A recovery in the rupee triggered by comments by Prime Minister Dr. Manmohan Singh said in parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country triggered rally on the domestic bourses on the last trading session of the month. Intraday volatility on the bourses was quite high as the Sensex alternately swung between positive and negative zone. The barometer index, the S&P BSE Sensex attained its highest closing level in more than two weeks. The Sensex jumped 218.68 points or 1.19%, up close to 350 points from the day's low and off about 70 points from the day's high. The market breadth, indicating the overall health of the market, was positive.
The Sensex gained for the third straight day today, 30 August 2013. The Sensex has risen 651.64 points or 3.62% in three trading sessions from a recent low of 17,968.08 on 27 August 2013. The Sensex lost 725.98 points or 3.75% in August 2013. The Sensex has declined 806.99 points or 4.15% in calendar 2013 so far (till 30 August 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,823.90 points or 8.92%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has risen 1,368.92 points or 7.93%.
Coming back to today's trade, shares of Jindal Steel & Power tumbled after the company's board approved buyback proposal. Shares of two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales, with Hero MotoCorp hitting 52-week high. Index heavyweight and cigarette marker ITC edged higher in choppy trade. Another index heavyweight Reliance Industries also gained in choppy trade. Cairn India fell along with crude oil prices. Realty stocks were mixed.
In the foreign currency market, the rupee recovered amid high intraday volatility after Prime Minister Dr. Manmohan Singh said in parliament that the government isn't looking at imposing restrictions on the movement of capital out of the country as he sought to allay investor concerns that have lately hurt financial markets. The partially convertible rupee was hovering at 65.78, sharply higher than its close of 66.55/56 on Thursday, 29 August 2013.
The rupee had risen sharply on Thursday, 29 August 2013, after the Reserve Bank of India (RBI) on Wednesday, 28 August 2013, said it will sell dollars to oil companies to defend the local currency.
The rupee has slumped this month on worries that India would struggle to fund its current-account deficit when the US central bank pulls back stimulus to the US economy.
The S&P BSE Sensex jumped 218.68 points or 1.19% to settle at 18,619.72, its highest closing level since 14 August 2013. The index jumped 278.22 points at the day's high of 18,679.26 in late trade. The index fell 128.28 points at the day's low of 18,272.76 in mid-afternoon trade.
The CNX Nifty was up 62.75 points or 1.16% to 5,471.80, its highest closing level since 26 August 2013. The index hit a high of 5,493.30 and a low of 5,360.20 in intraday trade.
The BSE Mid-Cap index fell 0.01% and underperformed the Sensex. The BSE Small-Cap index rose 0.2% and underperformed the Sensex.
The total turnover on BSE amounted to Rs 2917 crore, higher than Rs 2190.39 crore on Thursday, 29 August 2013.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,156 shares rose and 1,074 shares fell. A total of 178 shares were unchanged.
Among the 30-share Sensex pack, 18 stocks rose and rest of them fell.
Shares of two wheeler makers rose on expectations of pick up in sales during the upcoming festive season and on hopes good rains this year will boost rural sales. Bajaj Auto jumped 5.62%.
Hero MotoCorp rose 1.78% to Rs 2,008, with the stock paring gains after hitting a 52-week high of Rs 2,059 in intraday trade today, 30 August 2013.
Cairn India lost 0.97% as US crude oil futures fell for a second straight day after UK lawmakers rejected a motion for military action against Syria, easing concern that unrest will disrupt Middle East oil supplies. US crude oil futures for October 2013 delivery were down 87 cents a barrel at $107.93 a barrel in the electronic trading today, 30 August 2013. The contract had fallen $1.30 a barrel or 1.18% to settle at $108.80 a barrel on the New York Mercantile Exchange on Thursday, 29 August 2013. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms like Cairn India.
Index heavyweight and cigarette marker ITC rose 1.08% to Rs 309.15. The stock was volatile. The scrip hit high of Rs 310.45 and low of Rs 300.05.
Another index heavyweight Reliance Industries rose 0.09% to Rs 846. The scrip hit high of Rs 858.35 and low of Rs 828.25.
Realty stocks were mixed. HDIL (down 1.35%), DLF (down 1.26%), Sobha Developers (down 2.09%), D B Realty (down 1.37%), declined. Unitech (up 3.11%), Indiabulls Real Estate (up 1.89%), Peninsula Land (up 1.79%) and Anant Raj (up 4.5%) rose.
