The results of a private survey which indicated slowdown in India's manufacturing activity in May 2013 weighed on sentiment as Indian stocks extended Friday's steep slide. The S&P BSE Sensex settled at one-month low. The 50-unit CNX Nifty reached its lowest closing level in more than a month. The Sensex lost 149.82 points or 0.76%, off close to 250 points from the day's high and up about 70 points from the day's low. The market breadth, indicating the overall health of the market, was negative.
The Sensex had plunged 455.10 points or 2.25% on Friday, 31 May 2013, amid a broad decline in world stocks and after hawkish comments on inflation from Reserve Bank of India governor D. Subbarao dashed hopes that the central bank will continue to lower interest rates to boost economic growth. The Sensex has declined 604.92 points or 2.99% in the past two trading sessions from a recent high of 20,215.40 on 30 May 2013. The Sensex has gained 183.77 points or 0.94% in calendar 2013 so far (till 3 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 833.14 points or 4.07%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 3,861.50 points or 24.51%.
Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged lower. Mahindra & Mahindra bounced back after initial weakness on strong tractor sales in May 2013. Shares of two wheeler makers declined as PSU OMCs raised petrol price. Infosys jumped in volatile trade after the announcement of the return of founder and former chairman N.R. Narayana Murthy as executive chairman of the company. Capital goods stocks declined on worries slowing economy could adversely affect new order flow.
The market sentiment was also affected adversely by data showing that foreign funds remained net sellers of Indian stocks on Friday, 31 May 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 298.50 crore into the secondary equity markets on Friday, 31 May 2013, as per the data from the Securities & Exchange Board of India (Sebi).
The S&P BSE Sensex lost 149.82 points or 0.76% to 19,610.48, its lowest closing level since 3 May 2013. The index declined 218.33 points at the day's low of 19,541.97 in mid-afternoon trade. The index rose 99.89 points at the day's high of 19.860.19 in opening trade.
The CNX Nifty was down 46.65 points or 0.78% to 5,939.30, its lowest closing level since 30 April 2013. The index hit a low of 5,916.35 and a high of 6,011 in intraday trade.
The BSE Mid-Cap index rose 0.26%. The BSE Small-Cap index declined 0.1%. Both these indices outperformed the Sensex.
The BSE Teck index (up 1.11%), BSE IT index (up 1.01%), BSE Metal index (up 0.38%), BSE Realty index (up 0.33%), BSE FMCG index (down 0.35%), BSE HealthCare index (down 0.39%), BSE Bankex (down 0.55%), BSE PSU index (down 0.66%) outperformered the Sensex.
The BSE Oil & Gas index (down 1.84%), BSE Power index (down 1.02%), BSE Consumer Durables index (down 0.99%), BSE Capital Goods index (down 0.99%) and BSE Auto index (down 0.84%), underperformed the Sensex.
The total turnover on BSE amounted to Rs 1775 crore, lower than Rs 2039.04 crore on Friday, 31 May 2013.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,307 shares fell and 1,013 shares rose. A total of 131 shares were unchanged.
Among the 30-share Sensex pack, 20 stocks declined and the rest of them gained.
Shares of state run oil exploration firms declined. ONGC declined 2.85%. Oil India lost 3.87%
HDFC fell 2.4%.
From metal pack, Jindal Steel & Power, Sail and Tata Steel rose by 0.89% to 2.25%. Hindalco Industries fell 0.73%.
Sterlite Industries declined 0.91%. The company said after market hours on Friday, 31 May 2013, that the National Green Tribunal (NGT) has allowed the company to recommence production from its Tuticorin copper. NGT has laid down certain conditions for restarting the unit. The company said it welcomes the order and will work closely with the regulatory authorities and expects to resume production in approximately one week
Infosys jumped 4.42% to Rs 2,513.95 after the company announced on Saturday, 1 June 2013, that the board of directors have approved appointing Mr. N R Narayana Murthy as Executive Chairman of the board and Additional Director for a five year period with effect from 1 June 2013. The stock came off the day's high of Rs 2,624.90 hit during early trade. The stock had jumped 9.02% at the day's high.
Mr. K V Kamath would step down from his position as Chairman of the board and take up the position of Lead Independent Director effective 1 June 2013.
During his five-year term, Mr. Murthy would draw a token compensation of rupee one per year.
Mr. S Gopalakrishnan would be re-designated as Executive Vice Chairman effective 1 June 2013 and would primarily focus on key client relationships and broader industry issues. Mr. S D Shibulal would continue to be the Managing Director and CEO. Mr. S Gopalakrishnan and Mr. S D Shibulal have requested that they draw a compensation of rupee one per year. The board has accepted their requests, subject to necessary shareholder and government approvals.
