Key benchmark indices gained for the second day in a row as Asian and European stocks rose on speculation the Federal Reserve will hold off on tapering its monetary stimulus program after a monetary policy review this week. The S&P BSE Sensex and the 50-unit CNX Nifty, both, settled at their highest level in one week. The Sensex was up 147.94 points or 0.77%, off 18.41 points from the day's high and up 241.19 points from the day's low. The market breadth, indicating the overall health of the market, was positive.
Indian stocks gained for the second straight day today, 17 June 2013. The Sensex had jumped 1.86% on Friday, 14 June 2013, on gains in Asian and European stocks. The Sensex has gained 498.71 points or 2.65% in two trading sessions from a recent low of 18,827.16 on 13 June 2013. The Sensex has lost 434.43 points or 2.2% in this month so far (till 17 June 2013). The Sensex has fallen 100.84 points or 0.52% in calendar 2013 so far (till 17 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,117.75 points or 5.47%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 2,727.39 points or 16.43%.
Coming back to today's trade, Reliance Industries (RIL) extended Friday's gains triggered by partner Niko Resources providing clarity on the companies' recent gas and condensate discovery at key KG-D6 block in India. Bharti Airtel advanced after the company said that it has completed the allotment of 19.98 crore new shares, representing 5% equity stake in the company, to Qatar Foundation Endowment in one of the largest private equity (PE) transactions in India. Capital goods stocks gained. Auto stocks rose across the board. Shares of Mahindra Group companies gained after the Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announced the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal).
PSU OMCs were mostly lower after Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas today, 17 June 2013, said that the under-recovery on high speed diesel (HSD) has increased sharply. Sterlite Industries (India) hit a 52-week low. JSW Steel rose after announcing May 2013 crude steel production during market hours today. MMTC was locked at 5% lower circuit at Rs 162.80 on BSE, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price last week.
Bank stocks reversed intraday fall. Realty stocks gained. Infosys rose after the company's US-based subsidiary Infosys Public Services bagged a one-year contract valued at $49.5 million from the US District of Columbia.
A bout of volatility was witnessed in early trade as key benchmark indices slipped into the negative terrain after opening higher. Key benchmark indices trimmed intraday losses amid range bound trade as investors awaited the outcome of Reserve Bank of India's mid-quarter monetary policy review. Key benchmark indices edged lower to hit fresh intraday low in mid-morning trade after the Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy. The market reversed intraday losses to hit fresh intraday high in early afternoon trade. Key benchmark indices strengthened further to hit fresh intraday high in afternoon trade as European markets edged higher in early trade. The market trimmed gains after hitting fresh intraday high in mid-afternoon trade. It strengthened to hit fresh intraday high in late trade.
The S&P BSE Sensex was up 147.94 points or 0.77% to 19,325.87, its highest closing level since 10 June 2013. The index rose 166.35 points at the day's high of 19,344.28 in late trade, its highest level since 11 June 2013. The index fell 93.25 points at the day's low of 19,084.68 in mid-morning trade.
The CNX Nifty was up 41.65 points or 0.72% to 5,850.05, its highest closing level since 10 June 2013. The index hit a high of 5,854.90 in intraday trade, its highest level since 11 June 2013. The index hit a low of 5,770.25 in intraday trade.
The total turnover on BSE amounted to Rs 1538 crore, lower than Rs 2507.39 crore on Friday, 14 June 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,218 shares rose and 1,074 shares fell. A total of 140 shares were unchanged.
The BSE Mid-Cap index rose 0.33% and the BSE Small-Cap index gained 0.39%. Both these indices underperformed the Sensex.
The BSE Capital Goods index (up 1.15%), BSE Teck (up 1.09%) and BSE Consumer Durables index (up 1.02%) outperformed the Sensex.
The BSE Auto index (up 1.9%), BSE IT index (up 0.76%), BSE Oil & Gas index (up 0.64%), BSE FMCG index (up 0.55%), BSE Healthcare index (up 0.5%), BSE Power index (up 0.45%), BSE Bankex (up 0.43%), BSE PSU index (up 0.12%), BSE Realty index (up 0.03%), BSE Metal index (down 0.13%), underperformed the Sensex.
