Market ekes out small gains

Key benchmark indices edged higher after the government said Prime Minister Dr. Manmohan Singh who took charge of the finance ministry on Wednesday, 27 June 2012, is chalking out plan for the country's economic revival. The barometer index, BSE Sensex, settled below the psychological 17,000 mark, having alternately moved above and below that level in intraday trade. The market breadth was positive. The Sensex rose 23 points or 0.14%, off close to 40 points from the day's high and up about 70 points from the day's low. Volatility was high as traders rolled over positions from the near-month June 2012 series to July 2012 series. The June 2012 derivatives contracts expired today, 28 June 2012. Index heavyweight Reliance Industries declined. Gas distribution major GAIL (India) lost on profit booking after recent rally. Interest rate sensitive banking stocks were mostly lower. Software pivotals were mostly higher. Truck major Tata Motors recovered in late trade. Private sector aluminium major Hindalco Industries reversed intraday gains triggered by the company reporting strong financial performance for the year March 2012 after trading hours on Wednesday. The market edged higher in early trade as Prime Minister Dr. Manmohan Singh on Wednesday, 27 June 2012, met senior officials from the Finance Ministry after taking over the Finance portfolio to chalk out plan for the country's economic revival. The market retained positive zone in morning trade. The barometer index, BSE Sensex, regained the psychological 17,000, having alternately moved above and below that level in intraday trade. The market hit a fresh intraday high in mid-morning trade. A bout of volatility was witnessed in early afternoon trade as key benchmark indices pared gains after striking fresh intraday highs. Volatility continued as key benchmark indices recovered soon after hitting fresh intraday lows in afternoon trade. Key benchmark indices reversed intraday gains in mid-afternoon trade on reports the progress of monsoon rains has been delayed by about a week. Volatility ruled the roost in late trade as the key benchmark indices reversed direction after striking fresh intraday highs. The BSE Sensex was up 23 points or 0.14% to 16,990.76, its highest closing level since 21 June 2012. The index jumped 66.09 points at the day's high of 17,033.85 in late trade. The index lost 48.89 points at the day's low of 16,918.87 in mid-afternoon trade, its lowest level since 26 June 2012. The S&P CNX Nifty was up 7.25 points or 0.14% to 5,149.15, its highest closing level since 21 June 2012. The index hit a high of 5159.05 in intraday trade. The index 5,125.30 in intraday trade, its lowest level since 26 June 2012. The BSE Mid-Cap index rose 0.07% and underperformed the Sensex. The BSE Small-Cap index gained 0.22% and outperformed the Sensex. The total turnover on BSE amounted to Rs 4339 crore, higher than Rs 1634.90 crore clocked on Wednesday, 27 June 2012. The market breadth, indicating the overall health of the market, was positive. On BSE, 1,461 shares gained and 1,312 shares declined. A total of 127 shares were unchanged. Among the 30-share Sensex pack, 15 declined while the rest of them gained. Index heavyweight Reliance Industries (RIL) fell 0.49% to Rs 719.35. The stock came off the day's high of Rs 727.70. RIL on Wednesday, 27 June 2012, said it has bought back 3 crore shares for Rs 2144.73 crore till 22 June 2012. Under the ongoing share buyback program, RIL has set a maximum buyback price of Rs 870. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai early this month that the company's buyback program represents a highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future. Gas distribution major GAIL (India) lost 2.44% to Rs 345.75 and was the top loser from the Sensex pack. The stock lost on profit booking after gaining 5.42% in prior six trading sessions. Interest rate sensitive banking stocks were mostly lower. India's second largest private sector bank by net profit HDFC Bank shed 0.31% as the stock turned ex-dividend today, 28 June 2012, for dividend of Rs 4.30 per share for the year ended 31 March 2012 (FY 2012). India's largest commercial bank in terms of branch network State Bank of India (SBI) fell 0.85%. But, India's largest private sector bank by net profit ICICI Bank rose 0.48%. IndusInd Bank shed 0.18%. The bank said during market hours today said it has opened its first Currency Chest in Mumbai at the bank's branch at Thane near Mumbai. Speaking on the