Market opens higher on positive Asian stocks

Key benchmark indices edged higher in early trade on positive Asian stocks. The S&P BSE Sensex was up 138.36 points or 0.74%, up 48.98 points from the day's low and off 24.29 points from the day's high. The market breadth, indicating the overall health of the market, was strong.

Bank pivotals were mostly lower after the Reserve Bank of India (RBI) on Thursday, 8 August 2013, announced fresh steps to drain cash from the banking system, as it stepped up efforts to stop the rupee's decline against the dollar. Pharma major Sun Pharmaceutical Industries (Sun Pharma) jumped after declaring Q1 result on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id. Another pharma firm Cipla gained after declaring Q1 result on Saturday, 10 August 2013.

Sterlite Industries (India) rose after the company after trading hours on Thursday, 8 August 2013, said the National Green Tribunal (NGT) has in its judgment upheld its interim order of 31 May 2013, and has allowed the company's Tuticorin Copper Smelter to continue to operate. ABB lost after reporting fall in Q1 net profit on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id. Aditya Birla Nuvo (ABNL) advanced after good Q1 result announced on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id.

Foreign institutional investors (FIIs) sold shares worth a net Rs 395.78 crore on Thursday, 8 August 2013, as per provisional data from the stock exchanges.

At 9:24 IST, the S&P BSE Sensex was up 138.36 points or 0.74% to 18,927.70. The index gained 162.65 points at the day's high of 18,951.99 in early trade. The index rose 89.38 points at the day's low of 18,878.72 in early trade.

The CNX Nifty was up 33.40 points or 0.6% to 5,599.05. The index hit a high of 5,610.65 in intraday trade. The index hit a low of 5,588.95 in intraday trade.

The market breadth, indicating the overall health of the market, was strong. On BSE, 606 shares gained and 211 shares fell. A total of 29 shares were unchanged.

The total turnover on BSE amounted to Rs 88 crore by 09:20 IST.

Among the 30-share Sensex pack, 21 stocks gained and rest of them declined.

ONGC rose 0.26% ahead of its Q1 June 2013 result today, 12 August 2013.

DLF rose 0.29% ahead of its Q1 June 2013 result today, 12 August 2013.

Bank pivotals were mostly lower after the Reserve Bank of India (RBI) on Thursday, 8 August 2013, announced fresh steps to drain cash from the banking system, as it stepped up efforts to stop the rupee's decline against the dollar.

ICICI Bank rose 1.08%. HDFC Bank fell 1.49%.

State Bank of India lost 1.93%. The state-run bank unveils its Q1 result today, 12 August 2013.

The RBI said it would sell Rs 22000-crore of short-term cash management bills every week on Monday. The sale is in addition to Rs 12000-crore of Treasury bills and Rs 15000-crore of sovereign bonds the government sells every week to fund its fiscal gap.

Sterlite Industries (India) rose 1.93%. The company after trading hours on Thursday, 8 August 2013, said the National Green Tribunal (NGT) has in its judgment upheld its interim order of 31 May 2013, and has allowed the company's Tuticorin Copper Smelter to continue to operate. "We welcome this judgment and shall implement all recommendations laid down by the NGT appointed Expert Committee in a time bound manner. We will work closely with the regulatory authorities and the government and will continue to ensure the highest environment standards at our operations," the company said in a statement.

Sun Pharmaceutical Industries (Sun Pharma) jumped 6.97%. The company reported consolidated net loss of Rs 1276.10 crore in Q1 June 2013, as against net profit of Rs 795.55 crore in Q1 June 2012. The result was announced on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id.

The net loss on consolidated basis during the quarter is on account of a provision of Rs 2517 crore towards settlement for patent infringement litigation related to generic versions of 'Protonix'. Recurring net profit jumped 56% to Rs 1241 crore in Q1 June 2013 over Q1 June 2012.

Sun Pharma's consolidated net sales grew 31% to Rs 3482 crore in Q1 June 2013 over Q1 June 2012. Adjusted for the impact of one-time sales recorded in the domestic business in Q4 March 2012, which lowered Q1 June 2012 sales, the net sales have grown by 23% year on year (YoY) in Q1 June 2013.

Branded generic sales in India grew 44% to Rs 849 crore in Q1 June 2013 over Q1 June 2012. Adjusted sales growth of the domestic formulation business during the quarter was 11%. US finished dosages sale in dollar terms rose 28% to $364 million in Q1 June 2013 over Q1 June 2012. International formulation sales grew 19% to $81 million.

Sun Pharma's consolidated earnings before interest, taxation, depreciation and amortization (EBITDA) surged 26% to Rs 1531 crore in Q1 June 2013 over Q1 June 2012. EBITDA margin was at 44%, lower than 46% reported in corresponding previous quarter.

Dilip Shanghvi, Managing Director, Sun Pharmaceutical Industries said: "All our businesses continue to perform in-line with our expectations. We remain focused on strengthening our existing businesses and developing a differentiated and specialty driven product basket. We also continue to review opportunities to expand and strengthen our global footprint".

Sun Pharma's consolidated R&D expense for Q1 June 2013 was Rs 205 crore, which is 6% of sales.

Cipla gained 3.06%. The company's net profit rose 18.5% to Rs 475 crore on 25.3% increase in gross revenues to Rs 2492 crore in Q1 June 2013 over Q1 June 2012. Operating margins grew by 24.8% to Rs 675 crore during the period under review. The result was announced on Saturday, 10 August 2013.

