Sensex, Nifty attain over 3-1/2-week closing high

Key benchmark indices edged higher after the Reserve Bank of India after trading hours on Tuesday, 18 February 2014, said it will conduct term repo auctions in March 2014 to address liquidity tightness in the banking system. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, settled at their highest level in more than 3-1/2 weeks. The Sensex garnered 88.76 points or 0.43%, off 27.55 points from the day's high and up 93.41 points from the day's low. The market breadth, indicating the overall health of the market was positive. The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Tuesday, 18 February 2014.

Indian stocks edged higher for the fourth day in a row today, 19 February 2014. The Sensex has garnered 529.62 points or 2.62% in four sessions from a recent low of 20,193.35 on 13 February 2014. The Sensex has risen 209.12 points or 1.01% in this month so far (till 19 February 2014). The Sensex has declined 447.71 points or 2.11% so far in calendar 2014 (till 19 February 2014). From a record high of 21,483.74 on 9 December 2013, the Sensex has declined 760.77 points or 3.54%. From a 52-week low of 17,448.71 on 28 August 2013, the Sensex has risen 3,274.26 points or 18.76%.

Coming back to today's trade, pharma stocks rose on renewed buying. Sun Pharmaceutical Industries rose on reports the company has received approval from the US Food and Drug Administration to sell a drug to treat Osteoporosis. IT stocks rose on continued optimism about US business.

The market edged higher amid initial volatility. The Sensex pared gains after hitting fresh intraday high in morning trade. The Sensex and the 50-unit CNX Nifty, both, hit 3-week high. Key benchmark indices moved in a narrow range in positive zone in early afternoon trade. A bout of volatility was witnessed as key benchmark indices trimmed gains after hitting fresh intraday high in afternoon trade. Key benchmark indices retained positive zone in mid-afternoon trade. The Sensex extended gains in late trade.

The market sentiment was boosted by data showing that foreign funds remained buyers of Indian stocks on Tuesday, 18 February 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 292.23 crore on Tuesday, 18 February 2014, as per provisional data from the stock exchanges.

The S&P BSE Sensex garnered 88.76 points or 0.43% to settle at 20,722.97, its highest closing level since 24 January 2014. The index jumped 116.31 points at the day's high of 20,750.52 in late trade. The index fell 4.65 points at the day's low of 20,629.56 in early trade.

The CNX Nifty garnered 25.65 points or 0.42% to settle at 6,152.75, its highest closing level since 24 January 2014. The index hit a high of 6,160.35 in intraday trade. The index hit a low of 6,125.75 in intraday trade.

The BSE Mid-Cap index rose 31.48 points or 0.5% to settle at 6,376.94. The BSE Small-Cap index rose 41.48 points or 0.66% to settle at 6,372.20. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 1668 crore, lower than Rs 1936.97 crore on Tuesday, 18 February 2014.

The market breadth, indicating the overall health of the market was positive. On BSE, 1,459 shares rose and 1,215 shares fell. A total of 155 shares were unchanged.

The S&P BSE IT index (up 1.48%), the S&P BSE Teck index (up 1.22%), the S&P BSE Healthcare index (up 1.17%), the S&P BSE Consumer Durables index (up 1.11%), the S&P BSE Capital Goods index (up 1.04%) outperformed the Sensex.

The S&P BSE Realty index (up 0.43%) matched the Sensex's rise.

The S&P BSE Bankex (up 0.29%), the S&P BSE Oil & Gas index (up 0.29%), the S&P BSE Auto index (down 0.09%), the S&P BSE FMCG index (down 0.18%), the S&P BSE Power index (down 0.41%) and the S&P BSE Metal index (down 1.06%) underperformed the Sensex.

Among the 30-share Sensex pack, 16 stocks rose and rest fell. ONGC (up 0.6%), HDFC (up 0.36%) and GAIL (India) (up 0.8%) edged higher from the Sensex pack.

