Friday, May 31, 2013
Key benchmark indices eked out small gains in volatile trade as European stocks rose. The barometer index, the S&P BSE Sensex, and the CNX Nifty, both, hit their highest closing level in over one week. The Sensex advanced 67.76 points or 0.34%, up close to 150 points from the day's low and off about 40 points from the day's high. Index heavyweight and cigarette major ITC scaled record high. Anther index heavyweight Reliance Industries (RIL) dropped. The market breadth, indicating the overall health of the market was negative. The Sensex has gained 711.22 points or 3.64% in this month so far (till 30 May 2013). The Sensex has gained 788.69 points or 4.05% in calendar 2013 so far (till 30 May 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 228.22 points or 1.11%. From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has surged 4,466.42 points or 28.36%. Coming back to today's trade, Mahindra & Mahindra (M&M) surged over 5% after announcing strong Q4 result during market hours today, 30 May 2013. Auto major Tata Motors gained after announcing Q4 earnings after market hours on Wednesday, 29 May 2013. Pharma major Cipla dropped after the company declared weak Q4 result after market hours on Wednesday, 29 May 2013. ICICI Bank dropped after turning ex-dividend today, 30 May 2013. Tata Power Company rose after reporting turnaround Q4 earnings during market hours today, 30 May 2013. Indian Oil Corporation rose after good Q4 result announced during market hours today, 30 May 2013. The market was volatile today, 30 May 2013, as traders rolled over positions in the futures & options (F&O) segment from the near-month May 2013 series to June 2013 series. The May 2013 derivatives contracts expired today, 30 May 2013. The S&P BSE Sensex advanced 67.76 points or 0.34% to settle at 20,215.40, its highest closing level since 20 May 2013. The index rose 106.39 points at the day's high of 20,254.03 in late trade. The index fell 81.50 points at the day's low of 20,066.14 in early trade. The CNX Nifty advanced 19.75 points or 0.32% to settle at 6,124.05, its highest closing level since 20 May 2013. The index hit a high of 6,133.75 and a low of 6,072.15 in intraday trade. The BSE Mid-Cap index rose 0.04%. The BSE Small-Cap index declined 0.35%. Both these indices underperformed the Sensex. The BSE Auto index (up 2.29%), BSE FMCG index (up 1.88%) and BSE Power index (up 0.71%), outperformed the Sensex. The BSE Realty index (down 2.39%), BSE Metal index (down 1.11%), BSE Oil & Gas index (down 0.74%), BSE Capital Goods index (down 0.56%), BSE HealthCare index (down 0.4%), BSE Bankex (down 0.4%), BSE Consumer Durables index (down 0.16%), BSE Teck index (down 0.16%), BSE IT index (down 0.16%), and BSE PSU index (up 0.12%), underperformed the Sensex. The total turnover on BSE amounted to Rs 4022 crore, higher than Rs 1801 crore on Wednesday, 29 May 2013. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,327 shares declined and 1,962 shares rose. A total of 133 shares were unchanged. Among the 30-share Sensex pack, 18 stocks declined and the rest of them gained. Index heavyweight Reliance Industries (RIL) shed 1.34% to Rs 835.90. The stock hit high of Rs 846.50 and low of Rs 830.50. RIL and its partners BP and NIKO on 24 May 2013 announced a significant gas and condensate discovery in the KG D6 block off the eastern coast of India. RIL is the operator of KG D6 with 60% equity. BP has a 30% share and NIKO the remaining 10%. Meanwhile, ratings agency Standard & Poor's (S&P) on Wednesday, 29 May 2013, raised the long term corporate credit rating on RIL to "BBB+" from "BBB", with a "negative" outlook. RIL's articulation of its growth strategy removes the uncertainty regarding the company's use of its high cash balance, S&P said. RIL is planning to spend more than $30 billion on expansion over the next three years in core businesses such as refining, petrochemical, and exploration and production (E&P). Commenting on the rating upgrade, V. Srikanth, Joint CFO, RIL, said that the upgrade recognizes the value of RIL's focused capital expenditure plan in strengthening the company's profitability and competitiveness. State-run oil exploration major ONGC fell 0.09%. The company's net profit declined 39.96% to Rs 3388.71 crore on 12.87% growth in total income from operations (net) to Rs 21829.86 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. The decline in net profit despite lower subsidy sharing burden was due to exceptional one-time expenses. ONGC said an amount of Rs 1850 crore has been provided for in Q4 March 2013 on account of difference of employer's contribution towards superannuation benefits up to 30% as per guidelines issued by Department of Public Enterprises (DPE) for the period from 1 January 2007 to 31 March 2013. ONGC gave a subsidy discount of Rs 12312 crore in Q4 March 2013, which