A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh intraday high in mid-morning trade. The barometer index, the S&P BSE Sensex, was up 86.80 points or 0.44%, off 41.62 points from the day's high and up 56.84 points from the day's low. The market breadth, indicating the overall health of the market, was positive. The government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors boosted sentiment.
Index heavyweight and cigarette major ITC held firm. Another index heavyweight Reliance Industries extended intraday gains. IT stocks gained as Infosys last week retained its revenue growth guidance in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result, belying fears that it may lower the guidance.
Key benchmark indices edged higher in early trade boosted by the government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors. The market retained positive zone in morning trade. A bout of volatility was witnessed as key benchmark indices pared gains after hitting fresh intraday high in mid-morning trade.
Foreign institutional investors (FIIs) sold shares worth a net Rs 357.40 crore on Tuesday, 16 July 2013, as per provisional data from the stock exchanges.
At 11:25 IST, the S&P BSE Sensex was up 86.80 points or 0.44% to 19,938.03. The index jumped 128.42 points at the day's high of 19,979.65 in mid-morning trade, its highest level since 15 July 2013. The index rose 29.96 points at the day's low of 19,881.19 in mid-morning trade.
The CNX Nifty was up 20.90 points or 0.35% to 5,976.15. The index hit a high of 5,989.80 in intraday trade, its highest level since 15 July 2013. The index hit a low of 5,968.80 in intraday trade.
The market breadth, indicating the overall health of the market, was positive. On BSE, 1,012 shares gained and 675 shares fell. A total of 102 shares were unchanged.
The total turnover on BSE amounted to Rs 622 crore by 11:20 IST compared to Rs 361 crore by 10:20 IST.
Among the 30-share Sensex pack, 20 stocks gained and rest of them declined.
Index heavyweight and cigarette major ITC rose 1.6% to Rs 365.90 after striking a record high of Rs 366.50 in intraday trade today, 17 July 2013. The company announces Q1 results on 25 July 2013.
Index heavyweight Reliance Industries (RIL) rose 1.57% at Rs 915.10, with the stock extending initial gain. The stock hit a high of Rs 915.65 and low of Rs 903 so far during the day. The Cabinet Committee on Economic Affairs (CCEA) on 27 June 2013 approved new gas pricing formula from 1 April 2014. The price of gas as per the formula is likely to be about $8.4 mmBtu as opposed to $4.2 mmBtu currently.
IT stocks gained as Infosys last week retained its revenue growth guidance in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result, belying fears that it may lower the guidance.
Infosys rose 0.71%. Infosys etained its guidance of 6% to 10% growth in revenue in dollar terms for the year ending 31 March 2014 (FY 2014) at the time of announcing Q1 June 2013 result on Friday, 12 July 2013. The company has raised the guidance in rupee terms due to a steep depreciation of the rupee against the dollar. The company has forecast 13% to 17% growth in revenue in rupee terms for FY 2014, higher than its earlier guidance of 6% to 10% growth which the company had given at the time of announcement of Q4 March 2013 results.
Infosys said that compensation increases for FY 2014 which will become effective from July 2003, will adversely impact the company's profit margins in the future quarters. The company's management is cautiously optimistic about rest of the year.
Wipro rose 1.27%.
TCS gained 1.88% to Rs 1,680. The stock hit record high of Rs 1,684 in intraday trade today, 17 July 2013.
HCL Technologies rose 0.92% to Rs 884.05. The stock hit record high of Rs 888.20 in intraday trade today, 17 July 2013.
Tech Mahindra advanced 2.44% to Rs 1,119. Tech Mahindra on Friday, 12 July 2013, announced that it has completed the process of allocating shares of the company to the shareholders of erstwhile Mahindra Satyam. The issued capital of the company has gone up from earlier 12.9 crore shares to 23.2 crore shares. Subsequent to the scheme of amalgamation between Tech Mahindra and Mahindra Satyam becoming effective, the board of directors fixed 5 July 2013 as record date for Mahindra Satyam shareholders. The new shares were admitted for trading on the stock exchanges on 12 July 2013.