Among the 30-share Sensex pack, 22 stocks rose and the rest of them fell. Sun Pharmaceutical Industries (up 1.8%), HDFC (up 1.2%) and Tata Power Company (up 1.11%), edged higher.
NTPC (down 1.15%), Dr Reddy's Laboratories (down 1.08%) and GAIL (India) (down 0.78%) edged lower from the Sensex pack.
Shares of index heavyweight Reliance Industries (RIL) gained 1.31% to Rs 824.70, with the stock extending Friday's 3.15% gains. Niko Resources on 13 June 2013 said its proved reserves increased by 160%, and that a recent gas discovery in the D6 block off India's east coast could add significantly to future reserves. RIL is the operator of the block with a 60% stake. BP Plc holds 30% and Niko the rest.
PSU OMCs were mostly lower after Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas today, 17 June 2013, said that the under-recovery on high speed diesel (HSD) applicable for second fortnight of June effective from 16 June 2013 has increased sharply to Rs 6.31 per litre from Rs 4.87 per litre during the first fortnight of June 2013. HPCL (down 0.71%) and BPCL (down 0.34%) edged lower. Indian Oil Corporation rose 0.18%.
PSU OMCs are currently incurring daily under-recovery of about Rs 286 crore on the sale of diesel, PDS kerosene and domestic LPG. 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.
Meanwhile, PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013, the second increase in rates this month as devaluation of rupee against US dollar made imports costlier. The hike is excluding local sales tax or VAT and actual increase for consumers will be higher. Petrol price in Delhi was hiked by Rs 2.40 a litre to Rs 66.39 from Rs 63.99 previously. Petrol has been deregulated by the government.
Auto stocks rose across the board. Tata Motors rose 0.36%, with the stock reversing intraday losses. Tata Motors' global wholesales declined 14.88% to 81,783 units in May 2013 over May 2012.
Tata Motors' global wholesales, including Jaguar Land Rover, fell 14.89% to 81,783 units in May 2013 over May 2012. Global wholesales for Jaguar Land Rover rose 3.71% to 31,210 vehicles in May 2013 over May 2012. Jaguar wholesales jumped 62.62% to 7,061 units in May 2013 over May 2012. Land Rover wholesales fell 6.22% to 24,149 units in May 2013 over May 2012.
Global wholesales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range fell 14.18% to 38,641 units in May 2013 over May 2012. Global wholesales of all passenger vehicles declined 15.51% to 43,142 units in May 2013 over May 2012. Global wholesales of Tata passenger vehicles dropped 43.1% to 11,932 units in May 2013 over May 2012.
Maruti Suzuki India rose 1.32% after the company on Saturday, 15 June 2013, announced the launch of the CNG variant of Ertiga, 7-seater utility vehicle named Ertiga Green. With this launch, Ertiga will now be available in all three fuel variants: CNG, petrol and diesel. Ertiga Green will be available in two variants viz. Ertiga Green LXi CNG and Ertiga Green VXi CNG with ex-showroom price of Rs 6.52 lakh and Rs 7.30 lakh respectively at Delhi. Ertiga Green will be available in states with CNG infrastructure including Delhi, NCR, Gujarat, Mumbai, Pune and parts of Andhra Pradesh, Uttar Pradesh and Madhya Pradesh.
Mahindra & Mahindra (M&M) was up 4.43%. Mahindra Ugine Steel Company hit maximum permissible upper limit of 10% at Rs 71.70. Mahindra Composites hit maximum permissible upper limit of 5% at Rs 34.45. Mahindra Forgings fell 0.82%. The Mahindra Group and CIE Automotive S. A. (Spain) on Saturday, 15 June 2013, announced the signing of a global alliance agreement between Mahindra's automotive component businesses (held under its Systech Sector) and CIE Automotive (involving also its subsidiary Autometal). The agreement will see the formation of a global automotive component supply network with combined annual sales of approximately Rs 15000 crore or $3 billion with operations in North America, South America, Europe and Asia held through listed businesses in Spain, Brazil and India.