occasion, Mr. Romesh Sobti, MD & CEO, Indusind Bank said, "Induslnd Bank is committed to provide better services to its clients and this Currency Chest would be a pillar of support for cash transactions at branches in the region. The Currency Chest has been set up with most modern, state-of-the-art machines available today in note counting, sorting and counterfeit detection. Also, it is strategically located to provide easy access to our clients and branches lined across both Western and Eastern Express Highways as also other areas around Mumbai. It is yet another step towards customer responsiveness." Axis Bank fell 2.96% to Rs 971. The stock fell on huge volume of 2.68 crore shares on BSE, as against average daily volume of 2.41 lakh shares in the past one quarter. Yes Bank fell 0.73%. Volume in the stock on NSE was exceptionally high at 2.95 crore shares. A unit of UK's HSBC Holdings PLC sold stakes in Axis Bank and Yes Bank through separate bulk deals today, 28 June 2012. HSBC sold a 4.73% stake in Axis Bank. The HSBC Group held a total of 3.77 crore shares of Axis Bank as on 31 March 2012, constituting 9.14% stake in the Indian private sector bank, as per data from the stock exchanges. HSBC sold 4.74% stake investment in the smaller Yes Bank. The HSBC Group held a total of 1.67 crore shares of Yes Bank as on 31 March 2012, constituting 4.76% stake in the Indian private sector bank. Software pivotals were mostly higher on positive economic data in the US. US is the biggest outsourcing market for Indian IT firms. India's largest IT company by revenue, Tata Consultancy Services (TCS), rose 0.97%. India's second largest software services exporter by revenues, Infosys, rose 0.17%. India's third largest software services exporter by revenue, Wipro, shed 0.25%. The stock turned ex-dividend today, 28 June 2012, for final dividend of Rs 4 per share for FY 2012. Private sector aluminium major Hindalco Industries shed 1.24%. The stock reversed initial gains triggered after the company reporting a strong 38% growth in consolidated net profit to Rs 3397 crore on 12% growth in revenue from operations to Rs 80821.40 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). The result was announced after market hours on Wednesday, 27 June 2012. The company said the growth in net profit was primarily attributable to strong performance of copper business in India and also due to strong performance of its US unit Novelis. The top line growth was driven by better product mix and depreciating rupee, Hindalco said. Hindalco Industries said that despite economic headwinds during the year, the balanced portfolio approach, low cost operation and strong value added businesses resulted in commendable performance. With the low cost advantage and formidable global presence in aluminium downstream, Hindalco is well set for being the Last Man Standing and the First Man Forward, Hindalco said. Hindalco Industries' US based wholly owned subsidiary, Novelis Inc., reported strong operating results in FY 2012 despite challenging market conditions globally. The premium product portfolio, long-term customer base and focused business model enabled Novelis to produce solid results for the year. Hindalco Industries also said that the company has completed issuance of Secured Redeemable Non-convertible Debentures amounting to Rs 1500 crores on private placement basis at the coupon of 9.55% per annum. The proceeds of the issue will be used, for general, business purposes including capital expenditure, working capital, refinancing of existing debt. The debentures are proposed to be listed on WDM segment of National Stock Exchange of India, Hindalco said. JSW Steel rose 0.23%. During market hours today, 28 June 2012, the company it has redeemed the outstanding foreign currency convertible bonds issued in June 2007 on due date. JSW Steel said the total payment for redeeming the outstanding $274.40 million foreign currency convertible bonds (FCCB) issued in June 2007 was $391.84 million, including the redemption premium. Post this redemption of FCCBs, there has been no dilution in the company's equity share capital, which would have otherwise occurred through the issue of 1.15 crore equity shares of Rs 10 each arising out of such conversion of the FCCBs, JSW Steel said. Index heavyweight and cigarette major ITC rose 1.47% to Rs 251.45. The stock had scaled a record high of Rs 253.80 in intraday trade on 25 June 2012. NHPC declined 1.1%. The company said after market hours today that unit No. 2 & 3 with an