The company's material cost was at 40.8% of total sales in Q1 June 2013 as compared to 37.6% in Q1 June 2012.

The company's domestic revenue rose 16.7% to Rs 1132 crore in Q1 June 2013 over Q1 June 2012. The growth in domestic revenue was largely on account of growth in anti-asthma, anti-biotics/infectives, and cardiovascular therapy segments.

Exports of formulations jumped 27.7% to Rs 1034 crore in Q1 June 2013 over Q1 June 2012. Exports of Active Pharmaceutical Ingredients (APIs) fell 13.1% to Rs 146 crore in Q1 June 2013 over Q1 June 2012. The growth in export revenues was primarily due to growth in anti-retroviral, anti-asthma and anti-allergic segments, the company said.

TCS fell 1.19%. The company announced on Saturday, 10 August 2013, that it will set up a software development campus in Indore, Madhya Pradesh, with an investment of Rs 500 crore in two phases. The TCS Indore campus will be located in the SEZ Area allotted by the Madhya Pradesh state government. The world-class TCS campus will comprise software engineering blocks, training facilities, amphitheatre and other facilities to offer a holistic environment for knowledge professionals.

BPCL rose 0.33%. The company said on Saturday, 10 August 2013, that Bharat Petro Resources (BRPL), a wholly owned subsidiary of BPCL advises that Petrobras, operator of the block SEAL-M-426 in BM-SEAL-11 Concession, Brazil, has announced that it has discovered hydrocarbons during the drilling of the first appraisal well informally known as "Farfan 1", located in the concession area BM-SEAL-11, Block SEAL-M-426 in ultradeepwaters of the Sergipe Basin.

The results obtained in this well confirm the extension of the light oil reservoirs previously discovered in the Farfan discovery well within turbidite sandstones of Upper Calpanian age (Columbia Formation). The well is currently under drilling which will be followed by drill stem test (DST) to confirm the flow potential of the reservoir. The consortium plans to continue with the Discovery Assessment Plan, under approval by the Brazilian Regulatory Agency, ANP.

Petrobas is the operator of the concession BM-SEAL-11 with 60% interest in partnership with IBV Brazil (a 50:50 joint venture company, formed by wholly owned subsidiaries of Bharat PetroResources and Videocon Industries) holding the remaining 40%.

ABB lost 2.33%. The company's net profit fell 23.07% to Rs 40 crore on 7.42% decline in revenue to Rs 1720 crore in Q2 June 2013 over Q2 June 2012. The result was announced on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id.

ABB said that it continues to follow a policy of cash over revenue in its businesses to mitigate the credit risk in the market. Localized offerings also enabled the company to stay competitive in a tough economic environment. ABB said that savings from operational excellence initiatives and cost take out programs helped offset the impact of price pressures and the higher cost of working capital.

ABB's adjusted operational earnings before interest, taxation, depreciation and amortization (EBITDA) rose 27.58% to Rs 111 crore in Q2 June 2013 over Q2 June 2012. Adjusted EBITDA margin improved to 6.4% from 4.7% a year ago.

ABB's order intake declined 15.35% to Rs 1731 crore in Q2 June 2013 over Q2 June 2012, reflecting a challenging business environment as customers continue to exercise caution on large investments. ABB said it continues to focus on balancing its risks and returns.

ABB said that the company's thrust on exports and new business streams yielded results with export orders demonstrating clear growth over successive quarters. Orders from sectors such as renewable energy continued on their growth trajectory.

The company's order backlog stood at Rs 8235 crore as on 30 June 2013, as against Rs 9175 crore as on 30 June 2012.

Commenting on the company's Q2 results, Bazmi Hussain, MD, ABB said: "The economic environment is now increasingly depressed. Our multiple productivity and operational excellence initiatives are yielding results. We are confident that our broad portfolio, cost take out programs, localization initiatives and the ability to find new opportunities will give us pole position as market eventually revives".

Aditya Birla Nuvo (ABNL) advanced 2.56%. The company's consolidated net profit rose 24.16% to Rs 331.33 crore on 7.92% growth in revenue to Rs 5744.54 crore in Q1 June 2013 over Q1 June 2012. The result was announced on Friday, 9 August 2013, when the stock market was closed on account of Ramzan Id.

Industrial production is seen registering a decline of 1.5% in June 2013, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had registered a contraction of 1.6% in May 2013. The government will unveil industrial production data for June 2013 today, 12 August 2013.

Consumer price inflation is expected to ease a bit in July 2013. The combined consumer price index (CPI) for urban and rural India is expected to ease at 9.7% in July 2013, from 9.9% in June 2013, as per the median estimate of a poll of economists carried out by Capital Market. The government will also unveil the CPI data for July 2013 today, 12 August 2013.

Asian markets edged higher on Monday, 12 August 2013, after data showed that Chinese banks issued more credit than estimated in July 2013. Key benchmark indices in China, Hong Kong, Singapore, South Korea, Japan and Taiwan were up by 0.02% to 1.6%. Indonesia's Jakarta Composite fell 0.47%.

Japan's economy grew an annualized 2.6% in the April-June period, the Cabinet Officer reported Monday, cooling sharply from a rapid 4.1% gain in the first calendar quarter. On a seasonally adjusted quarterly basis, gross domestic product rose 0.6% from the first quarter's 0.9% increase.

US stock indexes declined Friday, with the Dow Jones Industrial Average halting its longest weekly winning streak since August of last year.

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.