was lower than Rs 14170 crore in Q4 March 2012. The subsidy discount impacted the profit before tax (PBT) by Rs 10214 crore and profit after tax (PAT) by Rs 6900 crore. ONGC shares the under recoveries of state-run oil marketing companies (PSU OMCs) by allowing discount in the prices of crude oil, PDS kerosene, and domestic LPG based on the rates of discount communicated by the Ministry of Petroleum and Natural Gas and the Petroleum Planning and Analysis Cell. ONGC has notified two new gas discoveries -- one in the KG shallow offshore basin and other in Western offshore basin in Kutch. Meanwhile, the company's board has approved an investment of Rs 4124.35 crore for the integrated development of Vashishta and S-1 fields for production of natural gas from KG offshore. The project is expected to be completed in by April 2016. Crude oil refiner BPCL rose 1.41% after net profit rose 21.1% to Rs 4797.29 crore on 2.5% growth in net sales to Rs 66282.01 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. Indian Oil Corporation (IOC) rose 1.41%. The company's net profit rose 14.54% to Rs 14512.81 crore on 9.72% growth in total income from operations to Rs 128681.03 crore in Q4 March 2013 over Q4 March 2012. The result was announced during market hours today, 30 May 2013. IOC's net profit surged 26.56% to Rs 5005.17 crore on 12.2% growth in total income from operations to Rs 447096.41 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). On consolidated basis, IOC's net profit rose 5.27% to Rs 4449.01 crore on 12.92% growth in total income from operations to Rs 461779.67 crore in FY 2013 over FY 2012. IOC's average gross refining margins for Q4 March 2013 was $2.39 per barrel, as against $4.25 per barrel in Q4 March 2012. Average gross refining margin for FY 2013 stood at $2.26 per barrel, as against $3.63 per barrel in FY 2012. Power Finance Corporation declined 2.15%. The company's net profit jumped 58.14% to Rs 1294.13 crore on 26.62% rise in total income from operations to Rs 4663.52 crore in Q4 March 2013 over Q4 March 2012. The company announced its Q4 results during market hours today, 30 May 2013. Capital goods pivotals were mixed. Bhel rose 1.08%. L&T dropped 1.4%. The company, last week, reported 6.9% fall in net profit to Rs 1787.94 crore on 9.9% rise in total income to Rs 20686.93 crore in Q4 March 2013 over Q4 March 2012. The result was announced on 22 May 2013. Bank stocks were mixed. State Bank of India (SBI) dropped 0.8%. Among other PSU bank stocks, Canara Bank, Union Bank of India, Bank of India and Bank of Baroda rose by 0.39% to 2.47%. Punjab National Bank fell 0.75%. HDFC Bank rose 1.21% to Rs 723.80. The stock hit a record high of Rs 727 in intraday trade today, 30 May 2013. ICICI Bank fell 2.71% after turning ex-dividend today, 30 May 2013 for dividend of Rs 20 per share for the year ended 31 March 2013. Metal stocks declined for second day in a row after the International Monetary Fund (IMF) cut its growth forecast for China this year to 7.75% from 8%, citing a weak world economy and exports, adding to concerns that the world's second-largest economy is losing momentum. China is the world's largest consumer of copper and aluminum. Sterlite Industries (India), Hindalco Industries, Tata Steel, Jindal Steel & Power and Hindustan Zinc shed by 0.3% to 3.9%. Sail dropped 0.92%. The company's consolidated net profit declined 38.46% to Rs 2180.52 crore on 3.59% fall in total income from operations (net) to Rs 44697.61 crore in the year ended 31 March 2013 (FY 2013) over FY 2012. The result was announced during market hours today, 30 May 2013. State-run iron ore miner NMDC rose 2.4%. NMDC's net profit declined 10.8% to Rs 1464.95 crore on 23.5% growth in turnover to Rs 3204 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. The company said it achieved a record production and sales of iron ore for the 4th quarter. This was accomplished inspite of the slurry pipeline not being available at all for evacuation, NMDC said. NMDC said it has been pursuing its growth programme vigorously. NMDC, as part of its forward integration programme and value addition, is setting up a 3 million tonnes per annum (MTPA) steel plant at Nagarnar in Chhattisgarh, for which most of the major packages have been finalized and awarded. So far, cumulative orders worth Rs 13475 crore have already been placed and expenditure of over Rs 2346 crore has already been incurred. Work on some of the packages have already started and the project is expected to be completed by 2015-16, NMDC said. NMDC said it incurred capital expenditure of Rs 1607.24 crore in the year ended 31 March 2013 (FY 2013) under various schemes. For the year ending 31 March 2014 (FY 2014), an expenditure of Rs 2720 crore is planned to be expended, NMDC said. Jet Airways (India) fell 1.12% to Rs 528.55 on massive volume of 3.22 crore