Tuesday, May 14, 2013
At 9:15 AM, the Sensex was trading at 19747, up 55 points, while the Nifty was quoting at 5,980, down 126 points. The BSE Small-Cap and Mid- Cap indices was trading at 0.21% and 0.16%, respectively. Dr Reddy's Laboratories, Bharti Airtel, Coal India, Gail India, Infosys, Cipla, ONGC, Tata Consultancy Services, NTPC, Wipro are the gainers in today's session. Tata Steel, Bajaj Auto, HDFC, L&T, Maruti Suzuki, Hindalco Industries are trading with a negative bias. Among sectoral indices, the gainers include IT, FMCG, healthcare, oil and gas, realty, power, autos, and banking while capital goods, metals, and consumer durables are seeing some weakness. Dealers expect bargain hunting in select counters post lunch unless wholesale inflation data for April disappoints. The street is expecting Wholesale Price Index for April to come in around 5.4%. On the global front, the cues are not too favourable for equity markets. Reports suggest officials at the US Federal Reserve are considering an exit strategy from its aggressive stimulus measures, which have been fueling the economy since late 2008, are weighing on sentiment. In Monday's trade, the Dow ended weak while the S&P 500 and Nasdaq managed a positive close. US retail sales data for April were positive, an indication that the US economy is turning around. Retail sales rose 0.1% in April against a 0.5% drop in March Asian markets too are quiet. The Nikkei, Kospi and Hang Seng index are trading a tad higher while China's Shanghai index is showing some weakness. After Pakistani democracy consolidated its position with Nawaz Sharif winning the elections, Indian democracy was forced to reaffirm its own after reports that Prime Minister Manmohan Singh may not complete his term after the recent Coalgate and Bansalgate imbroglio. However, the Congress top brass re-affirmed their faith in the octogenarian Indian Prime Minister saying there is no rift in between Singh and party president Sonia Gandhi. Dismissing reports that Singh may be replaced by party vice-president Rahul Gandhi, the high command said Singh will continue to be the Prime Minister till the end of his term in 2014. Media reports suggest that the Reserve Bank of India’s forensic study into Cobrapost’s money laundering expose by banks and insurers has indicted three banks for wrongdoing on various counts. Ranbaxy Laboratories has pleaded guilty to felony charges relating to drug safety. It has agreed to pay $500mn in civil and criminal fines under a settlement agreement with the US Department of Justice. The stock is currently trading flat. Punj Llyod is up 1% after the company said it bagged a Rs. 730 crore contract from ONGC. Tata Steel is down close to 2% on non-cash write down of goodwill and assets of around $1.6bn due to poor macroeconomic condition in Europe, among others.
The market is set to open flat. Some bargain hunting may be seen in counters which could prop up the indices later in the day unless inflation data disappoints. Finance Minister Chidambaram will addre.. What can really explain the sell-off on the bourses on Monday? Some attribute to RBI report on Cobrapost revelations, others say it is the trade deficit data and some others think it may be due to political developments. Perhaps, profit booking at higher levels may be more accepted. The market is set to open flat. Some bargain hunting may be seen in counters which could prop up the indices later in the day unless inflation data disappoints. Finance Minister Chidambaram will address bankers on financing of pending infrastructure project later in the day. The Asian markets are marginally higher. Nikkei and Hang Seng index have gained a tad while South Korea's Kospi index was trading almost a percent higher. China's Shanghai index is however lower. A report stated that US central bank officials are considering an exit strategy for the massive stimulus measures that have been fueling the economy since late 2008. Dow slipped while S&P 500 and Nasdaq managed a positive close. US retail sales data were positive. Results Preview: Dr Reddy's Revenue Rs30.1bn (+13.2% yoy), Reported PAT Rs4.2bn (-1.2% yoy)
Prices end mildly higher as a firmer U.S. dollar hurt commodities Red metal prices finished near unchanged mark at Comex on Monday, 13 May, 2013. Prices ended mildly higher as a firmer U.S. dollar hurt commodities. At Comex, July copper ended higher by 0.5 cents (0.15%) at $3.36 a pound on Monday. Copper for three-month delivery was little changed at $7,403 on Monday. It garnered a gain of half a percent. Investors considered the possible curtailing of monetary-policy stimulus by the Fed. The central bank's easy monetary policy tends to raise the risk of inflation, as well as put pressure on the dollar. China on Monday reported its industrial production did improve during April, but still came in slightly below trade expectations. Industrial production in China came in at up 9.3%, on an annualized basis, in April. The market expected up 9.5%. Reviewing today's economic data at Wall Street, business inventories growth was flat for a second consecutive month in March. The consensus expected business inventories to increase 0.3%. Inventory growth from manufacturers (0.0%) and merchant wholesalers (0.4%) was known prior to the release. The only new information was that retailer inventories declined 0.5% in March after increasing 0.2% in February. Retail sales increased 0.1% in April after declining 0.5% in March. The consensus expected retail sales to decline 0.3%. The April employment report showed a 0.3% decline in aggregate wages. The increase in sales was a result of consumers reducing their savings rate. That may work in the short-run, but consumers are expected eventually to increase their savings rate back to 2012 levels. Unless income growth accelerates, retail sales growth will likely decelerate and possibly contract in the long-run. In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.15% on Monday. China accounts for 40% global copper consumption, Europe around 20% and the United States 8%. The global copper market showed a 70,000 tonne surplus in January this year, compared with a 60,000 tonne deficit in the same month last year, reflecting lower demand by big consumers of the metal, which is widely used in construction and power cables. Among other traded metals at LME on Monday, lead in London ended 0.4% higher at $2,017 a ton and nickel rose 0.5% to $15,370 a ton. Aluminum ended 0.2% higher at $1,870 a ton, and zinc closed higher by 0.5% at $1,870.5 a ton. At the MCX, copper prices for June delivery ended lower by Rs 2.2 (0.53%) at Rs 408.6/Kg. Prices rose to a high of Rs 411.55/Kg and fell to a low of Rs 405.08/Kg.