In order to function more effectively Mr. Narayana Murthy intends to create the Chairman's office to assist him during his tenure and has requested the board to permit him to put together a team for this function. The team will include his son, Dr. Rohan Murty, as Mr. Narayana Murthy's executive assistant. The board has agreed to Mr. Narayana Murthy's requests, subject to necessary approvals.
Tata Communications tumbled 6.02% to Rs 194.45. Tata Communications' promoter Tata Sons had offered 0.96% stake, comprising 27.50 lakh shares, in the company through offer for sale (OFS) route on the stock exchanges today, 3 June 2013, to meet Sebi's minimum public shareholding norms.
The OFS got bids for 43.05 lakh shares, compared with 27.50 lakh shares on offer, as per data from the stock exchanges. The OFS was subscribed 156.58% at an indicative bid price of Rs 174.41 per share. The price in the OFS was below the floor price of Rs 196. The promoters announced the floor price after trading hours.
As on 31 March 2013, promoters held 76.15% stake in Tata Communications. Tata Sons held 14.22% stake in the company.
BGR Energy Systems slumped 11.88% to Rs 169.50 after weak investor response to the divestment of the promoter's 6.13% stake in the company through the stock exchanges mechanism today, 3 June 2013. BGR Energy Systems' promoters had offered 6.13% stake, comprising 44.22 lakh shares, in the company through offer for sale (OFS) route on stock exchanges today, 3 June 2013, to meet the minimum public shareholding norms.
The OFS got bids for 22.47 lakh shares, compared with 44.22 lakh shares on offer, as per data from the stock exchanges. The OFS was subscribed 50.82% at an indicative bid price of Rs 167.99 per share. The floor price for OFS was fixed at Rs 163 per share.
As on 31 March 2013, promoters held 81.13% stake in BGR Energy Systems. The OFS is aimed at complying with the minimum public float rule. Market regulator Securities & Exchange Board of India (Sebi) has mandated minimum public shareholding of 25% for private companies and 10% for state-run firms. 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.
Capital goods stocks declined on worries slowing economy could adversely affect new order flow. L&T, Siemens and Bhel shed by 0.88% to 1.43%.
Pharmaceutical major Sun Pharmaceutical Industries fell 2.68% to Rs 1017.15, off the day's low of Rs 990. The company is reportedly in talks to buy Sweden's Meda AB for between $5 billion and $6 billion to boost its generics business in developed markets. Meda makes speciality products, over-the-counter drugs and branded generics -- the same areas of focus as Sun.
Ashok Leyland lost 1.48% after the company said its total vehicle sales declined 16% at 7,267 units in May 2013 over May 2012. Ashok Leyland's sales of commercial vehicles excluding small commercial vehicle (SCV) Dost declined 22% at 4,932 units in May 2013 over May 2012. Sales of SCV Dost rose 1% at 2,335 units in May 2013 over May 2012.
Tata Motors rose 0.11% to Rs 313.80, with the stock reversing intraday losses triggered by the company reporting slide in sales in May 2013. The company's total sales (including exports) of Tata commercial and passenger vehicles declined 23.37% to 49,304 vehicles in May 2013 over May 2012. The company's domestic sales of Tata commercial and passenger vehicles declined 24.44% to 45,430 units in May 2013 over May 2012. Exports declined 8.17% to 3,874 units in May 2013 over May 2012.
Maruti Suzuki India was down 2.27% to Rs 1,569.80 after the company reported fall in sales in May 2013. The stock was volatile. The stock hit high of Rs 1605 and low of Rs 1,548. The company on Saturday, 1 June 2013, reported 14.4% fall in total sales to 84,677 units in May 2013 over May 2012. The company's domestic sales declined 13% to 77,821 units in May 2013 over May 2012. Exports fell 27.1% to 6,856 units in May 2013 over May 2012.
Shares of two wheeler makers extended intraday losses as PSU OMCs raised petrol price. Hero MotoCorp shed 3.65%.
Bajaj Auto slumped 3.32% to Rs 1762.20 on fall in sales in May 2013. The stock came off the day's low of Rs 1746. The company said during market hours today, 3 June 2013, that total sales fell 4% to 3.39 lakh units in May 2013 over May 2012. Motorcycle sales fell 5% to 3.04 lakh units in May 2013 over May 2012. Domestic motorcycle sales rose 3% to 2.12 lakh units in May 2013 over May 2012, owing to the launch of new Discover models. Sales of Commercial vehicles rose 14% to 34,568 units in May 2013 over May 2012. Total exports declined 14% to 1.11 lakh units in May 2013 over May 2012.
Mahindra & Mahindra (M&M) rose 0.83% to Rs 973.35, off the day's low of Rs 945.40. The company during market hours today, 3 June 2013, announced that its tractor sales rose 24% to 23,626 units in May 2013 over May 2012. The company's domestic tractor sales jumped 25% to 22,471 units in May 2013 over May 2012. Exports rose 16% to 1,155 units in May 2013 over May 2012.
