Key benchmark indices edged lower on caution ahead of the release of minutes of the Federal Open Market Committee (FOMC) meeting on 19 June, which may provide more insight into the Federal Reserve's outlook on monetary stimulus. The barometer index, the S&P BSE Sensex, settled at one week low. The BSE Sensex lost 145.36 points or 0.75%, off 211.81 points from the day's high and up 56.21 points from the day's low. The market breadth, indicating the overall health of the market, turned negative from positive in late trade.
The Sensex has declined 101.69 points or 0.52% so far in July 2013 (till 10 July 2013). The Sensex has fallen 132.59 points or 0.68% in calendar 2013 so far (till 10 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,149.50 points or 5.62%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 2,695.64 points or 16.24%.
Coming back to today's trade, Reliance Industries (RIL) dropped on reports that the finance ministry has told oil ministry that RIL must deliver outstanding gas at old rate of $4.2 per million metric British thermal units (mmBtu). IndusInd Bank fell on profit booking after reporting strong Q1 results. Hindustan Unilever and Cairn India, both, declined after turning ex-dividend.
Auto, FMCG and capital goods stocks edged lower. PSU OMCs edged lower on higher crude oil price. In pharmaceutical pack, shares of Sun Pharmaceutical Industries reversed direction after hitting record high. Another pharma major Lupin hit a record high. Steel stocks edged lower, with Tata Steel hitting 52-week low. Other stocks from the metal pack declined on weak trade data in China.
IT stocks rose on recent weakness of rupee against the dollar. Shares of companies in the education space rallied for the second straight day. Realty stocks edged lower in volatile trade. Sugar stocks gained after the government on Tuesday, 9 July 2013, raised the import duty on sugar to 15% from 10% with immediate effect.
The market edged higher in early trade. The Sensex slipped into the red to hit fresh intraday low after paring initial gains in morning trade. The market hit fresh intraday low in mid-morning trade. Key benchmark indices alternately moved between positive and negative zone near the flat line in early afternoon trade. Key benchmark indices were range bound in afternoon trade. The market lost ground to hit fresh intraday low in mid-afternoon trade.
The S&P BSE Sensex shed 145.36 points or 0.75% to 19,294.12, its lowest closing level since 3 July 2013. The index fell 201.57 points at the day's low of 19,237.91 in mid-afternoon trade. The index rose 66.45 points at the day's high of 19,505.93 in early trade, its highest level since 5 July 2013.
The CNX Nifty was down 42.30 points or 0.72% to 5,816.70, its lowest closing level since 8 July 2013. The index hit a low of 5,802.85 in intraday trade. The index hit a high of 5,879.35 in intraday trade, its highest level since 5 July 2013.
The total turnover on BSE amounted to Rs 1615 crore, lower than Rs 1751.70 crore on Tuesday, 9 July 2013.
The market breadth, indicating the overall health of the market, turned negative from positive in late trade. On BSE, 1,166 shares fell and 1,156 shares rose. A total of 137 shares were unchanged.
The BSE Mid-Cap index fell 0.4% and the BSE Small-Cap index slipped 0.04%. Both these indices outperformed the Sensex.
The BSE Consumer Durables index (up 1.95%), BSE IT index (up 0.66%), BSE Teck index (up 0.27%), BSE Healthcare index (up 0.11%), BSE Bankex (down 0.62%) and BSE FMCG index (down 0.65%) outperformed the Sensex.
BSE Metal index (down 0.91%), BSE Power index (down 0.98%), BSE Capital Goods index (down 0.98%), BSE PSU index (down 1.02%), BSE Realty index (down 1.32%), BSE Auto index (down 1.5%) and BSE Oil & Gas index (down 1.82%) underperformed the Sensex.
From the 30-share Sensex pack, 23 stocks fell and rest of them rose.
Reliance Industries (RIL) dropped 1.79% on reports that the finance ministry has told oil ministry that RIL must deliver outstanding gas at old rate of $4.2 per million metric British thermal units (mmBtu). The Cabinet Committee on Economic Affairs (CCEA) had 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.
Cairn India declined 2.78% as the stock turned ex-dividend today, 10 July 2013, for final dividend of Rs 6.50 per share for the year ended 31 March 2013 (FY 2013).