The path-breaking Land Acquisition Bill, which seeks to provide just and fair compensation to farmers while ensuring that no land can be acquired forcibly, was passed by the Lok Sabha with overwhelming majority on Thursday, 29 August 2013. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012 stipulates mandatory consent of at least 70% for acquiring land for Public Private Partnership (PPP) projects and 80% for acquiring land for private companies. The bill, which will replace over a century-old law, proposes compensation that is up to four times the market value in rural areas and two times the market value in urban areas. The bill was passed with 216 votes in favour and 19 against.
Financial Technologies (India) slumped 19.29%.
Shares of commodities futures exchange Multi Commodity Exchange of India (MCX) jumped by maximum permissible 5% upper limit at Rs 372.95. MCX clarified during market hours today, 30 August 2013, that IBMA is not a Member of MCX and that IBMA has traded on exchange in the capacity of a client. As per the company's records, IBMA volume as a percentage of total exchange turnover was 0.09% in FY2012-13 and 0.17% in FY2013-14. As on date the exchange does not have any open position or pay-in/pay-out obligations with respect to IBMA, MCX said.
MCX and the National Spot Exchange (NSEL) are group companies of Financial Technologies India (FTIL). The NSEL had to shut down its operation early this month following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension.
Shares of Pipavav Defence and Offshore Engineering Company fell by maximum permissible 5% of the day at Rs 52.35 on BSE, extending Thursday's 5% loss. The company during trading hours on Thursday, 29 August 2013, said a consortium of the company and L&T has bagged an order worth over $170 million from ONGC. Pipavav Defence also said that the order book of the company has now crossed Rs 12000 crore.
Larsen & Toubro was almost flat at Rs 722.25. The company said during market hours today, 30 August 2013, that L&T Hydrocarbon has recently bagged new orders worth Rs 807 crore for the supply of cracking furnace modules and parts, supply of equipment, EPC execution of cryogenic ethylene package, civil, structural, mechanical, electrical and instrumentation for petrochemical complexes of all companies in India, Fabrication and assembly work for all the modules and equipment will be done at L&T's modular fabrication facility at Hazira near Surat.
Most metal and mining stocks declined. NMDC (down 0.92%), JSW Steel (down 4.98%), and Tata Steel (down 1.46%) edged lower.
Jindal Steel & Power (JSPL) tumbled 8.85% to Rs 221.90 after the company's board approved share buyback proposal through open market purchases. The company said it has set aside Rs 1000 crore for share buyback. The ceiling price for the share buyback through the open market purchases has been set Rs 261 per share. The maximum buyback price of Rs 261 per share is at a premium of 17.62% to the stock's ruling market price.
Sesa Goa shed 2.7%. The company said after market hours on Thursday, 29 August 2013, that the company has allotted equity shares to the shareholders of Sterlite Industries, The Madras Aluminium Company and Ekaterina pursuant to the Schemes of Amalgamation and Arrangement. After the allotment of equity shares, the paid up equity share capital of the company stands increased to Rs 296.46 crore from Rs 86.91 crore, it said.
Sesa Goa said that the company will apply to the Bombay Stock Exchange and the National Stock Exchange for listing approval for the new Sesa Goa shares and expects to receive the final listing approval within three to four business days. Thereafter, Sesa Goa will apply to the stock exchanges for trading approval for the new Sesa Goa shares and expects to receive the trading approval within a further two to three business days. The new Sesa Goa shares are expected to begin trading on the bourses on the next business day in India after trading approval is received, Sesa Goa said.
Hindalco Industries declined 1.67% as the stock turned ex-dividend today, 30 August 2013, for dividend of Rs 1.40 per share for the year ended March 2013.
Pharma stocks gained. Cipla (up 4.96%), Dr Reddy's Laboratories (up 1.92%), and Sun Pharmaceutical Industries (up 1.81%), rose. But, Ranbaxy Laboratories fell 2.57%.
Shasun Pharmaceuticals surged 5.54% after the company said it has successfully completed MHRA inspection during the third week of August 2013. The announcement was made during trading hours today, 30 August 2013. Shasun Pharmaceuticals said that the main focus of MHRA inspection was to conduct cGMP audit for the company's formulation facility.
IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms.
Wipro rose 2% to Rs 483.90 after hitting a 52-week high of Rs 495 in intraday trade. Wipro on Thursday, 29 August 2013, announced the launch of a range of information technology (IT) products for the aviation industry.