Strong dollar and concerns around monetary easing put pressure on prices Crude-oil prices ended lower on Monday, 13 May 2013 at Nymex. June crude oil dropped following a strong dollar. Prices also slipped on concerns that the U.S. Federal Reserve will ease back on economic stimulus and rising output from key oil producers pushing prices to their lowest close in over a week. Light and sweet crude for June ended lower by $0.87 (0.9%) at $95.17 a barrel on the New York Mercantile Exchange on Monday. Investors considered the possible curtailing of monetary-policy stimulus by the Fed. The central bank's easy monetary policy tends to raise the risk of inflation, as well as put pressure on the dollar. China on Monday reported its industrial production did improve during April, but still came in slightly below trade expectations. Industrial production in China came in at up 9.3%, on an annualized basis, in April. The market expected up 9.5%. Reviewing today's economic data at Wall Street, business inventories growth was flat for a second consecutive month in March. The consensus expected business inventories to increase 0.3%. Inventory growth from manufacturers (0.0%) and merchant wholesalers (0.4%) was known prior to the release. The only new information was that retailer inventories declined 0.5% in March after increasing 0.2% in February. Retail sales increased 0.1% in April after declining 0.5% in March. The consensus expected retail sales to decline 0.3%. The April employment report showed a 0.3% decline in aggregate wages. The increase in sales was a result of consumers reducing their savings rate. That may work in the short-run, but consumers are expected eventually to increase their savings rate back to 2012 levels. Unless income growth accelerates, retail sales growth will likely decelerate and possibly contract in the long-run. In the currency market, the dollar index, which weighs the strength of the dollar against a basket of six other currencies, rose by 0.15% on Monday. Among other energy products on Monday, June heating oil slipped 1.5 cents, or 0.5%, to $2.89 a gallon. June gasoline lost 4 cents, or 1.4%, to close at $2.82 a gallon. Natural gas for June delivery tacked on 1.5 cents, or 0.4%, to $3.93 per million British thermal units. At the MCX, crude oil for May delivery closed lower by Rs 15 (0.3%) at Rs 5,237/barrel. Natural gas for May delivery closed higher by Rs 1.1 (0.5%) at Rs 215.2.
Price band set at Rs 470 to Rs 543 per share Just Dial, a local search engine, is proposing a public issue of 1.74 crore equity shares through an offer for sale by the selling shareholders. A discount of 10% to the floor price is being offered to retail individual bidders. The offer will constitute 25.02% of the fully diluted post-offer paid-up equity share capital of the company. The price band for the IPO has been fixed at Rs 470 to Rs 543 per share. The IPO will open for subscription on 20 May 2013 and will close on 22 May 2013. The equity shares are proposed to be listed on the BSE, the NSE and MCX-SX. Just Dial is promoted by V.S.S. Mani, Anita Mani, Ramani Iyer and V. Krishnan.