The M&M stock had dropped in early trade after the company reported weak sales in its automotive division. The company on Saturday, 1 June 2013, said its total sales declined 1% at 43,460 units in May 2013 over May 2012. Auto sales in the domestic market rose 5% to 42,104 units in May 2013 over May 2012. The passenger vehicles segment which includes the UVs and Verito registered a growth of 5% at 22,244 units in May 2013 over May 2012. The four-wheeler commercial segment which includes the passenger and load vehicles registered a 12% growth at 14,848 units while the three-wheeler segment witnessed a 7% decline in sales at 4,028 units in May 2013 over May 2012. Exports declined sharply by 67% at 1,356 units in May 2013 over May 2012.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, M&M said, "We have achieved an overall growth of 5% in our domestic volumes during May 2013 for our automotive sector, in spite of a challenging environment. The growth in capital investment and private spending have also slowed down which is a cause for concern. At Mahindra, we remain cautiously optimistic of the situation and do hope that on the back of the new product launches, the auto industry will rev up sooner than later".
Index heavyweight Reliance Industries (RIL) fell 2.17% to Rs 788.10, with the stock extending intraday losses. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%.
Suzlon Energy was locked at 10% lower circuit at Rs 10.58, with the stock extending Friday's 9.89% slide triggered by the company reporting sharp increase in net loss in Q4 March 2013. Suzlon Energy reported consolidated net loss of Rs 1912.72 crore in Q4 March 2013, higher than a net loss of Rs 300.24 crore in Q4 March 2012. Net sales declined 36.1% to Rs 4280.53 crore in Q4 March 2013 over Q4 March 2012. The company the results after market hours on Thursday, 30 May 2013
Torrent Pharmaceuticals jumped 4.79% to Rs 824.40, with the stock extending Friday's 9.72% rally triggered by the company reporting turnaround Q4 results and its board recommending issue of bonus shares in the ratio of 1:1. Torrent Pharmaceuticals reported consolidated net profit of Rs 111 crore in Q4 March 2013, as against net loss of Rs 2 crore in Q4 March 2012. Net sales rose 22.8% to Rs 803 crore in Q4 March 2013 over Q4 March 2012. The company the results after market hours on Thursday, 30 May 2013
Shares of private banks declined. ICICI Bank fell 0.89%. HDFC Bank declined 1.63%. Kotak Mahindra Bank shed 1.39%.
But, State Bank of India rose 1.07%.
The Reserve Bank of India (RBI) today, 3 June 2013, said in a clarification to queries on new bank licences that the validity of in-principle approval for new banks has been extended to 18 months from one year. Applicants must take approval from other regulators to bring in entities regulated by them under the bank holding company, the RBI said.
Coal India rose 0.37% to Rs 326.15. The company during trading hours today, 3 June 2013, said its coal production stood at 34.55 million tonnes in May 2013 which was 95% of the target. The coal supply stood at 38.27 million tonnes for the month which was 94% of the target.
Index heavyweight and cigarette major ITC dropped 1.04%, with the stock extending intraday losses.
Credit rating firm CRISIL hit an upper circuit limit of 20% at Rs 1,126.60. McGraw Hill Financial today, 3 June 2013, announced a voluntary open offer to increase its stake in the company to 75% from 52.77%. McGraw Hill Financial is making a voluntary open offer to acquire up to 1.56 crore shares, representing 22.23% of the total equity shares outstanding in CRISIL at Rs 1,210 per share. The cash offer of Rs 1,210 per share represents a premium of 28.88% to the closing share price of Rs 938.85 on Friday, 31 May 2013.
The tender offer period is expected to begin in July 2013 and conclude in early August 2013. All requirements and procedures under Indian law will be strictly followed, McGraw Hill Financial said in a statement.
CRISIL and S&P Ratings Services first signed an affiliation agreement in 1996. The relationship was further strengthened in 1997 when McGraw Hill Financial acquired its initial equity stake in CRISIL. In 2005, McGraw Hill Financial became CRISIL's majority shareholder.
McGraw Hill Financial, a financial intelligence company, is a leader in credit ratings, benchmarks and analytics for the global capital and commodity markets. Its iconic brands include: Standard & Poor's Ratings Services, S&P Capital IQ, S&P Dow Jones Indices, Platts, CRISIL, J.D. Power & Associates, McGraw Hill Construction and Aviation Week.
Shares of other two credit rating firms also rose. ICRA (up 13.23%) and Credit Analysis and Research (CARE) (up 3.05%), surged.
