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Wednesday, June 26, 2013
Nifty hits over 10-week low
Key benchmark indices edged lower with the market sentiment hit adversely after the rupee hit record low below 60 against the dollar in afternoon deals. The S&P BSE Sensex lost 77.03 points or 0.41%, off close to 140 points from the day's high and up about 35 points from the day's low. The 50-unit CNX Nifty reached its lowest closing level in more than 10 weeks. The market breadth, indicating the overall health of the market, was negative. Also hitting market sentiment was data showing that foreign institutional investors (FIIs) remained net sellers of Indian stocks on Tuesday, 25 June 2013. The Sensex has lost 1,208.18 points or 6.11% in this month so far (till 26 June 2013). The Sensex has fallen 874.59 points or 4.5% in calendar 2013 so far (till 26 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,891.50 points or 9.25%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 1,953.64 points or 11.77%. Coming back to today's trade, index heavyweight and cigarette major ITC pared gains in late trade. Reliance Industries (RIL) reversed intraday gains and slipped into the red in late trade. Bharti Airtel dropped on reports the Department of Telecom (DoT) has decided to slap a Rs 650-crore penalty on the company for violating roaming norms in 13 circles between 2003-2005. Auto stocks were mostly lower. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. In the currency market, the rupee breached the 60-mark against dollar and touched all-time low in the mid-session trading on higher demand from banks and importers and heavy outflows by foreign institutional investors. The rupee was hovering at 60.69 against the dollar, sharply lower than Tuesday's close of 59.66/67. A weak rupee makes the cost of oil and other imported goods higher in rupee terms, adding to inflationary pressure. The market may remain volatile tomorrow, 27 June 2013, as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire tomorrow, 27 June 2013. The market sentiment was hit adversely by data showing that foreign funds remained net sellers of Indian stocks on Tuesday, 25 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1319.80 crore into the secondary equity markets on Tuesday, 25 June 2013, as per the data from the Securities & Exchange Board of India (Sebi). The S&P BSE Sensex shed 77.03 points or 0.41% to 18,552.12, its lowest closing level since 24 June 2013. The index gained 61.35 points at the day's high of 18,690.50 in morning trade. The index fell 114.80 points at the day's low of 18,514.35 in late trade. The CNX Nifty lost 20.40 points or 0.36% to 5,588.70, its lowest closing level since 15 April 2013. The index hit a high of 5,635.25 in intraday trade. The index hit a low of 5,579.35 in intraday trade. The BSE Mid-Cap index fell 0.67% and underperformed the Sensex. The BSE Small-Cap index declined 0.37% and outperformed the Sensex. The BSE IT index (up 1.69%), BSE Power index (up 0.93%), BSE FMCG index (up 0.66%), BSE Teck index (up 0.4%), BSE Oil & Gas index (down 0.07%), BSE PSU index (down 0.23%), and BSE Realty index (down 0.29%), outperformed the Sensex. The BSE Auto index (down 1.79%), BSE Metal index (down 1.31%), BSE Consumer Durables index (down 1.12%), BSE Healthcare index (down 1.12%), BSE Bankex (down 1.03%), and BSE Capital Goods index (down 0.79%), underperformed the Sensex. The total turnover on BSE amounted to Rs 1483 crore, lower than Rs 1930 crore on Tuesday, 25 June 2013. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,360 shares declined and 952 shares rose. A total of 144 shares were unchanged. Among the 30-share Sensex pack, 18 stocks declined and rest of them gained. FMCG stocks gained on renewed buying. Colgate-Palmolive (India) (up 3.35%) and Godrej Consumer Products (up 0.87%), gained. Hindustan Unilever rose 0.12% to Rs 588.30. Anglo-Dutch consumer goods major Unilever's open offer to raise its stake in Indian unit, which opened on 21 June 2013, closes on 4 July 2013. Unilever will buyback shares from minority shareholders at Rs 600 per share to hike its stake in Hindustan Unilever from 52.48% to up to 75%. Marico rose 6.72% to Rs 204.15, with the stock recovering on bargain hunting. Shares of Marico had declined 15.54% in six trading sessions to settle at Rs 191.30 on Tuesday, 25 June 2013, from a recent high of Rs 226.50 on 17 June 2013. Index heavyweight and cigarette major ITC rose 0.87% to Rs 323. The stock hit a high of Rs 326.80 and low of Rs 318.95. DLF advanced 1.29% to Rs 168.65. The stock had hit a 52-week low of Rs 161.25 in intraday trade on Monday, 24 June 2013. Metal stocks edged lower. Tata Steel (down 0.69%), Hindalco Industries (down 2.32%) and Jindal Steel & Power (down 2.89%) edged lower. But, Sterlite Industries rose 0.06%. Shares of some power generation and power distribution companies edged