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Friday, September 06, 2013
FIIs in buying mode
Net inflow of Rs 102.60 crore on 4 September 2013
Foreign institutional investors (FIIs) bought shares worth net Rs 102.60 crore on Wednesday, 4 September 2013, compared with net outflow of Rs 726.30 crore on Tuesday, 3 September 2013.
The net inflow of Rs 102.60 crore on Wednesday, 4 September 2013, was a result of gross purchases of Rs 2784.90 crore and gross sales of Rs 2682.30 crore. There was a net inflow of Rs 107.60 crore into the secondary equity markets on 4 September 2013, which was a result of gross purchases Rs 2784.90 crore and gross sales Rs 2677.30 crore. The S&P BSE Sensex had jumped 332.89 points or 1.83% to settle at 18,567.55 on that day, its highest closing level since 2 September 2013.
There was an outflow of Rs 4.90 crore from the category 'primary market others' on Wednesday, 4 September 2013.
FIIs have offloaded shares worth a net Rs 222 crore in September 2013 so far (till 4 September 2013). FIIs sold shares worth a net Rs 5922.50 crore in August 2013.
FIIs have purchased shares worth a net Rs 59947.90 crore in 2013 so far (till 4 September 2013). FIIs bought shares worth a net Rs 128359.80 crore in calendar 2012.
There are a total of 1,753 foreign funds registered with the Securities & Exchange Board of India.
Market may open higher
The market may start higher, with the indices extending last two-day gains. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 85 points at the opening bell. The new central bank Governor Raghuram Rajan announcing plans late on Wednesday, 4 September 2013 to bolster the financial industry and stabilize the rupee helped calmed investors' nerves battered by the recent sharp slide in rupee.
Fertilizer Corporation of India (FCIL) has signed an memorandum of understanding (MoU) with Coal India (CIL), GAIL India and Rashtriya Chemicals & Fertilizers (RCF) for revival of Talcher Urea Plant in Odisha on Thursday. The MoU was signed in presence of Union Minister of Petroleum & Natural Gas, Shri Veerapa Moily, Minister of Coal, Shri Sriprakash Jaiswal and Minister of State (I/C) for Chemicals and Fertilizers, Statistics & PI, Shri Srikant Kumar Jena. On the occasion, Shri Srikant Kumar Jena said that today is a historic day for the country, in particular for the people of Odisha, as the Talcher Unit of FCIL is being revived by a consortium of RCF, CIL, GAIL & FCIL at an estimated cost of about Rs 8000 crore. He said that it is a unique project being setup on Coal Gasification for production of 1.2 million tonnes per annum (MTPA) Urea and Ammonium Nitrate. CIL shall supply about 5 million tons per annum of coal for this project.
Shri Jena informed that it has been decided to form two separate Joint Venture (JV) Companies for the proposed revival. JV-1 would take up upstream coal gasification and gas purification with GAIL having major stake. JV-2 would take up down-stream Urea-cum-Ammonium Nitrate Complex & Off-sites, including Power Plant & Coal Washery and will have major stakes of RCF & CIL with minor stake by FCIL & GAIL, the Minister added.
The pre-project activities for revival of Talcher project have already started. GAIL has already floated tender for pre-qualification of Coal-Gas Technology Supplier. RCF has also floated tender calling for LSTK bids for Ammonia - Urea plant. The project will not only reduce the dependence on imported urea but shall also utilize indigenously available feedstock. The project is expected to be commissioned by 2017.
Bharat Heavy Electricals (Bhel) turns ex-dividend today, 6 September 2013, for final dividend of Rs 3.29 per share for the year ended 31 March 2013.
BPCL turns ex-dividend today, 6 September 2013, for dividend of Rs 11 per share for the year ended 31 March 2013.
Coal India turns ex-dividend today, 6 September 2013, for final dividend of Rs 4.30 per share for the year ended 31 March 2013.
Key benchmark indices surged and the rupee rose against the dollar on Thursday, 5 September 2014 after the new central bank Governor Raghuram Rajan announced plans late on Wednesday, 4 September 2013 to bolster the financial industry and stabilize the rupee. The S&P BSE Sensex jumped 412.21 points or 2.22% to settle at 18,979.76 on that day, its highest closing level since 14 August 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1101.41 crore on Thursday, 5 September 2013, as per provisional data from the stock exchanges.
The Reserve Bank of India said on Thursday that it will release the next Mid-Quarter Review of Monetary Policy 2013-14 at 11.00 IST on 20 September 2013 instead of 18 September 2013 as indicated in the First Quarter Review of Monetary Policy 2013-14. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon.
Most Asian stocks gained on Friday, extending a six-day advance as investors await the monthly American jobs report later in the global day today, 6 September 2013. Key benchmark indices in China, Hong Kong, South Korea, and Singapore rose by 0.08% to 0.24%. Key benchmark indices in Indonesia, Japan and Taiwan shed by 0.08% to 1.18%.
