Key benchmark indices further pared intraday gains to hit fresh intraday low in morning trade. The barometer index, the S&P BSE Sensex, was up 22.24 points or 0.12%, up about 5 points from the day's low and off close to 60 points from the day's high. Index heavyweight and cigarette maker ITC held firm. Another index heavyweight Reliance Industries (RIL) reversed initial gains. The market breadth was strong.
IT stocks were mixed. Wipro slumped over 9% on the first trading session of demerger of non-IT business. Realty stocks rose on renewed buying.
A bout of volatility was witnessed in early trade as key benchmark indices trimmed gains after a firm start triggered by firm Asian stocks. The market further pared intraday gains to hit fresh intraday low in morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 163.95 crore on Monday, 8 April 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 22.24 points or 0.12% to 18,460.02. The index gained 83.95 points at the day's high of 18,521.73 in early trade, its highest level since 5 April 2013. The index rose 17.36 points at the day's low of 18,455.14 in morning trade.
The CNX Nifty was up 25.55 points or 0.46% to 5,568.50. The index hit a high of 5,580.60 in intraday trade, its highest level since 4 April 2013. The index hit a low of 5,563.40 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 851 shares rose and 379 shares fell. A total of 40 shares were unchanged.
Among the 30-share Sensex pack, 21 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) fell 0.08% at Rs 787. The scrip hit high of Rs 795.35 and a low of Rs 786.20 so far during the day. Shares of Reliance Communications gained 1.52%. Reliance Jio Infocomm and Reliance Communications (RCom) on 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 rose 0.63% to Rs 294.75. The scrip hit high of Rs 295.30 and a low of Rs 293.40 so far during the day. 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.
IT stocks were mixed. Infosys shed 1.11%. Infosys announces Q4 results on Friday, 12 April 2013. Infosys said during market hours on 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 rose 0.2%. TCS announces Q4 results on 17 April 2013. 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.
HCL Technologies rose 0.64%. The company on 3 April 2013 said that it 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.
Wipro slumped 9.13%. The sharp slide in the counter was because the demerger of the non-IT business of the company took effect on the bourses today, 9 April 2013. Following the demerger, the non-IT business of the company will be transferred to a separate company to be called Wipro Enterprises. Wipro will now be a company focused on IT services business. The demerged company will have non-IT business, including consumer care products, the infrastructure engineering business and medical diagnostic product and services business.
The Wipro board had announced the demerger of the non-IT business in November 2012.
Wipro announces Q4 results on 19 April 2013.
Realty stocks rose on renewed buying. DLF, Sobha Developers, HDIL and Unitech rose by 1.05% to 2.32%.
The upside on the domestic 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 next major trigger for the market is Q4 March 2013 results. The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on Friday, 12 April 2013. Reliance Industries (RIL) announces Q4 results on 16 April 2013. TCS announces Q4 results on 17 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Wipro announces Q4 results on 19 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 and Maruti Suzuki unveil Q4 results on 26 April 2013. HDFC announces Q4 results on 8 May 2013. Dr. Reddys Laboratories announces Q4 results on 14 May 2013.
On the macro front, the government will unveil industrial production data for February 2013 on Friday, 12 April 2013. Industrial production had risen 2.4% in January 2013, as against a contraction of 0.5% in December 2012.
The government will unveil data on the combined consumer price index for urban and rural India for March 2013 on 12 April 2013. Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013.
The government will unveil data on the wholesale price index (WPI) for March 2013 on 15 April 2013. The annual rate of inflation, based on the monthly wholesale price index (WPI), edged up to 6.84% in February 2013 from 6.62% in January 2013.
The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.
The Reserve Bank of India (RBI) Governor D. Subbarao on 6 April 2013 said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The 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.
On the political front, the Congress led UPA government has been reduced to a minority government, with DMK removing support to the government in March this year citing differences on the issue of atrocities on Tamils in Sri Lanka. Earlier, the Trinamool Congress withdrew support to the government in September last year as it opposed economic reforms. 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 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.
Most Asian markets advanced Tuesday to cheer benign inflation data from China and a solid start to the U.S. earnings season. Key benchmark indices in China, Hong Kong, Indonesia, Singapore and Japan rose by 0.3% to 0.92%. Key benchmark indices in South Korea and Taiwan shed by 0.3% to 0.35%.
A report in China showed consumer prices last month in the world's second-largest economy rose less than economists forecast. China's consumer price index rose 2.1% in March 2013 from a year earlier. The result was significantly lower than February's rise of 3.2%, but was above January's 2% inflation rate.
Growth in developing Asia is seen gaining momentum this year, powered by rising domestic consumption and intra-regional trade, but authorities need to ward off risks of inflation and asset bubbles arising from strong capital inflows, the Asian Development Bank (ADB) said. Tensions over long-standing border disputes in Asia, deepening austerity fatigue in the euro zone and political risks linked to wrangling over the US debt ceiling are the main threats to the region's near-term outlook, the Manila-based development lender said on Tuesday in its latest regional outlook report for 2013.
The region needs to put up safeguards against the buildup of asset bubbles and possible withdrawal of huge liquidity that has spilled over to the region following monetary policy stimulus in developed economies, the report said, adding that macroprudential policy must be reinforced when necessary. Developing Asia - comprised of 45 countries in Central, East, South, and Southeast Asia and the Pacific - is forecast to grow 6.6% this year and 6.7% in 2014, the ADB said.
Trading in US index futures indicated that the Dow could gain 11 points at the opening bell on Tuesday, 9 April 2013. US stocks ended a volatile session higher on Monday as investors looked ahead to an earnings season expected to show modest growth despite concerns about the economy's health.
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