As part of the transaction, CIE Automotive, through one of its subsidiaries, will acquire from Mahindra Group a stake in its listed and unlisted companies belonging to Systech Automotive Component business and CIE Automotive will contribute its forging businesses in Spain and Lithuania and together consolidate all companies under Mahindra Forgings (MFL) which will be rechristened Mahindra CIE. Mahindra CIE will continue to be listed on BSE (Bombay Stock Exchange) and NSE (National Stock Exchange).
The share sale by Mahindra group will trigger open-offer provisions under the Securities Exchange Board of India (Substantial Acquisition of Shares and Takeovers) Regulations 2011. The proposed business transaction will be carried out in a series of steps over the next year that will culminate in Mahindra & Mahindra (M&M) taking a stake of 13.5% in CIE Automotive and CIE Automotive taking a majority stake in a single listed entity in India which will continue to operate the current Systech automotive component businesses globally and include CIE's European forgings operations. Post acquisition of 13.5% stake, M&M will be second largest shareholder in CIE. M&M will nominate 2 directors to the CIE board.
The Mahindra Systech business consists of five companies viz. Mahindra Forgings, Mahindra Ugine Steel Company, Mahindra Composites, Mahindra Hinoday Industries and Mahindra Gears.
Shares of two wheeler makers rose, shrugging off a hike in petrol price announced over the weekend. Hero MotoCorp (up 1.23%) and Bajaj Auto (up 2.31%), edged higher. PSU OMCs hiked petrol price by Rs 2 a litre on Saturday, 15 June 2013
Apollo Tyres fell 1.16% to Rs 64, with the stock extending recent slide triggered on concerns on the company's balance sheet about the impact of a large US acquisition. The stock hit a low of Rs 61.45 in intraday trade today, 17 June 2013 which is a 52-week low for the counter.
Apollo Tyres after trading hours on Wednesday, 12 June 2013 said that it has entered into a definitive merger agreement under which a wholly-owned step subsidiary of the company will acquire Cooper Tire & Rubber Company (Cooper), a company listed on the New York Stock Exchange, in an all-cash transaction valued at approximately $2.5 billion. This strategic combination will bring together two companies with highly complementary brands, geographic presence and technological expertise to create a global leader in tire manufacturing and distribution, Apollo Tyres said in a statement.
Cooper is the 11th largest tyre company in the world by revenue and it supplies premium and mid-tier tyres worldwide through renowned brands such as Cooper, Mastercraft, Starfire, Chengshan, Roadmaster and Avon. The combined company will be the seventh-largest tyre company in the world and will have a strong presence in high-growth end-markets across four continents, Apollo Tyres said. With a combined $6.6 billion in total sales in 2012, the combined company will have a comprehensive portfolio of signature brands and greater ability to cross-sell products in diverse countries with negligible overlap, Apollo Tyres said.
Bank stocks reversed intraday fall. HDFC Bank (up 0.56%), ICICI Bank (up 0.08%), and State Bank of India (up 1.21%), edged higher.
IndusInd Bank rise 0.86%. The stock turned ex-dividend today, 17 June 2013, for dividend of Rs 3 per share for the year ended 31 March 2013.
UCO Bank fell 0.52% as the stock turned ex-dividend today, 17 June 2013, for dividend of Rs 1.60 per share for the year ended 31 March 2013.
The Reserve Bank of India (RBI) kept repo rate and cash reserve ratio unchanged after mid-quarter review of the monetary policy.
Realty stocks edged higher. Unitech (up 1.15%), Indiabulls Real Estate (up 2.63%), D B Realty (up 1.22%) and HDIL (up 1.73%) edged higher. DLF shed 0.08%.
