeks. The Sensex shed 59.47 points or 0.32%, off close to 75 points from the day's high and up about 60 points from the day's low. The market breadth was positive. Index heavyweight and cigarette maker ITC fell nearly 3%. Another index heavyweight Reliance Industries (RIL) edged higher.
Indian stocks edged lower for third day in a row today, 5 April 2013. The Sensex has lost 590.72 points or 3.1% in three trading sessions from a recent high of 19,040.95 on 2 April 2013. The Sensex has fallen 385.44 points or 2.04% in first five trading sessions of April 2013. The Sensex has declined 976.48 points or 5.02% in calendar 2013 so far (till 5 April 2013). From a 52-week high of 20,203.66 on 29 January 2013, the Sensex has declined 1,753.43 points or 8.67%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 2,701.25 points or 17.15%.
Coming back to today's trade, Maruti Suzuki India jumped over 7% on hopes a weaker yen currency would improve margins by reducing the costs of importing auto parts from Japan after the Bank of Japan unleashed unprecedented monetary expansion. Realty stocks were mixed. Bank stocks were also mixed.
The market edged lower amid volatility in early trade. The Sensex hit 19 week low. The 50-unit CNX Nifty hit lowest level in over 19 weeks. The market hovered in negative terrain in morning trade. The Sensex slipped into the red after moving into the positive terrain from negative terrain for a brief period in mid-morning trade. The market extended losses to hit fresh intraday low in early afternoon trade. Key benchmark indices recovered sharply after hitting fresh intraday low in afternoon trade. The Sensex reversed intraday losses and moved into positive zone for a brief period in mid-afternoon trade. The Sensex soon slipped into the red.
The market sentiment was affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Thursday, 4 April 2013. Foreign institutional investors (FIIs) sold shares worth Rs 248.10 crore from the secondary equity markets on Thursday, 4 April 2013, as per data from Securities & Exchange Board of India.
The S&P BSE Sensex was down 59.47 points or 0.32% to 18,450.23, its lowest closing level since 20 November 2012. The index fell 120.41 points at the day's low of 18,389.29 in afternoon trade. The index rose 15.75 points at the day's high of 18,525.45 in mid-afternoon trade.
The CNX Nifty was down 21.50 points or 0.39% to 5,553.25, its lowest closing level since 13 September 2012. The index hit a low of 5,534.70 in intraday trade. The index hit a high of 5,577.30 in intraday trade.
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The BSE Small-Cap index fell 0.15%. The BSE Mid-Cap index advanced 0.02%. Both these indices outperformed the Sensex.
The BSE FMCG index (down 1.74%), the BSE Consumer Durables index (down 0.78%), the BSE Capital Goods index (down 0.72%), the BSE Power index (down 0.56%), the BSE banking index -- the Bankex (down 0.36%), underperformed the Sensex. The BSE Oil & Gas index (up 1.65%), the BSE Auto index (up 0.55%), the BSE Metal index (up 0.31%) and the BSE PSU index (up 0.14%), outperformed the Sensex.
The total turnover on BSE amounted to Rs 1674 crore, higher than Rs 1551.17 crore on Thursday, 4 April 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,397 shares rose and 1,330 shares fell. A total of 127 shares were unchanged. The market breadth alternately swung between positive and negative zone in intraday trade.
Among the 30-share Sensex pack, 16 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) gained 1.73% at Rs 780. The scrip hit high of Rs 782 and a low of Rs 766.20. Shares of Reliance Communications rose 0.24%. Reliance Jio Infocomm and Reliance Communications (RCom) on Tuesday, 2 April 2013, announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC declined 2.79% to Rs 291.45 on profit booking. The scrip hit high of Rs 299.50 and a low of Rs 290.15. The stock had hit record high of Rs 310.75 on 4 February 2013. The government 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, which was unveiled on 28 February 2013.
FMCG major Hindustan Unilever gained 0.13% after the company said before market hours today, 5 April 2013, that the company has entered into a Share Purchase Agreement with the promoters of Aquagel Chemicals Private (ACPL) for acquisition of 74% of the equity share capital of ACPL. The company was earlier holding an investment to the extent of 26% of the equity share capital of ACPL. Consequent to the acquisition of remaining 74% of the equity share capital, ACPL has become a wholly owned subsidiary of Hindustan Unilever with effect from 1 April 2013.