Leaders of the world's biggest economies at a Group of 20 summit in Russia grappled with threats to the global economy as the effects of the Syrian conflict added to the fallout from a potential stimulus exit. The BRICS countries pledged yesterday in St. Petersburg to create a $100 billion pool of currency reserves to guard against shocks even as Russia said US President Barack Obama sought to ease concern about an abrupt pullback. Chinese and Italian officials warned that military intervention in Syria would risk harming the global economy. China will contribute $41 billion to a pool of BRICS reserves, with Russia, India and Brazil each adding $18 billion and South Africa providing $5 billion, according to a statement issued yesterday. The BRICS countries, which also agreed to seed a new development bank with $50 billion of capital, are seeking a shield against unintended negative spillovers from unconventional monetary policies in developed economies, according to the statement.
US stocks on Thursday climbed for a third consecutive session, with the Dow Jones Industrial Average posting its longest winning run since the middle of July, as investors looked to the government's monthly jobs report. Claims for US unemployment benefits declined by 9,000 to 323,000 in the week ended August 31, less than the estimates. Another report showed companies boosted employment by 176,000 workers in August, according to the ADP Research Institute.
The influential US nonfarm payroll report for August 2013 is due for release today, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. 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.
In Europe, European Central Bank indicated recent improvements in the euro zone's economy haven't been strong enough for a pullback from the bank's easy monetary policies. While the ECB's Governing Council left its benchmark lending rate unchanged at 0.5% at its meeting Thursday, ECB President Mario Draghi said policy makers had discussed lowering the rate. He also said inflation expectations are contained, which will give the central bank room to hold off on raising rates for some time.
The Bank of England also on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($585 billion). The minutes from the September 4 meeting will be published on September 18. The central bank has said it aims to keep rates low at least until the UK unemployment rate drops below 7%, which it doesn't expect will happen until 2016.
Daily News Roundup - Sep 6 2013
The Steel Authority of India (SAIL) has requested the Government to set up a dedicated institution to finance capacity expansion in the sector. (BL)
The embattled Financial Technologies Ltd, has sought shareholder approval to raise Rs10bn to fund its future growth opportunities. (BL)
The Central Electricity Regulatory Commission (CERC) has returned the recommendations submitted by a high-level panel headed by Deepak Parekh that proposed increasing tariff for imported coal-based thermal stations of Tata Power and Adani Power. (BL)
Tata Consultancy Services has pipped Infosys and Wipro to bag a Rs1.93bn contract for setting up and managing a new software platform for the Income Tax Department, it is reliably learned. (BL)
The Cabinet Committee on Economic Affairs had decided earlier to raise the price of domestic gas but the row on the issue still looks far from settled. In what could prove a setback for Reliance Industries Ltd (RIL), there is a proposal to deny it a higher price for gas produced from its D1 and D3 discoveries, if it is established the company artificially suppressed output in these fields. (BS)
Central Bank of India (CBOI) said it has raised interest rates on high value deposits by 50 basis points to 9.50 %. (ET)
Power Finance Corp has kick started the process of bidding two ultra mega Power projects by signing an agreement with states authorizing company to issue bid documents as approved by the government last week. (ET)
The consortium of Rashtriya Chemicals Fertilisers (RCF), GAIL, CIL and FCIL will invest Rs80bn for the revival of urea plant at Talcher in Orissa with production capacity of 1.2 mn tonnes per annum. (ET)
Rashtriya Ispat Nigam Ltd (RINL) plans to increase its steel exports to around 25 % of overall sales in coming years and has already created a separate division to focus on the same. (ET)
Bharti group Chairman Sunil Mittal said he has no intention of buying back around 4 % stake that UK-based Vodafone, which also operates in India, holds in his Bharti Airtel. (ET)
Hatsun Agro Product Ltd, the Rs20bn private dairy company, will focus on Hatsun branded curd and Ibaco chain of exclusive ice-cream parlours during the current year. (BL)
Economy Snippets
The Government is considering measures to clamp down on imports of sub-standard automobile components, primarily from China. The move could bring some relief to the domestic industry, which is struggling to cope with competition from cheap imports. (BL)
In a bid to attract foreign investments, the banking regulator has allowed banks to stand guarantee on behalf of non-residents acquiring shares or convertible debentures of an Indian company through open offers/delisting/exit offers without its prior approval.(BL)
BRICS (Brazil, Russia, India, China and South Africa) nations on agreed to set up a US$100-bn foreign currency reserve pool to counter the impact of a pull-out by foreign investors when the US Federal Reserve started tapering its quantitative easing programme.(BS)
The day after...Nifty ends above 5550
Its been just a day that the new RBI governor has taken charge and the effects are already showing. The measures announced by Dr. Raghuram Rajan to liberalise financial markets and the banking sector lifted the Nifty and Sensex to surge past the 5,550 and the 18,500 mark respectively.
The banking sector once again showed strong leadership. The index jumped 9% in a single trading session. Commenting on the same, Amar Ambani, Head of Research at IIFL said, "Banking stocks rallied on the back of measures announced by the new governor Raghuram Rajan to support the battered rupee and liberalize the Indian banking system. He indicated that RBI will take steps to reduce the statutory liquidity ratio and provide freedom to banks to open branches without prior permission. The Rupee appreciated and the 10-year bond yield receded in response to the announced measures".
The rally in the banks was seen even after Moody's Investors Service announced that it downgraded the subordinated debt (subdebt) and junior subordinated debt ratings of 11 Indian banks.