Infosys gained 1.05% after the company said after market hours on Friday, 14 June 2013, that its US-based subsidiary Infosys Public Services has bagged a one-year contract valued at $49.5 million from the US District of Columbia to develop a new health benefit exchange, a crucial component of the Affordable Care Act. Infosys Public Services is the prime systems integrator of this healthcare system transformation that will bring critically important benefits to nearly one quarter million district residents, Infosys said in a statement. Individuals, families, and small businesses can purchase healthcare coverage through an online marketplace, the company said.
Tech Mahindra rose 0.75%. The company after market hours on Friday, 14 June 2013, announced the appointment of Milind Kulkarni as Chief Financial Officer, and Manoj Bhat as Deputy Chief Financial Officer of the company. Sonjoy Anand, who has served as Chief Financial Officer of Tech Mahindra moves on having decided to pursue opportunities internationally, Tech Mahindra said in a statement. Milind Kulkarni has been Senior Vice President, Finance till now of the company. He will take charge of the CFO's office with immediate effect. Manoj Bhat who is leading the Corporate Planning (including Mergers and Acquisitions) and also Investor Relations portfolio, will now take up the additional responsibility of Deputy CFO.
Hindalco Industries fell 1.59% on profit booking after jumping 7.07% on Friday, 14 June 2013.
Sterlite Industries (India) lost 0.84% to Rs 82.30 after hitting a 52-week low of Rs 81 in intraday trade today, 17 June 2013. It was the top loser from the Sensex pack.
JSW Steel rose 1.16%. JSW Steel during market hours today announced that its May 2013 crude steel production stood at 10.13 tonne. The company reported its monthly production from its three manufacturing locations viz Vijaynagar, Salem and Dolvi together. May 2013 crude steel production shot up 40% as compared to production in 2012, the company said.
The company's crude steel production rose 40% to 10.13 million tonne in May 2013 over May 2012. The production of flat rolled products rose 57% to 8.06 million tonne in May 2013 over May 2012. The production of long rolled products rose 13% to 1.68 million tonne in May 2013 over May 2012. The rise was production was due to merger of JSW ISPAT Steel with the company.
Telecom stocks gained after the Telecom Regulatory Authority of India (TRAI) said it has reduced ceilings for national roaming calls and SMS and instituted a new regime for providing flexibility to telecom service providers to customise tariffs for national roamers through special tariff vouchers (STVs) and combo vouchers. TRAI has also mandated two types of free national roaming plans to be provided by all telecom service providers. These changes will come into effect from 1 July 2013. Reliance Communications and Idea Cellular rose by 3.2% to 4.2%. MTNL and Tata Teleservices (Maharashtra) fell by 0.17% to 0.27%.
As per the latest (TRAI) mandate, outgoing local call charges, while on roaming, will be capped at Rs 1 per minute from Rs 1.40 earlier, while outgoing STD charges, while on national roaming, have been capped to Rs 1.50 from Rs 2.40 per minute earlier. The ceiling tariffs for incoming calls while on national roaming have been reduced from Rs 1.75 per minute to 75 paise per minute, TRAI said. Outgoing local SMS-es will cost Rs 1, while outgoing STD SMS will cost Rs 1.50. Incoming SMS will remain free of charge. The changes will be effective from 1 July 2013.
India is divided into 22 telecoms zones. Currently, subscribers pay an additional fee for making and receiving calls when they are outside their home zone.
Bharti Airtel rose 2.23% after the company today, 17 June 2013, said that it has completed the allotment of 19.98 crore new shares, representing 5% equity stake in the company, to Qatar Foundation Endowment. The shares, having face value of Rs 5 each, have been issued at a price of Rs 340 each on a preferential basis for a total consideration of Rs 6796 crore. The allotment marks one of the largest private equity transactions in the history of India, Bharti said. On 3 May 2013, Bharti and Qatar Foundation Endowment had announced a binding agreement for the share sale. As part of the entitlement, QFE is entitled to one seat on the board of Bharti.
Jet Airways rose 0.72% to Rs 472.60, sharply off the day's low of Rs 411.60. Franco-Dutch airline Air France-KLM and Jet Airways today, 17 June 2013, said they signed a code-sharing agreement in order to offer customers more destinations between Europe and India. Code share is a commercial agreement between two or more airlines that share the same flight, with all the partnering airlines able to sell seats on that particular flight.
