Market spurts as world stocks rally on good economic data

Key benchmark indices edged higher in the week ended Friday, 8 March 2013 as world stocks rose on bullish economic data in the US and China, the world's no 1 and 2 economies. The barometer index, the 30-share S&P BSE Sensex, attained its highest closing level in more than 4-1/2 weeks. The 50-unit CNX Nifty attained its highest closing level in more than 4 weeks. Indian stocks gained in four out of five trading sessions in the week ended Friday, 8 March 2013. The BSE Mid-Cap and the BSE Small-Cap indices underperformed the Sensex during the week In the week ended Friday, 8 March 2013, the 30-share S&P BSE Sensex advanced 764.71 points or 4.04% to 19,683.23. The 50-unit CNX Nifty gained 226 points or 3.95% to 5,945.70. The S&P BSE Mid-Cap index gained 2.63% and the S&P BSE Small-Cap index advanced 2.23%. Both these indices underperformed the Sensex. Key benchmark indices edged lower in choppy trade on Monday, 4 March 2013 as weakness in global stocks dampened investor sentiment. The S&P BSE Sensex lost 40.56 points or 0.21% to 18,877.96, its lowest closing level since 28 February 2013. Key benchmark indices surged on Tuesday, 5 March 2013 after Finance Minister P. Chidambaram on Monday, 4 March 2013, said that the government will soon announce more measures to boost economic growth which will include sops for exporters. The S&P BSE Sensex was up 265.21 points or 1.4% to 19,143.17, its highest closing level since 27 February 2013. Key benchmark indices edged higher on Wednesday, 6 March 2013 as world stocks rose as a bullish report on the US service sector on Tuesday, 5 March 2013, fed into indications that the US economy is gradually improving. United States is the world's biggest economy. The S&P BSE Sensex jumped 109.44 points or 0.57% to 19,252.61, its highest closing level since 25 February 2013. Key benchmark indices surged on Thursday, 7 March 2013 as European stocks edged higher. The S&P BSE Sensex jumped 160.93 points or 0.84% to 19,413.54, its highest closing level since 20 February 2013. Key benchmark indices advanced on Friday, 8 March 2013 as upbeat Chinese exports data for February 2013 suggested increasing demand for Chinese goods and a rebound in the global economy. China is the world's second biggest economy after the United States. The S&P BSE Sensex was up 269.69 points or 1.39% to 19,683.23, its highest closing level since 4 February 2013. From 30-share Sensex pack, 27 stocks gained and only three of them declined in the week ended Friday, 8 March 2013. Hindustan Unilever (down 3.25%) and NTPC (down 0.43%) edged lower from the Sensex pack. Cipla (up 5.93%), Dr Reddy's Laboratories (up 4.74%) and HDFC (up 4.55%) edged higher from the Sensex pack. Index heavyweight Reliance Industries (RIL) edged higher after the telecom department on Thursday, 7 March 2013, cleared a proposal to allow companies with Internet permits to also offer basic mobile telecom services by paying a one-time license-conversion fee. The stock gained 5.13% at Rs 851. RIL's telecom unit, Reliance Jio Infocomm, has frequencies to provide broadband Internet across India. Under the new rule, RIL will have to pay about Rs 1658 crore to also provide voice services. The Finance Minister said in his speech while presenting the Union Budget 2013-14 on 28 February 2013 that the oil and gas exploration policy will be reviewed to move from profit sharing to revenue sharing contracts. The natural gas pricing policy will be reviewed and uncertainties regarding pricing will be removed. NELP blocks that were awarded but are stalled will be cleared. A policy to encourage exploration and production of shale gas will be announced. Index heavyweight and cigarette major ITC advanced 2.37% to Rs 297.80. The government raised the excise duty on cigarettes by about 18% on all cigarettes except cigarettes of length not exceeding 65 mm in Union Budget 2013-14 which was unveiled on Thursday, 28 February 2013. The Ministry of Health & Family Welfare has suggested to the Department of Revenue, Ministry of Finance to increase taxes on all tobacco products and also to impose 'sin tax' on tobacco products, the proceeds of which can be used for tobacco control. The Ministry of Health & Family Welfare, alongwith WHO Country Office for India, also organized a 'National Consultation on Economics of Tobacco' in December 2012. This information was given by Minister for Health & Family Welfare Shri Ghulam Nabi Azad in written reply to a question in the Lok Sabha on Friday, 8 March 2013. Metal stocks edged higher as global commodity prices rose. Sterlite Industries (India) (up 8.37%) and Hindalco Industries (up 2.22%) gained. Steel shares rose after the Minister of