A bout of volatility was witnessed in early trade as key benchmark indices trimmed gains after a firm start triggered by firm Asian stocks. The barometer index, the S&P BSE Sensex, was up 43.50 points or 0.24%, up about 10 points from the day's low and off close to 40 points from the day's high. Index heavyweight and cigarette maker ITC edged higher in early trade. Another index heavyweight Reliance Industries (RIL) also edged higher. The market breadth was strong.
Cairn India gained after the company announced a new oil discovery. Wipro slumped over 7% on the first trading session of demerger of non-IT business.
Foreign institutional investors (FIIs) sold shares worth a net Rs 163.95 crore on Monday, 8 April 2013, as per provisional data from the stock exchanges.
At 9:30 IST, the S&P BSE Sensex was up 43.50 points or 0.24% to 18,481.28. The index gained 83.95 points at the day's high of 18,521.73 in early trade. The index rose 33.88 points at the day's low of 18,471.66 in early trade.
The CNX Nifty was up 28.15 points or 0.51% to 5,571.10. The index hit a high of 5,580.60 in intraday trade. The index hit a low of 5,564 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 689 shares rose and 167 shares fell. A total of 35 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks gained while rest of them fell.
Index heavyweight Reliance Industries (RIL) gained 0.44% at Rs 792.65. Shares of Reliance Communications gained 1.97%. Reliance Jio Infocomm and Reliance Communications (RCom) on 2 April 2013 announced the signing of a definitive agreement for approximately Rs 1200 crore as one time indefeasible right to use (IRU) fees for sharing RCom's nationwide inter-city fiber optic network infrastructure. Reliance Jio Infocomm will utilize multiple fiber pairs across RCom's 1.2 lakh kilometres inter-city fiber optic network to provide a robust and future proof backbone for rolling out its state-of-the-art 4G services. As per the agreement, RCom will in turn have reciprocal access to optic fiber infrastructure to be built by Reliance Jio Infocomm in the future.
The agreement provides for joint working arrangements to be put in place immediately for upgradation of the optic fiber network to ensure seamless delivery of next generation services.
Index heavyweight and cigarette major ITC rose 0.46% to Rs 294.25. The stock had hit record high of Rs 310.75 on 4 February 2013. The government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14, which was unveiled on 28 February 2013.
Aditya Birla Nuvo rose 1.47%. The company said before market hours today, 9 April 2013, that the Scheme of Arrangement between Pantaloons Retail (India) (now known as Future Retail (PRIL)) and Peter England Fashions and Retail (PEFRL), and their respective shareholders and creditors and Indigold Trade and Services as shareholder of PEFRL (Scheme) has been sanctioned by the High Court of Bombay on 1 March 2013 and a certified copy of the order has been filed with the Registrar of Companies, Maharashtra. The board of directors of PEFRL at its meeting held on 8 April 2013 has declared the Scheme effective from 8 April 2013. Accordingly, the Pantaloons Fashion Retail Business of PRIL has been transferred by way of demerger to PEFRL with effect from the effective date.
Cairn India gained 2.76%. The company before trading hours today, 9 April 2013, said it has made its latest oil discovery, the 26th discovery so far in the RJ-ON-90/1 block, following recent policy clarity by Government of India (GoI) to conduct exploration activity in development blocks. Technical evaluations indicate about 10 metres of gross oil column within Dharvi Dungar Formation. Oil has been discovered and tested for the first time in Dharvi Dungar sands in Raageshwari-Tukaram area, where previous discoveries were in the shallower Thumbli sands. The volumes of oil in place and the potential resource base associated with this discovery are under evaluation, Cairn India said.
Commenting on the new oil discovery, Mr. Elango P, Member of the Board, Cairn India said: "We are delighted with the 26th discovery in the block. This reaffirms our belief that an aggressive exploration drilling programme will help harness the full potential of the Barmer Basin in Rajasthan. This is a step closer towards reserve accretion through exploration led growth."
Wipro slumped 7.46%. The sharp slide in the counter was because the demerger of the non-IT business of the company took effect on the bourses today, 9 April 2013. Following the demerger, the non-IT business of the company will be transferred to a separate company. Wipro will now be a company focused on IT services business. The demerged company will have non-IT business, including consumer care products and the infrastructure engineering business.
