Key benchmark indices turned positive after a lower start triggered on negative Asian stocks. The S&P BSE Sensex was up 14.72 points or 0.08%, up 62.96 points from the day's low and off 31.34 points from the day's high. The market breadth, indicating the overall health of the market, was strong. Index heavyweight and cigarette major ITC was slightly lower in early trade. ONGC, Oil India and Reliance Industries (RIL) edged higher for second day in a row after the government's decision to revise gas pricing to the one based on global trade transactions of gas. Shares of public sector oil marketing companies (PSU OMCs) were slightly higher after these companies raised petrol price by Rs 1.82 a litre, excluding local sales tax or VAT, with effect from midnight of Friday, 28 June 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1124.31 crore on Friday, 28 June 2013, as per provisional data from the stock exchanges.
At 9:25 IST, the S&P BSE Sensex was up 14.72 points or 0.08% to 19,410.53. The index gained 46.06 points at the day's high of 19,441.87 in early trade. The index fell 48.24 points at the day's low of 19,347.57 in early trade.
The CNX Nifty was up 2 points or 0.03% to 5,844.20. The index hit a high of 5,848.70 in intraday trade. The index hit a low of 5,822.20 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 562 shares gained and 241 shares fell. A total of 38 shares were unchanged.
The total turnover on BSE amounted to Rs 88 crore by 09:30 IST.
Among the 30-share Sensex pack, 17 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC shed 0.34% to Rs 323.35.
ONGC, Oil India and Reliance Industries (RIL) edged higher for second day in a row after the government's decision to revise gas pricing to the one based on global trade transactions of gas.
ONGC was up 1.91%. Reliance Industries (RIL) was up 0.57%. Oil India gained 2.95%.
The government on Thursday, 27 June 2013, agreed to double natural gas prices to industrial and retail consumers to help fund investment in exploration and reverse declining domestic gas output. The price of gas could go up to $8.4 per million metric British thermal units (mmBtu), effective 1 April next year, from current $4.2 mmBtu.
Shares of public sector oil marketing companies (PSU OMCs) were slightly higher after these companies raised petrol price by Rs 1.82 a litre, excluding local sales tax or VAT, with effect from midnight of Friday, 28 June 2013.
HPCL (up 0.35%), BPCL (up 0.05%) and Indian Oil Corporation (up 0.55%) gained.
Actual increase will be higher and will vary from city to city depending on local taxes. Petrol price in Delhi was hiked by Rs 2.19 per litre to Rs 68.58 as against Rs 66.39 earlier. In Mumbai, petrol price has been increased by Rs 2.30 to Rs 76.90 while in Kolkata rates went up from Rs 73.79 to Rs 76.10 per litre. In Chennai, prices were hiked by Rs 2.32 to Rs 71.72. The price hike was mainly due to depreciation of rupee against the dollar.
Hero MotoCorp (HMC) rose 0.89%. The company before market hours today said it has incorporated a wholly owned subsidiary in USA by the name of HMCL (NA), Inc. (HMCL (NA)) inter alia for the purposes of investing in Erik Buell Racing, inc. (EBR). HMCL (NA) has agreed to invest $25 million in EBR for a total stake of 49.2% in the share capital of EBR. The first tranche of $15 million has been invested by HMCL (NA) on 28 June 2013. The second tranche of $10 million is proposed to be invested within the next 9 months.
Tata Power Company surged 3.43% after Maharashtra Electricity Regulatory Commission (MERC), the electricity regulatory commission in Maharashtra, on Friday, 28 June 2013, approved 25% increase in average tariff for Tata Power's residential consumers for the year ending 31 March 2014 (FY 2014), which will be effective from 1 July 2013. MERC has approved the multi-year tariff plan till 2016 of Tata Power and allowed an increase of 25% for FY 2014, 15% for FY 2015 and 11% for FY 2016 for residential consumers.
For commercial and industrial consumers, the tariff hike would range from 22% to 39% in the current financial year, 9% to 13% in FY 2015, and 4% to 8% in FY 2016.
Reliance Infrastructure (RInfra) rose 0.56%. Reliance Infrastructure (RInfra) through its special purpose vehicle (SPV) Delhi Airport Metro Express (DAMEPL) has intimated the take over of the line by Delhi Metro Railway Corporation (DMRC) with effect from 1 July 2013. The announcement was made before market hours today, 1 July 2013.
RInfra said that due to the defects in the civil structure designed and built by DMRC, DAMEPL after deliberations and consultations with all stakeholders was forced to suspend the operations of the project, with effect from 8 July 2012, in paramount interest of safety of commuters and public at large. In view of the fact that DMRC failed to cure the defects within the period prescribed under the concession agreement, and on account of material breach and DMRC Event of Default having arisen as a result thereof, DAMEPL terminated the concession agreement vide its termination notice dated 8 October 2012.