Earlier, the Jet Airways counter had tumbled as much as 12.27% at the day's low of Rs 411.60 in early trade after the Foreign Investment Promotion Board (FIPB) on Friday, 14 June 2013, deferred a decision on Etihad Airways' planned 24% stake buy in the airline. FIPB on Friday, 14 June 2013, asked for more details on effective control and ownership of the Indian carrier post the stake sale. Abu Dhabi's Etihad agreed in April to acquire a 24% stake in Jet Airways for $370 million -- becoming the first overseas operator to invest in an Indian airline since ownership rules were relaxed.
Volumes were high in Jet Airways counter. On BSE, 21.04 lakh shares changed hands on the counter, compared with average daily volume of 11.22 lakh shares in the past one quarter.
Capital goods stocks gained. Bhel jumped 3.74%.
L&T rose 0.95%.
Siemens rose 0.35% after the company said during market hours today, 17 June 2013 that it has received an order worth Rs 66 crore from NTPC for the renovation and modernisation of NTPC's Korba Stage II (3X500 megawatts) plant in Chattisgarh.
MMTC was locked at 5% lower circuit at Rs 162.80 on BSE, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake at a huge discount to the stock's ruling market price last week. The government last week sold 9.33% stake in MMTC via Offer for Sale through stock exchanges mechanism at an indicate price of Rs 60.86 per share.
The divestment was done to make the company compliant to the public shareholding requirements under the Securities Contract Regulations (Rules) (SCRR). Sebi has mandated minimum public shareholding of 10% for state-run firms by August 2013.
Orchid Chemicals & Pharmaceuticals hit maximum permissible limit of 10% at Rs 52.65 on BSE after the company said during market hours today, 17 June 2013, that Orchid's oral formulations facility at Irungattukottai near Chennai was successfully inspected and accepted by the USFDA without any observations.
Shares of Cinemax India were locked at 5% upper circuit at Rs 150.70 due to favourable swap ratio for the company's merger with PVR. Shares of PVR were up 1.85% at Rs 330. The board of directors of PVR on Saturday, 15 June 2013, approved the Scheme of Amalgamation for the merger of Cine Hospitality and Cinemax India with PVR. As per the swap ratio, shareholders of Cinemax India will get 4 shares of PVR for every 7 shares held in Cinemax India. PVR holds 93.19% stake in Cinemax India through its wholly owned subsidiary Cine Hospitality (as per the shareholding patter as on 31 March 2013).
Multiplex cinema chain operator PVR in November 2012 acquired promoters' entire stake in rival Cinemax India. PVR later raised its stake in Cinemax India via a mandatory open offer.
Emami Paper was locked at 5% upper circuit at Rs 26.25 after the company's board approved raising Rs 120 crore by issuing preference shares to finance its expansion project at Balasore in Orissa. The board of directors of the company at its meeting held on 14 June 2013 has considered and approved the issue of 30 lakh cumulative redeemable non-convertible preference shares of Rs 100 each at a premium of Rs 300 each aggregating to Rs 120 crore, Emami Paper Mills said in a statement. The shares will be issued on preferential basis to the promoters of the company in one or more tranches, it said.
The funds will be utilised for part finance of the expansion project at Balasore for manufacturing 1 lakh tonnes per annum (TPA) multi-layer coated board paper.
The Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged at 7.25% after mid-quarter review of the monetary policy today, 17 June 2013. The central bank also kept the cash reserve ratio (CRR) of scheduled banks unchanged at 4%. The RBI said in a statement that the inflation outlook going forward will be determined by suppressed inflation being released through revisions in administered prices, including the minimum support prices (MSP) as well as the recent depreciation of the rupee. The rupee declined 6.6% during the period from 22 May 2013 to 11 June 2013 due to sell-off by foreign institutional investors, reflecting risk-off sentiment triggered by apprehensions of possible tapering off of quantitative easing by the US Federal Reserve.
