Key benchmark indices were trading slightly higher in morning trade. The barometer index, the S&P BSE Sensex, was up 13.71 points or 0.06%, off close to 60 points from the day's high and up about 20 points from the day's low. The market breadth, indicating the overall health of the market, was strong.
Shares of the two power distribution companies in Delhi were mixed after the Aam Aadmi Party (AAP) government slashed power tariff in Delhi and after it asked the Comptroller and Auditor General (CAG) to audit the performance of Delhi's power distribution companies. Adani Power gained after the company 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 megawatts (MW), making it the only power station of such a gigantic size to reach a significant milestone in electricity production. Shares of power finance firms edged lower.
A bout of volatility was witnessed as key benchmark indices gave away almost entire gains after a positive start. Key benchmark indices were trading slightly higher in morning trade.
Foreign institutional investors (FIIs) bought shares worth a net Rs 309.70 crore on Tuesday, 31 December 2013, as per provisional data from the stock exchanges.
At 10:20 IST, the S&P BSE Sensex was up 13.71 points or 0.06% to 21,184.39. 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 index fell 4.13 points at the day's low of 21,166.55 in early trade.
The CNX Nifty was up 3.40 points or 0.05% to 6,307.40. The index hit a high of 6,327.20 in intraday trade, its highest level since 30 December 2013. The index hit a low of 6,301.65 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,122 shares gained and 490 shares fell. A total of 103 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks gained and rest of them declined. Coal India (up 1.03%), Maruti Suzuki India (up 0.69%) and Sesa Sterlite (up 0.79%) gained.
Power utility stocks edged higher. GVK Power & Infrastructure (up 0.84%), NTPC (up 0.15%),and Reliance Power (up 0.34%) gained. Power Grid Corporation of India (down 0.2%) and Torrent Power (down 0.88%) declined.
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 was off 1.1% at Rs 90.30. Reliance Infrastructure was up 0.16% at Rs 426.50.
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.61 crore over next three months. Kejriwal said further decision on the rate cut would be taken after the audit of power distribution companies in Delhi. He said the Cabinet would meet on Wednesday after the three companies submit to the government their views on the proposal for audit of their finances. 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.
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.
Shares of power finance firms edged lower. Power Finance Corporation (down 0.66%) and Rural Electrification Corporation (down 0.91%) declined.
Adani Power gained 1.13% 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.
Bharat Heavy Electricals (Bhel) rose 0.2%. 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.
Lakshmi Vilas Bank rose 4.13% 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.
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 61.965, 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's fiscal deficit touched Rs 5.1 lakh crore during April-November 2013, or 93.9% of the full-year target, government data showed on Tuesday, 31 December 2013. 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.
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.
Asian stock 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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