Thursday, February 21, 2013
BSE Sensex closed at 19325, down 317 points over the previous close. It had earlier touched a day's high of 19554 and a day's low of 19317. It opened at 19549. The NSE Nifty closed at 5,852 down 91 points over the previous close. It earlier touched a day’s high of 5,921 and a day’s low of 5844. It opened at 5,909. The global sell-off took its toll on the Indian equity market, which ended at its lowest level in the calendar year on Thursday. Heavy sell off was seen in the index heavy weights like Tata Steel, ICICI Bank, Reliance Infra, Sesa Goa, Hindalco and Maruti. The few stocks which bucked the trend were Bajaj Auto, Gail India and Cipla. Market sentiment took a beating after the Federal Reserve released the minute for its policy meeting held January 29-30, and raised market worries that the central bank may end QE3 measures earlier than expected. Stocks in Asia and Europe also witnessed selling pressure. The benchmark indices, after opening with a gap down, kept falling as the day progressed. Almost all the BSE sectoral indices ended in the red. The Metals stocks was among the top laggard, the index lost 3.2%, followed by BSE Banking index down 2.5% and BSE Capital Goods and Oil & Gas index losing 2% each. Finally, BSE Sensex closed at 19325, down 317 points over the previous close. It had earlier touched a day's high of 19554 and a day's low of 19317. It opened at 19549. The NSE Nifty closed at 5,852 down 91 points over the previous close. It earlier touched a day’s high of 5,921 and a day’s low of 5844. It opened at 5,909. RIL, Infosys, Wipro, NTPC, TCS, SBI, ICICI Bank, Tata Steel, Hero MotoCorp, ONGC, Dr Reddys Lab, Tata Motors, Hindalco Inds, Mahindra & Mahindra, Bharti Airtel and BHEL were among losers in Sensex and Nifty. The advance decline ratio was in favour of the bears. 1916 stocks declined against 913 advancing stocks. While 132 stocks remained unchanged. The INDIA VIX on NSE surged 8.5% to end at 16.94. It hit a day’s high of 17.25 and day's low of 15.25. Stocks which hit 52-week high during the week were Madras Cements, Finolex Inds, Malabar Trad, Blue Blend India and Hind Syntex. Stocks which hit 52 week low during the week were ABB, Gujarat Lease, Hindustan Oil, Maharashtra Seam and Oil Country Tub. Stocks in News ABB plunged by 6% to close at 574. The company posted a net profit of Rs. 167.70 mn for the quarter ended December 31, 2012 as compared to Rs. 641.20 mn for the quarter ended December 31, 2011. Total Income has decreased from Rs. 22269.20 million for the quarter ended December 31, 2011 to Rs. 20851 mn for the quarter ended December 31, 2012. Shares of HCL Technologies ended flat erasing early gains. The company announced a global alliance with hybris, the world’s fastest-growing commerce platform provider ranked “leader” by leading global analyst firms. This partnership will strengthen HCL’s portfolio to provide end-to-end omni-channel commerce solutions and integration services to its customers worldwide. It will also enable hybris to leverage HCL’s footprint in the Digital Media commerce market, its long-term relationships with many leading global businesses and infrastructure in markets in regions such as the Middle-East. On Wall Street, the Dow Jones industrial average dropped 0.77%, to 13,927, while Standard & Poor's 500 Index fell 1.24 percent, to 1,512. The Nasdaq Composite Index lost 1.53 percent, to end at 3,164. The Shanghai Composite index in china dropped nearly by 3% on Thursday on concerns that recent central bank behavior had signaled the beginning of a tightening cycle. According to reports, The People's Bank of China let a net 910 billion yuan ($145.89 billion) drain from the interbank market this week. The Nikkei index in Japan was down 1.5%, the Hang Seng index in Hong Kong lost 1.8%, Straits Times ended lower 0.6% and Taiwan index fell 1%. Even the European market were trading with losses. The FTSE index in UK and the CAC index in France declined by 1.6% each and DAX index in Germany was trading lower by 1.8%.
Weak global environment and profit booking in index heavyweights led to a severe fall in the Indian markets today. The Sensex lost 317 points and the Nifty fell 91 points. Major Headlines: ABB Q4 net profit declines by 74% Gold records new 7 month low at Rs29,305 ONGC in talks to buy Videocon stake in Mozambique field Indian indices Today the Dalal Street witnessed its worst trading day of 2013. The domestic markets remained weak led by decline in the global markets and a sharp crack in major sectors. There was no respite for the Indian markets today due to European jitters, depreciation in rupee, gold hitting seven month low and worries that the US Federal Reserve could wind down its bond-buying programme. Equities across the globe witnessed heavy sell-off pressure as the investors moved towards less riskier assets. The market breadth stood extremely weak. The broader indices too were in red. Weakness persisted in majority of the sectors and heavyweights like ICICI Bank, RIL, HDFC Bank, ITC, L&T, ONGC, Tata Motors, Bharti Airtel and SBI also added to the downfall. The BSE benchmark broke the 19,350 level While NSE Nifty fell below 5,860 levels on tremendous selling pressure. Movement of the Indian indices for the day: The Indian markets started today's trade on a negative note. The markets were under pressure throughout the day as its global peers were unsupportive. Indian equity benchmarks as well as broader markets were caught in a bear grip today. The markets traded lower right from the opening bell and remained under pressure on account of profit booking. At the closing bell, the BSE Midcap index and BSE Smallcap index fell nearly 2% each. The NSE Nifty headed towards its biggest fall since July 23, 2013 and closed its lowest level since December 21, 2012.The BSE Sensex dropped 1.62% and NSE Nifty was down by 1.53%, heading towards their biggest single day fall since October 8, 2012. The BSE Sensex posted its biggest fall since May 2012 as bank shares such as ICICI Bank fell a day after RBI data showed loan growth was still a concern and on weakness in global shares due to concerns over Fed slowing its bond buying program. Indian gold buying rose on Thursday (February 21, 2013) after prices in the world's biggest consumer fell to their lowest in seven months at Rs29,305, in line with the global market, and denting government plans to make the metal expensive by levying a higher import duty. Adding further the Budget session of Parliament began today (February 21, 2013) with the United Progressive Alliance government set to face a stiff challenge because of the controversies surrounding the chopper deal. On the currency front, the rupee slipped by 42 paise to 54.50 against the dollar at the Interbank Foreign Exchange (Forex) market hurt by risk-off sentiment. The fall was due to sustained demand for the US currency from importers. The Sensex closed at 19,325, down by 317.39 points and the Nifty fell 90.80 points to settle at 5,852.25 in trade today. Following are the stocks/ sectors which were in news today: 1. Videocon Industries gained after the consumer electronics and Oil Company said that it is in talks to sell its 10% stake in an oil and gas block off the coast of Mozambique and Tanzania. The stock was up by 5.52% in today’s trade. 