higher. Torrent Power, NHPC, Power Grid Corporation of India, Tata Power Company and JSW Energy rose by 0.12% to 2.47%. NTPC gained 2.13%. Coal India fell 1.72%. Reportedly NTPC has resolved its public spat with Coal India over quality and payment terms and agreed to sign fuel-supply agreement (FSA) with the state-run coal major. NTPC had earlier publicly challenged Coal India on various issues, particularly the quality of coal supplied, and said it would make payments only on the basis of quality of the fuel supplied. NTPC accounts for more than 35% of the quantity that Coal India supplies under the new FSAs. As per reports, Coal India's board is scheduled to consider the fuel pact at a meeting today, 26 June 2013, after which the final agreement will be signed. Reliance Industries (RIL) shed 0.16% at Rs 802.55. The stock hit a high of Rs 814.55 and low of Rs 800.85. As per reports, the Cabinet Committee on Economic Affairs (CCEA) will consider a proposal this week for a steep hike in natural gas prices. The CCEA last week deferred a decision on a proposal to hike natural gas prices as Oil Minister M Veerappa Moily was away on an official tour. The oil ministry has proposed an increase in gas prices to $6.775 million British thermal unit (mbtu) from current $4.2 mbtu. The Oil Ministry has proposed raising gas price for state-run firms immediately and that for Reliance Industries (RIL) from April 2014 when it is contractually due. Auto stocks were mostly lower. Bajaj Auto fell 0.29% to Rs 1,794.70, off day's low of Rs 1,764. The company after market hours on Tuesday, 25 June 2013 said workmen at its Chakan plant in Pune have stopped coming to work. Bajaj Auto said the workers had earlier given a notice for a stoppage of work at the plant from the morning shift of 28 June 2013. The reason for the strike was that management had refused to concede their demand that all the workmen working in Bajaj Auto should each be given an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 per share, Bajaj Auto added. The workmen have, however, stopped coming to the Chakan plant from 25 June 2013, itself, without assigning any reason for this stoppage, the company said in a filing. Hero MotoCorp rose 3.89%. Maruti Suzuki India rose 0.2%. M&M (down 4.63%) and Tata Motors (down 3.02%) declined. Meanwhile, Ford India has launched today, 26 June 2013 a much awaited compact sports utility vehicle EcoSport. The vehicle is priced at Rs 5.59 lakh onwards in New Delhi. IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. TCS (up 2.84%), Infosys (up 0.82%) and Wipro (up 0.97%), edged higher. Rupee's weakness also aided gains in IT stocks. The rupee hit record low below 60 versus the dollar today, 26 June 2013. The rupee was hovering at 60.69 against the dollar, sharply lower than Tuesday's close of 59.66/67. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Bharti Airtel tumbled 5.73% to Rs 278.45 on reports the Department of Telecom (DoT) has decided to slap a Rs 650 crore penalty on Bharti Airtel for violating roaming norms in 13 circles between 2003-2005. It was the top loser from the Sensex pack. Asian Paints rose 2.93%. The company during market hours today,26 June 2013, said that it has fixed 31 July 2013 as the record date for 10-for-1 stock split. Bharat Heavy Electricals (Bhel) rose 0.03% to Rs 163.65, with the stock recovering on bargain hunting. Shares of Bhel had declined 10.28% in six trading sessions to settle at Rs 163.60 on Tuesday, 25 June 2013, from a recent high of Rs 182.35 on 17 June 2013. Lupin shed 1.86%. The company during market hours today said that the company's board of directors has approved the increase in the limit of investments by foreign institutional investors (FIIs) in the equity share capital of the company from 33% to 49%. Dr Reddy's Laboratories fell 0.32%. The company during market hours today, 26 June 2013 said it has launched Lamotrigine Extended-Release Tablets (25 mg, 50 mg, 100 mg, 200 mg, 300 mg) a therapeutic equivalent generic version of Lamictal XR in the US market on 25 June 2013 following the approval by the United States Food & Drug Administration (USFDA) of Dr Reddy's abbreviated new drug application (ANDA) for Lamotrigine XR tablets. According to IMS Health data, the Lamictal XR brand and its generic verision had combined sales of approximately $300.5 million in the United States for the twelve months ended April 2013. MMTC hit maximum permissible 5% lower circuit at Rs 113.90, also its 52-week low, with the stock extending recent steep slide triggered by government concluding the divestment of 9.33% stake in the firm at a huge discount to the stock's ruling market price. Shares of MMTC have slumped 46.13% in ten trading sessions from a recent high of Rs 211.45 on 12 June 2013. On 13 June 2013, the Government of India (GoI) sold 9.33% stake in MMTC via Offer for Sale (OFS) through stock exchanges mechanism