installed capacity of 77 megawatts (MW) each of Chamera Hydro Electric Project (Stage III) will come under commercial operation from June 30, 2012 after successful trial run and demonstration of peaking capacity. Some fertiliser shares rose on reports the ministry of chemicals and fertilizers has approved the new investment policy for urea and sent it for inter-ministerial consultations. National Fertilizer, GSFC, GNFC, Rashtriya Chemicals & Fertilizers, Nagarjuna Fertilizers & Chemicals and Chambal Fertiliser & Chemicals rose by between 0.01% to 1.68%. The policy will reportedly be ready for Cabinet consideration in the next few weeks. Under the proposed policy, imported liquified natural gas (LNG) used for urea production would be given pass through status so that fertilizer producers get enough subsidy to use the expensive fuel and still make a 12% return on investment. Sugar stocks gained across the board. Balrampur Chini, Bajaj Hindusthan and Shree Renuka Sugars gained by between 0.65% to 2.45%. Cement stocks gained across the board as companies from this sector will start unveiling monthly cement dispatches data for June 2012 from 1 July 2012. ACC, Ambuja Cements, Jaiprakash Associates, India Cements and UltraTech Cements gained by between 1.33% to 2.95%. The Competition Commission of India (CCI) last week levied a penalty of over Rs 6000 crore on 11 cement companies due to violation of the provisions of the Competition Act, 2002, which deals with anti-competitive agreements including cartels. The order was passed pursuant to investigation carried out by the Director General upon information filed by Builders Association of India. CCI has imposed penalty on 11 cement manufacturers at 0.5 times of their profit for the year 2009-10 and 2010-11. ACC has said that the company feels aggrieved by this order and it will appeal against it before the Competition Appellate Tribunal. For ACC, the penalty works out to Rs 1147.59 crore. UltraTech Cement has said the company will take appropriate action after having fully examined the order. For UltraTech Cement, the penalty works out to Rs 1175 crore. Ambuja Cements said the CCI has fined the company Rs 1163 crore. The company said it contests the allegations and findings against the company. Ambuja Cements has said it will appeal against this order to the Appellate Tribunal and will seek a stay on the penalty. Most realty shares edged lower on profit booking after recent gains triggered by the Competition Commission of India last week directing cement firms to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Cement is a key raw material in housing construction. Sobha Developers, Unitech and D B Realty dropped by between 0.56% to 4.19%. But, DLF rose 0.99%. Auto stocks were mixed. India's largest utility vehicles maker Mahindra & Mahindra (M&M) dropped 0.36%. The company early this month said it has received an overwhelming 7,200 plus bookings for its cheetah-inspired XUV500 from customers within just 2 days of opening all India bookings for the vehicle. All India bookings for the XUV500 were opened from 8 June 2012. Tata Motors, India's biggest auto maker by revenue, rose 0.36% to Rs 239.90. The stock recovered from an intraday low of Rs 232.90. Tata Motors has decided to stop production of medium and heavy trucks at its Jamshedpur unit for three days from 28 June to 30 June 2012 to avoid piling up stocks amid tepid demand. Earlier this week, Tata Motors shut its truck factory in Pune, Maharashtra for three days to align production with demand. India's top small-car maker by sales Maruti Suzuki India declined 0.16%. India's second largest motorcycle maker by sales Bajaj Auto shed 0.63%. The company early this month said its total sales fell 2% to 3,52,219 units in May 2012 over May 2011, as exports to Sri Lanka were nil in May 2012 against a typical monthly average of 10,000 motorcycles and 3-wheelers each per month. The company expects recovery in Sri Lankan exports from July 2012 onwards. The company's exports rose 3% to 1,30,573 units in May 2012 over May 2011. India's largest motorcycle maker by sales Hero MotoCorp (HMCL) rose 1.58%. Power generation stocks extended this month's gains as lower international coal prices could boost profitability. JSW Energy, GVK Power & Infra, NTPC and Torrent Power gained by between 0.39% to 1.48%. Fall in international coal prices this year could boost profitability of those power generation firms which buy imported coal in the spot market. Coal is the largest source of energy for