Among the other major gainers were, the realty index up 5.4%, consumer durables index up 4.5%, capital goods index 3.4% and FMCG index up 2.8%. Even the mid-cap and the small-cap index rose by 1.7% and 1.5% respectively.
In a bid to boost sentiment in the foreign exchange market, the Reserve Bank of India (RBI) has decided to offer banks a window to swap fresh foreign currency non-resident (banks) dollar funds. These are mobilised for a minimum tenor of three years and at a fixed rate of 3.5 % per annum.
The Rupee continued to show strength against the US Dollar and was trading around the Rs66.05 mark.
In another important development, the Lok Sabha passed the Pension Fund Regulatory & Development Authority (PFRDA) Bill, which seeks to give statutory powers to the interim regulator constituted by an executive order in 2003.
Finally, BSE Sensex closed at 18,979 up 412 points, while NSE Nifty closed at 5,592 up 144 points over the previous close.
The advance-decline ratio favoured the bulls. On the BSE, 1488 stocks advanced against 848 declining stocks, while 138 remained unchanged.
The INDIA VIX plunged 8% at 28.53. It hit a day’s high of 31.11 and low of 27.51.
Stocks in News
Axis Bank, Kotak Bank, SBI, ICICI Bank, Bank of Baroda, DLF, BHEL, HDFC Bank, IndusInd Bank, PNB and Coal India were among the top gainers in the Nifty. While, Sesa Goa, TCS, Infosys, Lupin, HCL Tech, GAIL and Ranbaxy were among the top losers in the Nifty.
Shares of Tata Motors gained by 1.5% to close at Rs316. The company announced that it is looking at launching the much-awaited diesel version of small car Nano in the current financial year.
Shares of IPCA Laboratories extended rally on Thursday after the company cleared US FDA inspection for its oral solid dosage formulations manufacturing facility situated at Pharmazone, SEZ Indore, Pithampur, Madhya Pradesh. The stock rose another 2% to close at Rs714 per share.
Conviction slowly sets in!
One needs to be slow to form convictions, but once formed they must be defended against the heaviest odds. - Mahatma Gandhi
Healthy global cues and the great hope in the new RBI governor have slowly begun to bring some conviction to the investors. The Rupee gained 1.6% to close at 66.01 against the dollar. The main indices too staged a smart upmove. The rally underway could be short-lived and extreme caution should be exercised.
The outlook is a bright start. The developments in Parliament will be eyed too. Dovish comments have come in from the European Central Bank. The situation in Syria will also be on top of investors’ minds. Syria will remain in focus at the G-20 conference in Russia which begins today. A resolution authorising use of military force in Syria by a vote of 10-7 was passed, clearing way for vote in the full senate next week.
Moody's has cut 11 India banks subdebt ratings on increased bail-in risk.
US stocks moved up on strong US economic data. The jobs numbers released by payroll processing firm ADP showed hiring continuing at a modest pace. The August jobs report for US is due today. This report is anxiously awaited following which speculation will begin again on whether the Federal Reserve will start tapering its bond purchase program.
The Dow Jones industrial average rose 6.61 points or 0.04 percent, to 14,937.48, the S&P 500 gained 2 points or 0.12 percent, to 1,655.08 and the Nasdaq Composite added 9.743 points or 0.27 percent, to 3,658.785.
Asian stocks are mixed. Japan's Nikkei was 1% down while Hong Kong's Hang Seng index gained almost a percent. South Korea's Kospi index is marginally higher and so is China's Shanghai index.
Trends in FII flows: The FIIs were net buyers of Rs11.01bn in the cash segment on Thursday, while the domestic institutional investors (DIIs) were net sellers of Rs4.92bn, as per the provisional figures released by the NSE.
The foreign funds were net buyers of Rs6.85bn in the cash segment on Wednesday, according to the SEBI figures.
AGMs: Aditya Birla Nuvo, Alembic, Kothari Sugars and Chemicals, Pfizer, Shree Ganesh Jewellery House (I), Sunbright Stock Broking, Super Spinning Mills, Take Solutions, Uniply Industries, Unity Infraprojects, Wyeth.