at an indicative price of Rs 60.86 per share, at a discount of 71.21% to the closing price of the stock of Rs 211.45 on 12 June 2013. The divestment was done to make the company compliant to the public shareholding requirements under the Securities Contract Regulations (Rules) (SCRR). Sebi has mandated minimum public shareholding of 10% for state-run firms by 8 August 2013. Post stake sale, the GoI holds 90% stake in MMTC. Reliance Capital rose 2.08% after the company said it will apply to Reserve Bank of India for a banking license. Reliance Capital will be the promoter of the proposed new bank. The company said Sumitomo Mitsui Trust Bank and Nippon Life Insurance, two leading financial institutions from Japan, propose to take between 4-5% stake each in the proposed new bank, subject to necessary regulatory approvals, etc. Sumitomo Mitsui Trust Bank is a preeminent trust banking group in Japan. Nippon Life Insurance is Japan's largest private life insurer. Aditya Birla Nuvo rose 0.29% after the company said its board has approved the proposal of making an application to the Reserve Bank of India for obtaining licence for setting up a bank. The announcement was made after market hours on Tuesday, 25 June 2013. Market regulator Securities & Exchange Board of India (Sebi) on Tuesday approved changes to buyback of shares or other specified securities from the open market through stock exchange mechanism as part of its constant endeavour to align regulatory requirements with the changing market realities as well as to enhance efficiency of the buy-back process. Sebi said after a board meeting that the mandatory minimum buy-back has been increased to 50% of the amount earmarked for the buy-back, as against existing 25%, failing which amount in the escrow account would be forfeited subject to a maximum of 2.5% of the total amount earmarked. The maximum buy-back period has been reduced to 6 months from 12 months, it added. Sebi's new rules will require companies to not raise further capital for a period of one year from the closure of the buy-back except in discharge of subsisting obligations as against the existing 6 months. The company shall not make another buy-back offer within a period of one year from the date of closure of the preceding offer. The companies can buy-back 15% or more of capital (paid-up capital and free reserves) only by way of tender offer, it added. Approving a Sebi committee report on the rationalization of foreign investment routes, Sebi also introduced uniform entry norms for existing foreign institutional investors (FIIs), sub-accounts and qualified foreign investors (QFIs) and combined these entities under a category known as foreign portfolio investors (FPIs). In another key move, the regulator approved the proposal to put in place a single self-regulatory organization (SRO) for mutual fund distributors. In order to speed up the process, Sebi decided to have a cut-off time for accepting applications from potential SROs. European stocks edged higher on Wednesday, 26 June 2013, as positive sentiment from the US on the back of upbeat data encouraged investors to move into the stock market. Key benchmark indices in France, Germany and UK rose by 1.02% to 1.84%. French gross domestic product contracted in the first quarter of the year, confirming the euro-zone's second largest economy succumbed to the recession in the wider euro zone, statistics showed Wednesday. France's economy contracted 0.2% in the first quarter from the previous quarter, when GDP fell 0.2%, statistics agency Insee said. Through 2009, France posted weak or negative GDP, but had avoided recession defined as two consecutive quarters of economic contraction. Asian stocks edged higher to reverse a four-day losing streak on Wednesday, 26 June 2013, as investors took comfort from firm US data underscoring an American recovery, and assurances from China's central bank to provide funds to institutions if needed. Key benchmark indices in Hong Kong, South Korea, Indonesia, Taiwan and Singapore were up by 0.16% to 3.82%. China's Shanghai Composite index fell 0.41%, extending recent losses on fears of a credit crunch and slower loan growth. Japan's Nikkei 225 index shed 1.04%. Trading in US index futures indicated that the Dow could advance 51 points at the opening bell on Wednesday, 26 June 2013. US stocks rose sharply on Tuesday cheered by upbeat economic data showing increases in durable-goods orders, new-home sales and consumer confidence. The Commerce Department said orders for goods built to last at least three years rose 3.6% in May. Another report from the Commerce Department indicated new-home sales rising 2.1% last month. Separately, the S&P/Case-Shiller index of home values rose 12.1% in April from a year earlier, the biggest jump in more than seven years. The Conference Board's consumer-confidence index rose to 81.4 in June from 74.3 in May.