Wipro enters the CNX Nifty index in place of Reliance Infrastructure with effect from 27 September 2013 as per an announcement by the National Stock Exchange (NSE) on 27 August 2013.
HCL Technologies gained 2.07% to Rs 1,038.25 after hitting a record high of Rs 1044 in intraday trade.
TCS rose 3.96% to Rs 2023.15 after hitting a record high of Rs 2040 in intraday trade.
Tech Mahindra rose 0.71% to Rs 1376.75 after hitting a 52-week high of Rs 1428 in intraday trade.
But, Infosys fell 0.28%.
MphasiS rose 0.92% after consolidated net profit rose 9.1% to Rs 193 crore on 9.6% growth in revenue to Rs 1540 crore in Q3 July 2013 over Q2 April 2013. The Q3 result was announced after market hours on Thursday, 29 August 2013.
MphasiS reported an impressive bottom line growth during the quarter despite a 160 basis points increase in effective tax rates to 26.7%. Operating margins for the quarter expanded 110 bps to 15.8% despite the impact of wage hikes that were administered during the quarter. Cash and cash equivalents increased by Rs 348 crore during the quarter to reach Rs 2688 crore.
MphasiS said that the share of Direct business grew from 54% to 59%, further mitigating risk of client concentration.
Commenting on the company's Q3 performance, Ganesh Ayyar, Chief Executive Officer, MphasiS said: "Our Direct business growth is a reflection of our strategy in action. Our investment in Data, Analytics and Mobility is experiencing growing demand."
During the quarter, the company added 16 clients with 10 in the Direct channel.
Most bank stocks gained. HDFC Bank rose 3.86%. But, ICICI Bank fell 0.3%.
State Bank of India (SBI) rose 1.69%. The bank said after market hours on Thursday, 29 August 2013, that the interest rate for bulk deposits for the tenors 7 days to 60 days will be 9% per annum and for the tenor 61 days to less than one year will be 8.25% per annum with effect from 31 August 2013.
Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank gained by 1.08% to 6.95%.
The Union Finance Minister Shri P. Chidambaram said on Thursday that banks must ensure flow of credit to every sector of industry. He said that bankers have been told to be sympathetic and have humane approach towards genuine defaulters. He said that this is time for hand holding of borrowers who are facing difficulties, especially industry. He said that genuine defaulters and willful defaulters need to be dealt with separately. We have to be strict with willful defaulters, he added. The Finance Minister was speaking at the Third Parliamentary Consultative Committee Meeting of his Ministry on Thursday. The subject matter for the discussion of the meeting was NPAs in Public Sector Banks (PSBs) and measures taken to contain them.
The Finance Minister said that banks need capitalization to meet their enhanced lendings, which is increasing every year. He said that this year the government has made provisions of Rs 14000 crore for bank recapitalization. He said that normally banks make their own arrangements to meet their capital requirements both through their own resources such as their profit etc. and the market. The Finance Minister said that all our Public Sector Banks (PSBs) are following Basel III norms and, in fact, our capital and provisioning requirements are stricter than Basel III norms.
Earlier, participating in the discussion, members of the Consultative Committee gave various suggestions with regard to recovery from willful/genuine defaulters and how to deal with different NPA cases. Some members raised the issue of softer approach by the bankers towards genuine defaulters such as farmers and promoters of MSMEs among others as they are vulnerable to external factors which are beyond their control. Some members raised the issue of misuse of CDR, down grading of banks, if any, by rating agencies due to NPAs or other factors, overall analysis of NPAs to find out who are genuine or willful defaulters and to take personal guarantees from industrialists if they have assets etc among others.
Jayant Agro Organics gained 1.1% after the company entered into a joint venture agreement with two Japanese firms to focus on manufacturing castor oil based polyols. The company made this announcement after market hours on Thursday, 29 August 2013. Jayant Agro Organics and Mitsui Chemicals, Inc. Japan and Itoh Oil Chemicals Co., Japan have together entered into a joint venture agreement for investing in the equity shares of Vithal Castor Polyols in the ratio 50:40:10 respectively. The joint venture will be focused on manufacturing castor oil based polyols through Vithal Castor Polyol.
The Forward Markets Commission (FMC), which regulates the commodity futures market in India, has raised the initial margin on gold futures to 5% from 4% for domestic traders effective Monday, 2 September 2013. The FMC move comes after gold prices rose 18% to reach a record high earlier this week. The FMC also imposed an additional 5% margin on gold, silver and crude oil futures contracts from Monday, 2 September 2013.