2. ABB dropped after its quarterly net profit fell 73.43% to Rs17 crore on 5.39% decline in revenue to Rs2053 crore in Q4 December 2012 over Q4 December 2011. The stock was down by 4.50% in today’s trade. 3. SKS Microfinance declined as insurance regulator IRDA imposed Rs50 lakh penalty on the company which collected extra funds, apart from the premium, as a corporate insurance agent without proper disclosure to policy-holders. The stock was down by 4.29% in today’s trade. Market sentiment The market breadth stood in favor of declines. Of the 2,961 stocks traded on the BSE, 904 (30.53%) rose, 1,929 (65.15%) fell and 128 (4.32%) stocks remained unchanged. Sectoral & stock screening Among the 13 sectoral indices, only one sector closed in green BSE CD marginally up by 0.04%. The top most losers were - BSE Metal slipped by 3.23%, BSE Bankex dipped by 2.52% and BSE Realty fell by 2.33%. Among 'A' group stocks, top three gainers were- Videocon Industries rose by 5.25%, CRISIL up by 2.04% and Godrej Consumer Products gained by 1.22%. Top three losers were- Shriram Transport Finance Company declined by 7.72%, Sun TV Network down by 7.21% and United Breweries fell by 5.91%. Global signals: Asian markets ended lower in trade today as China ordered increased property curbs amid talks of a hedge fund liquidating big positions in commodities. European markets opened lower on Thursday after U.S. Federal Reserve minutes suggested the central bank may stop printing the money that has helped to drive the recent rally in equities sooner than expected. US stock index futures pointed towards a lower opening at the Wall Street on Thursday.
Key benchmark indices slumped as stocks fell across the globe after minutes from the US Federal Reserve released on Wednesday, 20 February 2013, stoked concerns that policy makers could pull back on their massive quantitative-easing program as the US central bank said that it would review the program in March 2013. The Fed's asset purchases, known more popularly as quantitative easing (QE), are regarded as a key source of global liquidity that helps support an array of assets, including equities. The 50-unit CNX Nifty index reached its lowest closing level in almost 9 weeks. The barometer index, BSE Sensex, reached 8-week closing low. The Sensex lost 317.39 points or 1.62%, off close to 230 points from the day's high and up about 35 points from the day's low. The market breadth, indicating the overall health of the market, was weak. Indian stocks today, 21 February 2013, snapped three-day winning streak. The Sensex had gained 174.60 points or 0.89% in three trading sessions to settle at 19643.75 on 20 February 2013, from a recent low of 19468.15 on 15 February 2013, The Sensex has fallen 569.62 points or 2.86% in February 2013 so far (till 21 February 2013). The Sensex has declined 101.35 points or 0.52% in calendar 2013 so far (till 21 February 2013). From a 52-week high of 20,203.66 on 29 January 2013, the Sensex has declined 878.30 points or 4.34%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 3,576.38 points or 22.7%. Coming back to today's trade, index heavyweight and cigarette maker ITC dropped after the Gujarat state government increased the VAT on cigarettes to 30% from 25% in the state government's FY 2014 budget presented on Wednesday, 20 February 2013. Index heavyweight Reliance Industries (RIL) extended intraday losses in late trade. Construction shares edged lower. Metal shares declined as global commodity prices fell. In IT pack, shares of TCS reversed direction after striking record high. HCL Technologies reversed direction after hitting a 52-week high. Key benchmark indices edged lower in early trade on weak Asian stocks. The market extended initial losses to hit fresh intraday low in morning trade. The Sensex hit its lowest level in almost a week. Weakness persisted on the bourses in early afternoon trade. The market extended losses to hit fresh intraday low in afternoon trade. Key benchmark indices slumped in mid-afternoon trade as European stocks dropped. The market extended losses in late trade. The BSE Sensex lost 317.39 points or 1.62% to settle at 19,325.36, its lowest closing level since 27 December 2012. The index lost 353.05 points at the day's low of 19,289.70 in late trade, its lowest level since 26 December 2012. The index fell 88.10 points at the day's high of 19,554.65 in early trade The CNX Nifty lost 90.80 points or 1.53% to 5,852.25, its lowest closing level since 21 December 2012. The index hit a low of 5,844.40 and a high of 5,921.15 in intraday trade. The BSE Mid-Cap index declined 1.64% and the BSE Small-Cap index fell 1.74%. Both these indices underperformed the Sensex. The total turnover on BSE amounted to Rs 1944 crore, higher than Rs 1825 crore on Wednesday, 20 February 2013. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,929 shares declined and 904 shares gained. A total of 128 shares were unchanged. Index heavyweight Reliance Industries (RIL) lost 2.12% to Rs 856.75. The stock hit high of Rs 877.05 and low of Rs 852.55. Under the KG D6 block enhancement plan, BP and RIL are planning to invest in a series of projects to develop around 4 trillion cubic feet of discovered natural gas resources from the block. At current international liquefied natural gas (LNG) prices, it would cost more than $50 billion to import this volume of gas into India, RIL and BP said in a joint statement on 19 February 2013. This plan, when implemented, would entail a potential total investment in excess of $5 billion over the next three to five years. RIL and BP have agreed to accelerate the pace of exploration and development activities as soon as necessary approvals are received. The implementation of the plan will require deployment of advanced skills, processes and technologies through the combined partnership of RIL and BP to produce gas from water depths of more than 1,500 metres. RIL and BP are confident that development of the existing discoveries, together with exploration prospects in KG D6 have the potential to enhance domestic production significantly. In an historic partnership with RIL in 2011, BP took a 30% stake in multiple oil and gas blocks in India, including the producing KG D6 block and the formation of a 50:50 joint venture to source and market gas in India. The