In other news in the media:
The Steel Authority of India (SAIL) has requested the Government to set up a dedicated institution to finance capacity expansion in the sector. (BL)
The embattled Financial Technologies Ltd, has sought shareholder approval to raise Rs10bn to fund its future growth opportunities. (BL)
The Central Electricity Regulatory Commission (CERC) has returned the recommendations submitted by a high-level panel headed by Deepak Parekh that proposed increasing tariff for imported coal-based thermal stations of Tata Power and Adani Power. (BL)
Tata Consultancy Services has pipped Infosys and Wipro to bag a Rs1.93bn contract for setting up and managing a new software platform for the Income Tax Department, it is reliably learned. (BL)
The Cabinet Committee on Economic Affairs had decided earlier to raise the price of domestic gas but the row on the issue still looks far from settled. In what could prove a setback for Reliance Industries Ltd (RIL), there is a proposal to deny it a higher price for gas produced from its D1 and D3 discoveries, if it is established the company artificially suppressed output in these fields. (BS)
Central Bank of India (CBOI) said it has raised interest rates on high value deposits by 50 basis points to 9.50 %. (ET)
Power Finance Corp has kick started the process of bidding two ultra mega Power projects by signing an agreement with states authorizing company to issue bid documents as approved by the government last week. (ET)
The consortium of Rashtriya Chemicals Fertilisers (RCF), GAIL, CIL and FCIL will invest Rs80bn for the revival of urea plant at Talcher in Orissa with production capacity of 1.2 mn tonnes per annum. (ET)
Rashtriya Ispat Nigam Ltd (RINL) plans to increase its steel exports to around 25 % of overall sales in coming years and has already created a separate division to focus on the same. (ET)
Bharti group Chairman Sunil Mittal said he has no intention of buying back around 4 % stake that UK-based Vodafone, which also operates in India, holds in his Bharti Airtel. (ET)
Hatsun Agro Product Ltd, the Rs20bn private dairy company, will focus on Hatsun branded curd and Ibaco chain of exclusive ice-cream parlours during the current year. (BL)
The Government is considering measures to clamp down on imports of sub-standard automobile components, primarily from China. The move could bring some relief to the domestic industry, which is struggling to cope with competition from cheap imports. (BL)
In a bid to attract foreign investments, the banking regulator has allowed banks to stand guarantee on behalf of non-residents acquiring shares or convertible debentures of an Indian company through open offers/delisting/exit offers without its prior approval.(BL)
BRICS (Brazil, Russia, India, China and South Africa) nations on agreed to set up a US$100-bn foreign currency reserve pool to counter the impact of a pull-out by foreign investors when the US Federal Reserve started tapering its quantitative easing programme.(BS)
Global Data Watch: G20 Meeting, Bank of Japan Monthly Economic Survey JPY, Coincident Index (Jul)Preliminar JPY, Leading Economic Index (Jul)Preliminar JPY, Current Account n.s.a. (Jul) EUR, Trade Balance s.a. (Jul) EUR, Exports (MoM) (Jul) EUR, Imports (MoM) (Jul) EUR, Budget (Jul) EUR, Consumer Confidence (Aug) EUR, Trade Balance EUR (Jul) EUR, Exports, EUR (Jul) EUR, Imports, EUR (Jul) EUR, Foreign Currency Reserves (Aug) CHF, Halifax House Prices (MoM) (Aug) GBP, Halifax House Prices (3m/YoY) (Aug) GBP, Consumer Price Index (MoM) (Aug) CHF, Consumer Price Index (YoY) (Aug) CHF, Industrial Production (YoY) (Q2) CHF, Industrial Production (QoQ) (Q2) CHF, Trade Balance non-EU (Jul) EUR, Consumer Inflation Expectations GBP, Industrial Production (MoM) (Jul) GBP, Industrial Production (YoY) (Jul) GBP, Manufacturing Production (MoM) (Jul) GBP, Manufacturing Production (YoY) (Jul) GBP, Total Trade Balance (Jul) GBP, Goods Trade Balance (Jul) GBP, Trade Balance; non-EU (Jul) GBP, Gross Domestic Product n.s.a (YoY) (Q2) EUR, Gross Domestic Product (QoQ) (Q2) EUR, Gross Domestic Product (YoY) (Q2) EUR, Industrial Production s.a. (MoM) (Jul) EUR, Industrial Production n.s.a. w.d.a. (YoY) (Jul) EUR, Global Trade Balance (Jul) EUR, Bank Loan Growth (Jul) INR, Fed's Evans Speech USD, Labor Productivity (QoQ) (Q2) CAD, Net Change in Employment (Aug) CAD, Participation rate (Aug) CAD, Average Hourly Earnings (MoM) (Aug) USD, Average Hourly Earnings (YoY) (Aug) USD, Average Weekly Hours (Aug) USD, Nonfarm Payrolls (Aug) USD, Unemployment Rate (Aug) USD, Unemployment Rate (Aug) CAD, Ivey Purchasing Managers Index (Aug) CAD, Ivey Purchasing Managers Index s.a (Aug) CAD, NIESR GDP Estimate (3M) (Aug) GBP, Fed's George Speech USD
Bank stocks soar on fresh measures by new RBI chief
Key benchmark indices surged and the rupee rose against the dollar after the new central bank Governor Raghuram Rajan announced plans late on Wednesday to bolster the financial industry and stabilize the rupee. The barometer index, S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled at over three-week high. The Sensex jumped 412.21 points or 2.22%, up 132.74 points from the day's low and off 137.76 points from the day's high. The market breadth, indicating the overall health of the market, was strong. The Sensex fell below the psychological 19,000 mark, after regaining that mark in early trade.
Indian stocks gained for the second straight day today, 5 September 2013. The Sensex has garnered 745.10 points or 4.09% in two trading days from a recent low of 18,234.66 on 3 September 2013. The Sensex has gained 360.04 points or 1.93% in September 2013 so far (till 5 September 2013). The Sensex has declined 446.95 points or 2.3% in calendar 2013 so far (till 5 September 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,463.86 points or 7.16%. From a 52-week low of 17,250.80 on 5 September 2012, the Sensex has risen 1,728.96 points or 10.02%.