electricity generation. Tata Power Company advanced 1.33% to Rs 98.95. The stock extended Wednesday's 2.25% gain after Delhi Electricity Regulatory Commission (DERC) early this week approved a steep tariff hike in Delhi. New Delhi's electricity regulator has approved higher electricity tariffs in the country's capital, by an average of 20.8%, starting July 1 to help the company narrow losses. On average, the electricity tariffs for industrial and household consumers will rise to Rs 6.63 a kilowatt hour from Rs 5.49 a kilowatt hour. The four electricity distribution companies that operate in New Delhi -- Reliance Infrastructure's BSES Rajdhani Power and BSES Yamuna Power and Tata Power Company's Delhi Distribution along with provincial government's New Delhi Municipal Council had sought the raise, citing the need to cut their electricity distribution losses. Bhel extended two-day gains triggered by new order win. The stock was up 0.34%. Bhel early this week said it has won a contract for the electro-mechanical equipment package for a 1,020 megawatts (MW) hydroelectric project in Bhutan. The contract is valued at Rs 950 crore. This contract will further strengthen Bhel's presence in the overseas hydro business segment, Bhel said in a statement. Bhel's globalisation strategy is already yielding rich dividends and the company has established its footprints in six continents of the world spanning over 75 countries, Bhel said. Axis Bank clocked highest volume of 2.68 crore shares on BSE. Manappuram Finance (59.79 lakh shares), Suzlon Energy (54.23 lakh shares), Cals Refineries (42.89 lakh shares) and Lanco Infratech (40.88 lakh shares) were the other volume toppers in that order. Axis Bank clocked highest turnover of Rs 260.92 crore on BSE. SBI (Rs 113.28 crore), Glaxosmithkline Pharma (Rs 71.58 crore), ABG Shipyard (Rs 48.84 crore) and Infosys (Rs 44.42 crore) were the other turnover toppers in that order. Prime Minister Dr. Manmohan Singh on Wednesday, 27 June 2012, met senior officials from the Finance Ministry after taking over the Finance portfolio to chalk out plan for the country's economic revival. He stressed that reviving investor sentiment is on top of his priorities as the country is passing through challenging times, economically. Singh said he is also concerned about the way the exchange rate is going. He said India needs to work towards making the country resilient in meeting external challenges. In the short run, there is a need to revive investor sentiment, both domestic and international, Singh said. Singh said there have been many factors that have contributed to the general negative mood. There are problems on the tax front which need to be addressed, Singh said. Prime Minister Manmohan Singh took additional charge of the finance ministry after Pranab Mukherjee on Tuesday resigned as finance minister to contest the presidential polls next month. The shift comes at a time when the economy is going through a slowdown amid deteriorating domestic conditions and euro-zone troubles. Mr. Mukherjee is the leading contender in the July 19 presidential election, having been nominated by the Congress party-led United Progressive Alliance government for the largely ceremonial post. The government said on Monday, 25 June 2012, that the withholding tax would be liberalized as announced in the 2012-13 Budget. In Budget 2012-13, Finance Minister Pranab Mukherjee had proposed to reduce the rate of withholding tax on interest payments on external commercial borrowing (ECBs) from 20% to 5% for three years, for certain stressed infrastructure sectors. As per reports, the progress of monsoon rains been delayed by about a week. The monsoon rains were 18% below average in the week to 27 June 2012. As per reports, the rainfall was 23% below the long-term average in the monsoon season till 27 June 2012. The delay and deficiency in monsoon rains are worrisome, as they coincide with the peak sowing period for summer crops. Weak rains have already hit sowing of summer-sown crops such as rice and soybeans, two of the country's most important staples. The timing, distribution and quantity of rainfall are all important for crops. Delayed and or insufficient rainfall could hurt farm production and affect rural consumption. More than half of India's workforce is still employed in the farm sector. The India Meteorological Department (IMD) last week cut the expected quantum of total rainfall in the country for 2012. The IMD said monsoon rains in 2012 would be 96% of the long-term average