Steel, Mr. Beni Prasad Verma on Thursday, 7 March 2013, said that the Supreme Court has permitted some mines in Karnataka to reopen. Tata Steel (up 4.95%) and Jindal Steel & Power (up 2.34%) rose. In a written reply in the Rajya Sabha on Thursday, 7 March 2013, Verma said that some iron and steel companies and industry associations such as Karnataka Iron and Steel Manufacturer's Association had requested Ministry of Steel for intervention in reopening of iron ore mines in Karnataka, which had been closed as per orders of Supreme Court. He said that the Ministry of Steel has informed Supreme Court about the requirement of iron ore of iron and steel industry located in and around Karnataka. The matter was also taken up with the Government of Karnataka. Supreme Court has now permitted some mines in Karnataka to reopen, Verma said. Bank stocks advanced. ICICI Bank rose 7.79%. The private sector bank on 5 March 2013 said that it has received aggregate capital repatriation of $100 million from ICICI Bank UK PLC -- its wholly owned banking subsidiary in the United Kingdom. This comprises redemption of $50 million of preference share capital and return of $50 million of equity capital, after receiving requisite approvals. ICICI Bank UK PLC had a capital adequacy ratio of 31.5% as on 31 December 2012. Post the repatriation, the capital base of ICICI Bank UK is $495 million and its capital adequacy ratio continues to be strong, ICICI Bank said in a statement. ICICI Bank already has a strong capital adequacy ratio, and the above return of capital would further improve the same and enhance ICICI Bank's ability to optimise capital deployment and return on equity, ICICI Bank said. HDFC Bank gained 5.7%. The bank said on Thursday, 7 March 2013, that it has raised $500 million by way of Fixed Rate Senior Unsecured Notes (Notes) under its $1 billion Medium Term Note Programme on 6 March 2013. The Notes carry a coupon of 3% per annum payable semi annually and will mature on 6 March 2018. The Notes will be listed on the Singapore Stock Exchange, HDFC Bank said. PSU banking giant State Bank of India rose 5.49%. The Finance Minister on 28 February 2013 said that the government will provide Rs 14000 crore for capital infusion in public sector banks in FY 2014. In Union Budget 2013-14 announced on 28 February 2013, the finance minister (FM) set a target of Rs 7 lakh crore for agricultural credit in FY 2014. He said that the target of Rs 5.75 lakh crore fixed for 2012-13 is likely to be exceeded. The FM said that the interest subvention scheme for short-term crop loans will be continued and a farmer who repays the loan on time will be able to get credit at 4% per annum. The FM proposed to extend the scheme to crop loans borrowed from private sector scheduled commercial banks in respect of loans given within the service area of the branch concerned. So far, the scheme has been applied to loans extended by public sector banks, RRBs and cooperative banks. L&T surged 6.86%. The company during trading hours on Friday, 8 March 2013, said that its strategic business unit viz. L&T Integrated Engineering Services (L&T IES) recently inaugurated its offshore development centre (ODC) for Calsonic Kansei (CK) at Chennai. This partnership initiative called Calsonic Kansei Engineering Centre India-L&T (CECI-L&T) will extend CK's presence in India by replicating their engineering function to support project development, L&T said in a statement. Over the initial phase of five years, CECI-L&T will focus on expansion and optimisation of activities in this facility. L&T IES' partnership with CK is an enablement of business opportunity in the southern capital of India, giving an immediate prospect for a geographical uplift, L&T said. This strategic initiative will focus closely to support CK's Indian customers. L&T IES will facilitate the ODC with test labs and advance functional areas over the period of time. L&T IES' bilingual engineers are the mainstay feature of this project, L&T said. The progress made in a short span of time has been impressive to establish core function teams at CECI-L&T, including design and analysis, material research, supplier localization and global process standardization, L&T said in a statement. L&T after trading hours on Thursday, 7 March 2013, said that the company as a licensee of CMI Energy, Belgium, has signed an agreement with CMI Energy, Belgium for extension of L&T's license territory to manufacture and supply small heat recovery steam generators (HRSGs) installed behind gas turbines below 80 megawatts (MW) to South East Asia and the Middle East. Under this agreement, L&T will have the exclusive rights to apply CMI technology in these markets for manufacturing and supplying single