implementation of the various projects in the KG D6 enhancement plan is subject to regulatory and government approvals, RIL said. PSU OMCs edged lower. BPCL, HPCL and Indian Oil Corporation dropped by 0.75% to 1.21%. PSU OMCs raised diesel prices by 45 paise a litre and petrol by Rs 1.50 per litre with effect from 16 February 2013. The Ministry of Petroleum and Natural Gas on 18 February 2013 said that the under-recovery on High Speed Diesel (HSD) applicable for the 2nd fortnight of February 2013, effective from 16 February 2013, has increased to Rs 10.27 per litre from Rs 9.22 per litre for the 1st fortnight of February 2013. PSU OMCs are currently incurring daily under-recovery of about Rs 454 crore on the sale of Diesel, PDS Kerosene and Domestic LPG, the oil ministry said. PSU OMCs have reported under-recovery of Rs 1.24 lakh crore for nine-month period April-December 2012. They had incurred under-recovery of Rs 1.38 lakh crore in the year ended 31 March 2012 (FY 2012). Index heavyweight and cigarette maker ITC edged lower after the Gujarat state government increased the VAT on cigarettes to 30% from 25% in the state government's FY 2014 budget presented on Wednesday, 20 February 2013. The stock shed 1.17% to Rs 296.50. The stock hit high of Rs 300.35 and low of Rs 294.95. The stock had hit record high of Rs 310.75 in intraday trade on 4 February 2013. The Ministry of Health and Family Welfare in October 2012 notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. The Ministry of Health and Family Welfare said in a statement on 22 October 2012 that three sets of warnings each have been notified for smoking as well as smokeless forms of tobacco product packages. The well-designed health warnings and messages are part of a range of measures to communicate health risks due to tobacco use. Pictorial health warnings communicate health risks in a visible way, provoke a greater emotional response and increase the motivation of tobacco users to quit and to decrease their tobacco consumption, the ministry's statement said. Graphic warning labels have a greater impact than text-only labels and can be recognized by low-literacy audiences and children, the statement added. Nestle India fell 0.15%. The company's net profit jumped 20.8% to Rs 278.93 crore on 10.1% increase in net sales to Rs 2152.64 crore in Q4 December 2012 over Q4 December 2011. The result was announced after market hours on Wednesday, 20 February 2013. Domestic sales rose 9.6% on year on year basis in Q4 December 2012, mainly on account of net realizations and product mix, the company said in a statement. Export sales jumped 20.6%, contributed largely by exports to third parties which rose 47.2%, Nestle India said. The company reported 11.1% increase in net profit to Rs 1067.93 crore on 10.8% growth in net sales to Rs 8302.26 crore in the year ended 31 December 2012 (FY 2012) over the year ended 31 December 2011 (FY 2011). Domestic sales after portfolio and channel optimization rose 11% in FY 2012, mainly on account of net realizations and product mix, Nestle India said. Export sales rose 7.6% where exports to third parties jumped 36.7%, partly offset by a decline in exports to affiliates by 11.7%, Nestle India said. The cost of materials for goods sold as a percentage of net sales decreased in FY 2012, largely due to higher sales realizations, product and channel mix partially offset by higher input costs, Nestle India said. The increase in employees benefit cost is due to increase in headcount to support business expansions and the company's remuneration strategy, Nestle India said. Commenting on FY 2012 results, A Helio Waszyk, Chairman and Managing Director, Nestle India said: "We anticipated the challenges and we started 2012 with caution to deliver again a steady performance by taking the challenges head on. We invested close to Rs 1000 crore responsibly, expanding our manufacturing and distribution footprint. We have further improved our margins by 10 basis points despite depreciation going up by 130 basis points. We have increased support behind our brands. We continue to rationalize our portfolio. We have repaid all our short term loans. Given the uncertainty in the environment, we remain remains cautious in the short term but confident of sustainable and profitable growth in the future". Nestle India said that in FY 2012, $56 million was drawn down from parent Nestle SA for five years under the ECB approval from the Reserve Bank of India. The total amount outstanding as on 31 December 2012 was $192 million (Rs 1050 crore). The annualized cost of this ECB over the loan period up to December 2012, including interest and exchange differences, is 16.6% (rupee has depreciated by 13.6% during the loan period), Nestle India said. Nestle India's board declared third interim dividend of Rs 12.5 per equity share for FY 2012. This in addition to two interim dividends of Rs 18 each per share paid in August and December 2012, respectively. The total dividend per share for FY 2012 aggregates to Rs 48.50, the same as in the last three years in line with the financing strategy for capital expenditure, Nestle India said. Metal shares declined as global commodity prices fell. Sterlite Industries (India) (down 3.43%), Jindal Steel & Power (down 4.36%), Tata Steel (down 4.28%), Hindalco Industries (down 3.67%), JSW Steel (down 5.01%), Hindustan Zinc (down 3.18%), Sail (down 3.8%) and National Aluminium Company (down 1.51%), edged lower. Coal India fell 0.73%. President Pranab Mukherjee said in a speech delivered at the beginning of the Budget session of the Parliament today, 21 February 2013, that a number of steps such as technology development & modernization and development of new coal blocks by engaging Mine Developer and Operator have been taken to improve the productivity of Coal India (CIL). After resolving pending issues, 46 Fuel Supply Agreements were signed by CIL with power utilities, he said. TCS fell 0.31% to Rs 1,447.65. The stock reversed direction after hitting record high of Rs 1,455.55 in intraday trade today, 21 February 2013. The company on Monday, 18 February 2013, said it is expanding its operations in the UK. The company has invested in a new delivery centre in Liverpool, dedicated to delivering government services that require Impact Level 3 (IL3) security constraints. TCS plans to use the facility to deliver services to the Home Office, following a multi million, multi year contract that was awarded in November 2012, to manage, the technology needs and support services of the newly formed Disclosure and Barring Service (DBS), TCS said in a statement. The new facility in Liverpool will be fully operational in July 2013 and will house over 300 employees, TCS said. Infosys fell 0.42%. Infosys after trading hours on Wednesday, 20 February 2013, announced