Tata Power Company (down 2.59%), NTPC (down 1.38%) and Hindustan Unilever (down 0.64%) edged lower from the Sensex pack.

Index heavyweight and cigarette major ITC shed 0.14% at Rs 316.95. The stock hit a high of Rs 318.75 and low of Rs 316.25.

Index heavyweight Reliance Industries (RIL) rose 0.15% at Rs 814. The scrip hit high of Rs 819.95 and low of Rs 810.50.

PSU OMCs reversed intraday fall in volatile trade. HPCL (up 0.29%) and Indian Oil Corporation (up 1.66%) gained. BPCL fell 0.76%.

The under-recovery on High Speed Diesel (HSD) applicable for the second fortnight of February 2014, effective from 16 February 2014, has risen to Rs 8.31 per litre, from Rs 7.39 per litre during first fortnight of February 2014. PSU OMCs are currently incurring combined daily under-recovery of about Rs 456 crore on the sale of Diesel, PDS Kerosene and Domestic LPG at government controlled prices. This is higher than Rs 446 crore daily under-recoveries for the first fortnight of February 2014.

PSU OMCs reported a total of Rs 100632 crore as under-recoveries during first nine months of 2013-14 (April-December 2013) on Diesel, PDS Kerosene, Domestic LPG.

In the interim budget announced on Monday, 17 February 2014, Finance Minister P. Chidambaram provided Rs 65000 crore for fuel subsidy for 2014-15. The government, this year, absorbed the rollover of Rs 45000 crore from the fourth quarter of 2012-13 and it will rollover only Rs 35000 crore from the fourth quarter of this year into the next year, Chidambaram said in the budget speech on Monday, 17 February 2014.

Capital goods stocks rose for the third day in a row after the government announced reduction in excise duty on some capital goods to 10% from 12% in the interim budget on Monday, 17 February 2014. Siemens (up 1.69%), Bharat Heavy Electricals (Bhel) (up 0.57%), Thermax (up 3.92%) and L&T (up 0.85%) gained. The excise duty has been cut from 12% to 10% for a period up to 30 June 2014 for capital goods and consumer durable falling under chapter 84 and chapter 85 of the Schedule to the Central Excise Tariff Act. The chapter 84/85 includes products like boiler, turbine, transformers, motors, air conditioners, toaster, oven, switches, switchgears etc.

ABB India rose 1.25%, with the stock extending Tuesday's rally triggered by the company's strong Q4 December 2013 earnings. The result was announced during market hours on Tuesday, 18 February 2014. Shares of ABB India had surged 12.80% to settle at Rs 666.65 on that day. ABB India's net profit surged 249.37% to Rs 58.59 crore on 5.72% rise in total income to Rs 2204.56 crore in Q4 December 2013 over Q4 December 2012.

The company said it generated a healthy operating cash flow in the midst of a tight liquidity in the market.

The company received orders worth Rs 1666 crore in Q4 December 2013, which was higher than the order intake of Rs 1579 crore in the corresponding quarter of the previous year. The order intake for the full year 2013 stood at Rs 6717 crore. Base orders from a wider spectrum of customers helped offset dearth of large projects in the market, ABB India said in a statement on Tuesday. The company said its exports grew, annulling the effect of a contraction in the domestic market opportunities. The company continued to tap sectors like renewable energy, data center, railways, grid stability, mining, oil and gas that look increasingly promising, the company said in a statement.

The company said it is well positioned with an order backlog of Rs 7709 crore as on 31 December 2013, providing necessary visibility to future revenue.