Power Grid Corporation of India rose 0.38%. The company after trading hours today, 5 April 2013, said that the board of directors at meeting held on 28 March 2013 has approved 7 new projects with a total cost of Rs 3450.81 crore.
Some pharma stocks gained on defensive buying. Cipla, Dr. Reddy's Laboratories and Ranbaxy Laboratories rose by 0.3% to 1.05%. Sun Pharmaceutical Industries fell 0.03%.
Most metal shares edged higher as LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.74% on Thursday, 4 April 2013. Tata Steel, Hindalco Industries and Jindal Steel & Power rose by 1.35% to 1.67%. Bhushan Steel, Hindustan Zinc and JSW Steel shed by 0.04% to 0.71%.
Sterlite Industries (India) rose 1.77% to Rs 89.25, with the stock recovering on bargain hunting after 2-day 5.8% slide. The stock recovered after hitting a 52-week low of Rs 87 in intraday trade today, 5 April 2013. Shares of Sterlite Industries (India) had declined 5.8% in two trading sessions to settle at Rs 87.70 on Thursday, 4 April 2013, from a recent high of Rs 93.10 on 2 April 2013.
Sterlite Industries (India) on 3 April 2013 said that the Bombay High Court at Goa, by order dated 3 April 2013, has approved the Scheme of Amalgamation and Arrangement amongst Sterlite Industries (India), Madras Aluminium Company, Sterlite Energy, Vedanta Aluminium and Sesa Goa and their respective shareholders and creditors, to create Sesa Sterlite.
The scheme is also subject to approval of the Madras High Court wherein the hearings have completed and the order is awaited, Sterlite said in a statement.
Sterlite Industries (India) on 2 April 2013 said that Supreme Court of India vide its judgment dated 2 April 2013 has allowed the appeal of the company and set aside the judgment of the Madras High Court order dated 29 September 2010 vide which the company's Tuticorin Smelter was ordered to be closed. The company had appealed against the Madras High Court order closing the Tuticorin Smelter (Unit). The Apex Court had initially stayed the Madras High Court judgment vide interim order dated 1 October 2010. The Apex Court had appointed a team of NEERI, TNPCB and CPCB to carry out inspection of the Unit. NEERI submitted its report confirming that the Unit meets the required standards and made certain recommendations for improvements which were implemented.
The Supreme Court after being satisfied has allowed the appeal of the company. The Apex Court as part of environment commitment of the company has asked the company to deposit Rs 100 crore to the Collector, Tuticorin. This money will be kept in a Nationalized bank and the interest will be used to improve the air and water environment of Tuticorin, Sterlite said.
The company said it will continue to work in close association with the state government of Tamil Nadu and other regulatory bodies, towards maintaining highest standards of Health, Safety and Environment.
Steel Authority of India (Sail) gained 0.33% after the company signed a Memorandum of Understanding (MOU) with Kerala State Industrial Development Corporation (KSIDC) and Kerala Minerals and Metals (KMML), for setting up a Titanium Project in joint venture in Kerala. Through this MOU, possibilities of setting up of the Titanium Project in joint venture in Kerala will be explored by Sail, KSIDC and KMML in a phased manner. To begin with, in Phase 1, setting up of a Titanium Sponge and Metal Plant based on supply of Titanium Tetrachloride by KMML will be considered. In subsequent phases, backward and forward integration will be explored for ensuring long term viability of the project.
Speaking on the occasion, Sail Chairman Mr. C.S. Verma stated that the state government of Kerala and Sail have a longstanding association. He further said that, Sail is continuously on the lookout for new business opportunities in the areas of its competency. The signing of MOU is a step in that direction, he said.
This will be the another major titanium project in Kerala after the nation's first titanium sponge plant was put up at KMML's Chavara complex in Kerala between KMML, Vikram Sarabhai Space Centre (VSSC) and the Defence Metallurgical Research Laboratory in the year 2011.
State-owned miner, NMDC tumbled 4.71% on reports company has slashed the price of higher grade iron ore (lumps) by about 7% for the current month. This is the fifth reduction since last October in iron ore lump prices by NMDC. However, the company has not changed the price of iron ore fines (lower grade) for the second month in succession.
IT stocks were mixed after negative economic data in US, the biggest outsourcing market for the Indian IT firms. Infosys dropped 0.66%. Infosys announces Q4 results on 12 April 2013. Infosys said during market hours Tuesday, 2 April 2013, that it has signed an agreement with RWE Supply & Trading (RWEST), a leading European energy trading house to provide technology services to transform RWEST's trading operations to create business efficiencies and drive growth from new markets and commodities.
