Key benchmark indices edged lower on the first trading session of 2014 after the latest data on government's finances raised concerns that India may overshoot its ambitious target of containing fiscal deficit at 4.8% of GDP this year and after another data showed a muted growth in the core sector in November 2013. A breach of the target could prompt rating agencies to downgrade India's debt to junk, which India must avoid if it hopes to emerge from a prolonged and painful economic slowdown. The barometer index, the S&P BSE Sensex, lost 30.20 points or 0.14%, off 103.87 points from the day's high and up 6.66 points from the day's low. The small decline pushed the Sensex to its lowest closing level in nearly a week. The Sensex alternately swung between positive and negative zone during the course of the trading session today, 1 January 2014.
The Sensex clocked a gain of 1,743.97 points or 8.97% in calendar 2013. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,691.77 points or 21.16%. From a record high of 21,483.74 hit on 9 December 2013, the Sensex is off 343.26 points or 1.6%.
Coming back to today's trade, shares of a number of small-cap companies surged. The market breadth, indicating the overall health of the market, was strong. The BSE Small-Cap index and the BSE Mid-Cap indices, both, rose.
Realty stocks edged higher on renewed buying. Telecom stocks also rose. IT stocks edged lower. Shares of private sector banks declined. Shares of PSU banks rose. Pharma stocks rose on renewed buying.
Most auto stocks were in green. Mahindra & Mahindra rose after the company reported decent growth in tractor sales for the month just gone by. Among side counters, Alstom T&D India hit 52-week high. Finolex Industries scaled record high.
The S&P BSE Sensex shed 30.20 points or 0.14% to settle at 21,140.48, its lowest closing level since 26 December 2013. The index fell 36.86 points at the day's low of 21,133.82 in late trade. The index rose 73.67 points at the day's high of 21,244.35 in early trade, its highest level since 30 December 2013.
The CNX Nifty lost 2.35 points or 0.04% to 6,301.65, its lowest closing level since 30 December 2013. The index hit a low of 6,298.25 in intraday trade. The index hit a high of 6,327.20 in intraday trade, its highest level since 30 December 2013.
The total turnover on BSE amounted to Rs 1433 crore, lower than Rs 1658.21 crore on Tuesday, 31 December 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,600 shares gained and 897 shares fell. A total of 132 shares were unchanged.
The BSE Small-Cap index rose 1.5% and the BSE Mid-Cap index gained 0.47%. Both these indices outperformed the Sensex.
Jindal Saw (up 12.13%), Punj Lloyd (up 12.02%), Elder Pharmaceuticals (up 11.27%), REI Agro (up 10.76%), Himachal Futuristic Communications (up 10.75%), Heidelberg Cement (up 10.16%), Gujarat Natural Resources (up 9.5%), PTC India Financial Services (up 8.7%), Sanwaria Agro Oils (up 8.52%) and VST Tillers Tractors (up 8.48%) were among the major gainers from BSE Small-Cap index.
Suzlon Energy (up 9.98%), Gujarat Flurochemicals (up 6.72%), UCO Bank (up 6.09%), State Bank of Mysore (up 5.58%), Indiabulls Power (up 5.49%), Amtek India (up 5.11%), Jaypee Infratech (up 4.97%), State Bank of Travancore (up 4.87%), Godfrey Phillips India (up 4.5%) and IRB Infrastructure (up 4%) were among the major gainers from BSE Mid-Cap index.
The S&P BSE Realty index (up 2.89%), the S&P BSE Consumer Durables index (up 0.89%), the S&P BSE Healthcare index (up 0.53%), the S&P BSE PSU index (up 0.28%), the S&P BSE Metal index (up 0.21%), the S&P BSE FMCG index (up 0.15%), the S&P BSE Auto index (up 0.13%), the S&P BSE Power index (up 0.09%), the S&P BSE Bankex (up 0.06%) and the S&P BSE Capital Goods index (up 0.05%) outperformed the BSE Sensex.
The S&P BSE Teck index (down 0.2%), the S&P BSE Oil & Gas index (down 0.37%) and the S&P BSE IT index (down 0.65%) underperformed the BSE Sensex.
Among the 30-share Sensex pack, 15 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 0.12% to Rs 322. The stock hit a high of Rs 323.50 and low of Rs 321.35.
Index heavyweight Reliance Industries fell 0.68% to Rs 888.70. The stock hit a high of Rs 898 and low of Rs 887.20.
Auto stocks were mostly higher. Mahindra & Mahindra (M&M) rose 0.57%. M&M during market hours today, 1 January 2014, said that its total auto sales declined 13% to 39,611 units in December 2013 over December 2012.