PSU OMCs edged lower as US crude oil futures traded near the highest level in 14 months on speculation that shrinking crude stockpiles in the United States indicate increased demand in the world's biggest oil consumer. HPCL (down 3.4%), BPCL (down 2.66%), and Indian Oil Corporation (down 0.34%), edged lower. US crude oil futures for August delivery added $1.2 to $104.73 a barrel in electronic trade today, 10 July 2013. The contract had risen 39 cents a barrel or 0.37% to settle at $103.53 a barrel on the New York Mercantile Exchange on Tuesday, 9 July 2013. Higher crude oil price will increase under-recovery of PSU OMCs on domestic sales of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
UltraTech Cement rose 1.41%. The company after market hours today said it has commissioned its clinkerisation plant of 3.3 million tonnes a year (mtpa) at Malkhed in Karnataka.
Grasim Industries fell 1.34%. Grasim Industries holds 60.3% stake in UltraTech Cement.
Capital goods stocks edged lower. ABB (down 0.94%), Crompton Greaves (down 1.57%), Thermax (down 1.4%), Siemens (down 1.63%), L&T (down 1.1%) and Bhel (down 1.98%) edged lower.
FMCG stocks declined. Dabur India (down 1.02%), ITC (down 0.62%), Colgate-Palmolive (India) (down 0.7%), edged lower.
Hindustan Unilever fell 1.61% as the stock turned ex-dividend today, 10 July 2013, for final dividend of Rs 6 per share for the year ended 31 March 2013 (FY 2013).
Sun Pharmaceutical Industries shed 0.36% at Rs 1,076.05. The stock reversed direction after striking a record high of Rs 1,095.80 in intraday today, 10 July 2013.
Lupin gained 2.47% at Rs 856. The stock hit a record high of Rs 864.50 in intraday today, 10 July 2013.
Wockhardt spurted 5.12% to Rs 961.
Strides Arcolab dropped 7.52%, with the stock extending recent losses triggered by reports that the Department of Industrial Policy and Promotion (DIPP) has put on hold the company's unit Agila Specialties' sale plan on concerns that ownership of critical cancer drug-making facilities will fall into foreign hands. The DIPP, the government body that makes FDI (foreign direct investment) policy, raised fears that foreign multinational firms were taking over the few remaining domestic cancer drug-making facilities. The Foreign Investment Promotion Board (FIPB) has reported deferred a decision on the deal.
On 28 February this year, Strides Arcolab and the US-based Mylan Inc signed a massive $1.6 billion plus agreement by which the US drug major was to acquire Agila Specialties, the injectable medicine business of Strides.
Steel stocks edged lower. JSW Steel (down 2.65%) and Sail (down 0.94%), edged lower. Jindal Steel & Power rose 0.53%.
Tata Steel fell 2.22% to Rs 255.60, also its 52-week low. Tata Steel said today, 10 July 2013, its hot metal production rose 20% to 2.22 million tonnes in first quarter ended June 2013-14 (Q1 FY 2014) over Q1 FY 2013. The crude steel production rose 22% to 2.46 million tonnes in Q1 FY 2014 over Q1 FY 2013. Saleable Steel production was higher by 23% to 2.14 million tonnes in Q1 FY 2014 over Q1 FY 2013 and sales increased by 26% to 2.01 million tonnes in Q1 FY 2014 over Q1 FY 2013.
Other stocks from the metal pack declined on weak trade data in China. China is the world's largest consumer of copper and aluminum. Sterlite Industries (down 0.65%), Hindustan Zinc (down 0.83%) and Hindalco Industries (down 2.78%), edged lower.
MMTC was locked at 5% lower circuit at Rs 68.45, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake in the firm at a huge discount to the stock's ruling market price last month. On 13 June 2013, the Government of India (GoI) sold 9.33% stake in MMTC via Offer for Sale (OFS) through stock exchanges mechanism at an indicative price of Rs 60.86 per share, at a discount of 71.21% to the closing price of the stock of Rs 211.45 on 12 June 2013.
IndusInd Bank fell 2.13% on profit booking after reporting good Q1 results. The stock fell on profit booking after rising 5.93% in the preceding two sessions to Rs 502 on 9 July 2013, from Rs 473.90 on 5 July 2013. The bank's net profit rose 41.72% to Rs 334.84 crore on 22.14% rise in total income to Rs 2382.81 crore in Q1 June 2013 over Q1 June 2012. The bank announced Q1 results during market hours today, 10 July 2013.
IndusInd Bank's ratio of net non-performing assets (NPAs) to net advances stood at 0.21% as on 30 June 2013, compared with 0.31% as on 30 June 2013 and 0.27% as on 30 June 2012.