The market may open higher on firm Asian stocks. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 14.50 points at the opening bell. The government will unveil data on the wholesale price index (WPI) for April 2013 today, 14 May 2013. WPI eased to the lowest level in 40 months at 5.96% in March 2013, and sharply lower than 6.84% in February 2013. Dr Reddy's Laboratories and Reliance Infrastructure unveil Q4 results today, 14 May 2013. Tata Steel said after market hours on Monday, 13 May 2013, that the company has substantially completed its year end impairment review for the consolidated financial statements for the financial year end 31 March 2013 (FY 2013) as required under the Indian Accounting Standards. This review was undertaken taking into account the external economic environment and macroeconomic conditions especially in Europe, the underlying demand-supply imbalance of the global steel industry and the prudent view of the forecast of the businesses. Following the review, the company expects non-cash write down of the goodwill and assets in the consolidated financial statements for the year ended 31 March 2013 of around $1.6 billion. The impairment is primarily due to a weaker macroeconomic and market environment in Europe where apparent steel demand has fallen significantly in 2012-13 by almost 8% which in aggregate results in almost 30% since the emergence of the global financial crisis in 2007. This has led to a downward revision of cash flow expectations underlying the valuation of the European business. The impairment also includes the effect of write down of assets in the ferro chrome business in South Africa and the mini blast furnace in Tata Steel Thailand which has been impacted by the high cost of raw material feedstock. The final figures will be included in the full year results on 23 May 2013, Tata Steel said. The company's financial covenants are unaffected by the above non-cash write down of goodwill and assets, it added. Ranbaxy Laboratories said after market hours on Monday, 13 May 2013, that a previously disclosed investigation by the US Department of Justice (DOJ) of data integrity and manufacturing processes at certain Ranbaxy facilities in India has been concluded. The investigation related to conduct which occurred several years ago, and Ranbaxy's current management team fully cooperated with the DOJ, Ranbaxy said. On 20 December 2011, Ranbaxy announced that it had signed a consent decree with the US Food and Drug Administration (USFDA), under which Ranbaxy had committed to further strengthen procedures and policies to ensure data integrity and to comply with Current Good Manufacturing Practice (cGMP). In anticipation of the settlement agreement with the DOJ, Ranbaxy had announced at that time its intention to make a financial provision of $500 million related to expected costs associated with resolving the DOJ investigation. Under the terms of the final settlement agreement, Ranbaxy and its affiliates have agreed to settle alleged civil violations of the False Claims Act with the US, all 50 states and the District of Columbia. Separately, a US subsidiary, Ranbaxy USA, Inc., has agreed to plead guilty to a criminal information charging violations of the Food, Drug and Cosmetic Act and other criminal statutes. Ranbaxy's payments related to both the civil and criminal settlements total $500 million in aggregate. The financial provision Ranbaxy established in December 2011 will be sufficient to cover all material financial obligations under the agreement, Ranbaxy said. Mr. Arun Sawhney, CEO & Managing Director, Ranbaxy, stated, "Today's announcement marks the resolution of this past issue. We are pleased to continue bringing safe, effective and quality medicines to market for the benefit of consumers in the US and other parts of the world. While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy's stakeholders; the conclusion of the DOJ investigation does not materially impact our current financial situation or performance. Ranbaxy has successfully launched several generic products recently and is well-positioned for future growth in the US and around the world with a robust pipeline of important products as it continues to build a strong global portfolio of branded and generic prescription and OTC pharmaceuticals. Our conduct is guided by our philosophy of 'Quality and Patients First'." Realty major DLF undertakes an institutional placement programme through the stock exchanges mechanism today, 14 May 2013. The company will issue up to 8.1 crore shares to eligible qualified institutional buyers. The floor price for the qualified institutional placement is Rs 222 per equity share, with price band of Rs 222 to Rs 233 per share. Key benchmark indices slumped on Monday, 13 May 2013, after the latest data showed that the country's trade deficit widened in April 2013. Weakness in European and Asian stocks also weighed on sentiment. The S&P BSE Sensex lost 430.65 points or 2.14% to settle at 19,691.67 on that day, its lowest closing level since 6 May 2013. Foreign institutional investors (FIIs) bought shares worth a net Rs 244.08 crore on Monday, 13 May 2013, as per provisional data from the stock exchanges. The focus of the market is on Q4 results. Bajaj Auto announces Q4 results on Thursday, 16 May 2013. ITC unveils Q4 results on Friday, 17 May 2013. Coal India unveils standalone FY 2013 results on 20 May 2013. L&T unveils Q4 results on 22 May 2013. Tata Steel and Bharat Heavy Electricals (Bhel) unveil Q4 results on 23 May 2013. Coal India unveils consolidated FY 2013 results on 27 May 2013. Sun Pharma, GAIL (India) and Hindalco Industries unveil Q4 results on 28 May 2013. BPCL announces Q4 results on 29 May 2013. M&M and Tata Power unveil Q4 results on 30 May 2013. Most Asian markets rose on Tuesday as an unexpected gain in US retail sales boosted optimism the recovery in the world's largest economy is gathering momentum. Key benchmark indices in Hong Kong, Indonesia, Japan, South Korea, Singapore, and Taiwan rose by 0.12% to 0.85%. China's Shanghai Composite fell 0.72%. US stocks finished little changed on Monday as investors mulled when the Federal Reserve may begin to scale back its $85-billion-a-month bond-buying program. US retail sales rose 0.1% in April, which was higher than forecast, signaling that central bank efforts to spur economic growth are working.