the launch of BigDataEdge to radically simplify the complex task of analyzing Big Data to discover relevant information. By empowering business users to rapidly develop insights from vast amounts of structured and unstructured data, better business decisions can be made in near real-time, Infosys said in a statement. With Infosys BigDataEdge, enterprises can reduce the time taken to extract information by up to 40% and generate insights up to eight times faster, Infosys said. Announcing the new platform, Vishnu Bhat, Vice President and Global Head - Cloud, Infosys said: "Enterprises today cannot afford to spend an inordinate amount of time making sense of the data deluge that surrounds them. Infosys BigDataEdge draws upon our deep research and development capabilities and proven expertise in Big Data and analytics to help clients turn data into revenues faster. This unique platform is already enabling ten global organizations to develop actionable insights in a matter of days and act on them from day one." HCL Technologies fell 0.28% to Rs 720. The stock reversed direction after hitting a 52-week high of Rs 731.90 in intraday trade today, 21 February 2013. HCL Technologies today, 21 February 2013, announced a global alliance with hybris, the world's fastest-growing commerce platform provider ranked "leader" by leading global analyst firms. This partnership will strengthen HCL's portfolio to provide end-to-end omni-channel commerce solutions and integration services to its customers worldwide. It will also enable hybris to leverage HCL's footprint in the Digital Media commerce market, its long-term relationships with many leading global businesses and infrastructure in markets in regions such as the Middle-East. As part of the partnership, HCL will co-create customised solutions, tools and storefront accelerators based on the hybris Commerce Suite that focus on vertical segments such as Consumer Products, Media, Entertainment, Retail, Telecom and Manufacturing. HCL Technologies after market hours on Wednesday, 20 February 2013, clarified that the bankruptcy filing by Reader's Digest Association (RDA) should not affect HCL Technologies' relationship and engagement with RDA and that HCL continues to support RDA. Construction shares edged lower. L&T (down 2.29%), Jaiprakash Associates (down 3.69%), IVRCL Infrastructure (down 2.95%), HCC (down 1.17%), NCC (down 5.94%) and Valecha Engineering (down 0.89%) edged lower. President Pranab Mukherjee said in a speech delivered at the beginning of the Budget session of the Parliament today, 21 February 2013, that in 2012-13, 2,600 km of roads are expected to be constructed and contracts for 3,000 km of new roads are expected to be awarded. A new approach to road construction, the EPC mode, has been put in place, he said. This will ensure significant cost and time savings compared to traditional contracting methods. A length of 2,900 km of highways will be put under the Operate, Maintain and Transfer system, which will improve road maintenance, Mukherjee said. National Thermal Power Corporation (NTPC) slipped 0.39%. The Cabinet Committee on Investment has cleared the proposal of the Ministry of Power for setting up of the North Karanpura Super Thermal Power Plant (NKSTPP) (3 x 660 MW) by the National Thermal Power Corporation (NTPC) in the vicinity of Tandwa town, district Chatra in Jharkhand. Safeguards according to the recommendation of the Chaturvedi Committee and accepted by the Group of Ministers (GoM) under the chairmanship of Finance Minister will apply, the Ministry of Power said in a statement after trading hours on Wednesday, 20 February 2013. The Cabinet Committee on Investment also agreed to restore the original coal linkage for the project. The coal supply would be made available in the 13th Plan. The project will be on a pit-head with environment friendly super-critical technology. The power will be generated by NTPC for about 35 years of plant life. The execution of the project would lead to generation of 1,980 MW of power. This is the first project of NTPC in Jharkhand which will benefit the state and people of Jharkhand where about 26 percent of the population is tribal, the Ministry of Power said. Realty stocks declined. D B Realty, HDIL, Sobha Developers and Unitech dropped by 0.67% to 2.86%. Realty major DLF slipped 2.61% to Rs 272.40. The scrip had hit a 52-week high of Rs 281.60 in intraday trade on Wednesday, 20 February 2013. DLF's consolidated net profit rose 10.46% to Rs 285 crore on 4% fall in revenue to Rs 2291 crore in Q3 December 2012 over Q3 December 2011. Earnings before interest, taxation, depreciation and amortization (EBITDA) dropped 10% to Rs 1068 crore in Q3 December 2012 over Q3 December 2011. On sequential basis, DLF's net profit jumped 105.03% to Rs 285 crore on 6% growth in revenue to Rs 2291 crore in Q3 December 2012 over Q2 September 2012. EBITDA jumped 24% to Rs 1068 crore in Q3 December 2012 over Q2 September 2012. The company announced Q3 results on 14 February 2013. The financial results are after taking into account 'one time' profit from the sale of NTC mills land in Mumbai and accounting for certain additional costs/rebates to be incurred in the future on existing projects, including potential loss on the sale of Silverlink Resorts (Aman Resorts). It also reflected the deferment of recognition of revenues under the new accounting policy for new launches. DLF's net debt declined by Rs 1870 crore in Q3 December 2012. The company said it continues to make investments in new assets, with a capex/land of about Rs 250 crore in Q3 December 2012. DLF said that the management believes that with the new initiatives by the government on the policy initiatives and outlook of reduction on the interest rates, the investment sentiment in the country shall improve. This shall have a positive impact on the company's operations in the medium term, DLF said. DLF said that highly accretive launches in Gurgaon are on the anvil from the company, which is expected to further bolster cash flows of the company. However, in most cases, the revenue and profitability shall be reflected only after a few quarters given the new accounting policies, DFL said. DLF said that the company is focused to create a business model of highly stable and predictable earnings, cash flows and long term value creation. In the current macro environment, DLF intends to continue with the current volume of launches, development and leasing. Over the next few years, DLF expects to move to a higher RoE model with reduced quantum of debt and at a lower cost. Bank stocks declined across the board. State Bank of India (SBI) declined 1.84%. The bank's net profit rose 4.08% to Rs 3396.06 crore on 14.12% rise in total income to Rs 33992.11 crore in Q3 December 2012 over Q3 December 2011. The