Realty stocks jumped on renewed buying. IT stocks fell on profit booking as the rupee strengthened against the dollar. Bank stocks jumped after Rajan said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country and also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy. Axis Bank jumped after the bank said its total direct and indirect exposure to the National Spot Exchange (NSEL) is insignificant and that the bank has adequate collateral to back these exposures.
PSU OMCs rose on firm rupee and as crude oil prices traded near one-week low. Metal and mining stocks extended Wednesday's gains triggered by a private survey showing growth in China's services sector hitting five-month high in August. Auto and capital stocks also participated in the rally.
The market sentiment was also boosted after the Lok Sabha on Wednesday, 4 September 2013, passed the Pension Fund Regulatory and Development Authority (PFRDA) Bill 2011, an important economic legislation that will pave the way for foreign investment in the sector.
In the foreign exchange market, the rupee strengthened against the dollar after the new head of the central bank on Wednesday, 4 September 2013, announced fresh steps to stabilize the currency and sought to reassure investors. The partially convertible rupee was hovering at 66, sharply higher than its close of 67.065/075 on Wednesday, 4 September 2013. Banks can swap dollars raised from foreign-currency deposits by overseas Indians for rupees with the central bank an annual interest of 3.5%, Reserve Bank of India Governor Raghuram Rajan said late on Wednesday. The RBI also doubled what banks can raise through overseas bonds and allowed them to hedge those dollars at a special rate with the RBI.
The market sentiment was boosted by data showing that foreign funds were net buyers of Indian stocks on Wednesday, 4 September 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 107.60 crore from the secondary equity markets on Wednesday, 4 September 2013, as per data from Securities & Exchange Board of India.
The S&P BSE Sensex jumped 412.21 points or 2.22% to settle at 18,979.76, its highest closing level since 14 August 2013. The index spurted 549.97 points at the day's high of 19,117.52 in early trade. The index rose 273.47 points at the day's low of 18,847.02 in mid-afternoon trade.
The CNX Nifty surged 144.85 points or 2.66% to 5,592.95, its highest closing level since 14 August 2013. The index hit a high of 5,625.75 in intraday trade. The index hit a low of 5,552.70 in intraday trade.
The total turnover on BSE amounted to Rs 2056 crore, higher than Rs 1938.81 crore on Wednesday, 4 September 2013.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,488 shares rose and 848 shares fell. A total of 138 shares were unchanged.
The BSE Mid-Cap index rose 1.69% and the BSE Small-Cap index rose 1.52%. Both these indices underperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE Bankex (up 9.3%), the S&P BSE Realty index (up 5.41%), the S&P BSE Consumer Durables index (up 4.54%), the S&P BSE PSU index (up 4.5%), the S&P BSE Capital Goods index (up 3.48%), the S&P BSE FMCG index (up 2.78%), outperformed the Sensex.
The S&P BSE Oil & Gas index (up 2.02%), the S&P BSE Power index (up 1.74%), the S&P BSE Metal index (up 1.16%), the S&P BSE Auto index (up 0.85%), the S&P BSE Healthcare (down 0.22%), the S&P BSE Teck index (down 2.19%), the S&P BSE IT index (down 2.95%) underperformed the Sensex.
Among the 30-share Sensex pack, 21 stocks rose and rest of them fell.
Index heavyweight and cigarette maker ITC jumped 3.74%.
Reliance Industries rose 1.02% to Rs 858.
PSU OMCs rose on firm rupee and as crude oil prices traded near one-week low. HPCL (up 2.68%), BPCL (up 6.64%) and Indian Oil Corporation (up 6.94%) gained.
The firmness in rupee eased concerns about increasing costs of importing oil. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged. The recent sharp fall in rupee had heightened concerns about increased costs of importing oil.
US crude oil futures fell 1.21% at $107.23 per barrel on Wednesday.
In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals while completely deregulating diesel prices sold to institutional or bulk buyers. The government has already freed pricing of petrol.
Capital goods pivotals rose on renewed buying. Shares of L&T gained 4.08%.
Bhel surged 8.24%.
NTPC was down marginally by 0.04%. The stock turned ex-dividend today, 5 September 2013, for a total dividend of Rs 2 per share for the year ended 31 March 2013. This includes a special dividend of Rs 1.25 per share.
Rural Electrification Corporation (REC) rose 3.33% after the company said during market hours today, 5 September 2013, that REC Transmission Projects Company (RECTPCL) a 100% subsidiary of REC has transferred its wholly owned subsidiary, namely Kudgi Transmission (KTL) incorporated for development of Transmission System required for evacuation of power from Kudgi TPS (3 x 800 MW in Phase-I) of NTPC to L&T Infrastructure Development Projects, the successful bidder selected through Tariff Based Competitive Bidding Guidelines for Transmission services issued of Ministry of Power, Government of India. RECTPCL has received an acquisition price of Rs 15.19 crore from L&T Infrastructure Development Projects towards acquisition of KTL along with its all assets and liabilities.
GAIL (India) fell 1.54% as the stock turned ex-dividend today, 5 September 2013, for a final dividend of Rs 5.60 per share for the year ended 31 March 2013.