The RBI's monetary policy stance will be determined by how growth and inflation trajectories and the balance of payments situation evolve in the months ahead, the central bank said. It is only a durable receding of inflation that will open up the space for monetary policy to continue to address risks to growth, the RBI said. While several measures have been taken to contain the current account deficit, we need to be vigilant about the global uncertainty, the rapid shift in risk perceptions and its impact on capital flows, the central bank said. The RBI stands ready to use all available instruments and measures to respond rapidly and appropriately to any adverse developments, it said.
India's exports declined 1.11% to $24.505 billion in May 2013 over May 2012, as per latest data released by the government. Imports rose 6.99% to $44.649 billion. Oil imports rose 3.05% to $15.022 billion and non-oil imports rose 9.1% to $29.627 billion. The trade deficit widened sharply to $20.143 billion in May 2013 from $16.953 billion in May 2012.
The India Meteorological Department (IMD) said on 14 June 2013 that cumulative seasonal rainfall for the country as a whole during the period between 1-13 June 2013 was 28% above the Long Period Average (LPA).
On the political front, the 17-year long relationship between the BJP and Janata Dal (United) ended on Sunday, 16 June 2013, as Bihar Chief Minister Nitish Kumar remained adamant against elevation of Narendra Modi to the BJP's election campaign committee. The BJP on 9 June 2013 appointed Modi as the Chairman of BJP's Election Campaign Committee for 2014 Lok Sabha polls which could make him the party's candidate for Prime Minister.
Janata Dal (United) rules in Bihar state in a coalition with the BJP. The split is unlikely to bring down Bihar's state government. Mr. Kumar said on Sunday he had asked the state's governor to sack the BJP's ministers. He said his party would seek a vote of confidence in Bihar's state assembly on June 19 to show it has a majority even without the BJP.
European stock markets rose on Monday, 17 June 2013, tracking Asia stocks higher and with investors speculating whether the US Federal Reserve will make any changes to its monetary policy when it meets later this week. Key benchmark indices in UK, France and Germany were up by 0.92% to 1.82%.
Asian stocks rose for a second day on Monday, 17 June 2013, as investors await this week's Federal Reserve meeting. Key benchmark indices in Hong Kong, Indonesia, Japan, Taiwan and Singapore rose by 0.29% to 2.73%. Key benchmark indices in China and South Korea shed by 0.27% to 0.32%.
Singapore's exports fell more than economists estimated in May as manufacturers shipped fewer electronics after an uneven global recovery hurt demand. Non-oil domestic exports slid 4.6% from a year earlier, after falling 1% in April, the trade promotion agency said in a statement today.
Trading in US index futures indicated that the Dow could gain 125 points at the opening bell on Monday, 17 June 2013. US stocks fell on Friday as the International Monetary Fund cut its 2014 outlook for the US and urged the central bank to carefully manage its exit from stimulus plans. The Washington-based IMF lowered its US growth forecast for 2014 to 2.7%, from 3% predicted in April. It left its predication for growth this year unchanged at 1.9%. The IMF sees the Federal Reserve maintaining large monthly bond purchases until at least the end of this year and urged the central bank to carefully manage its exit plan to avoid disrupting financial markets.
The Thomson Reuters/University of Michigan June preliminary index of consumer sentiment fell to 82.7 from a final reading of 84.5 the prior month. Other reports showed US industrial production was unchanged in May and wholesale prices climbed for the first time in three months.
The Federal Open Market Committee, the Fed's interest-rating setting body, is due to begin its two-day meeting on interest rates in the United States tomorrow, 18 June 2013. As per reports last week, Fed Chairman Ben Bernanke this week will try to calm fears that the central bank plans to end its bond-buying program all at once. The Fed's monthly bond purchases of $85 billion a month is aimed at encouraging US economic growth. Uncertainty about whether the Fed will curtail the pace of its bond purchases has triggered volatility in global stocks over the past few weeks. Bernanke said last month that the bank could start scaling back its aggressive easing program in coming months if data continue to improve.
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