Friday, June 28, 2013
The market is geared for a firm opening on positive Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could jump 104 points at the opening bell. Asian stocks edged higher tracking an overnight rise in global equities on easing fears of an early end to US monetary stimulus. Reliance Industries (RIL), ONGC and Oil India may be in focus after the government on Thursday almost doubled the price at which natural gas will be sold to producers of power, fertilizer, minerals and steel. The price of gas could go up to $8.4 per million metric British thermal units (mmBtu), effective 1 April next year, from the current domestic prices that range between $3.5 and $5.73 per mmBtu. Bajaj Auto may be in spotlight. The company had 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 today, 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. HDFC Bank reportedly said that income tax sleuths had conducted an enquiry on its following the Cobrapost expose. Bajaj Finserv said it has submitted its application to Reserve Bank of India on 26 June 2013 for a licence to commence banking business in terms of section 22 of the Banking Companies Act, 1949. It is proposed to do this by converting its subsidiary Bajaj Finance into a bank in terms of RBI guidelines for licensing of new banks in the private sector dated 22 February 2013. Key benchmark indices surged on Thursday, 27 June 2013, as the battered Indian rupee recovered against the dollar after the latest data showed that India's current account deficit (CAD) moderated sharply to 3.6% of GDP in Q4 of March 2013 from a historically high level of 6.7% of GDP in Q3 December 2012. The S&P BSE Sensex jumped 323.83 points or 1.75% to settle at 18,875.95, its highest closing level since 19 June 2013. Foreign institutional investors (FIIs) sold shares worth a net Rs 1,043.27 crore on Thursday, 27 June 2013, as per provisional data from the stock exchanges. Asian stocks edged higher tracking an overnight rise in global equities on easing fears of an early end to US monetary stimulus. Key benchmark indices in Hong Kong, Indonesia, Taiwan, Singapore, China and South Korea were up 0.57% to 1.99%. Japanese Nikkei 225 index shot higher by 3.14% as a weakened yen combined with upbeat industrial-production data to lifted sentiment. Japan's industrial production showed a surprise jump in May, while retail sales for the same month also gained, though the largest retailers saw a decline. Industrial output rose 2% during the last month, the Ministry of Economy, Trade and Industry said Friday, accelerating from a 0.9% gain in April. US stocks surged for a third session on Thursday on upbeat economic data and reiterations from Federal Reserve officials that monetary policy depends on the economic outlook. The US Department of Labor reported the number of Americans filing for state unemployment benefits fell by 9,000 to 346,000 last week. Also the National Association of Realtors reported that pending home sales jumped to a six-year high in May. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts.
ONGC and Reliance Industries will see an uptick as the Cabinet Committee for Economic Affairs approved the proposal to hike the natural gas price to USD 8.4 per mmbtu from April 1, 2014. On the other hand, power and fertiliser companies will react negatively to this development. National Fertiliser Ltd (NFL) will see some price action as CCEA approved disinvestment of 7.6 per cent of government stake. Airtel may see some red after the company lost to Telenor in the Myanmar telecom licence race. Indian Hotels may see some negative price action as the company may lose first right of refusal on Taj Mansingh hotel.