result was announced on 14 February 2013. SBI's ratio of net non-performing assets to net advances stood at 2.59% as on 31 December 2012, higher than 2.44% as on 30 September 2012 and 2.22% as on 31 December 2011. The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 5.3% as on 31 December 2012, higher than 5.15% as on 30 September 2012 and 4.61% as on 31 December 2011. The bank's provision for non-performing assets declined 7.98% to Rs 2766.18 crore in Q3 December 2012 over Q3 December 2011. On sequential basis, the provision for non-performing assets jumped 50.56% to Rs 2766.18 crore in Q3 December 2012 over Q2 September 2012. State Bank of India's (SBI) provision coverage ratio works out to 61.49% as on 31 December 2012. The Government of India has decided to infuse capital funds to the tune of Rs 3004 crore in SBI by way of preferential allotment of equity in favour of the Government of India. The Government of India (GoI) currently holds 61.58% stake in SBI (as per the shareholding pattern as on 31 December 2012). Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India, and Punjab National Bank shed by 1.38% to 4.14%. ICICI Bank slumped 3.77%. Bank of Baroda declined 2.24%. Finance Minister Mr. P. Chidambaram on Tuesday, 19 February 2013, launched the operations of India Infra Debt (Infradebt) promoted by ICICI Bank, Bank of Baroda, Citibank and Life Insurance of Corporation (LIC). ICICI Bank (together with a wholly-owned subsidiary) is the largest shareholder in Infradebt with 31% holding followed by Bank of Baroda at 30%, Citibank at 29% and LIC at 10%. Infradebt would seek to raise debt capital from domestic as well as foreign resources and would invest in infrastructure projects under the Public-Private Partnership model that have completed one year of operations, the Ministry of Finance said in a statement on Tuesday, 19 February 2013. Infradebt will expand and diversify the domestic and international sources of debt funding to meet the large financing needs of the infrastructure sector, thereby giving an impetus to the creation of the infrastructure necessary to drive India's growth, the finance ministry said. India's second largest private sector bank by net profit HDFC Bank fell 1.69%. The bank's net profit rose 30.04% to Rs 1859.07 crore on 23.01% increase in total income to Rs 10,606.51 crore in Q3 December 2012 over Q3 December 2011. The result was announced on 18 January 2013. Auto stocks fell across the board. India's largest car maker by sales Maruti Suzuki India shed 2.48% to Rs 1,470.55. Maruti Suzuki India on 1 February 2013 its total sales fell 1.1% to 1.14 lakh units in January 2013 over January 2012. Domestic sales rose 2% to 1.03 lakh units in January 2013 over January 2012. Exports declined 22.3% to 11,179 units in January 2013 over January 2012. Tata Motors dropped 2.04%. The company on 15 February 2013 said it has developed a line-up of world-class buses for the MCV market. The company on Friday, 15 February 2013, showcased two new exciting applications for intercity transportation and staff transportation at the SIAM International Bus & Utility Vehicles Show, at Greater Noida. The new MCV buses are fully built offerings catering to both AC and Non AC contract and intercity applications. The world-class body has been built as per international standards by Tata Motors Marcopolo, on proven Tata LPO 1618 and LPO 1512 chassis, which are known for its reliability and superior performance, Tata Motors said in a statement. The light weight body improves vehicle performance while still keeping the durability and strength aspect intact due to the superior body building process technology adopted from Marcopolo, Brazil, Tata Motors said. These buses are built on the improved Ex range on MCV buses which promises superior mileage, best operating economics and enhanced safety standards, Tata Motors said. Mahindra & Mahindra (M&M) declined 1.54%. M&M on 14 February 2013 said it has decided to invest about 80 billion Korean Won which is equivalent to around $73.73 million at the current exchange rate, by way of subscribing to preferential issue of equity shares of the company's Korean subsidiary viz. Ssangyong Motor Company (SYMC). The preferential allotment will result in an increase in the paid-up capital of SYMC by 11.9% and increase in the M&M's shareholding in SYMC to 72.85% from current 69.63%. The preferential issue would facilitate improvement of the financial structure of SYMC and proceeds of the issue would be utilised by SYMC for new product development and strengthen its competitiveness, M&M said in a statement. India's largest motorcycle maker by sales, Hero MotoCorp, slipped 0.32%. The company's total sales rose 7% to 5.57 lakh units in January 2013 over January 2012. Bajaj Auto declined 0.26%. The company's total sales rose 3% to 3.47 lakh units in January 2013 over January 2012. Motorcycle sales rose 2% to 3.01 lakh units in January 2013 over January 2012. Sales of commercial vehicles rose 7% to 46,263 units in January 2013 over January 2012. Total exports rose 10% to 1.28 lakh units in January 2013 over January 2012. The company announced the monthly sales data on 2 February 2013. Pharma stocks edged lower. Cipla, Dr Reddy's Laboratories, Ranbaxy Laboratories and Cadila Healthcare shed by 0.09% to 1.89%. Sun Pharmaceutical Industries fell 0.16% to Rs 795.70 on profit booking. The stock had hit record high of Rs 803 in intraday Wednesday, 20 February 2013. Pharma major, Lupin declined 0.21%. The company announced after market hours today, 21 February 2013, that its subsidiary Lupin Pharmaceuticals Inc. has received final approval for its Lorazepam Oral Concentrate USP, 2 mg/mL from the United States Food and Drugs Administration (US FDA) to market a generic version of Lorazepam Intensol, 2 mg/mL, of Roxane Inc. Lupin's Lorazepam Oral Concentrate USP, 2 mg/mL is indicated for the management of anxiety disorders or for the short term relief of the symptoms of anxiety or anxiety associated with depressive symptoms. Lorazepam Oral Concentrate had annual US sales of approximately $10.7 million as per IMS MAT September 2012 sales data. ABB tumbled 4.5% on weak Q4 results. ABB's net profit fell 73.43% to Rs 17 crore on 5.39% decline in revenue to Rs 2053 crore in Q4 December 2012 over Q4 December 2011. The operational earnings before interest and tax (EBIT) excluding depreciation and amortization adjusted for unrealized gains and losses on derivatives, adjusted for realized gains and losses on derivatives where the underlying hedged transaction has not yet been realized, adjusted for unrealized foreign exchange movements on receivables/payables, adjusted for restructuring and restructuring-related expenses, and adjusted for acquisition-related expenses and certain non-provisional items, declined 