The bank's ratio of gross NPAs to gross advances stood at 1.06% as on 30 June 2013, compared with 1.03% as on 31 March 2013 and 0.97% as on 30 June 2012.
Provisions and contingencies surged 146.84% to Rs 132.06 crore in Q1 June 2013 over Q1 June 2012. The bank has created floating provision of Rs 50 crore in Q1 June 2013. This provision is made in excess of minimum requirement prescribed by the Reserve Bank of India (RBI) under income recognition and asset classification (IRAC) norms without reference to any specific NPA and the same has been computed while computing the position of net NPAs.
The bank's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 14.42% as on 30 June 2013, compared with 15.36% as on 31 March 2013 and 12.86% as on 30 June 2012.
Bajaj Finserv climbed 2.98% to Rs 653.85. The company announces Q1 results on 18 July 2013.
Most auto stocks edged lower. M&M (down 2.58%) and Tata Motors (down 1.44%), edged lower.
Shares of car major Maruti Suzuki India rose 0.31%. As per recent reports, the company has stopped the third shift at its diesel engine plant in Manesar due to low demand. With increase in prices of diesel, the demand for diesel cars has tapered off.
The company on Monday, 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.
Two wheeler stocks declined. Bajaj Auto fell 2.27%. Hero MotoCorp declined 0.39%.
IT stocks rose on recent weakness of rupee against the dollar. HCL Technologies (up 2.46%), TCS (up 0.51%), Tech Mahindra (up 3.63%) and Wipro (up 1.33%), edged higher.
The rupee was trading at 60.05, stronger compared with Tuesday's close of 60.14/15. The rupee had hit a record low of 61.21 in intraday deals on 8 July 2013. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue.
IT major Infosys rose 0.69%. The company on Tuesday, 9 July 2013, said head of global sales Basab Pradhan has left the company. The company gave no reason for Pradhan's departure.
Infosys unveils Q1 June 2013 results on Friday, 12 July 2013. The company's Q1 results will reflect the impact of salary hike, rupee depreciation and cross-currency movements. Investors will closely watch the management commentary on demand environment. At the time of announcement of Q4 March 2013 results in April this year, Infosys had forecast 6% to 10% growth in revenue in both rupee terms and dollar terms for the year ending 31 March 2014 (FY 2014). Infosys has suspended the practice of giving EPS guidance or outlook on margins citing uncertainty in various factors.
Rolta India rose 5.02% after the company said it has secured a multi-million dollar contract from Sadara Chemical Company (Sadara) to implement a comprehensive engineering system at its complex which will be the world's largest petrochemical facility ever built in a single phase. Rolta said it was selected for this challenging project based upon its unique combination of world class capabilities in engineering and IT. The project will be managed by a global Rolta team working out of the United States, India and Saudi Arabia, and will be completed by late 2014, the company said.
Shares of companies in the education space rallied for the second straight day. Everonn Education (up 15.55%), Edserv Softsystems (up 9.95%), NIIT (up 2.37%), and MT Educare (up 0.81%), gained.
Educomp Solutions gained by its maximum permissible daily limit of 10% for the second day in a row. The company early this week said it has initiated discussion with lenders and approached corporate debt restructuring forum to restructure its rupee debt. The company said it has initiated discussions with its lenders and has approached corporate debt restructuring (CDR) forum to restructure its rupee debt to correct the asset liability mismatch on its balance sheet. The company has also approached the CDR forum for restructuring of debt in its K-12 business (second major business, operated through its subsidiary -- Educomp Infrastructure and School Management). The debt-restructuring exercise will enable the company to comprehensively address the liquidity issues by matching the maturity profile of debt with the relatively long-term nature of its investments. The restructuring will also allow the company to focus on and strengthen its core operations, Educomp Solutions said in a statement.
Realty stocks edged lower in volatile trade. Indiabulls Real Estate (down 4.72%), Parsvnath Developers (down 1.72%), HDIL (down 2.9%), Omaxe (down 0.46%), and Unitech (down 1.96%), edged lower.
DLF fell 2.03%. The company on 6 July 2013 said it has completed the Rs 325.38-crore deal to sell 150 megawatts (MW) wind turbine project in Gujarat to Bharat Light and Power. The transaction is in line with the DLF's objective of divesting its non core assets, the company said in a statement.
Sugar stocks gained after the government on Tuesday, 9 July 2013, raised the import duty on sugar to 15% from 10% with immediate effect. Bajaj Hindusthan (up 0.96%), Balrampur Chini Mills (up 2.31%), Dhampur Sugar Mills (up 1.29%), Simbhaoli Sugar Mills (up 5.57%) and Shree Renuka Sugars (up 3.46%) gained.