Power Grid Corporation of India declined 0.99%. Rural Electrification Corporation gained 0.52%. Rural Electrification Corporation said during market hours that the Ministry of Power (MoP), Government of India, vide its letter dated 8 October 2012 had appointed REC Transmission Projects Company (RECTPCL) -- a wholly owned subsidiary of REC -- as the Bid Process Coordinator for the purpose of selection of bidder as Transmission Service Provider to establish "Transmission System for ATS of Unchahar TPS", through Tariff Based Competitive Bidding Process. Accordingly, RECTPCL formed a project specific Special Purpose Vehicle (SPV) namely Unchahar Transmission (UTL), as its wholly owned subsidiary company, with authorized and paid up capital of Rs 5 lakh, divided into 50,000 equity shares of Rs 10 each. In response to the Request for Proposal (RfP) for this project, RECTPCL received Financial Bids and based on the recommendations of the Bid Evaluation Committee (BEC), the Board of Directors of RECTPCL in its 44th Meeting held on February 12, 2014 approved the name of M/s Power Grid Corporation of India Limited as successful Bidder for issuance of Letter of Intent (Lol) for establishment of "Transmission System for ATS of Unchahar TPS".

Further, in terms of Section 4 (1) (c) of the Companies Act, 1956, UTL being also a subsidiary company of REC, the board of directors of REC in its 401st meeting held on 14 February 2014 has approved the sale and transfer of 50,000 equity shares of Unchahar Transmission, presently held by RECTPCL and its nominees, to Power Grid Corporation of India and their nominees, substantially upon the terms & conditions of the Share Purchase Agreement to be executed between the RECTPCL, UTL and Power Grid Corporation of India for establishment of "Transmission System for ATS of Unchahar TPS", subject to obtaining necessary approval from the Ministry of Power, Government of India.

NHPC gained 0.56% after the company said after market hours on Tuesday, 18 February 2014, that Unit-1 of Parbati-III H.E. Project has been synchronized at 15:50 IST on 17 February 2014.

Alstom India rose 2.45%. The company said at the fag end of trading hours on Tuesday, 18 February 2014, said that it has been awarded a contract by NTPC to provide the Flue Gas Desulphurisation (FGD) system for its 500 megawatts (MW) Vindyachal super thermal power plant in Madhya Pradesh. This project will be the first full scope limestone based FGD for a 500 MW plant in India and the fourth FGD project installation for Alstorn in the country, the company said in a statement. The contract is valued at close to 25 million euros, it said.

The scope of the contract includes delivery of the wet limestone based FGD system for the lx500 MW pulverised coal-fired boiler unit on full turnkey basis including designing, engineering, manufacturing, testing, civil works, erection and commissioning, Alstom India said in a statement.

Patrick Ledermann, Managing Director & Vice Chairman, Alstom India, said: "As the first full scope turnkey Lime Stone based FGD project in India, this project will be a benchmark installation in India. The FGD will have SO2 removal efficiency of more than 90% which further reaffirms our commitment towards providing clean power solutions and our growing footprint in air quality control systems".

Kalpataru Power Transmission rose by maximum permissible level of 20% to Rs 90.90. On BSE, 3.67 lakh shares were traded in the counter as against an average daily volume of 40,852 shares in the past one quarter.

Pharma stocks rose on renewed buying. Cipla (up 0.44%), Dr. Reddy's Laboratories (up 1.02%), and Lupin (up 2.41%), gained.

Ranbaxy Laboratories rose 2.69%. The New York Attorney General and the US units of Ranbaxy Laboratories and Teva Pharmaceutical Industries have reportedly settled claims that an agreement between the two drugmakers unlawfully restricted competition. Under the terms of the settlement, the two generic drug makers will end a 2010 agreement of not challenging each other's rights to sell certain drugs exclusively in the United States. Teva and Ranbaxy will pay the New York state $300,000 and have agreed to refrain from similar agreements in the future.

Sun Pharmaceutical Industries rose 2.21% on reports the company received US Food and Drug Administration approval to sell a drug to treat Osteoporosis. Currently the drug, Ibandronate Sodium, is marketed by Roche under the brand name Bovina. Ibandronate Sodium is indicated in the treatment of osteoporosis, a bone-weakening disease, in postmenopausal women.

According to reports, Sun Pharmaceutical Industries (Sun Pharma) is currently the only generic player to have final approval for this product. Bovina generated an annual sales of $82 million in 2012, reports said. More players would be able to sell the drug after its patent expiry on 2 September 2014, reports added.