19.85% to Rs 109 crore in Q4 December 2012 over Q4 December 2011. ABB's net profit fell 25.94% to Rs 137 crore on 1.35% increase in revenue to Rs 7470 crore in the year ended 31 December 2012 (FY 2012) over the year ended 31 December 2011 (FY 2011). The operational earnings before interest and tax (EBIT) excluding depreciation and amortization adjusted for unrealized gains and losses on derivatives, adjusted for realized gains and losses on derivatives where the underlying hedged transaction has not yet been realized, adjusted for unrealized foreign exchange movements on receivables/payables, adjusted for restructuring and restructuring-related expenses, and adjusted for acquisition-related expenses and certain non-provisional items, declined 7.45% to Rs 385 crore in FY 2012 over FY 2011. The company said while its product businesses performed well while service and exports grew significantly in FY 2012. However, the project businesses were affected by poor market conditions, tight liquidity and other external factors. The company further increased its efforts to improve operational efficiencies, consolidate supplier base and increase productivity. As part of its strategy to expand global footprint, the company continued to invest in manufacturing and improve competitiveness in domestic as well as export markets. These include both new investments and upgradation of existing facilities, ABB said. The company's products businesses delivered improved profitability in FY 2012. However, project businesses faced several challenges due to anticipated cost overrun mainly caused by project delays on account of external factors. Delays in receipt of payments due to tight liquidity in the market, inflexible terms and conditions in infrastructure projects, forex volatility and lower price realization increased the risk level significantly and impacted project margins in FY 2012, ABB said. ABB said it received orders worth Rs 6966 crore in FY 2012, which was lower than order intake of Rs 8189 crore in FY 2011. To overcome the challenges arising out of weak investments in traditional markets, the company leveraged new business streams such as solar, data centers and energy efficiency solutions, ABB said in a statement. As part of its strategic thrust to enhance service business, the company tapped into its large installed base in traditional sectors which yielded positive results, ABB said. Good implementation of the export strategy over the quarters resulted in double digit growth with increased geographical reach, ABB said. The company decided to reposition its power systems business for higher profitability by adopting a business model in line with the global strategy of having higher ABB content in projects with appropriate risk return profile, ABB said. ABB said that the company is well positioned with a significant order backlog of Rs 8672 crore as on 31 December 2012, providing the necessary visibility to future revenues. Commenting on the financial performance, Bazmi Husain, Managing Director, ABB said: "While short term economic uncertainties cannot be ruled out, the company is cautiously optimistic about the long term potential of the Indian market. We look forward to the government's reform initiatives to accelerate and revive the capital goods sector. We continue to take several initiatives to introduce new technology and products that help Indian utility and industry customers remain competitive. We are also intensifying our efforts to boost productivity, strengthen project management and optimize resource utilization for sustained profitable growth". PSU disinvestment and reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. The government has set target of Rs 30000 crore from PSU divestment for the fiscal year ending 31 March 2013. Meanwhile, as per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 13 June 2013, while the deadline for state-run firms is 13 August 2013. Finance Minister Mr. P. Chidambaram on Tuesday, 19 February 2013, emphasized the need to meet the financing requirements of the infrastructural deficit. He said that that the government has initiated several major steps in this direction. He said that the government has set-up the Cabinet Committee on Investments (CCI) with the Prime Minister as the Chairman to expedite decisions on approvals/clearances for implementation of projects. This is likely to improve the investment environment by bringing transparency, efficiency and accountability in accordance of various approvals and sanctions, Chidambaram said. The government is also promoting Public Private Partnerships (PPPs) as an effective tool for bringing private sector efficiencies in creation of economic and social infrastructure assets and for delivery of quality public services, Chidambaram said. The Viability Gap Funding Scheme has been further strengthened by adding many new sectors like modern storage, education, health, irrigation etc. The cost and tariff of infrastructure services are likely to go down as a result of low cost long term debt provided by Infrastructure Debt Fund (IDFs), Chidambaram said on the occasion of the launch of the first Infrastructure Debt Fund (IDF) under the NBFC structure on Tuesday, 19 February 2013. A buy-out guarantee from Project Authority will enable IDF-NBFC to maintain zero NPAs, Chidambaram said. The taking over of existing bank debts by IDFs will release an equivalent volume for fresh lending by banks to infrastructure projects, the finance minister said. The Reserve Bank of India governor D. Subbarao said in mid-February 2013 that he sees limited room for further interest rate cuts. The annual rate of inflation, based on monthly wholesale price index (WPI), decelerated to 6.62% in January 2013 from 7.18% in December 2012 and 7.24% in November 2012, data released by the government on 14 February 2013 showed. This is the first time since November 2009 that the inflation rate has dropped below 7%. The non-food manufacturing inflation or core inflation decelerated to 4.08% in January 2013 from 4.19% in December 2012. Inflation based on the combined consumer price index for urban and rural India edged up to 10.79% in January 2013, from 10.56% in December 2012, another data released by the CSO on 12 February 2013 showed. Within the consumer price index, inflation in the category 'food and beverages' stood at 13.36% in January 2013. Inflation based on the All-India Consumer Price Index for Agricultural Labourers (CPI-AL) edged up to 12.3% in January 2013 from 11.33% in December 2012, data released by the government on Wednesday, 20 February 2013, showed. Within CPI-AL, food price inflation stood at 12.98% in January 2013. Inflation based on the All-India Consumer Price Index for Rural Labourers (CPI-RL) edged up to 12.28% in January 2013 from 11.31% in December 