The government on Tuesday, 9 July 2013, raised the import duty on sugar to 15% from 10% with immediate effect to prevent a flood of cheap imports due to a sharp fall in global sugar prices.
Gitanjali Gems was locked at 5% lower circuit at Rs 157.10, also its 52-week low. Shares of Gitanjali Gems (GGL) have slumped a whopping 71.25% in 16 trading sessions from a recent high of Rs 546.50 on 18 June 2013. Credit rating agency CARE on 5 July 2013, revised the ratings assigned to the bank facilities/instruments of Gitanjali Gems (GGL) and its subsidiaries/step-down subsidiaries and placed them on credit watch. The revision in the ratings takes into account stressed liquidity position of GGL as evidenced by full utilisation of the existing working capital limits which along with the recent RBI guidelines on gold import for domestic purpose would further put pressure on its liquidity position, CARE said.
CARE further added that it has also taken into account the significant erosion in share price and market capitalisation of the company in the last two weeks of June 2013 which in CARE's opinion would have weakening effect on GGL's financial flexibility and liquidity. The rating has been placed on credit watch due to lack of adequate information in-order to take a final view, the rating agency added.
Titan Industries galloped 4.31% to Rs 249.45, extending Tuesday's 2.71% rise triggered by a foreign brokerage upgrading the stock to 'buy' from 'neutral'. The broker said in its report that Titan Industries is sufficiently capitalised to buy gold without too much leverage, while its growth is being supported by additional stores and resilient wedding and discretionary demand. The report added that Titan's policy of hedging gold fully protects it from volatile gold prices, while it offers a strong competitive position due to its high capital efficiency. Titan imports gold for its retail gold jewellery business.
Sterlite Technologies jumped 4.52% after the company said it has entered into a 50:50 joint venture agreement with Conduspar Condutores Eletricos Limitada to manufacture optical fiber cable in Brazil. Conduspar is one of the largest companies in Brazil specialized in providing copper and aluminium cables for low and medium voltage applications in Latin America. The JV will set up a greenfield facility in Curitiba within the state of Parana (Brazil), and produce optical fiber cables for the Latin American markets. This venture would be a key milestone toward's Sterlite's global expansion strategy of its telecommunications business. The JV is expected to start commercial production by the first quarter of 2015 fiscal year, the company said.
European stocks edged lower in choppy trade as investors awaited the minutes of the last Federal Reserve meeting for further evidence of how long the central bank's asset-purchase program will operate. Key benchmark indices in UK, France and Germany were down by 0.28% to 0.55%.
Global ratings agency Standard & Poor's cut Italy's sovereign credit rating on Tuesday to BBB from BBB-plus and left its outlook on negative, citing concerns about prospects for an economy stuck in its worst recession since World War Two.
Most Asian stocks rose on Wednesday, 10 July 2013, after an improved economic outlook clinched a fourth day of improvement for US equities on Tuesday, 9 July 2013. Key benchmark indices in China, Hong Kong, Indonesia, Singapore, and Taiwan rose by 0.3% to 2.17%. Key benchmark indices in South Korea and Japan fell by 0.34% to 0.39%.
Chinese stocks rose on expectations that policy makers will ensure economic stability.
China's exports and imports both unexpectedly declined in June in a sign that weakness in global and domestic demand will intensify the slowdown in the world's second-biggest economy. Overseas shipments fell 3.1% from a year earlier, the General Administration of Customs said in Beijing today, 10 July 2013. Imports declined 0.7% after a 0.3% drop in May.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 10 July 2013. US stocks closed solidly higher for the fourth straight day on Tuesday, 9 July 2013, pushing the S&P 500 to within 1% of its all-time closing high, as Wall Street embraced an improving economy and higher interest rates.
The minutes of Federal Open Market Committee's (FOMC) policy meeting held on 19 June 2013, will be released later in the global day today, 10 July 2013. The minutes may provide more insight into the Federal Reserve's outlook on monetary stimulus. Fed Chairman Ben Bernanke is also due to deliver a speech today, 10 July 2013. 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.
World economic growth will struggle to accelerate this year as a US expansion weakens, China's economy levels off and Europe's recession deepens, the International Monetary Fund said. Global growth will be 3.1% this year, unchanged from the 2012 rate, and less than the 3.3% forecast in April, the Washington-based fund said yesterday, trimming its prediction for this year a fifth consecutive time.
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