ICRA is an independent and professional investment information and credit rating agency. The international credit rating agency Moody's Investors Service is ICRA's largest shareholder. As on 31 March 2013, Moodys Investment Company India held 28.51% stake in ICRA.
Dr Reddy's Laboratories gained 0.98%. The company said during market hours today, 3 June 2013, that FUJIFILM Corporation and the company have decided to terminate the memorandum of understanding (MoU) to enter into a exclusive partnership in the generic drugs business for the Japanese market and to establish joint venture in Japan. Based on MoU signed on 28 July 2011, the tow companies had conducted detailed studies on the establishment of a joint venture for developing and manufacturing generic drugs in Japan. However, as Fujifilm realigns its long term growth strategy in pharmaceutical business, both companies have decided to terminate the MoU.
The two companies will continue to explore partnerships/alliance in other pharmaceutical businesses such as active pharmaceutical ingredients (API) development and manufacturing, contract research and development and manufacturing, and the development and marketing of super-generics.
PSU OMCs were mostly lower after announcing increase in retail selling prices of petrol by Rs 0.75 per liter and an increase in retail selling price of diesel by Rs 0.50 per liter with effect from Saturday, 1 June 2013. BPCL, and Indian Oil Corporation shed by 0.46% to 2.17%. HPCL rose 0.85%.
The current increase was mainly due to depreciation of rupee from Rs 54.26 to Rs 55.32 against the dollar. PSU OMCs suffer under recoveries on domestic sale of diesel, LPG and kerosene at 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.
HSBC's India manufacturing PMI, which gauges business activity in Indian factories but not its utilities, eased to 50.1 in May 2013 from 51 in April 2013 led by a fall in output and a slowdown in new orders. Meanwhile, new export orders continued to firm. Quantity of purchases grew at a slower clip, stocks of purchases accelerated and stocks of finished goods grew at broadly the same pace. Backlogs of work rose notably and supplier delivery times continued to lengthen, albeit at a slower pace. Meanwhile, employment rose at a slightly faster pace. Input prices deflated and output prices declined for the first time since the global financial crisis.
With inflation pressures easing, the RBI may cut the policy rate again at the June meeting, but it is not blessed with a lot of room to ease monetary policy settings, said HSBC Economists after the manufacturing data.
Fiscal deficit for or the fiscal year ended 31 March 2013 (FY 2013) came in lower at 4.9% of GDP against 5.1% budgeted (in February 2012) and revised to 5.2% in February 2013, data released by the government after trading hours on Friday, 31 May 2013, showed. Fiscal deficit for FY 2014 is budgeted at 4.8% of GDP.
The crucial monsoon arrived on cue in Kerala on the southern coast on Saturday, 1 June 2013, boosting farming. The rains, which run from June to September, are vital for the 55% of farmland without irrigation in India, one of the world's largest producers and consumers of food. The weather office last month predicted the monsoon would arrive over Kerala on June 3.
Most European indices reversed initial losses on Monday. Key benchmark indices in France and Germany were up by 0.13% to 0.46%. UK's FTSE 100 fell 1.19%.
Asian stocks fell across the board on Monday after improving US economic data added to concern the Federal Reserve will scale back its stimulus. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, Taiwan and South Korea shed by 0.06% to 3.72%.
The final version of the HSBC China manufacturing Purchasing Managers' Index for May fell to 49.2, down from a preliminary reading of 49.6, and more than a point off from April's 50.4. HSBC said that while the result marked the first contraction in seven months, "albeit at only a marginal pace," manufacturing output actually registered its seventh straight gain, though that too was small in size.
The official purchasing managers' index (PMI), issued by the National Bureau of Statistics and China Federation of Logistics and Purchasing, indicated activity in China's vast manufacturing sector picked up slightly in May. China's official PMI rose to 50.8 in May from 50.6 in April, data showed on Saturday, 1 June 2013. A reading above 50 indicates expanding activity while a reading below that level points to a contraction.
Separately, a government gauge of services industries today, 3 June 2013 showed the slowest expansion since September. The official China non-manufacturing PMI for May declined to 54.3 from 54.5.
South Korea's exports unexpectedly increased in May as surging smartphone shipments and improving demand from the US and China countered a decline in the yen. Overseas shipments increased 3.2% from a year earlier after a 0.4% gain in April, the Ministry of Trade, Industry and Energy said in a statement on Saturday, 1 June 2013.
Trading in US index futures indicated that the Dow could gain 84 points at the opening bell on Monday, 3 June 2013. US stocks tanked on Friday after positive economic indicators rekindled talk that the Federal Reserve will soon scale back stimulus measures. The Thomson Reuters/University of Michigan's final consumer sentiment index rose to 84.5 in May from 83.7 in April. A separate report showed that the Chicago purchasing managers' index climbed to 58.7 this month from 49 in April, beating expectations for a rise to 50.
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