2012. Within CPI-RL, food price inflation stood at 12.94% in January 2013. The Reserve Bank of India (RBI) on 29 January 2013 announced a 25 basis points reduction in its key policy rate viz. the repo rate to 7.75% from 8% after a monetary policy review. The central bank also announced a reduction of 25 basis points in the cash reserve ratio (CRR) to 4% from 4.25% effective the fortnight beginning 9 February 2013. With headline inflation likely to have peaked and non-food manufactured products inflation declining steadily over the last few months, there is an increasing likelihood of inflation remaining range-bound around current levels going into 2013-14, the Reserve Bank of India (RBI) said. This provides space, albeit limited, for monetary policy to give greater emphasis to growth risks, the central bank said in its policy guidance. This policy guidance will, however, be conditioned by the evolving growth-inflation dynamic and the management of risks from twin deficits viz. the current account deficit and fiscal deficit, RBI said. The next mid-quarter review of Monetary Policy for 2012-13 will be announced on 19 March 2013. The central bank on 29 January 2013 also signaled that there is less room for aggressive policy rate cuts amid any negative surprise emanating from inflation and the twin deficits. Investors' focus is now on Union Budget 2013-14 to be presented to the Parliament on 28 February 2013. Investors will focus on changes, if any, in excise duty and service tax in the Budget. It remains to be seen if the government announces measures to revive weak investment growth. It also remains to be seen if the government announces more economic reforms. A key figure to watch out is the divestment target for 2013-14. It remains to be seen if the Budget contains a clear roadmap for the implementation of Goods and Services Tax (GST). There has been some debate over taxing the super-rich. It remains to be seen if the Budget provides a clear roadmap to cap the government's subsidy bill. It also remains to be seen if there are measures to increase agriculture production to rein in food inflation. President Pranab Mukherjee said in his speech delivered at the beginning of the Budget session of the Parliament today, 21 February 2013, that the government is taking steps to deal with factors of economic slowdown. Both global and domestic factors have adversely affected India's economic growth, Mukherjee said. The government has responded to the situation by taking several measures to revive investment activity and investor sentiment, he said. Inflation is reducing gradually but still a problem, Mukherjee said. The government is working with the state governments to reach a consensus on the Goods and Services Tax (GST), Mukherjee said. The President of India said that the government remains committed to increasing the share of manufacturing to 25% of GDP and creating 100 million jobs within a decade. The next phase of the Jawaharlal Nehru Urban Renewal Mission is being finalized, Mukherjee said. Meanwhile, the tenure of the current Mission has been extended until March 2014 for completion of ongoing projects and for sanction of new projects so as to maintain the momentum of development of urban infrastructure. In order to give a push to capacity building efforts of Urban Local Bodies, the Government has decided to create a separate fund of Rs 1000 crore, Mukherjee said. In due course, the Direct Benefits Transfer System will cover wages and subsidies on food and LPG, Mukherjee said. The Direct Benefits Transfer System will help cut down leakages, bring millions of people into the financial system and lead to better targeting of beneficiaries, Mukherjee said. The Dedicated Freight Corridor project is an ambitious mega project connecting our Eastern and Western Coasts with the interiors of the country and will cover 3,300 km of railway track, Mukherjee said. Construction of over 1,000 km route length is expected to begin shortly, he said. In 2012-13, 42 PPP port projects have been targeted for award, involving an additional capacity of 251 Million Tonnes Per Annum with an investment of Rs 14770 crore in 2012-13. The government proposes to establish two new major ports, one at Sagar Island in West Bengal and the other in Andhra Pradesh with a total additional capacity of around 100 Million Tonnes Per Annum. The Budget Session of the Parliament which began today, 21 February 2013, will conclude on 10 May 2013. In order to enable the Standing Committees to consider the Demands for Grants of Ministries/Departments and prepare their Reports, the two Houses will adjourn for recess on 22 March 2013 to meet again on 22 April 2013. The Railway Budget for 2013-2014 will be presented to the Lok Sabha on 26 February 2013 immediately after Question Hour. The Economic Survey of India will be laid in the Parliament on 27 February 2013. On the eve of the commencement of the Budget session of the parliament, Prime Minister Dr. Manmohan Singh on Wednesday, 20 February 2013, said that the Budget session of the Parliament is going to transact the important financial business before the house, and that he is hopeful and confident that this session is going to be a fruitful session. "I have said this before and I repeat it again. Parliament is a forum for discussion, for dialogue, and all parties have an obligation to ensure that Parliament runs smoothly. This is a session, as I said, which is going to deal with the financial business, and our country faces many economic challenges, and it is my sincere hope that all political parties will join hands to find productive, constructive solutions to the formidable challenges facing our nation", Dr. Singh said. The government has lined up a number of key bills for consideration and passing during the Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008. Economic affairs secretary Arvind Mayaram on 9 February 2013 said that the fiscal deficit for the current financial year ending 31 March 2013 will not exceed the projected 5.3% of the country's gross domestic product. He said that the government will stick to its fiscal deficit aim and its borrowing plan. Finance Minister, P. Chidambaram on 9 February 2013 said he it confident of a 5.5% growth rate in the economy for this year. In the second half of this fiscal year, there are indications of green shoots in the economy, he said, adding it is imperative for the country to achieve a growth rate of 8%. The Ministry of Finance on 8 February 2013 said that since the GDP growth is turning around, it is likely that the CSO's advance estimate of 5% GDP growth for 2012-13 will be revised upwards and the final estimate will be closer to the finance ministry's estimate of a growth rate of 5.5% or slightly more. Early sign of an upturn in the economy are evident in the