shares. A block deal of 1.59 crore shares was struck on the counter at Rs 525 per share in opening trade on BSE today, 30 May 2013. Another block deal of 1.59 crore shares was executed on the counter at Rs 527.65 per share in opening trade on BSE today, 30 May 2013. The block deals saw a staggering 36.8% equity stake of Jet Airways (India) changing hands. Tail Winds, a promoter of Jet Airways (India), had put on block 43.17 lakh shares of the company, representing approximately 5% of the total paid up equity share capital, via Offer for Sale (OFS) today 30 May 2013 through a separate window provided by the stock exchanges for this purpose. The OFS got bids for 29.86 lakh shares by 15:30 IST, compared with 43.17 lakh shares on offer, as per data from the stock exchanges. The OFS was subscribed 69.16% at an indicative bid price of Rs 515.17 per share. The floor price for the offer for sale was fixed at Rs 510. Realty stocks declined. Unitech, Sobha Developers and Anant Raj Industries dropped by 2.08% to 4.2%. DLF fell 2.16% ahead of its Q4 results today, 30 May 2013. Housing Development and Infrastructure (HDIL) lost 6.88%. The stock had lost 6.8% on Wednesday, 29 May 2013, after the company reported its Q4 results. HDIL reported consolidated net loss of Rs 279.95 crore in Q4 March 2013, as against net profit of Rs 315.52 crore in Q4 March 2012. HDIL's consolidated total income declined 76.04% to Rs 155.54 crore in Q4 March 2013 over Q4 March 2012. HDIL said that the Mumbai International Airport has served notice of termination on the company for Mumbai International Airport Slum Rehabilitation project citing unsubstantiated charges on which the company has initiated legal remedies. The board of HDIL following its conservative accounting policy has written off unrealised cost aggregating to Rs 441.98 crore pertaining to the Mumbai International Airport Slum Rehabilitation project as exceptional item in Q4 March 2013, HDIL said HDIL's consolidated net profit fell 90.94% to Rs 73.33 crore on 48.18% decline in total income to Rs 1065.23 crore in the year ended 31 March 2013 (FY 2013) over the year ended 31 March 2012 (FY 2012). Mahindra & Mahindra (M&M) surged 4.61% to Rs 1,004.60 and was the top gainer from the Sensex pack. The combined profit before exceptional items and tax of M&M and its 100% subsidiary -- Mahindra Vehicle Manufacturers (MVML) -- jumped 41.8% to Rs 1230.40 crore in Q4 March 2013 over Q4 March 2012. MVML, located at Chakan near Pune in Maharashtra, has been set up as a 100% subsidiary of M&M with a view to source contemporary products for expanding the market offering of M&M. The operating margin for the combined entity (M&M and MVML) during the quarter improved to 14.4%, from 12% in Q4 March 2012. The good growth in the operating margin and profits of the entity during the quarter was due to a strong sales performance by its Automotive sector and its relentless focus on cost control, M&M said in a statement. The combined net profit of M&M and MVML after exceptional items and tax rose 5.7% to Rs 962.90 crore in Q4 March 2013 over Q4 March 2012. During the quarter, there was an exceptional profit of Rs 90.60 crore arising from the sale of 34 lakh shares in M&M's subsidiary, Mahindra Holdings and Resorts India. In Q4 March 2012 too, there was an exceptional profit of Rs 108.30 crore arising from the merger with M&M of the automotive business of a M&M subsidiary -- Mahindra Automotive Distributors (MADPL). Also due to this merger, the past unabsorbed tax losses related to automotive business of MADPL became available to M&M and there was a onetime tax saving of Rs 148.50 crore in Q4 March 2012. Auto major Tata Motors gained 4.31%. The company's consolidated net profit declined 36.71% to Rs 3945 crore on 10% growth in revenue to Rs 56002 crore in Q4 March 2013 over Q4 March 2012. The fall in bottom line was due to base effect. Tata Motors had accounted for a large tax credit in Q4 March 2012. Tata Motors' British luxury car unit Jaguar Land Rover (JLR) had accounted for tax credit of 225 million pounds (Rs 1794 crore) in Q4 March 2012 for past income tax losses. Tata Motors' profit before tax (PBT) rose 6.1% to Rs 4694 crore in Q4 March 2013 over Q4 March 2012. Tata Motors attributed revenue growth to strong demand, growth in volumes and favourable market mix at JLR and favourable operating foreign exchange at the British luxury car unit. The result was announced after market hours on Wednesday, 29 May 2013. Due to weak operating environment in the commercial vehicles and passenger car business in India, the board of Tata Motors pruned dividend to Rs 2 per share for the year ended 31 March 2013 (FY 2013) from Rs 4 per share for the year ended 31 March 2012 (FY 2012). India's largest car maker by sales, Maruti Suzuki India gained 0.23%. Two wheeler makers were mixed. Bajaj Auto rose 