Key benchmark indices surged as the battered Indian rupee recovered against the dollar after the latest data showed that India's current account deficit (CAD) moderated sharply to 3.6% of GDP in Q4 of March 2013 from a historically high level of 6.7% of GDP in Q3 December 2012. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained over one-week closing high. The Sensex jumped 323.83 points or 1.75%, up close to 190 points from the day's low and off about 50 points from the day's high. The market breadth, indicating the overall health of the market, was positive. The rupee edged higher, backing off from a record low of 60.76 hit on Wednesday, 27 June 2013, as the country's current account deficit (CAD) narrowed in the January-March quarter, easing some concerns about the funding of the deficit. The rupee was hovering at 60.24 versus the dollar, higher than Wednesday's close of 60.7150/7250. The Sensex has lost 884.35 points or 4.47% in this month so far (till 27 June 2013). The Sensex has fallen 550.76 points or 2.83% in calendar 2013 so far (till 27 June 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,567.67 points or 7.66%. From a 52-week low of 16,598.48 on 26 July 2012, the Sensex has surged 2,277.47 points or 13.72%. Coming back to today's trade, Reliance Industries (RIL), ONGC and Oil India edged higher on reports that a meeting of Cabinet Committee on Economic Affairs (CCEA) will be held today, 27 June 2013, to consider a proposal for a steep hike in natural gas prices. IT and pharma stocks gained on a recent steep slide in rupee against the dollar. Index heavyweight and cigarette major ITC slipped in volatile trade. NTPC reversed initial gains in volatile trade. The market was volatile as traders rolled 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 expired today, 27 June 2013. Key benchmark indices surged in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices regained strength after paring initial gains. Key benchmark indices held firm in mid-morning trade. Key benchmark indices pared gains to register intraday low in early afternoon trade. The Sensex regained strength in afternoon trade. The market extended intraday gain to strike one-week high in mid-afternoon trade. The S&P BSE Sensex jumped 323.83 points or 1.75% to settle at 18,875.95, its highest closing level since 19 June 2013. The index jumped 373.63 points at the day's high of 18,925.75 in late trade. The index rose 136.16 points at the day's low of 18,688.28 in early afternoon trade. The CNX Nifty advanced 93.65 points or 1.68% to settle at 5,682.35, its highest closing level since 19 June 2013. The index hit a high of 5,699.35 and a low of 5,630.95 in intraday trade. The BSE Mid-Cap index rose 0.26% and the BSE Small-Cap index gained 0.32%. Both these indices underperformed the Sensex. The BSE Oil & Gas index (up 3.22%), BSE IT index (up 3.15%), BSE Teck index (up 2.7%), BSE Healthcare index (up 2.49%) and BSE Realty index (up 1.8%), outperformed the Sensex. The BSE Consumer Durables index (down 1.04%), BSE Capital Goods index (down 0.04%), BSE FMCG index (up 0.11%), BSE Power index (up 0.23%), BSE Auto index (up 0.43%), BSE Metal index (up 0.44%), BSE PSU index (up 0.83%), and BSE Bankex (up 1.5%), underperformed the Sensex. The total turnover on BSE amounted to Rs 1576 crore, higher than Rs 1491 crore on Wednesday, 26 June 2013. The market breadth, indicating the overall health of the market, was positive. On BSE, 1,210 shares rose and 1,112 shares declined. A total of 137 shares were unchanged. Among the 30-share Sensex pack, 21 stocks gained and the rest of them declined. Reliance Industries (RIL), ONGC and Oil India edged higher on reports that a meeting of Cabinet Committee on Economic Affairs (CCEA) will be held today, 27 June 2013, to consider a proposal for a steep hike in natural gas prices. Reliance Industries (RIL) gained 3.48% at Rs 830.45. The stock hit a high of Rs 835.55 and low of Rs 814.35. Oil India (up 1.7%) and ONGC (up 4.14%) edged higher. 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. Cairn India rose 5.07% as US crude oil futures rose for a fourth straight day as US refiners boosted crude processing to the highest rate this year and industrial profits increased in China. US crude oil futures for August 2013 delivery were up 23 cents a barrel at $95.73 a barrel in the electronic trading today, 27 June 2013. The contract had risen 18 cents or 0.18% to settle at $95.50 a barrel on the New York Mercantile Exchange on Wednesday, 26 June 2013, its highest closing level since 19 June 2013. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms like Cairn India. IT stocks rose on a recent steep slide in rupee against the dollar. TCS (up 3.85%), HCL Technologies (up 3.69%), and Infosys (up 3.31%), edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. Tech Mahindra rose 3.6% and Mahindra Satyam gained 4.13%. The two IT companies on 25 June 2013 announced the formal amalgamation of Mahindra Satyam with Tech Mahindra. The merged entity is amongst the top 5 Indian IT services companies, with revenue of $2.7 billion, a team of 84,000 professionals servicing 540 customers across 46 countries, the two companies said. The board of directors of Tech Mahindra at its meeting held on 25 June 2013 fixed 5 July 2013 as the record date for determining the shareholders of Mahindra Satyam who would be entitled to receive shares Tech Mahindra as per the amalgamation scheme. The swap ratio for merger has been fixed at two shares of Tech Mahindra for every 17 shares held in Mahindra Satyam. Wipro shed 0.22% as the stock turned ex-dividend today, 27 June 2013, for final dividend of Rs 5 per share for the year ended 31 March 2013. Pharma stocks edged higher. Pharma companies are likely to benefit from the depreciation of rupee against the dollar as pharma firms derive substantial revenue from exports. Dr Reddy's Laboratories (up 3.72%) Sun Pharmaceutical Industries (up 3.54%), and Cipla (up 1.74%) gained. Ranbaxy Laboratories rose 1.7%. The Supreme Court of India on 25 June 2013, dismissed a public interest lawsuit against the company for allegedly manufacturing and selling substandard medicines due to lack of evidence against the company. NTPC reversed initial gains in volatile trade. The stock was off 0.53% to Rs 140.45. The stock rose as much as 1.26% at the day's high of Rs 143 in early trade. The company said after market hours on Wednesday, 26 June 2013, that the board of directors of the company at its meeting held on 25 June 2013 has accorded investment approval for the development of a 50 megawatts (MW) solar photo voltaic based project at Rajgarh, Madhya Pradesh at an appraised current project cost of Rs 346.42 crore. FMCG stocks gained on renewed buying. Dabur India (up 0.62%), Nestle India (up 0.34%), Marico (up 1.86%), Godrej Consumer Products (up 2.04%) and Colgate-Palmolive (India) (up 2.64%), gained. Hindustan Unilever rose 0.15% to Rs 589.20. 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%. Tata Global Beverages shed 2.25%. The stock turned ex-dividend today, 27 June 2013, for dividend of Rs 2.15 per share for the year ended 31 March 2013. Index heavyweight and cigarette major ITC shed 0.05% at Rs 322.85 in volatile trade. The stock hit a high of Rs 326.95 and low of Rs 317.55. Capital goods pivotals edged lower. L&T shed 0.27%. India's largest power equipment maker by capacity Bhel fell 0.37% to Rs 163.05. The stock hit 52-week low of Rs 162.10 in intraday trade today, 27 June 2013. Bank pivotals edged higher. ICICI Bank (up 0.56%), State Bank of India (up 0.68%) and HDFC Bank (up 3.42%), edged higher. South Indian Bank rose 3.09% after the Reserve Bank of India on Wednesday, 26 June 2013, withdrew restrictions placed on the purchase of its shares by foreign investors. The ceiling on investment by foreign institutional investors (FIIs) in South Indian Bank is 49%. Auto stocks were mixed. Bajaj Auto gained 2.9%. The stock had declined 0.66% in volatile trade on Wednesday. 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 0.89%. Maruti Suzuki India shed 1.61%. M&M advanced 2.42%. Tata Motors dropped in volatile trade. The stock lost 1.35% at Rs 269.50. The scrip hit high of Rs 276.30 and low of Rs 263.10. Shares of Tata Motors have been on a downward journey, sliding 8.8% in seven trading days to Rs 273.20 on 26 June 2013 from a recent high of Rs 299.55 on 17 June 2013. Realty stocks were in demand on renewed buying. HDIL (up 6.52%), DLF (up 4.48%) and Unitech (up 1.01%), gained. Housing Development Finance Corporation (HDFC) rose 2.7%. The stock turned ex-dividend today, 27 June 2013, for dividend of Rs 12.50 per share for the year ended 31 March 2013. MMTC hit maximum permissible 5% lower circuit at Rs 108.25, 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 48.81% in 11 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. Neyveli Lignite Corporation (NLC) rose 0.73% in volatile trade. The company during market hours today, 27 June 2013, said it has received an intimation letter from the recognized unions and few other registered unions communicating their intention to go on