Infosys on 15 March 2013 announced that it has been selected by India Post to implement and manage a platform that will transform its rural operations. With this new agreement, Infosys will facilitate India Post's Rural Systems Integration (RSI) program.
Software major TCS declined 0.46%. The company on 26 March 2013 said that it has bagged a contract from Southern Water to implement a customer services and revenue transformation programme for the latter. The programme will combine front and back-end technology deployments with internal process redevelopment. Southern Water will benefit from enhanced customer service capabilities, improved cash collection and debt management, and will see a reduction in operating expenditure, TCS said a statement.
Wipro rose 1.17%.
HCL Technologies gained 1.89%. The company said during market hours Wednesday, 3 April 2013, that the company is collaborating with North Carolina New Schools -- a statewide public-private catalyst for education innovation -- to create and promote science, technology, engineering and math (STEM) programs and get college students ready for the 21st century workforce. HCL will design an online technology hub which will serve as a central gathering place for featured content and discussion between teachers, principals, school staff, students, counselors, college liaisons, district office superintendents and NC New Schools administration staff. NC New Schools will leverage HCL's services for content creation and management of its collaborative, online community offering access to tools and resources required to accelerate systemic, sustainable innovation in schools. NC New Schools will move approximately 3,000 NC New Schools intranet users to the new technology hub.
United Spirits (USL) tumbled 3.75% to Rs 1755. JM Financial Institutional Securities, the manager to the open offer of United Spirits, said that open offer shall commence on 10 April 2013 and shall close on 26 April 2013. The offer price shall remain at Rs. 1440 per share. The offer price would be paid together with interest computed at the rate of 10% per annum on the offer price from 19 March 2013 till the date of actual payment to all the Public Shareholders who successfully tender their shares in the offer. The open offer is a mandatory offer by Diageo plc to acquire up to 3.77 crore equity shares of USL constituting 26% the enlarged share capital of USL. The open offer is a part of the deal inked by Diageo plc and the UB group whereby Diageo plc will acquire 53.4% of the enlarged USL share capital at an aggregate cost of Rs 11166.50 crore (approximately 1,285 million) in two stages.
Auto stocks were mixed. Tata Motors dropped 0.97%. The company's total sales (including exports) of Tata commercial and passenger vehicles in March 2013 were 72,712 vehicles. The company's domestic sales of Tata commercial and passenger vehicles for March 2013 were 69,160 units. Cumulative sales (including exports) for the company were 8.10 lakh units in FY 2013. Tata Motors announced the monthly sales data on Monday, 1 April 2013.
Maruti Suzuki India jumped 7.15% on hopes a weaker yen currency would improve margins by reducing the costs of importing auto parts from Japan after the Bank of Japan (BOJ) unleashed unprecedented monetary expansion. The yen slid to a 3-1/2 year low against the dollar on Friday, after suffering its biggest one-day tumble since late 2008 on Thursday, on the back of the BOJ's radical campaign to attack deflation.
Maruti Suzuki imports raw materials from its Japanese parent Suzuki Motor. It also pays annual royalty on sales to the Japanese parent.
Maruti announced during market hours on Tuesday, 2 April 2013, that its total sales declined 4.8% to 1,19,937 units in March 2013 over March 2012. The company's domestic sales fell 4.3% to 1,07,890 units in March 2013 over March 2012. The company's exports dropped 8.9% to 12,047 units in March 2013 over March 2012
Mahindra & Mahindra (M&M) declined 1.06%. M&M's total automobile sales rose 11% to 51,904 units in March 2013 over March 2012. The company's domestic sales rose 11% to 49,225 units in March 2013 over March 2012. Exports for the month of March 2013 stood at 2,679 units. Sales of passenger vehicles (which includes UVs and Verito) rose 13% to 25,847 units in March 2013 over March 2012. Sales of 4 wheeler commercial segment, which includes the passenger and load vehicles, jumped 17% to 17,212 units in March 2013 over March 2012. Sales of 3-wheelers declined 5% to 4,831 units in March 2013 over March 2012. M&M announced the monthly sales data during trading hours Monday, 1 April 2013.