year on year growth in Union Excise Duty of 16% and of 33% increase in service tax in April-December 2012. The Purchasing Manager's Index (manufacturing) has started moving up since October 2012. This has been accompanied by a seasonally adjusted stabilization of the index of industrial production since October 2012, the finance ministry said in a statement. The finance ministry also said that lower interest rates will help support growth. The Ministry of Finance in its initial reaction to the CSO's advance estimate had said on 7 February 2018 that the finance ministry is keeping a watch on the situation adding that it has taken and will continue to take appropriate measures to revive growth. The Ministry of Finance on 14 January 2013 said that the government has decided to defer the implementation of the General Anti Avoidance Rules or GAAR by two years until 1 April 2016 and that it has accepted major recommendations of the Parthasarathi Shome Committee on GAAR with some modifications. The provisions of GAAR will apply to only those foreign institutional investors (FIIs) who seek to take advantage of the double taxation avoidance treaties India has with different countries. The rules won't apply to the non-resident individual investors who put money with the FIIs. Any investments made before 30 August 2010 won't be examined under GAAR. Finance Minister Mr. Chidambaram said that the GAAR provisions strike a balance between the government's need for revenue generation and investors' interests. Commerce, Industry and Textiles Minister Mr. Anand Sharma on 9 January 2013 said that the Joint Working Group on Indo-Mauritius Double Taxation Avoidance Convention (DTAC), which is scheduled to meet in February 2013, would be able to take the deliberations forward. Finance Minister Mr. P. Chidambaram on 31 January 2013 reiterated the commitment of the government for observing the path of fiscal consolidation and imposition of fiscal targets and policies that will make necessary fiscal correction needed for the economy and take the economy back to the path of higher growth. Chidambaram highlighted the efforts being made to turn the economy around and create a more investor-friendly climate. Chidambaram said that to encourage foreign flows into India and offer reassurance on the positive investment climate, he had recently held discussions with a cross section of international investors at Singapore, Hongkong, London and Frankfurt last month and hoped to get positive results. He was speaking at the Sixth Meeting of the Financial Stability and Development Council. The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The deficit target is 5.3% of gross domestic product for the current fiscal year through March, 4.8% in the next fiscal year, and 3% by the end of the year through March 2017. The government on 17 January 2013 allowed PSU OMCs to increase diesel prices by a small margin from time to time, a decision aimed at reducing the government's oil subsidy burden and fiscal deficit and improving the government's finances. Oil Minister Veerappa Moily said after a meeting of the Union Cabinet that there was an earlier proposal to deregulate diesel prices, and in pursuance of that, oil companies have been authorised to make price corrections from time to time. Finance Minister P. Chidambaram on 17 January 2013 said the government will factor in the reduction in subsidies and its impact on the deficit once the retailers say how much they intend to increase prices by. The government on 17 January 2013 also said it has increased the limit of subsidized cooking-gas cylinders to nine per year a family from six now. Mr. Moily said that the raising of the cap will cost the government about an additional Rs 10000 crore a year. RBI said after Third Quarter Review of Monetary Policy 2012-13 on 29 January 2013 that a staggered increase in diesel prices will percolate through to overall costs and inflation. However, these price pressures will dissipate over time, and the consequent reduction entailed in the fiscal deficit will bring about an enduring reduction in inflation and inflation expectations, the central bank said at that time. Bahujan Samaj Party (BSP) chief Mayawati slammed the UPA government last month for its decision to deregulate diesel prices and said that it would affect prices and hit common man badly. She, however, ruled out the possibility of withdrawing BSP's support to the government, saying she did not want to destabilise it as the general election is not too far. BSP provides outside support to the Congress led UPA government which has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year. European stock markets dropped on Thursday, 21 February 2013, after minutes from the US Federal Reserve's latest meeting late the prior day showed that some members expressed concerns about the central bank's monetary-easing program. Key benchmark indices in UK, France and Germany were off 1.75% to 2.01%. The euro-zone downturn appeared to steepen in February, with the preliminary composite purchasing-managers' index, or PMI, for the region slumping to a two-month low of 47.3 from a January reading of 48.6, according to Markit. A reading of less than 50 indicates a contraction in activity. The February services PMI dipped to a three-month low of 47.3 versus a January level of 48.6, while the manufacturing PMI for the region edged down to 47.8 from 47.9. Asian stocks fell on Thursday, 21 February 2013, after minutes from the Federal Reserve's latest interest-rate meeting fed into concerns that global liquidity will fall. Key benchmark indices in Hong Kong, Indonesia, Singapore, South Korea, Japan, China and Taiwan were down by 0.04% to 2.97%. Trading in US index futures indicated that the Dow could fall 55 points at the opening bell on Thursday, 21 February 2013. US stocks fell sharply on Wednesday, 20 February 2013, retreating from multiyear highs, after minutes from the Federal Reserve's last meeting offered investors differing views over the prospects for continued stimulus. Minutes from the Federal Open Market Committee's January meeting released on Wednesday, 20 February 2013, revealed that many Fed officials are worried about the costs and risks arising from the central bank's quantitative-easing program, with the Fed's balance sheet recently passing the $3 trillion mark. The Fed minutes indicated the central bank will review the program in March 2013. The Fed, along with other global central banks, has provided massive amounts of liquidity to markets since the onset of the global financial crisis, which has worked its way through to various asset classes. The Fed's most recent addition to its liquidity-boosting moves came late last year, when it pledged billions of dollars a month of asset buying until the US jobs market picks up.