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Thursday, August 08, 2013

Market may edge higher in early trade on firm Asian stocks

The market may edge higher in early trade on mostly higher Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 10.50 points at the opening bell.The stock market remains closed tomorrow, 9 August 2013, on account of Ramzan Id.

Ranbaxy Laboratories after trading hours on Wednesday, 7 August 2013, reported consolidated net loss of Rs 524.24 crore for Q2 June 2013, lower than net loss of Rs 585.72 crore in Q2 June 2012. Sales declined 17.83% to Rs 2633.20 crore in Q2 June 2013 over Q2 June 2012. Ranbaxy said that base business sales registered double digit growth and base business margins continued to improve in Q2 June 2013.

Ranbaxy said that bottom line in Q2 June 2013 was adversely impacted by the depreciation of rupee against the dollar. Though favourable to Ranbaxy's export business, the rupee depreciation had an adverse impact on the company's profitability mainly on account of application of the accounting standards that require marking to market the entire derivatives and foreign currency denominated loans outstanding. There was a net charge of Rs 540.30 crore on this account in Q2 June 2013, Ranbaxy said.

Ranbaxy said that the macroeconomic environment continued to be challenging in certain countries in Western Europe. Specifically in France, the generic pharma industry has been impacted adversely by continuing pricing and trade challenges. Ranbaxy has accordingly taken an impairment of goodwill of Rs 119.20 crore in Q2 June 2013 pertaining to its operations in France in line with the accounting standards.

Ranbaxy said the company registered profit after tax of Rs 135.20 crore in Q2 June 2013 if one excludes the impact of forex losses and other exceptional items.

Ranbaxy said sales declined on year on year basis in Q2 June 2013 due to base effect. The company said sales in Q2 June 2012 was boosted by contribution from exclusivities. On a like-to-like basis, sales grew in double digits over the corresponding quarter, Ranbaxy said.

Mr. Arun Sawhney, CEO & Managing Director, Ranbaxy said that the company's focus on branded markets and business continues and this will help navigate the growth of Ranbaxy in the coming years. He also said that the management is consciously working on efficiency improvement across the organization.

State Bank Of India said after market hours on Wednesday, 7 August 2013 that consequent upon the appointment of Smt. Arundhati Bhattacharya as Managing Director of the Bank, as advised in company's letter dated 3 August 2013, it has now been decided to designate Smt. Bhattacharya, as the Managing Director and Chief Financial Officer (CFO), vice Shri Diwakar Gupta (who has since retired on superannuation).

Steel stocks will be in focus after the government said on Wednesday some steel products can be imported for certain critical applications without local quality certification, a move that could further hit domestic suppliers after imports rose 15% last fiscal year. The government said imports for projects in sectors such as infrastructure, petroleum, nuclear reactors and defence would be exempted from applicable local quality standards if at least Rs 1000 crore is invested in such a project. The exporters will, however, have to obtain quality certificates from their country of origin, a notification from the commerce and industry ministry said.

Key benchmark indices fell for second day in a row on Wednesday, 7 August 2013 as Asian and European stocks fell on concerns US monetary policy will soon become less accommodative after two Federal Reserve officials on Tuesday, 6 August 2013, said a reduction in Fed's asset purchases is likely later this year. The S&P BSE Sensex lost 68.16 points or 0.36% to settle at 18,664.88 on that day, its lowest closing level since 26 June 2013.

Foreign institutional investors (FIIs) sold shares worth a net Rs 350.93 crore on Wednesday, 7 August 2013, as per provisional data from the stock exchanges.

Most Asian stocks rose on Thursday as investors await the conclusion of a Bank of Japan's policy meeting and Chinese trade data today. Key benchmark indices in Hong Kong, Japan and South Korea were up 0.35% to 0.73%. Key benchmark indices in China and Taiwan fell by 0.13% to 0.14%. Stock markets in Singapore, Indonesia and Malaysia were closed for holidays.

The Bank of Japan (BoJ) ends its two-day policy meet today, 8 August 2013. The BoJ is widely expected to maintain its pledge of increasing the monetary base at an annual pace of about 60 trillion to 70 trillion yen ($600 billion-$700 billion).

Australian employers unexpectedly cut payrolls in July and unemployment held at an almost four-year high, denting Prime Minister Kevin Rudd's bid for a come-from-behind election win. The number of people employed fell 10,200, the statistics bureau said in Sydney today.

US stocks lost ground for a third consecutive session on Wednesday on growing uncertainty over when the Federal Reserve may start to wind down its stimulus, which has been a driving force behind the rally in equities this year. Federal Reserve Bank of Cleveland President Sandra Pianalto said on Wednesday that the central bank would be prepared to scale back asset purchases if the labor market remains on the stronger path followed since last fall. Charles Evans, the president of the Federal Reserve Bank of Chicago, said on Tuesday that the Fed would probably scale back its bond-buying program later this year, perhaps beginning as early as next month, depending on economic data. That echoed comments made earlier on Tuesday by Dennis Lockhart, the president of the Federal Reserve Bank of Atlanta.

The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities. 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