Better Trades for the Day
Global Cues: The European shares closed higher on Tuesday (June 25, 2013) were, FTSE100 was up by 1.21%, CAC40 ended 1.51% higher and DAX rose by 1.55%. The US stocks were also up on Tuesday (June 25, 2013), Dow Jones rose by 0.69% while Nasdaq gained by 0.82%. The Asian shares are trading higher on Wednesday (June 26, 2013). SGX Nifty is up by 14.00 points. Stock in news: Bajaj Auto workers at Chakan plant go on strike. Godrej Properties to cut Rs 525 cr debt from rights issue. Gitanjali to cut sale of gold coins, bars.
India will lift FDI cap in some sectors by July: FM
India will lift foreign direct investment ( FDI) caps in some sectors by the third week of July, Finance Minister P. Chidambaram said on Tuesday. He said a finance ministry panel has already submitted a report on revising FDI caps in different sectors, and the Department of Industrial Policy and Promotion is in talks with stakeholders. India is widely expected to raise FDI limits in sectors like defence and telecommunications. Chidambaram on Tuesday did not name the sectors.
Market likely to open higher
The market is poised for a higher start on mostly positive Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 22 points at the opening bell. Asian stocks were mostly higher on Wednesday after goods and housing data bolstered the US economic outlook. Bajaj Auto after market hours on Tuesday, 25 June 2013 said it received a notice from the workmen's union of its Chakan plant viz., Vishwa Kalyan Kamgar Sanghatana stating that they propose to call for a stoppage of work by all the workmen employed in Chakan plant from the morning shift of 28 June 2013 for the reason that management had refused to concede their demand that all the workmen working in Bajaj Auto should each be given an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 per share. The workmen have however stopped coming to the Chakan plant from 25 June 2013, itself, without assigning any reason for this stoppage. The board of Aditya Birla Nuvo has approved the proposal of making an application to the Reserve Bank of India (RBI) for obtaining licence for setting up a bank. Shares of Emami turn ex-dividend today, 26 June 2013 for a dividend of Rs 8 per share for the year ended 31 March 2013. The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near month June 2013 series to July 2013 series. The June 2013 F&O contracts expire tomorrow, 27 June 2013. Key benchmark indices edged higher in volatile trade on Tuesday, 25 June 2013 as European stocks and US index futures rose after soothing words from China's central bank over the liquidity crunch in China. The S&P BSE Sensex advanced 88.26 points or 0.48% to settle at 18,629.15, its highest closing level since 21 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1285.86 crore on Tuesday, 25 June 2013, as per provisional data from the stock exchanges. Meanwhile, market regulator Securities & Exchange Board of India (Sebi) on Tuesday approved changes to buyback of shares or other specified securities from the open market through stock exchange mechanism as part of its constant endeavour to align regulatory requirements with the changing market realities as well as to enhance efficiency of the buy-back process. Sebi said after a board meeting that the mandatory minimum buy-back has been increased to 50% of the amount earmarked for the buy-back, as against existing 25%, failing which amount in the escrow account would be forfeited subject to a maximum of 2.5% of the total amount earmarked. The maximum buy-back period has been reduced to 6 months from 12 months, it added. Sebi's new rules will require companies to not raise further capital for a period of one year from the closure of the buy-back except in discharge of subsisting obligations as against the existing 6 months. The company shall not make another buy-back offer within a period of one year from the date of closure of the preceding offer. The companies can buy-back 15% or more of capital (paid-up capital and free reserves) only by way of tender offer, it added. Asian stocks were mostly higher on Wednesday after goods and housing data bolstered the US economic outlook. Key benchmark indices in Hong Kong, Indonesia, Taiwan and Singapore were up 0.5% to 1.82%. Key benchmark indices in China, Japan and South Korea were off 0.12% to 1.77%. US stocks rose sharply on Tuesday cheered by upbeat economic data showing increases in durable-goods orders, new-home sales and consumer confidence. The Commerce Department said orders for goods built to last at least three years rose 3.6% in May. Another report from the Commerce Department indicated new-home sales rising 2.1% last month. Separately, the S&P/Case-Shiller index of home values rose 12.1% in April from a year earlier, the biggest jump in more than seven years. The Conference Board's consumer-confidence index rose to 81.4 in June from 74.3 in May.
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