Speaking on the monthly performance, Pravin Shah, Chief Executive, Automotive Division, Mahindra & Mahindra said: "During the first nine months of the current fiscal, the auto industry has seen a negative growth due to sustained deceleration in economic activity and consequent weakness in consumer and business sentiments. While the immediate turnaround in the auto Industry is not expected without certain policy corrections and support, the worst seems to be over. At Mahindra we continue to focus on customer centricity and do hope that the new year will bring in the much needed cheer for the auto sector".
M&M separately said that its total tractor sales rose 15% to 17,037 units in December 2013 over December 2012. Tractor sales in the domestic market rose 19% to 16,257 units in December 2013 over December 2012. Exports fell 26% at 780 units in December 2013 over December 2012.
Speaking on the sector's monthly performance, Rajesh Jejurikar, Chief Executive, Tractor and Farm Mechanization, Mahindra & Mahindra said: "I am happy to share that at the end of the first 9 months of the current fiscal year, we have achieved a domestic growth of 24%. With expectations of a bumper Rabi crop, we believe we will see a double digit growth in the next 3 months. A continued shift towards greater mechanization on farms will provide an impetus to sales".
Maruti Suzuki India rose 0.09% at Rs 1,764.60. The scrip hit high of Rs 1,777.90 and low of Rs 1,758. The company said during market hours that its total sales fell 4.4% to 90,924 units in December 2013 over December 2012. Domestic sales rose 5.5% to 86,613 units in December 2013 over December 2012. Exports fell 67% to 4,311 units in December 2013 over December 2012.
Ashok Leyland (down 0.29%), and Tata Motors (down 0.54%) declined.
Shares of two-wheeler majors -- Bajaj Auto and Hero MotoCorp--edged higher. Bajaj Auto rose 0.23%. Hero MotoCorp gained 0.64%. TVS Motor Company fell 2.63%.
Atul Auto gained 4.02% after the company said its total vehicle sales jumped 23.42% to 3,510 units in December 2013 over December 2012. The company made the announcement during trading hours today, 1 January 2014. Atul Auto said its total vehicle sales grew 18.29% to 27,908 units in April-December 2013 over April-December 2012.
IT stocks edged lower. TCS fell 0.87%.
Wipro declined 1.44% to Rs 551. The stock reversed direction after hitting 52-week high of Rs 562.10 at the onset of the trading session.
Infosys slipped 0.62% to Rs 3,464. The stock had hit record high of Rs 3,575 in intraday trade on 30 December 2013.
HCL Technologies fell 0.44% to Rs 1,257.50. The stock reversed direction after hitting record high of Rs 1,270.10 at the onset of the trading session.
Tech Mahindra fell 0.7% to Rs 1,825.10. The stock had hit 52-week high of Rs 1,875 in intraday trade on 30 December 2013.
Adani Power gained 1.28% after the company after market hours on Tuesday, 31 December 2013 said that its state-of-the-art 4,620 megawatts (MW) power plant at Mundra, has set a record by attaining the highest generation of 4,644 MW, making it the only power station of such a gigantic size to reach a significant milestone in electricity production. The generation so far was constrained due to inadequate evacuation capacity, which has been alleviated with guidance, support and cooperation of various state and central grid authorities, Adani Power said in a statement.
Adani Power has a thermal power generating capacity of 7,920 MW, consisting of 4,620 MW at Mundra, 1,980 MW at Tiroda and 1,320 at Kawai. The Mundra plant, which is one of the world's largest private coal based power station at a single location, has five units of 660 MW and four units of 330 MW each. All the 660 MW units are based on environment friendly supercritical technology, Adani Power said in a statement.
Commenting on the development, Mr. Gautam Adani, Chairman, Adani Group said, Adani Power is committed to narrow the demand supply gap in electricity in India. We are proud that the Mundra plant has surpassed its installed capacity of 4,620 MW. This is a national record in the Indian power sector. We, at Adani, are devoted towards nation building and this project is dedicated to the people of India. We are confident of achieving a target of generating 9,240 MW of electricity by March 2014.
Mr. Vneet S Jaain, CEO, Adani Power said, Achieving 4,644 MW power generation at Mundra is one more feather in the cap of our Mundra plant. The state-of-the-art technology used in this project and Adani's expertise in management of such complex projects are key to its success. We hope to replicate this feat at our other projects too.
Shares of the two power distribution companies in Delhi were mixed after Delhi Chief Minister Arvind Kejriwal on Tuesday, 31 December 2013, announced that power tariffs will be slashed by 50% in the Capital. Tata Power dropped 0.99% at Rs 90.45. Reliance Infrastructure rose 2.1% at Rs 434.75.