Reliance Capital rose 1.9%. The company during market hours today, 17 July 2013, said Reliance Capital Asset Management (RCAM) has increased its total assets under management (AUM) by Rs 7000 crore in Q1 June 2013. The total AUM now stands at over Rs 180000 crore across mutual funds, PMS, EPFO, Pension Funds and Offshore Mandates. The company registered a 21% rise in its average AUM in mutual funds to Rs 97771 crore in Q1 June 2013.
Development Credit Bank rose 4.93% after net profit surged 126.5% to Rs 42.83 crore on 26.9% jump in operating income to Rs 305.84 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Tuesday, 16 July 2013.
Shasun Pharmaceuticals surged 7.15% after the company said it has successfully completed USFDA inspection and Brazilian inspection during the first week of June and July 2013 respectively. The announcement was made during trading hours today, 17 July 2013.
The government on Tuesday, 16 July 2013, eased overseas-investment rules for a number of sectors. The government has allowed 100% foreign direct investment (FDI) in telecom. FDI in the telecom services sector was increased from 74% to 100%, but all investments above 49% will continue to be routed through the FIPB.
In power exchanges and petroleum refiners, foreign investors won't have to seek government approval for up to 49% ownership, which is also the total cap for these sectors.
In defence, 26% FDI through the FIPB route has been maintained for state-of-the-art technologies. The increase in defence FDI will be on a case-to-case basis and will take place after consent from the Cabinet Committee on Security.
In a boost to the power sector, the government has allowed FDI in power exchanges through the automatic route. This means that no FIPB approval will have to be sought. However, it has retained the cap at 49%.
FDI cap for private insurers would be raised to 49% but that would need Parliament's approval. The FDI limit for credit information firms was raised from 49% to 74% --all of it may come through the automatic route, against the requirement for clearance from the Foreign Investment Promotion Board (FIPB) at present.
In single-brand retail, though there is no FDI limit at present, the investment has come only after FIPB clearance. This has been eased to allow up to 49 per cent investment through the automatic route.
The tea sector too had some reason to cheer as the condition of divestment to Indian partners has been deleted.
The government didn't take any decisions on increasing FDI caps in multibrand retail and print and electronic media. Commerce Minister Anand Sharma said that that the government will come out with clarifications related to multibrand retail policy soon.
Asian shares were mostly higher on Wednesday, 17 July 2013, ahead of two-day congressional testimony from Federal Reserve Chairman Ben Bernanke which begins today, 17 July 2013. Key benchmark indices in Japan, Taiwan and Singapore were down 0.04% to 0.34%. Key benchmark indices in China, Hong Kong, South Korea and Indonesia were up 0.14% to .17%.
The latest data showed that foreign-direct-investment flows into China jumped more than 20% in June 2013.
Meanwhile, the Xinhua news service, the official press agency of the People's Republic of China, reported that profit at Chinese state-owned companies outside the financial sector rose 7% in the first half of the year, accelerating from a 6.5% increase in the first five months of 2013.
Trading in US index futures indicated a flat opening of US stocks on Wednesday, 17 July 2013. US stocks fell on Tuesday, 16 July 29013, with Coca-Cola Co. and Goldman Sachs Group Inc. losing ground after their quarterly results, and as investors considered Kansas City Fed President Esther George's comment that the Federal Reserve should pare its bond purchases sooner rather than later.
Federal Reserve Chairman Ben Bernanke kicks off his two-day testimony on monetary policy in Washington today, 17 July 2013. In comments last week, Bernanke had eased concerns that the Fed would quickly unwind its monetary stimulus.
The minutes of the Fed's June meeting released on 10 July 2013 showed that while several members judged that a reduction in asset purchases would likely soon be warranted, many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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