Power Grid Corporation of India shed 1.14%. The stock turned ex-dividend today, 5 September 2013, for a final dividend of Rs 1.14 per share for the year ended 31 March 2013.
Sadbhav Engineering rose 1.47% after the company said its step down subsidiary viz. Ahmedabad Ring Road Infrastructure (ARRIL), the special purpose vehicle incorporated for undertaking of improvement and widening of then existing 2 Lane Sardar Patel Ring Road around Ahmedabad City to 4 lane carriageway, has received sanction of Rs 632.90 crore including existing debt of Rs 379.90 crore towards securitization of the project. This means that the company has received sanction of additional facility over and above existing facility to the tune of Rs 253 crore out of securitization proceeds of surplus toll revenue of the project. Door to door tenure of the total facility including existing facility is for a period of 11 years and 9 months at interest rate of 11% per annum linked to base rate of Senior Lenders of the project facility. These proceeds will be used for part funding of ongoing BOT projects of the company. ARRIL is in the process of executing the financing documents with the lenders.
The project is on DBFOT (toll) basis with a concession period of 20 years including the construction period of 18 months with effect from 1 January 2007. Commercial Operation Date of the project was achieved on 31 May 2008.
Shares of state-run coal miner Coal India (CIL) jumped 7.02% to Rs 266.50 on reports that credit rating agency CRISIL has reaffirmed ratings on Coal India's bank facilities and short term debt program at AAA and A1+ respectively. CRISIL's corporate credit rating on CIL continue to reflect the strategic role that CIL plays in helping India meet its energy requirements. The ratings also factor in the company's near-monopoly status in India, healthy profitability levels, and strong financial risk profile. These rating strengths are partially offset by CIL's exposure to the influence of socio-political factors, to regulatory risks, and to constraints in the coal distribution and evacuation infrastructure in the coal mining industry in India.
CRISIL expects CIL to maintain its dominant market position in the domestic coal market and its healthy cash accruals and strong liquidity, over the medium term. The outlook may be revised to 'Negative' if CIL's market position deteriorates and its profitability declines significantly, most likely due to changes in India's coal policy.
Meanwhile, CIL has reportedly signed agreements to supply coal to 16 private power projects worth Rs 84500 crore with a generation capacity of over 14,000 megawatts. The coal ministry has expedited the signing of these pacts in view of the Centre's drive to revive investor sentiment by jumpstarting large stalled investments, reports suggest.
Union Minister of Coal Mr. Sriprakash Jaiswal said to the member of Parliamentary Consultative Committee attached to the Ministry of Coal today, 5 September 2013, that the Ministry of Coal is making concerted efforts to increase the availability of coal in the country. In spite of various constraints, Coal India has produced 31.67 million tonnes in the month of August 2013, registering a growth of about 11% over the corresponding period of the previous year. He said that during the period April-august, 2013, the cumulative coal production has been 167.32 million tonnes registering a growth of about 3% over the corresponding period of the previous year. The off-take to the power sector at 25.9 million tonnes in August 2013 from CIL indicates a growth of 5.5% over the corresponding period of the previous year. Similarly the cumulative off-take to the power sector during the period April-August 2013 at 140.6 million tonnes from CIL indicates a growth of 6.6% over the corresponding period of the previous year. Coal companies are putting their best of efforts in meeting the requirements of different sectors of the economy, he asserted.
Jaiswal said that the exploration is the critical activity in enhancing the coal reserve base. With the efforts of the various exploration agencies in the country, the geological coal resources have reached a level of 299 billion tonnes and lignite resources 43 billion tonnes. However, only about 41% of coal resources and 14% of lignite resources are in the proved category and remaining need to be brought into proved category. He said that the Government is laying emphasis to bring more and more area in proven category so that mining could be taken up in bigger way.
Auto stocks also participated in the rally. Tata Motors rose 1.37%. The company's total sales (including exports) of Tata commercial and passenger vehicles fell 30.93% to 49,611 units in August 2013 over August 2012. Total domestic sales fell 33.71% to 44,717 units in August 2013 over in August 2012. The company's sales from exports jumped 11.91% to 4,894 units in August 2013 over August 2012.
Ashok Leyland rose 1.97%. The company's total sales declined 24% to 7,139 units in August 2013 over August 2012. Ashok Leyland's sales of commercial vehicles excluding small commercial vehicle (SCV) Dost fell 25% to 4,939 units in August 2013 over August 2012. Sales of SCV Dost declined 22% to 2,200 units in August 2013 over August 2012.
Maruti Suzuki India gained 1.39%. The company's total sales spurted 61.2% to 87,323 units in August 2013 over August 2012. Domestic sales rose 51.6% to 76,018 units in August 2013 over August 2012. Exports spurted 180.9% to 11,306 units in August 2013 over August 2012.
Mahindra & Mahindra (M&M) fell 0.49%. The company's total auto sales declined 17% to 37,897 units in August 2013 over August 2012. M&M's sales of Passenger Vehicles segment (which includes the UVs and Verito) declined 28% to 15,821 units in August 2013 over August 2012. The company's domestic sales declined 18% to 35,159 units in August 2013 over August 2012. The sale of four-wheeler commercial segment which includes passenger and load vehicles fell 4% to 13,718 units while that of three-wheelers declined 14% to 5,149 units in August 2013 over August 2012. Exports declined 9% to 2,738 units in August 2013 over August 2012.