Kejriwal on Tuesday announced that the power tariffs in Delhi will be slashed by 50% for up to 400 units. Kejriwal said the Delhi government will provide the subsidy and the money will be directly paid to the distribution companies. The cut in electricity tariffs, part of the AAP manifesto for the 4 December state assembly election, will entail a cost of Rs 61crore over next three months. Kejriwal said further decision on the rate cut would be taken after the audit of power distribution companies in Delhi. The Aam Aadmi Party (AAP) government on Tuesday also asked the Comptroller and Auditor General (CAG) to audit the performance of Delhi's power distribution companies. While ruling out any time frame for the audit, he said a decision on the same can be taken only after studying the replies of the power distribution companies who have been given time till 1 January 2014 to respond.
Bharat Heavy Electricals (Bhel) fell 1.11%. The company said during market hours that Department of Heavy Industry vide its communication dated 31 December 2013 has conveyed approval of the competent authority for the extension of tenure of Shri B. Prasada Rao, Chairman & Managing Director, Bhel for a period of two years from 1 January 2014, i.e. beyond superannuation on 31 December 2013.
Shares of private sector banks mostly declined. HDFC Bank (down 0.12%), and AXIS Bank (down 0.58%) declined. ICICI Bank rose 0.52%.
Shares of PSU banks rose. Bank of India (up 3.05%), Bank of Baroda (up 2.33%), Union Bank of India (up 1.15%), State Bank of India (SBI) (up 0.2%) and Punjab National Bank (up 1.67%) gained.
Canara Bank rose 1.28%. The state-run bank said before market hours that it has allotted 1.82 crore shares on 31 December 2013 to Government of India on preferential basis.
Lakshmi Vilas Bank rose 4.41% after the bank said its board will meet on 3 January 2014 to consider a rights issue of shares. The company made the announcement on 31 December 2013.
Pharma stocks rose on renewed buying. Cipla (up 0.16%), Dr Reddy's Laboratories (up 0.27%), Lupin (up 0.75%), Ranbaxy Laboratories (up 1.93%) and Sun Pharmaceutical Industries (up 0.57%) gained.
Telecom stocks rallied. MTNL (up 3.84%), Tata Teleservices (Maharashtra) (up 6.34%), Reliance Communications (up 6.55%), Idea Cellular (up 0.75%) and Bharti Airtel (up 2.16%) gained.
Realty stocks gained. DLF (up 2.04%), Indiabulls Real Estate (up 5.66%), Godrej Properties (up 8.47%), Oberoi Realty (up 1.54%), D B Realty (up 16.89%), HDIL (up 3.833%) and Unitech (up 2.94%) rose. Top lenders announced reduction in home loan rates for new borrowers last month. Lower interest rates may help perk up demand for properties. Purchases of both residential and commercial property are largely driven by finance.
Most aviation stocks extended Tuesday's gains. SpiceJet (up 7.41%), and Kingfisher Airlines (up 9.84%) gained. Jet Airways (India) shed 0.34%.
Alstom T&D India rose 3.15% to Rs 209.45 after hitting a 52-week high of Rs 210 in intraday trade.
Finolex Industries gained 4.18% to Rs 174.55 after hitting a record high of Rs 176.65 in intraday trade.
Gujarat Gas Company rose 2.64%. The company during market hours today, 1 January 2014, said that pursuant to the Memorandum of Understanding executed between the company and Gujarat State Petroleum Corporation (GSPC) on 3 September 2013, both the companies have executed gas supply contracts for supply of regassified LNG up to 0.65 million metric standard cubic metre (mmscmd) on long term basis, comprising of purchase of 0.574 mmscmd between period 1 March 2014 up to 1 July 2025 and purchase of 0.076 mmscmd between period 1 January 2014 upto 1 July 2025.
Ashoka Buildcon spurted 14.75% after the company said it has received letters of acceptance for a project worth Rs 596.28 crore in South India. The company made the announcement during trading hours today, 1 January 2014.
Ashoka Buildcon said it received letters of acceptance (LoAs) for a project worth Rs 596.28 crore from Tamil Nadu Generation and Distribution Co (TANGEDCO), Chennai. The project calls for execution of distribution strengthening works under "Re-structured Accelerated Power Development and Reforms Programme (R-APDRP) Part-B" scheme in Chennai North and South Regions of TANGEDCO on total turnkey basis.
Viceroy Hotels surged 13.02%. The company during market hours today, 1 January 2014, said that the J.W. Marriott deal had been concluded in favour of 'Ceebros Hotels', Chennai as per the resolution passed by the shareholders and after reaching a settlement with the bankers of 'Chennai Project Division'.
It may be recalled that Viceroy Hotels' board of directors at its meeting held on 8 May 2013 had approved the proposal to sell the entire 'Chennai Project Division' comprising of 'Chennai Hotel Project' and 'Chennai Residential Project to Ceebros Hotels, Chennai for a total consideration of Rs 480 crore.