IT stocks rose on continued optimism about US business. US is the biggest outsourcing market for Indian IT firms. Wipro (up 1.97%), TCS (up 2.01%), HCL Technologies (up 0.56%) and Infosys (up 2.12%) edged higher.

NIIT Technologies gained 2.8% to Rs 435.65 after hitting a record high of Rs 438.70 in intraday trade today, 19 February 2014.

Tata Elxsi advanced 3.13% to Rs 494.90 after hitting a record high of Rs 503 in intraday trade today, 19 February 2014.

Financial Technologies (India) rose by maximum permissible 5% upper limit on BSE on a media report that Tech Mahindra has shown interest in buying a sizeable equity stake in the company. According to the media report, Tech Mahindra has hired consultants to carry out a due diligence of Financial Technologies (India) (FTIL). However, the report suggested that it is uncertain whether the ongoing negotiations will translate into a deal.

According to preliminary discussions, Tech Mahindra will subscribe to preferential shares issued by FTIL as well as buy a part of the equity stake controlled by its promoters, the report added.

As on 31 December 2013, promoters held 45.63% stake in FTIL.

Shares of Tech Mahindra rose 1.19%. Tech Mahindra after market hours said that the news report of Tech Mahindra and Financial Technologies (India) coming close on deal talks is speculative in nature.

Bharti Airtel rose 0.26%. The company said during market hours that it has crossed the 200 million mobile subscribers mark in India, further consolidating its leadership position in the world's second largest mobile market. Airtel is the largest telecom operator in India, both in terms of customers and revenues. The company ranks as the fourth largest mobile operator in the world in terms of subscribers.

Gopal Vittal, Joint MD & CEO (India), Bharti Airtel said: "We are delighted to have reached this major milestone. It is gratifying to see the trust our customers have reposed in our brand and it will be our endeavor to continue delighting them with innovative and world-class services. We will also continue to invest towards building a robust data network of the future and be at the forefront of India's mobile broadband revolution".

Airtel has the largest bouquet of mobile services for customers in India, including 2G, 3G, 4G, Mobile Commerce and other Value Added Services. Its distribution channel is spread across 1.5 million outlets, with network presence in 5,121 census and 460,655 non-census towns and villages in India covering approximately 86.7% of the country's population. Airtel has the largest rural mobile customer base in India with over 88 million mobile customers (from rural markets).

Airtel has India's widest 3G footprint, offering customers high-speed internet access and a host of innovative services like Mobile TV, video calls, live-streaming videos and gaming. Airtel is the only mobile operator in India to offer 4G services using TD-LTE technology, providing customers the fastest wireless services with buffer-less HD video streaming and multi-tasking capabilities.

Airtel launched its mobile operations in India in 1995. Since then it has been at the forefront of India's mobile revolution that has empowered millions across the length and breadth of the country, Bharti Airtel said in a statement.

Hero MotorCorp lost 1.65% after the company said after market hours on Tuesday, 18 February 2014, that the company has decided to pass on the entire benefit of the excise duty reduction to customers. Hero MotorCorp said it has judiciously spread out the price cut across the product portfolio ranging from 2% going up to 5% with the maximum reduction being Rs 4,500 per unit. The government reduced excise duty on two-wheelers to 8% from 12% for a period up to 30 June 2014 in the Interim Budget for 2014-15 announced early this week.

Shares of other two wheeler companies were mixed. Bajaj Auto fell 1.15%. TVS Motor Company rose 0.55%.

Ashok Leyland gained 2.28%. The company after market hours on Tuesday, 18 February 2014, said it is exploring various options to cut down its debt and has also gone on press about its intention to divest non-core assets in this regard. One of the identified non-core asset that is being looked at for sale will be a property situated in the Boat Club Area in Chennai. As of now the company has not sold the property.