The company's domestic tractor sales declined 2.31% to 15,551 units in March 2013 over March 2012. The company's total tractor sales declined 0.43% to 17,330 units in March 2013 over March 2012. Exports jumped 20% at 1,779 units in March 2013 over March 2012. M&M announced the monthly tractor sales data during trading hours Monday, 1 April 2013. M&M said that the company maintained its leadership position in the Indian tractor industry during the year ended 31 March 2013 (FY 2013).
Ashok Leyland gained 0.91% on bargain hunting after recent slide triggered by the company reporting a decline in sales in March 2013. The company reported a 2% decline in total sales at 14,020 units in March 2013 over March 2012. However, sales of small commercial vehicle 'DOST' spurted 96% to 4,325 units in March 2013 from 2,211 units sold in March 2012.
Bike makers gained. Bajaj Auto rose 1.37% on bargain hunting after recent slide triggered by company reporting a decline in sales in March 2013. The company announced during market hours on Tuesday, 2 April 2013, that total sales fell 10% to 3.01 lakh units in March 2013 over March 2012. Motorcycles sales declined 11% to 2.67 lakh units in March 2013 over March 2012. Commercial vehicles sales fell 1% to 34,194 units in March 2013 over March 2012. Exports declined 6% to 1,01,374 units in March 2013 over March 2012
Shares of Hero MotoCorp rose 0.35%.
Capital goods stocks edged lower on worries the ongoing slowdown in the economy could restrict new orders. L&T declined 0.93%. The company said during market hours today, 5 April 2013, that its construction division has secured new orders valued over Rs 2004 crore across various segments in March 2013.
Among other capital goods stocks, Bhel, Thermax, Siemens and ABB dropped by 0.09% to 1.32%.
Sugar stocks gained after the government on Thursday partially decontrolled sugar sector by giving freedom to millers to sell in the open market and removed their obligation to supply the sweetener at subsidised rates to ration shops. Triveni Engineering & Industries, Dwarikesh Sugar, Bajaj Hindusthan, Balrampur Chini Mills and Shree Renuka Sugars jumped by 0.7% to 3.24%.
The government has taken steps to remove curbs on domestic sugar supplies after months of debate as the world's second-biggest producer hopes to iron out sharp swings in output that have triggered volatility in global prices. India, the biggest sugar consumer, will no longer force mills to sell sugar to the government at a discount and will not limit the amount they can sell in the open market, Food Minister K.V. Thomas was quoted by the media as saying on Thursday after the cabinet agreed to the changes.
Essar Oil (EOL) gained 1.91% after the company said after market hours on Thursday, 4 April 2013, that it has completed the process for exiting the Corporate Debt Restructuring (CDR) loan facility set up in December 2004 to help cover the construction of its Vadinar refinery in Gujarat. The CDR loan facility has been replaced with a new debt facility of about Rs 9100 crore on commercial terms from similar group of lenders.
Mr Lalit Gupta, Essar Oil Managing Director and Chief Executive Officer, said, "The CDR exit marks a significant step forward for Essar Oil. Complete stabilising of our expanded capacity pave the way for us to move forward positively to maximize value for all our stakeholders. Capacity expansion and high complexity has already improved our profitability."
Mr Suresh Jain, Chief Financial Officer, Essar Oil, said, "We are thankful to our lenders for their continued faith in us. The CDR exit will lead to greater operational and financial flexibility for the organization. We have begun the process of swapping our costly rupee debt with cheaper dollar loans that will lower our interest cost significantly, improve our cash flow, and strengthen the balance sheet."
In addition, as part of dollarization of its rupee term debt, EOL has refinanced Rs 2611 crore of rupee term loans into equivalent foreign currency debt of $481 million through ECBs/swaps. This will help in reduction of long-term interest cost. The company had received RBI approval of $2.27 billion to replace its high cost rupee debt with ECBs, and now with the CDR exit, the company will be able to refinance the remaining rupee loans to ECB.
Bank stocks were mixed. HDFC Bank rose 0.74%. HDFC Bank announces Q4 results on 23 April 2013.
ICICI Bank fell 1.4%. ICICI Bank announces Q4 results on 26 April 2013.
Axis Bank slipped 1.56%. Axis Bank will announce its Q4 March 2013 results on 24 April 2013.
State-run State Bank of India (SBI) declined 0.68%. SBI on 20 March 2013 said that the Executive Committee of the Central Board of the Bank, in its Meeting held on 20 March 2013, approved the issuance and allotment of 1.29 crore equity shares at Rs 2,312.78 per share to the Government of India (GoI) by way of preferential allotment.