overall, down from its April forecast of 99%. Rainfall in the northwestern grain bowl region is likely to be a slightly deficient at 93% of the long-term average this season. The weather office has forecast normal rains in July and August, key months for planting and maturing of crops. July rains this year are likely to be 98% of the long period average, while the rainfall in August is forecast to be 96% of the average. Moody's Investors Service on Monday, 25 June 2012, said it is maintaining its stable outlook on India's sovereign rating as the growth slowdown and deteriorating business sentiment in the economy are likely to be temporary. Moody's said India's Baa3 rating already reflected challenges such as a weak fiscal performance of the government, high inflation and an uncertain investment policy environment, which have characterized the economy for decades. The next major trigger for the stock market is Q1 June 2012 corporate earnings, which will start trickling from the second week of July 2012. HDFC announces Q1 results on 11 July 2012. Infosys announces its Q1 results on 12 July 2012. HDFC Bank declares its Q1 results on 13 July 2012. Bajaj Auto reports Q1 results on 18 July 2012. European stocks dropped on Thursday, 28 June 2012, as investors feared the region's leaders would not agree on adequate measures to tackle the ongoing euro-zone debt crisis as a key two-day summit of the European Union to discuss the ongoing European debt crisis begins today, 28 June 2012. Key benchmark indices in France, UK and Germany were down by 0.95% to 1.66%. Borrowing costs rose Thursday as the Italian government sold 5.4 billion euros ($6.8 billion) of 5- and 10-year bonds, slightly below the top end of its target range at 5.5 billion euros, news reports said. Italy sold 2.9 billion euros of 10-year government bonds at a yield of 6.19%, up from 6.03% in a late May sale, reports said. Bids exceeded supply 1.28 times, down from 1.4 times in May. Italy also sold 2.5 billion euros of five-year bonds, reports said, producing a yield of 5.84% versus 5.66% in late May. Bids exceeded supply 1.54 times, reports said, versus 1.35 in May. A key two-day summit of the European Union to discuss the ongoing European debt crisis begins today, 28 June 2012. European nations will take all necessary measures to safeguard the integrity and stability of the euro zone, improve the functioning of financial markets and break the feedback loop between sovereign debts and banks, according to the statement released at the end of the G20 summit in the Mexican resort of Los Cabos on 19 June 2012. The seasonally-adjusted number of unemployed German workers rose by 7,000 in June 2012, while the unemployment rate held steady at 6.8%, the Federal Labor Office reported Thursday. On an unadjusted basis, the number of unemployed dropped by 46,000, the agency said. British bank Barclays PLC said Wednesday it will pay around $452 million in penalties to settle a probe into attempted manipulation and false reporting relating to two global benchmark interest rates that form the basis for hundreds of trillions of dollars of transactions. Asian stocks were mixed on Thursday, 28 June 2012. Key benchmark indices in Singapore, South Korea, and Japan were up by 0.08% to 1.65%. Key benchmark indices China, Hong Kong, Indonesia and Taiwan were down by 0.19% to 1.20%. Japan's retail sales rose 3.6% in May compared to the year-ago period, smaller than gains in the previous two months, while sales at large-scale retailers declined 0.9% compared to the same period a year ago, government data out Thursday showed. China may introduce more proactive policies to ensure stable growth, the China Securities Journal said in a commentary published on the front page of the newspaper on Wednesday, 27 June 2012. Policies to stabilize foreign trade, expand infrastructure investment, fine-tune monetary policies and structurally reduce taxes may be introduced, according to the commentary. China is the world's second biggest economy after the US. Trading in US index futures indicated that the Dow could slide 72 points at the opening bell on Thursday, 28 June 2012. US shares surged on Wednesday as stronger-than-expected economic data helped to lift energy stocks, overshadowing the concerns of European Union summit. The Dow Jones Industrial Average rose 92.34 points, or 0.74%, to 12627.01. The Standard & Poor's 500-stock index rose 11.86 points, or 0.90%, to 1331.85 and the Nasdaq Composite index added 21.26 points, or 0.74%, to 2875.32.