M&M's domestic tractor sales rose 9% to 12,394 units in August 2013 over August 2012. Export sales dropped 27% to 840 units in August 2013 over August 2012. Total tractor sales rose 7% to 13,234 units in August 2013 over August 2012.
Two-wheeler major Hero MotoCorp rose 0.74%.
Bajaj Auto gained 1.57%. The company's total sales fell 9% to 3.12 lakh units in August 2013 over August 2012. Motorcycle sales declined 8% to 2.78 lakh units in August 2013 over August 2012. Commercial vehicles sales declined 17% to 33,605 units in August 2013 over August 2012. Exports rose 10% to 1.44 lakh units in August 2013 over August 2012.
IT stocks fell on profit booking as the rupee strengthened against the dollar. IT stocks had surged recently on a sharp fall in rupee against the dollar. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
Infosys (down 3.41%) and Wipro (down 3.6%), edged lower.
HCL Technologies dropped 2.24%. The company after market hours on Wednesday, 4 September 2013, said that Direct Energy, a leading energy and energy services company in North America, has reached an agreement with the company to implement and manage its residential billing and customer care operations in the Alberta market. The underlying solution will leverage a variety of leading technologies, including multiple technologies from SAP. HCL will provide infrastructure hosting, application management and business process services.
Tata Consultancy Services (TCS) fell 3.48%. The company announced after market hours on Wednesday, 4 September 2013, that it has been selected by CTM, the leading telecom service provider in Macau, for a multi-year and multi-million agreement for an IT and business transformation project, whereby TCS will deploy a new convergent rating and billing system for CTM. Currently, CTM uses different billing systems for each of its corresponding telecom service. In order to meet its needs of next-generation integrated multimedia telecom services, CTM sought to implement an converged billing system to provide a more instantaneous response to market demands, hence further strengthening its market competitiveness. CTM chose TCS as its service partner to deliver its new convergent rating and billing system.
Bank stocks jumped after new Reserve Bank of India (RBI) chief Raghuram Rajan on Wednesday, 4 September 2013, said that RBI will shortly issue the necessary circular to completely free bank branching for domestic scheduled commercial banks in every part of the country and also said that there is need to reduce the requirement for banks to invest in government securities in a calibrated way so as to ensure the flow of credit to the productive sectors of the economy. Among PSU bank stocks, State Bank of India (up 9.65%), Bank of Baroda (up 8.54%), Canara Bank (up 7.57%), Union Bank of India (up 7.91%), Bank of India (up 5.93%) and Punjab National Bank (up 6.99%) edged higher.
Among private bank stocks, Yes Bank (up 21.55%), Kotak Mahindra Bank (up 9.26%), ICICI Bank (up 8.82%), Federal Bank jumped (up 12.38%), and HDFC Bank (up 7.8%), edged higher.
In an unexpectedly detailed and wide-ranging briefing, new RBI Governor Raghuram Rajan on Wednesday outlined plans to attract more funds from overseas by subsidising hedging costs for banks and making it easier for importers and exporters to hedge currency risk. He made clear his intention to liberalise markets, including pushing for more rupee trade settlement, introducing new financial products such as overnight interest rate swaps and removing curbs on opening new branches by Indian banks. Rajan, in his remarks, outlined the plan to attract more funds from non-resident Indians (NRIs) as part of a broader push to lure inflows. Under the plan, the central bank will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians. India has the world's second-biggest diaspora, according to the Ministry of Overseas India Affairs, and the country has turned to overseas Indians for help in past financial crises. The central bank will also offer forex swap into rupees at a concessional rate below market levels for banks who raise dollar funds through overseas borrowings.
Rajan said banks should gradually be allowed to decrease their mandatory holdings of government securities, which would free up capital for lending. He also said new bank licences should be awarded on an ongoing basis. The central bank is now in the process of awarding the first new bank licences in a decade. Rajan also proposed the issue of inflation-indexed bonds linked to the consumer price index, an indication that the central bank may soon shift its inflation benchmark from the wholesale price index. Rajan also pushed back the date of the RBI's next monetary policy review by two days to 20 September 2013. That will give the central bank more time to consider the outcome of what is expected to be a pivotal two-day meeting of the US Federal Reserve, ending on 18 September 2013
Axis Bank jumped 15.63% after the bank said its total direct and indirect exposure to the National Spot Exchange (NSEL) is insignificant and that the bank has adequate collateral to back these exposures. Axis Bank issued the clarification amid media reports that it and two other private sector banks viz. ICICI Bank and HDFC Bank have the highest exposure to NSEL.
Another trigger for the rally in the Axis Bank counter was the removal of restrictions by the Reserve Bank of India (RBI) on foreign institutional investors (FIIs) on buying shares of Axis Bank as the overall foreign share holding in Axis Bank fell below the prescribed limit of 49%. Foreign share holding in Axis Bank under the portfolio investment scheme have gone below the prescribed threshold limit stipulated under the extant FDI Policy, the RBI said in a statement. Hence, the restrictions placed on the purchase of shares of Axis Bank are withdrawn with immediate effect, the central bank said.