0.73%. India's largest motorcycle maker by sales, Hero MotoCorp, shed 1.96%. Infosys slipped 0.36% after turning ex-dividend today, 30 May 2013 for a final dividend of Rs 27 per share for the year ended 31 March 2013. Index heavyweight and cigarette major ITC was up 3.51% at Rs 354.25. The stock hit record high of Rs 355.75 in intraday trade today, 30 May 2013. FMCG stocks gained on expectations of normal monsoon rains this year. FMCG firms derive substantial revenue from rural India. Dabur India (up 0.19%), Britannia Industries (up 3.05%), Godrej Consumer Products (up 0.07%) and Tata Global Beverages (up 3.85%) gained. Nestle India (down 0.08%), Marico (down 0.44%), Hindustan Unilever (down 0.16%) and Colgate-Palmolive (India) (down 1.27%) declined. Pharma major Cipla lost 4.62% to Rs 383 and was the top loser from the Sensex pack. The company's net profit fell 8.3% to Rs 268 crore on 4.9% growth in revenue to Rs 1982 crore in Q4 March 2013 over Q4 March 2012. The result was announced after market hours on Wednesday, 29 May 2013. Cipla's revenue from India operations rose 5.2% to Rs 793 crore in Q4 March 2013 over Q4 March 2012. The growth in revenue from the domestic business was largely on account of growth in anti-asthma, anti-biotics/infectives, and cardiovascular therapy segments. Exports of formulations rose 11.5% to Rs 954 crore in Q4 March 2013 over Q4 March 2012. Exports of active pharmaceutical ingredients (APIs) fell 24% to Rs 175 crore in Q4 March 2013 over Q4 March 2012. The company attributed growth in overall export revenue to growth in anti-asthma, anti-allergic, anti-depressants, and anti-retroviral segments. Cadila Healthcare slipped 1.52%. The company during market hours today, 30 May 2013, reported 54% rise in consolidated net profit to Rs 263 crore on 16% rise in gross sales to Rs 1599 crore in Q4 March 2013 over Q4 March 2012. Tata Power Company rose 0.28%. The company reported a consolidated net profit of Rs 181.36 crore in Q4 March 2013 as compared to net loss of Rs 628.75 crore in Q4 March 2012. Total income rose 27.27% to Rs 9071.97 crore in Q4 March 2013 over Q4 March 2012. The result was announced during market hours today, 30 May 2013. On the macro front, the government will announce Q4 March 2013 gross domestic product (GDP) data tomorrow, 31 May 2013. India's GDP grew 4.5% in Q3 December 2012, sharply slower than the 5.3% expansion reported for Q2 September 2012. The Reserve Bank of India (RBI) undertakes mid-quarter review of the monetary policy on 17 June 2013. The RBI on 3 May 2013 cut its key policy rate viz. the repo rate by 25 basis points (bps) to 7.25% and kept the cash reserve ratio (CRR) for banks unchanged at 4% after a monetary policy review. RBI said at that time that the balance of risks stemming from its assessment of the growth-inflation dynamic provides little space for further monetary easing. The RBI said it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command. The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The government hopes to reduce the fiscal deficit to 3% by March 2017. European stock markets edged higher on Thursday, 30 May 2013 ahead of a deluge of US data that could strengthen the case for the Federal Reserve to consider reducing its bond purchases. Key benchmark indices in Germany, France and UK rose by 0.28% to 1.05%. Asian stocks declined on Thursday, undermined by an overnight pullback in global equities as investors assessed the implications of a potential softening of the Federal Reserve's massive monetary stimulus programme. Key benchmark indices in Hong Kong, South Korea, Singapore, China, Taiwan and Indonesia were down by 0.05% to 1.37%. Japan's Nikkei 225 dropped 5.15% amid concerns about market volatility as the yen strengthened against the dollar. Trading in US index futures indicated that the Dow could gain 36 points at the opening bell on Thursday, 30 May 2013. US stocks fell sharply on Wednesday, with Wall Street giving back the prior day's gains, amid worries over global-growth prospects and fears the Federal Reserve will begin to scale back its bond-buying program. Data on tap on Thursday from the US include weekly jobless claims, the second report on first-quarter gross domestic product and pending-home-sales figures. Fed Chairman Ben Bernanke said last week that an improvement in data could trigger the central bank to start tapering its asset purchases in coming months, stoking fears that the $85-billion-a-month liquidity injection will soon come to an end. The Organization for Economic Cooperation and Development (OECD) on Wednesday cautioned that global growth could get hit as governments pare back easy-money programs. The OECD gave a bleaker forecast for the euro-zone economy this year. Also, the International Monetary Fund on Wednesday cut its estimate for China's economic growth in 2013 and 2014.