an indefinite strike till the disinvestment proposal of NLC shares is withdrawn by Government of India. The Government of India (GoI) holds 93.56% stake in NLC (as per the shareholding pattern as on 31 March 2013). Market regulator Securities & Exchange Board of India (Sebi) has set a deadline of 8 August 2013 for all listed central public sector units to have a minimum 10% public shareholding. Shares of diamond jewellery maker Gitanjali Gems hit maximum permissible 10% lower circuit at Rs 262.75, also its 52-week low. The stock has witnessed a steep slide this week. Religare Enterprises tumbled 5.83% to Rs 319.90, with the stock reversing intraday gain. The stock had jumped 7.74% at the day's high of Rs 366 in early trade after the company said that US-based Customers Bancorp Inc. has agreed to invest $51 million in the company through combination of primary and secondary market investment. The announcement was made after market hours on Wednesday, 26 June 2013. The Reserve Bank of India (RBI) today, 27 June 2013, said that as per the preliminary data, India's current account deficit (CAD) moderated sharply to 3.6% of GDP in Q4 of March 2013 from a historically high level of 6.7% of GDP in Q3 December 2012 as trade deficit narrowed. The RBI said that non-oil non-gold component of imports showed a decline in Q4 March 2013, reflecting slowdown in domestic economic activity. Net invisibles recorded a decline of 7.7% in Q4 March 2013 as compared to a growth of 27.5% n Q4 March 2012 on account of decline in net services, transfers and income receipts. The CAD edged up to 4.8% of GDP in the year ended 31 March 2013 (FY 2013), from 4.2% of GDP in the year ended 31 March 2012 (FY 2012). Burgeoning trade deficit along with significant decline in invisible earnings caused widening of CAD in FY 2013, RBI said. The RBI released the Balance of Payment (BoP) data a day ahead of its release scheduled on Friday, 28 June 2013, after the rupee hit record low below 60 versus the dollar on Wednesday, 26 June 2013. Most European stocks edged lower in choppy trade on Thursday, 27 June 2013. Key benchmark indices in Germany and France fell by 0.03% to 0.05%. UK's FTSE 100 rose 0.2%. European finance ministers reached an agreement early Thursday on rules for winding down insolvent banks, inking a deal in which banks' shareholders, creditors and big depositors would take the first hit in the event of a bank crisis. The deal still needs legislative approval from the European Parliament. Asian stocks advanced on Thursday, 27 June 2013, on hopes that a downward revision to US first-quarter gross domestic product growth might delay the Federal Reserve's plans to reduce asset purchases. Key benchmark indices in Hong Kong, Indonesia, Taiwan, Singapore and Japan were up 0.5% to 2.96%. China's Shanghai Composite shed 0.08%. Profit at major Chinese industrial firms in May rose 15.5% from the year-earlier period, the National Bureau of Statistics said on Thursday. Profit at the firms from the newly adjusted measure of "core operating activities" rose 8.8% from a year earlier, 2.8 percentage points slower than in April, the data said. In the January-May period, overall industrial profit was up 12.3% from the same period in 2012, though up 11.4% in terms of core activities, the bureau said. South Korean stocks jumped after data released on Thursday, 27 June 2013, showed that the nation's current-account surplus rose to a record high in May on the back of robust exports, even against the backdrop of a global slowdown. The Seoul Composite was up 2.87%. Trading in US index futures indicated that the Dow could gain 22 points at the opening bell on Thursday, 27 June 2013. US stocks jumped on Wednesday, 26 June 2013, pulling benchmark indexes into positive terrain for the week, as a downward revision in economic growth calmed concern about US monetary policy. Gross domestic product expanded 1.8% from January through March, down from an earlier estimate of 2.4%, the Commerce Department reported. Federal Reserve Chairman Ben Bernanke on 19 June 2013 said that the central bank may taper the pace of its bond purchases, currently set at $85 billion a month, as early as this year if the economy continues to improve in line with its forecasts. Data on consumer spending in May and a separate report on weekly initial claims for unemployment benefits are due later in the global day today, 27 June 2013. Also set for Thursday are speeches by three Federal Reserve officials and a report on pending home sales for May from the National Association of Realtors.