Total foreign holding in Axis Bank was 48.96% as at 30 June 2013, of which 40.70% was held by FIIs.
The NSEL had to shut down its operation since 1 August 2013 following the government direction in the wake of violation of certain rules. NSEL is grappling with the problem of payment settlement after the suspension. It has given eight-month plan to settle Rs 5574.31 crore to investors. NSEL is scheduled to make a payout every Tuesday for 30 weeks, ending in March 2014. Financial Technologies (India) is one of the two promoters of the NSEL.
Shares of Financial Technologies jumped 16.39%.
Metal and mining stocks extended Wednesday's gains triggered by a private survey showing growth in China's services sector hitting five-month high in August. China is the world's largest consumer of copper and aluminum. Jindal Steel & Power (up 0.16%), Hindustan Zinc (up 1.35%), NMDC (up %), Sail (up 0.63%), JSW Steel (up 4.08%), edged higher. But, Tata Steel fell 0.28%. Hindalco Industries slipped 0.92%.
Sesa Goa tumbled 6.58%, with the stock falling sharply in late trade. The stock was the biggest loser from the Sensex pack.
Ranbaxy Laboratories fell 1.58%. The company said during market hours today, 5 September 2013, that the company has completed 20 successful years in Russia. The company established its operations in the Russian market in 1993 with the launch of its key brand, Cifran. Since then, Ranbaxy has grown to become a number one player with a market share of 15.4% in the represented market segment in Russia (IMS, May 2013).
Idea Cellular lost 2.94%. The stock turned ex-dividend today, 5 September 2013, for a final dividend of 30 paise per share for the year ended 31 March 2013.
Realty stocks jumped on renewed buying. DLF (up 8.58%), Indiabulls Real Estate (up 7.53%), HDIL (up 9.55%), Unitech (up 3.34%), Godrej Properties (up 1.75%) and Parsvnath Developers (up 1.08%) gained.
Sobha Developers jumped 8.69% on bargain hunting after the stock tumbled 14.02% in the preceding four sessions to Rs 218.05 on Wednesday, 4 September 2013, from a recent high of Rs 253.60 on 29 August 2013.
The Lok Sabha on Wednesday passed the Pension Fund Regulatory and Development Authority (PFRDA) Bill 2011, an important economic legislation that will pave the way for foreign investment in the sector. The Bill allows 26% foreign investment in the Pension sector and gives statutory backing to the interim pension authority that had been functioning on executive authority for over a decade now. It also gives legal backing to the pensions regulator to create a social security architecture that channels savings of households into the financial sector. The PFRDA manages the New Pension System, a defined contribution scheme for the central government that many states have joined and is also now open to private individuals.
Global credit rating agency Moody's Investors Service on Wednesday, 4 September 2013, said that India's inflation and fiscal metrics remain weaker than peers. A higher subsidy burden and lower growth will weaken the country's fiscal metrics, analyst Atsi Sheth said in a presentation. The agency, however, said the country's current reserves can finance the current account and external debt payment needs. Moody's has an investment grade rating on India with a stable outlook.
European stock reversed initial decline on Thursday. Key benchmark indices in UK, France and Germany were up 0.35% to 0.55%.
The Bank of England on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($585 billion). The minutes from the September 4 meeting will be published on September 18. The central bank has said it aims to keep rates low at least until the UK unemployment rate drops below 7%, which it doesn't expect will happen until 2016.
Meanwhile, the ECB is also expected to leave monetary policy unchanged after a monthly review today, 5 September 2013.
Asian stocks rose on Thursday, 5 September 2013, following gains on Wall Street overnight. Key benchmark indices in Hong Kong, Japan, South Korea, Singapore and Taiwan rose by 0.08% to 1.22%. Key benchmark indices in Indonesia and China were down by 0.24% to 0.55%.
The Bank of Japan upgraded its assessment of the economy, saying a moderate recovery is underway, reinforcing Governor Haruhiko Kuroda's message that Japan can weather a sales-tax increase due in April. The central bank will expand the monetary base at an annual pace of 60 trillion yen ($602 billion) to 70 trillion yen, it said in Tokyo today, leaving policy unchanged.
Trading in US index futures indicated a flat opening of US stocks on Thursday, 5 September 2013. US stocks jumped on Wednesday after surging US auto sales pointed to robustness in the manufacturing sector. Federal Reserve data released overnight showed that the US economy grew at a "modest to moderate" pace in July and August, according to the central banks "beige book".
The influential US nonfarm payroll report for August 2013 is due for release tomorrow, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.
Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. 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.
Meanwhile, a summit of leaders from the Group of 20 major economies begins in St. Petersburg today, 5 September 2013. The meeting of leaders from the Group of 20 largest industrialized and developing nations in Russia is expected to be dominated by issues over Syria.
On Wednesday, US President Barack Obama reiterated the need for a global response on Syria as a US Senate panel approved a resolution authorising US military intervention. The Senate Foreign Relations Committee on Wednesday, in a 10-7 vote, approved a resolution allowing Obama to conduct military strikes against Syria. Obama is seeking full congressional approval for "limited" strikes in Syria. There are allegations that the Syrian government used chemical weapons against civilians late last month.
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