CRISIL fell 2.74% to Rs 1,174 on profit booking after the stock jumped 6.6% in the preceding three sessions to Rs 1,207.10 on 31 December 2013 from a recent low of Rs 1,132.40 on 26 December 2013.
Transport Corporation of India jumped 6.55% to Rs 91.10 after an investment firm run by independent investor Radhakishan Damani bought over 3% stake in the company on Tuesday, 31 December 2013, through a bulk deal on NSE. Derive Investments bought 25.48 lakh shares, or 3.49% of the total equity, in Transport Corporation of India (TCI) at Rs 78 per share on Tuesday, 31 December 2013. Shares of TCI spurted had 13.77% to Rs 85.50 on Tuesday.
Derive Investments bought the shares from FIL Investments (Mauritius), which sold 28.51 lakh shares of TCI at Rs 78.01 each on NSE.
Derive Investments is run by independent investor Radhakishan Damani who is known in India for his stock picks.
HOV Services was locked at 5% upper circuit at Rs 83.25 on BSE after SourceHOV LLC appointed an investment bank to explore various strategic options. The announcement was made before market hours today, 1 January 2014.
HOV Services before market hours today, 1 January 2014 said that SourceHOV LLC has appointed an investment bank to explore various strategic options. No other details were provided. HOV Services through its US-based wholly owned subsidiary (WOS) owns stake in SourceHOV LLC. The appointment of investment bank has been approved by SourceHOV on 29 December 2013, HOV Services said in a statement.
Coromandel Engineering Company was locked at 5% upper circuit at Rs 260.15 on BSE after the company scheduled a board meeting to consider rights issue of equity shares. The company made the announcement after market hours on Tuesday, 31 December 2013.
In the foreign exchange market, the rupee edged lower against the dollar on the first trading session of the New Year. The partially convertible rupee was hovering at 61.90, compared with its close of 61.80/81 on Tuesday, 31 December 2013.
On the macro front, the eight core industries with a combined weight of 37.90% in the Index of Industrial Production (IIP) has shown an increase of 1.7% in November 2013. During April-November 2013, the eight-core sector has shown growth of 2.5% against 6.7% growth registered in April-November 2012. The government announced the core sector data after trading hours on Tuesday, 31 December 2013.
The government's fiscal deficit touched Rs 5.1 lakh crore during April-November 2013, or 93.9% of the full-year target, raising concerns that India may overshoot its ambitious target of containing fiscal deficit at 4.8% of GDP this year. Net tax receipts touched Rs 3.96 lakh crore in the first eight months of the current fiscal year to March 2014, while total expenditure was Rs 10.21 lakh crore. The government unveiled the data on its finances after trading hours on Tuesday, 31 December 2013.
In the annual budget presented in February, Finance Minister P. Chidambaram had committed to narrow the fiscal deficit to 4.8% of gross domestic product (GDP) this fiscal year from 4.9% a year ago.
The next major trigger for the market is Q3 December 2013 corporate earnings. The Q3 earnings season will begin around mid-January 2014 and continue till mid-February 2014. Investors and analysts will closely watch the management commentary that would accompany the result to see if there is any revision in their future earnings forecast of the company for the current year and/or the next year.
The Reserve Bank of India's Third Quarter Review of Monetary Policy for 2013-14 is scheduled on 28 January 2014.
European and Asian markets were closed today, 1 January 2014, for New Year Holidays.
A Chinese manufacturing index slipped to a four-month low in December, underscoring challenges for President Xi Jinping as he tries to sustain economic momentum while rolling out reforms. The Purchasing Managers' Index was at 51, the statistics bureau and the logistics federation said today, 1 January 2014, in Beijing.
US stocks rose to records on Tuesday, 31 December 2013, with the Standard & Poor's 500 Index posting its biggest annual advance since 1997, as gains in consumer confidence and housing prices bolstered confidence in the world's largest economy. The Conference Board's index of US consumer confidence rose to 78.1 in December from 72 in the prior month while the S&P/Case-Shiller index showed property prices in 20 cities rose in October from a year ago by the most in more than seven years.
The US stock market is closed today, 1 January 2014, for New Year's Day holiday.
The US Federal Reserve said after a two-day monetary policy review on 18 December 2013 that it will cut its monthly bond purchases to $75 billion from $85 billion starting in January 2014 amid an improved outlook for the job market in the world's largest economy. The US central bank is poised to continue winding down its stimulus measures gradually over the next year.
The Federal Open Market Committee (FOMC) holds a two-day monetary policy meeting on 28 and 29 January 2014.
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