Prime Minister Dr. Manmohan Singh today, 30 August 2013, said in parliament that said that the rupee's tumble is a "matter of concern", but is part of a needed adjustment due to India's large current account deficit and will have a positive impact on export competitiveness in coming months. He said India's current account deficit was "unsustainably large" and to remedy this there needed to be a reduction in demand for gold and oil imports. He added that although the rupee fall was a matter of concern the government will not meet the rupee decline with capital control measures.
Earlier this month, the Reserve Bank of India tightened rules for overseas investments by Indian companies and individuals in an effort to stem capital outflows and prop up the rupee. The steps raised worries that authorities could impose more restrictions on capital flows, potentially making it difficult for foreign investors to pull out their money.
Dr. Singh also sought to calm concerns over the country's swelling current-account deficit and promised steps to help contain the deficit at $70 billion this fiscal year through March 2014. The deficit was about $88 billion in the last fiscal year.
The Prime Minister urged people to control the consumption of gold and oil. "We need to reduce our appetite for gold and economise the use of petroleum products and take steps to increase our exports," Singh said.
The Prime Minister said that the government won't go back on reforms in the current economic situation. "There is no question of reversing economic reforms. The cabinet decisions to give go-ahead to projects will show results in the second quarter," he said. Dr. Singh urged the Opposition to help in passing of certain bills for economic growth. "Many bills are stalled due to lack of political consensus. I urge political parties to come together and get them through for the economic growth," Singh said.
The Prime Minister said that India is not facing a repeat of the 1991 balance of payments crisis and fears that economic growth will slip to as low as 3% are unfounded. Noting that the rupee's sharp decline over the last three months was partly due to an expected tapering of the US Federal Reserve's liquidity measures, he said rich countries should pay more attention to the impact of their policy steps on developing countries' economies.
The Central Statistics Office (CSO) will unveil data on gross domestic product (GDP) for Q1 June 2013 at 17:30 IST today, 30 August 2013. The GDP growth is seen moderating further to 4.7% in Q1 June 2013, from 4.78% in Q4 March 2013, as per the median estimate of a poll of economists carried out by Capital Market. The GDP grew 5% in the year ended 31 March 2013, the weakest in a decade, as falling domestic and overseas demand, crumbling domestic infrastructure facilities, bureaucratic delays in approvals for industrial projects and high borrowing costs choked investments in the economy.
European stocks declined on Friday, 30 August 2013, as investors digested the latest developments in the Syria conflict. Key benchmark indices in UK, France and Germany were off 0.41% to 0.47%.
Economic confidence in the euro area soared to a two-year high in August as the 17-nation currency bloc's recovery gathered pace after it exited a record-long recession. An index of executive and consumer sentiment rose for a fourth month to 95.2 from 92.5 in July, the European Commission in Brussels said today.
Euro-area unemployment held at a record in July, underscoring the challenges that face the 17-nation currency bloc as it tries to shake off the legacy of a debt crisis now in its fourth year. The jobless rate in the euro zone remained at 12.1%, the European Union's statistics office in Luxembourg said today.
Euro-area inflation slowed more than economists forecast in August, led by a decline in energy prices, even as the 17-nation currency bloc's economic recovery began to gain momentum. Consumer prices rose 1.3% after a 1.6% gain in July, the European Union's statistics office in Luxembourg said in a preliminary estimate today.
Most Asian stocks rose on Friday, 30 August 2013, following overnight gains in US stocks triggered by data showing that the US economy expanded more rapidly than previously thought in the second quarter. Key benchmark indices in China, Hong Kong, South Korea, Indonesia, and Taiwan rose by 0.06% to 2.23%. Key benchmark indices in Singapore and Japan fell by 0.3% to 0.53%.
Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.
Trading in US index futures indicated that the Dow could gain 26 points at the opening bell on Friday, 30 August 2013. US stocks rose on Thursday, 29 August 2013, as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said
US markets remain closed on Monday, 2 September 2013, for the Labor Day holiday.
The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The UK Parliament has voted against the use of force in Syria. A further vote was set for early next week, specifically on whether the UK should get directly involved. The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said. Meanwhile, the White House told US congressional leaders that a potential strike on Syria would focus on removing the regime's chemical-weapons capability.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.
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