RInfra said it has requested DMRC for payment of termination payment. As per the terms of the concession agreement, for the termination due to DMRC's Event of Default, DMRC is to pay the termination payment equivalent to 130% of the adjusted equity and 100% of the debt-due. The total investment of RInfra towards project capital expenditure is to the tune of Rs 2800 crore, RInfra said.
Aditya Birla Nuvo rose 0.52%. Aditya Birla Nuvo before market hours today, 1 July 2013, said it has submitted its application to the Reserve Bank of India (RBI) on 28 June 2013 for obtaining a license to set up a bank. Presently Aditya Birla Financial Services (ABFSPL), a wholly-owned subsidiary of the company, holds all entities engaged in financial services with the exception of life insurance i.e. Birla Sun Life Insurance Company (BSLI), which is directly held by the company. It is proposed that ABFSPL will be the non-operative financial holding company (NOFHC) as stipulated in the RBI guidelines. ABFSPL will be holding the entire financial services businesses. The transfer of BSLI under ABFSPL would be subject to regulatory approvals.
In terms of RBI guidelines, Aditya Birla Finance, a wholly-owned subsidiary of ABFSPL, the existing non-banking finance company, will be converted into a bank. The company and its subsidiaries will comply with the RBI guidelines, Aditya Birla Nuvo said in a statement.
L&T Finance Holdings gained 2.23%. L&T Finance Holdings said that the company's board of directors at its meeting held on Saturday, 29 June 2013, has approved the company's proposal to apply to the Reserve Bank of India (RBl) for a license to set up a bank.
Videocon Industries jumped 4.07%. Videocon Industries after market hours on Friday, 28 June 2013, said its board of directors has accorded their approval to the proposal of the Group for filing an application with Reserve Bank of India (RBI) for opening a Bank, in terms of the Guidelines dated 22 February 2013, and to complete the formalities in connection therewith.
Hindustan Motors (HML) jumped 14.38% after market hours on Friday, 28 June 2013, said it has on 28 June 2013, signed a memorandum of understanding (MoU) with Isuzu Motors India, a subsidiary of Isuzu Motors, Japan for contract manufacturing of Isuzu SUVs and pickup trucks in India. The components for producing these vehicles will be imported by Isuzu Motors from Thailand and assembled in HML's factory at Thiruvallur near Chennai in Tamil Nadu. Isuzu Motors India is a subsidiary of Isuzu Motors, Japan. Known globally for its expertise in diesel engines and for the manufacture of tough and durable vehicles, Isuzu Motors will supply the MU7 sports utility vehicle and the DMAX pickup truck in India.
Markit Economics will today, 1 July 2013, unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for June 2013. HSBC's India manufacturing PMI, eased to 50.1 in May 2013 from 51 in April 2013 led by a fall in output and a slowdown in new orders.
The next major trigger for the markets is Q1 June 2013 results. India Inc. will start reporting Q1 June 2013 results from the second week of July 2013.
Asian stocks dropped on Monday, 1 July 2013, as a further slowdown in manufacturing activity in China, South Korea and Taiwan raised concerns about the health of those economies. Key benchmark indices in China, Indonesia, Taiwan, Singapore, Japan and South Korea were down 0.15% to 0.8%. The Hong Kong markets were closed to mark the anniversary of the territory's handover from the UK to China.
Two separate surveys in China showed a further loss of momentum in factory activity. An officially sponsored reading of the manufacturing Purchasing Managers' Index for June dropped to 50.1 from 50.8 in May. Another survey by HSBC showed the monthly PMI falling to 48.2 in June from 49.2 in May. A reading below 50 shows a deterioration in activity, while one above signals an improvement.
Meanwhile, separate HSBC surveys in South Korea and Taiwan also indicated weakened conditions for local manufacturers, with both affected by the slowdown in China. In South Korea, the June PMI dropped to 49.4, down from 51.1 in May, while in Taiwan, the June PMI came in at 49.5, up sharply from 47.1 in May but still below the 50-point threshold.
In Japan, the Bank of Japan's quarterly tankan survey showed an improvement in sentiment at both large manufacturers and non-manufacturers, with the former showing positive sentiment for the first time since mid 2011.
US stocks ended mostly weaker on Friday, 28 June 2013, but posted their strongest first half of any year since 1998 after reaching record highs in May supported by the Federal Reserve's massive monetary stimulus.
In recent weeks, investors have been preoccupied with when the Federal Reserve may start pulling back monetary stimulus as the economy improves further. Federal Reserve Gov. Jeremy Stein on Friday suggested that the central bank's first tapering move could come in September, although he only used the month as a hypothetical start date in a speech to the Council on Foreign Relations. Jeffrey Lacker, president of the Richmond Fed, said there's likely to be more market volatility over the outlook for monetary policy in coming months, but these moves shouldn't interfere with a modest economic recovery. John Williams, president of the San Francisco Fed Bank, said it's better to "wait a bit" before tapering asset purchases. Their comments follow relatively soothing Fed speeches on Thursday, 27 June 2013, in which three officials chastised markets for overreacting to the central bank's statement last week. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
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