Metal shares dropped. Sesa Sterlite (down 1.82%), Steel Authority of India (Sail) (down 0.5%), NMDC (down 0.69%), Hindalco Industries (down 0.65%), Hindustan Zinc (down 0.5%), Tata Steel (down 1.16%) declined. National Aluminum Company (up 0.15%) and JSW Steel (up 0.05%) rose.

Jindal Steel & Power (JSPL) lost 2.93%. JSPL's buyback programme ended on Tuesday, 18 February 2014, as per the company's announcement this month.

Ess Dee Aluminium jumped 5.42% to Rs 716 after hitting a 52-week high of Rs 731.50 in intraday trade today, 19 February 2014.

Sugar shares surged on expectations that lower output could boost sugar prices. Bajaj Hindusthan (up 5%), Balrampur Chini Mills (up 8.91%), Shree Renuka Sugars (up 6.85%), Sakthi Sugars (up 14.46%), Simbhaoli Sugars (up 5.79%), Triveni Engineering & Industries (up 4.11%) and Dwarikesh Sugar (up 4.9%) surged.

Mills had manufactured 16.58 million tonnes of sugar in the corresponding period of the 2012-13 marketing year (October-September), according to industry body Indian Sugar Mills Association (ISMA). On sugarcane arrears, ISMA said total cane payment dues of farmers have crossed Rs 12000 crore, of which Rs 8000 crore pertains to Uttar Pradesh and Rs 3000 crore for Karnataka alone as on date, it said in a statement. On exports, ISMA said about 850,000 tonnes of sugar has been sold in the overseas market till January of this year. Of this, 450,000 tonnes was raw sugar and the rest refined. Another 1.2 to 2 lakh tonnes, mostly raw sugar, are in transit for getting exported, it added.

The country had sugar stock of 11.7 million tonnes till January this year. ISMA, which has pegged sugar output at 25 million tonnes for this year, said it will soon review the estimated figures.

Tyre stocks rose across the board on expectations of pick up in demand from automobile OEMs after the government reduced excise duty on cars, commercial vehicles, sports utility vehicles (SUVs), motorcycles and scooters for the period up to 30 June 2014 in the in the Interim Budget for 2014-15 announced on Monday, 17 February 2014. Apollo Tyres (up 2.22%), JK Tyre & Industries (up 2.87%), MRF (up 1.89%) Goodyear India (up 2.71%), and CEAT (up 1.76%) gained.

The excise duty on small cars, two-wheelers and commercial vehicles has been reduced to 8% from 12%. The excise duty on SUVs has been reduced to 24% from 30%. The excise duty on large cars has been cut to 24% from 27%. The excise duty on mid-segment cars has been cut to 20% from 24%.

Monsanto India surged 4.48% to Rs 1,255 after hitting a record high of Rs 1,298.70 in intraday trade today, 19 February 2014.

Godfrey Phillips India gained 3.69% to Rs 3,620 after hitting a 52-week high of Rs 3,660.60 in intraday trade today, 19 February 2014.

Bharat Forge gained 2.63% to Rs 367.15 after hitting a 52-week high of Rs 373.25 in intraday trade today, 19 February 2014.

ABG Shipyard jumped 17.17% to Rs 304. On BSE, 5 lakh shares were traded in the counter as against an average daily volume of 42,746 shares in the past one quarter.

Paper Products gained 2.6% after consolidated net profit surged 66.1% to Rs 16.66 crore on 22.61% rise in net sales to Rs 279.02 crore in the quarter ended December 2013 over the quarter ended December 2012. The quarterly result was announced after market hours on Tuesday, 18 February 2014.

Net profit rose 24.68% to Rs 56.21 crore on 20.33% rise in net sales to Rs 1074.80 crore in the year ended 31 December 2013 over the year ended 31 December 2012.

Paper Products' board of directors at its meeting held on 18 February 2014, recommended dividend of Rs 2.80 per share for the financial year ended 31 December 2013.

HMT spurted 10.26% after the company said that the Government of India has approved its revival and restructuring plans which envisages financial support of Rs 1083.48 crore. The announcement was made after market hours on Tuesday, 18 February 2014.