wide HRSGs installed behind gas turbines below 80 MW. L&T and CMI Energy will jointly develop/improve the existing CMI design to suit the client requirements in the extended territory. This will allow CMI and L&T to improve their competitiveness in the regions, L&T said. HRSGs are used widely in combined cycle power plants and cogeneration applications in process industry. Over the past decade, the market for small HRSGs represents 24% share in terms of number of units sold worldwide, L&T said. This market is poised to grow by 3.5% per year over the next decade, L&T said. CMI Energy and L&T intend to be the key players in this market by attracting a minimum 10% market share, L&T said in a statement. IT stocks rose on positive economic data in the United States, the biggest outsourcing market for the Indian IT firms. TCS rose 5.64% to Rs 1,584.15. The stock had hit record high of Rs 1,598 in intraday trade Thursday, 7 March 2013. The company on 4 March 2013 said that it has added $1.179 billion in brand value over 2012, growing by 28.9% annually to reach the $5 billion brand value mark as per the brand valuation carried out by Brand Finance, the world's leading brand valuation firm. India's third largest software services exporter by revenues Wipro rose 5.66% to Rs 445.05. The stock hit a 52-week high of Rs 455.80 in intraday trade on Friday, 8 March 2013. Infosys gained 2.12% to Rs 2,970.20. The stock had hit 52-week high of Rs 3,009.90 in intraday trade on Thursday, 7 March 2013. The company on Thursday, 7 March 2013, said that Accor, the world's leading hotel operator and market leader in Europe, has deployed the Infosys' CommerceEdge platform to provide its customers with a social travel shopping experience. Auto stocks were mostly higher. Maruti Suzuki India rose 0.25%. Reportedly the company will suspend production of petrol cars at its factory in Gurgaon in Haryana for one day on Saturday, 9 March 2013, to reduce its stock pile. India's No. 1 car maker by sales produces between 3,000 and 3,200 vehicles a day including its best-selling Alto hatchback at the Gurgaon factor. Besides the Alto, Maruti makes the WagonR, Estilo and the Ritz hatchbacks as well as the Ertiga utility vehicle and minivans at the Gurgaon factory. Mahindra & Mahindra (M&M) rose 1.78%. The company said before market hours on Friday, 8 March 2013, that the tool down strike by employees of the company's Nashik plant which started on 5 March 2013 as well as the proposed strike from 11 March 2013 has been called off. Operation in all shifts is expected to be normal soon, M&M said in a statement. The management and union will continue their ongoing dialogue so as to reach a mutual agreement, M&M said. The management expects the production loss to be made good, M&M said. Tata Motors rose 5.23%. Tata Motors on Wednesday, 6 March 2013, announced a scheme whereby customers can swipe their credit card and drive out in a Tata Nano on the same day. Making the offer irresistible, customers can also convert the entire amount in monthly installments at 0% interest, over a period of 12 months, at an EMI of Rs 8,333 per lakh, Tata Motors said in a statement on 6 March 2013. Mr. Ranjit Yadav, President, Passenger Vehicles Business Unit, Tata Motors, said that this offer will enable customers to own a car in the fastest and hassle free manner. Tata Nano has partnered with five banks -- Axis Bank, HSBC Bank, ICICI Bank, Kotak Mahindra Bank and Standard Chartered Bank -- for this special scheme. Customers in India, who have credit cards belonging to these banks, can avail of this special scheme in 26 cities, across 75 Tata Motors Dealerships, Tata Motors said in a statement. Jaguar Land Rover (JLR), the UK's largest premium automotive manufacturer, on 5 March 2013 said it will reinforce its commitment to manufacturing in the UK by increasing the investment in its new Engine Manufacturing Centre to more than £500 million. In addition, JLR will invest £2.75 billion in product creation in 2013 to support its ambitious growth plans that will see the business introduce eight new or refreshed products during the year, JLR said in a statement. JLR's new Engine Manufacturing Centre in the UK is essential to support the company's long-term strategic growth plans and will be the home for a new generation of technologically advanced, lightweight 4-cylinder low emission diesel and petrol engines, the company said. The new Engine Manufacturing Centre will open later this year with the first engines coming off the production line in 2015. Tata Motors on 5 March 2013 said it has reduced the Tata Manza Club Class prices and the Manza range now starts at Rs 5.99 lakh (ex-showroom in New Delhi). The company also announced 'Club Class