Among other PSU bank stocks, Canara Bank, Bank of India, and Punjab National Bank gained by 0.51% to 1.63%. Bank of Baroda and Union Bank of India shed by 0.14% to 0.43%.
Realty stocks were mixed. D B Realty, Sobha Developers and HDIL gained by 0.89% to 2.22%. Unitech, Anant Raj Industries and Godrej Properties shed by 1.08% to 1.77%.
DLF declined 1.17%, with the stock reversing intraday gains. DLF announced before market hours today, 5 April 2013, that a definite agreement has been entered between the company's wholly-owned subsidiary DLF Home Developers (DHDL) and Tulip Renewable Powertech (Tulip). Accordingly, DHDL's Tamil Nadu wind mill undertaking of 34.5 megawatts (MW) capacity including related assets and liabilities (including current assets and liabilities) and relevant long term loans of the said undertaking, has been transferred by DHDL to Tulip as is where is basis by way of slump sale for lump sum consideration of Rs 188.70 crore.
DLF further added that a definitive agreement has been entered between DHDL and Violet Green Power (Violet) for sale of DHDL's Rajasthan wind mill undertaking of 33 MW capacity as is where is basis by way of slump sale for lump sum consideration of Rs 52.20 crore. Subject to the fulfilment of the terms and conditions and requisite regulatory approvals by both the parties in accordance with the said agreement, related assets and liabilities (including current assets and liabilities) of the said undertaking along with relevant long term loans will be transferred to Violet. DLF said these two transactions are in line with the DLF's objective of divesting its non core assets.
The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on 12 April 2013. HCL Technologies announces its Q3 results on 17 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank announces Q4 results on 26 April 2013.
On the political front, the DMK on 19 March 2013 withdrew support to the Congress led UPA government at the Centre citing differences on the issue of atrocities on Tamils in Sri Lanka. After the withdrawal of support by the DMK to the UPA government on 19 March 2013, Parliamentary Affairs Minister Kamal Nath on 20 March 2013 said the government was not a lame duck government and was stable. He said that no party has challenged the government for a floor test.
The UPA has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year. The Samajwadi Party (SP) along with its regional rival in Uttar Pradesh Bahujan Samaj Party (BSP) provide outside support to the UPA government. SP has 22 MPs in Lok Sabha and BSP has 21 MPs.
The Reserve Bank of India (RBI) will announce the Monetary Policy Statement 2013-14 on 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. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
The upside on the bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The India Meteorological Department will issue its first forecast of 2013 southwest monsoon in this month.
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.
The second half of the Budget session of the Parliament begins on 22 April 2013. The Budget Session of the Parliament ends on 10 May 2013. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
Assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.
European markets edged lower on Friday on mounting worries over the pace of the US economic recovery ahead of monthly jobs data. Key benchmark indices in France, Germany and UK fell by 1.31% to 1.87%.
European Central Bank (ECB) President Mario Draghi yesterday signaled the ECB will keep monetary policy loose for an extended period and that further easing is possible if economic conditions deteriorate. ECB has left its main interest rate unchanged at the historic low of 0.75%.
The Bank of England has decided not to restart its bond-buying programme this month amid mixed signals on the health of the fragile UK economy. In a widely expected move, the Monetary Policy Committee on Thursday kept the stock of asset purchases in its quantitative easing programme on hold at 375bn. It also kept the BoE interest rate at an all-time low of 0.5%.
Most Asian stocks fell on Friday, 5 April 2013. Key benchmark indices in Hong Kong, Singapore and South Korea fell by 0.24% to 2.73%. Markets in China and Taiwan remain closed for a holiday. Indonesia's Jakarta Composite rose 0.07%.
Japan's Nikkei Average jumped 1.58%. The Bank of Japan yesterday boosted its stimulus program, saying it will double the monetary base within two years.
Trading in US index futures indicated that the Dow could fall 58 points at the opening bell on Friday, 5 April 2013. US stocks rose on Thursday as cheer over Japan's monetary stimulus overcame resistance that came as US jobless claims climbed to a four-month high. The Labor Department reported that those filing for state unemployment benefits rose by 28,000 to a seasonally adjusted 385,000, the highest number since November and more than expected. The data came ahead of Friday's monthly nonfarm-payrolls report and after data Wednesday showed the economy created just 158,000 private-sector jobs in March.
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