HMT said that the revival and restructuring plans of the company was approved by the Government of India which envisages financial support of Rs 1083.48 crore which includes cash infusion of Rs 425 crore against which the company has to issue of 8% Redeemable Preferential Share Capital for Rs 425 crore. In the phase I, the Government of India has released the sanctioned funds amounting to Rs 217 crore. Further, HMT informed that the company's board of directors at their 305th meeting held on 25 January 2014 approved the allotment of fully paid-up 8% Redeemable Preference Shares of Rs 100 each for a face value of Rs 217 crore in favour of President of India which is redeemable within two years as per the terms of sanction of the investment by Government.

The Reserve Bank of India on Tuesday, 18 February 2014, said it will conduct term repo auctions of appropriate amount and tenor during March 2014 to address liquidity tightness. In order to address the anticipated tightening in liquidity conditions on account of advance tax payments by corporates commencing mid-March 2014 and with a view to providing flexibility to the banking system in its liquidity management towards March-end 2014, the Reserve Bank of India (RBI) will conduct term repo auctions of appropriate amount and tenor during March 2014, the RBI said in a press release issued on Tuesday. The details of the term repo auctions will be announced in due course, the RBI said.

The Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

On political front, the Lok Sabha passed a contentious proposal to split Andhra Pradesh and create the new state of Telangana on Tuesday amid chaotic scenes and uproar in parliament from opponents of the bill. The state capital Hyderabad will remain the common capital for the two states for a period of 10 years if the bill is passed in the upper house.

The decision to break up the state was made ahead of elections due by May 2014. The Bharatiya Janata Party, which is the frontrunner in the national election race, voted in favor of the bill, allowing it to pass. It still needs approval in the upper house by Friday, when parliament's final session before the election ends. The new state would account for 17 seats in parliament.

European stocks were mostly lower on Wednesday, 19 February 2014, as investors awaited a report on US housing starts. Key benchmark indices in France, Germany and UK were off 0.22% to 0.37%.

Asian stocks edged higher on Wednesday, 19 February 2014, after China's overnight money-market rate dropped to a nine-month low as an ample supply of cash offset the impact of the central bank draining funds. Key benchmark indices in Indonesia, Taiwan, Hong Kong, China and Singapore were up 0.24% to 1.11%. Key benchmark indices in Japan and South Korea were off 0.2% to 0.52%.

The People's Bank of China withdrew 48 billion yuan ($7.9 billion) by selling 14-day repurchase contracts at 3.8 percent yesterday, 18 February 2014. That was the first repo auction since June. The central bank said it will sell 50 billion yuan of nine-month treasury deposits on behalf of the Ministry of Finance tomorrow, 20 February 2014.

A preliminary report on China's manufacturing is due tomorrow, 20 February 2014.

Trading in US index futures indicated that the Dow could drop 27 points at the opening bell on Wednesday, 19 February 2014. US stocks settled mostly higher on Tuesday with the Nasdaq Composite recording its eighth consecutive session of gains, the longest since July 2013.

Manufacturing activity in the New York region gave up most of the strong gains made during the prior month although it remained in positive territory, according to data released Tuesday. The report fits a picture of a manufacturing sector struggling with severe winter weather. The ISM index for the US showed manufacturers suffered from the January chill last month.

A gauge of confidence among home builders plunged in February, dropping to the lowest level in nine months, led by weaker views on present sales of single-family homes, according to data released Tuesday. The housing-market index dropped to 46 this month from 56 in January 2014.

Minutes of the Federal Reserve's January meeting will be released later in the global day today, 19 February 2014. Federal Reserve Chairwoman Janet Yellen said last week that US growth has strengthened and that only a "notable change in the outlook" for the economy would prompt policy makers to slow the pace of cuts to the monthly bond-buying program.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion. The Fed also signaled that it is likely to keep reducing bond purchases in the coming months, citing a pickup in US economic activity and improvement in the US labor market.