Buyback Assurance', scheme. With the Club Class Buyback Assurance, Tata Motors offers its customers 60% of the purchase price after 3 years, Tata Motors said. Two wheeler makers were mixed. Hero MotoCorp gained 5.88%. Hero MotoCorp on 1 March 2013 said total sales declined 4.23% to 5.01 lakh units in February 2013 over February 2012. Hero MotoCorp's scooters -- Pleasure and Maestro -- clocked close to 54,000 unit sales in February 2013. The company is now scaling up its scooter production to over 60,000 units a month. Bajaj Auto fell 0.32%. The company on 4 March 2013 said its total sales fell 3% to 3.32 lakh units in February 2013 over February 2012. Motorcycles sales fell 4% to 2.91 lakh units February 2013 over February 2012. Sales of three wheelers declined 2% to 41,090 units in February 2013 over February 2012. The company's total exports rose 10% to 1.35 lakh units in February 2013 over February 2012. The Reserve Bank of India (RBI) on 5 March 2013 said that companies which are being investigated by law enforcement agencies no longer need to get its approval to raise money overseas. Previously, companies being investigated by the Directorate of Enforcement, for instance, needed to get their external commercial borrowing proposals cleared by the RBI. Finance Minister P. Chidambaram on Monday, 4 March 2013, said that the government will soon announce more measures -- including sops for exporters -- to boost economic growth. Some of these steps will be announced in parliament during the debate on the Budget, Chidambaram told industry representatives at a customary address held on Monday, 4 March 2013, after the budget announcement on 28 February 2013. The finance minister said that the fiscal deficit could turn out to be lower than the projected 5.2% of gross domestic product for the current fiscal year ending 31 March 2013. The government aims to reduce the fiscal deficit to 4.8% of GDP in the year ending 31 March 2014. Globally, the European Central Bank (ECB) kept interest rates steady on Thursday, 7 March 2013. At its monthly policy meeting, the ECB held its main refinancing rate at a record-low 0.75%. ECB cut its forecasts for the euro zone economy for this year and next but kept its forecasts for inflation broadly unchanged. In a new outlook given after its monthly policy meeting, the ECB foresaw gross domestic product (GDP) declining by between 0.9% and 0.1% in 2013, lowering the top end of the forecast which had held out some hope of growth this year. It also cut its forecast for growth next year to 0% and 2% from between 0.2% and 2.2% in its previous forecast. The Bank of England decided to keep its benchmark interest rate unchanged on Thursday, 7 March 2013, amid doubts about the strength of Britain's economic recovery. The central bank left its interest rate at 0.5%, a record low, and also held its program of economic stimulus unchanged at £375 billion, or about $560 billion. Trade data out from China on Friday, 8 March 2013, showed that the country recorded a surprise $15.3 billion trade surplus in February 2013, confounding expectations the economy would swing to a trade deficit due to seasonal weakness from the weeklong Chinese Lunar New Year holiday last month. February's exports were 21.8% higher than a year earlier, when the Lunar New Year fell in January, while imports were 15.2% lower than the year-earlier month. Japan's economy pulled out of its 2012 downturn faster than previously estimated, according to revised GDP data released on Friday, 8 March 2013, providing a tailwind to the government's pro-growth policies. The government said GDP rose at a price-adjusted 0.2% in annualized terms in the fourth quarter, up from the previous reading of a 0.4% contraction. That follows annualized declines in the April-June and July-September periods. The revision was due largely to a smaller drop in corporate capital expenditures than initially reported, as well as to a small increase in private consumption. Other data released on Friday, 8 March 2013, showed the third straight month of shortfall in Japan's current account as the country's trade balance deteriorated. The current account deficit came to 364.8 billion yen in January 2013 before seasonal adjustments, the government said, after a 264.1 billion yen deficit in December 2012. The current account is the broadest measure of what Japan earns from trade and cross-border investment. On Tuesday, 5 March 2013, a bullish survey on the service sector fed into indications that the US economy is gradually improving. The Institute for Supply Management's non-manufacturing index, which covers about 90 percent of the US economy, increased to 56 last month from 55.2 in January. Readings above 50 signal expansion.