The upside on the domestic bourses may be capped as reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 30 June 2013, while the deadline for state-run firms is 31 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The next major trigger for the market is Q4 March 2013 results. The Q4 March 2013 corporate earnings season will begin around mid-April 2013. Infosys announces Q4 results on Friday, 12 April 2013. Reliance Industries (RIL) announces Q4 results on 16 April 2013. TCS announces Q4 results on 17 April 2013. IndusInd Bank announces Q2 results on 18 April 2013. Wipro announces Q4 results on 19 April 2013. Cairn India announces Q4 results on 22 April 2013. HDFC Bank announces Q4 results on 23 April 2013. Axis Bank will announce its Q4 March 2013 results on 24 April 2013. ICICI Bank and Maruti Suzuki unveil Q4 results on 26 April 2013. HDFC announces Q4 results on 8 May 2013. Dr. Reddys Laboratories announces Q4 results on 14 May 2013.
On the macro front, the government will unveil industrial production data for February 2013 on Friday, 12 April 2013. Industrial production had risen 2.4% in January 2013, as against a contraction of 0.5% in December 2012.
The government will unveil data on the combined consumer price index for urban and rural India for March 2013 on 12 April 2013. Inflation based on the combined consumer price index for urban and rural India had edged up to 10.91% in February 2013, from 10.79% in January 2013.
The government will unveil data on the wholesale price index (WPI) for March 2013 on 15 April 2013. The annual rate of inflation, based on the monthly wholesale price index (WPI), edged up to 6.84% in February 2013 from 6.62% in January 2013.
The India Meteorological Department will issue its initial forecast of 2013 southwest monsoon in this month.
The Reserve Bank of India (RBI) Governor D. Subbarao on 6 April 2013 said that the high fiscal deficit is a problem because it exacerbates inflation and impedes monetary policy transmission. The RBI will announce the Monetary Policy Statement 2013-14 on 3 May 2013. The RBI cut its key policy rate viz. the repo rate by 25 basis points to 7.5% after a mid-quarter monetary policy review on 19 March 2013. The key macroeconomic priorities are to raise the growth rate, restrain inflation pressures and mitigate the vulnerability of the external sector, RBI said at that time. Even as the policy stance emphasises addressing the growth risks, the headroom for further monetary easing remains quite limited, the RBI said. The RBI said it will continue to actively manage liquidity through various instruments, including open market operations (OMO), so as to ensure adequate flow of credit to productive sectors of the economy.
The second half of the Budget session of the Parliament begins on 22 April 2013. The Budget Session of the Parliament ends on 10 May 2013. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
Assembly elections will be held in Karnataka on 5 May 2013 and the counting of votes and results of the election will be declared on 8 May 2013.
Most Asian stocks rose on Tuesday led by commodities producers. Key benchmark indices in China, Hong Kong, Indonesia, Singapore and Japan rose by 0.2% to 0.86%. Key benchmark indices in South Korea and Taiwan shed by 0.23% to 0.63%.
A report in China showed consumer prices last month in the world's second-largest economy rose less than economists forecast. China's consumer price index rose 2.1% in March 2013 from a year earlier. The result was significantly lower than February's rise of 3.2%, but was above January's 2% inflation rate.
Growth in developing Asia is seen gaining momentum this year, powered by rising domestic consumption and intra-regional trade, but authorities need to ward off risks of inflation and asset bubbles arising from strong capital inflows, the Asian Development Bank (ADB) said. Tensions over long-standing border disputes in Asia, deepening austerity fatigue in the euro zone and political risks linked to wrangling over the US debt ceiling are the main threats to the region's near-term outlook, the Manila-based development lender said on Tuesday in its latest regional outlook report for 2013.
The region needs to put up safeguards against the buildup of asset bubbles and possible withdrawal of huge liquidity that has spilled over to the region following monetary policy stimulus in developed economies, the report said, adding that macroprudential policy must be reinforced when necessary. Developing Asia - comprised of 45 countries in Central, East, South, and Southeast Asia and the Pacific - is forecast to grow 6.6% this year and 6.7% in 2014, the ADB said.
US stocks ended a volatile session higher on Monday as investors looked ahead to an earnings season expected to show modest growth despite concerns about the economy's health.
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