Indian stock markets: Sensex soars 320 pts even as Indian rupee plunges, Tata Steel shares up

Indian stock markets snapped a four-day losing streak with the BSE benchmark Sensex surging over 320 points in mid-session trades today on emergence of value buying in front-runner stocks led by metal sector amid a higher opening in Europe - Indian rupee however, continued to repeat recent history and fell against the US dollar, going under Rs 65, which is another record.

BSE Sensex which had tumbled 1,361 points in last four trading sessions and fell to 17,759.59 at the outset, bounced back by 319.93 points, or 1.79 per cent, to 18,225.84 at 1300 hrs.

On similar lines, the broad-based National Stock Exchange (NSE) Nifty surged by 101.30 points, or 1.91 per cent, to 5,403.85.

Brokers said the mid-session surge in the market was backed by metal stocks on expectations for a pick up in China after HSBC said its preliminary purchasing managers' index rose in August.

They said higher opening in European stocks markets as manufacturing in Germany expanded at a faster-than-expected pace, further influenced the market sentiment.

The metal sector index gained the most by rising 5.15 per cent to 7,518.94 as Tata Steel shares shot up by 6.80 per cent to Rs 264.80, Hindalco Industries Ltd by 3.99 per cent to Rs 97 and Jindal Steel by 5.73 per cent to Rs 233.30.

Two most-heaviest stocks, with nearly 15 per cent weightage in the Sensex, Reliance Industries (RIL) shot up by 2.14 per cent to Rs 800.65 and Infosys by 2.32 per cent to Rs 3,021.95.

Sensex soars 350 points, rupee off days low

The BSE Sensex surged over 350 points reversing early declines, while the broader Nifty benchmark edged above the key 5,400 levels in afternoon trade on Thursday.

The rupee also pulled back below the 65 to the dollar mark after earlier hitting a low of 65.56.

The gains came on the back of strong buying in metal and energy stocks, which rose tracking signs of stabilization in the world's second-largest economy. Data showed that China's vast manufacturing sector hit a four-month high in August.

Sesa Goa was among the top Nifty gainers, rising over 7 per cent, while Tata Steel jumped over 6 per cent. State run ONGC traded with over 5 per cent gains.

The BSE Metal index rose over 5 per cent, while the energy benchmark traded 3 per cent higher. Banking stocks, which dropped over 1 per cent in early trades, recovered to support the broader markets.

European stocks also opened higher supporting sentiments after the Federal Reserve's July policy minutes, published late night, showed the U.S. central bank was on track to start tapering stimulus as early as next month.

Traders said markets are oversold with the Sensex falling around 1,400 points in the last four sessions. Some analysts like Manish Sonthalia of Motilal Oswal AMC told NDTV that valuations are attractive so there is a case for buying stocks.

"There is panic in markets, but there is a case of buying at lower levels rather than selling at current levels," he added.

Traders said as long as the rupee continues to slide, there will be uncertainty in the markets. The weakening rupee not hits corporate profits, especially for companies with foreign currency loans and those that are dependent on imports, but is also likely to spark inflation and consequently higher rates, ultimately weighing on economic growth.

The Sensex traded 305 points higher at 18,210, while the Nifty advanced 80 points at 5,383 as of 1.22 p.m.

Sesa Goa gains 8 per cent on Sensex inclusion

Sesa Goa Ltd, the Indian unit of oil and mining group Vedanta Resources Plc, gains 8 per cent on inclusion in Sensex in place of another group unit Sterlite Industries Ltd.

The inclusion would be effective from August 27 as per a BSE circular on Wednesday.

Sesa Goa said on Saturday its merger with Sterlite Industries and the group's various Indian arms to create a single unit has become effective.

Sterlite Industries is also up 4 per cent.

JBF Industries surges on getting nod for buy-back of equity shares

JBF Industries’ board of directors at its meeting held on August 21, 2013, has approved buy-back of equity shares of Rs 10 each of the Company from the existing equity shareholders of the Company other than promoters and the persons who are in control of the Company at price not exceeding Rs. 105 per equity share. The maximum buy-back size shall not exceed the aggregate amount of Rs. 73.50 crore that is within 10% of the total paid-up equity share capital and free reserves of the Company as on March 31, 2013.

The buy-back will be through the methodology of ‘Open Market Purchases through Stock Exchanges’ prescribed under SEBI (Buy Back of Securities) Regulations, 1998.

JBF Industries is engaged in the manufacturing of polyester chips, partially oriented yarn and polyester processed yarn/specialty yarn at its plants at Silvasa in the Union Territory of Dadra and Nagar Haveli and at Valsad (Gujarat). The company is one of the leading names in Polyester business in India.

What the Fed meeting minutes mean for India

FOMC minutes had little by way of a firmer indication whether tapering of stimulus would start in September.

Here are the references to emerging markets in the much-awaited the Federal Open Market Committee (FOMC) minutes of the 30-31 July, out last night. They say, “A slower pace of expansion in many emerging market economies (EMEs), including China, since the beginning of the year offset an increase in the average rate of economic growth in the advanced foreign economies.”

On currencies, the minutes say, “The foreign exchange value of the dollar was little changed, on average, relative to the currencies of the advanced foreign economies, but appreciated against EME currencies amid weak incoming data on economic activity and monetary policy easing in some EMEs,along with rising US treasury yields. Emerging market mutual funds experienced sharp outflows in recent weeks, while EME stock prices declined and EME credit spreads widened on net.”

The committee members also “pointed to the foreign economic outlook as an ongoing downside risk”. The change in the economic outlook for emerging and developed markets has led to money flowing out of emerging markets, hurting their currency, bond and equity markets.

The FOMC minutes had little by way of a firmer indication whether tapering of asset purchases would commence in September. All it showed was that members were comfortable with tapering later this year.

But what matters was the reaction to the minutes. After an initial sell-off, US stocks and bonds snapped back, but settled lower at the end of the trading day. The US dollar strengthened. A jump in existing home sales added to the chances that the tapering would start next month. The Fed chairman has emphasized the timing of the taper depends on the data, but that has been mixed so far.

For emerging markets, the fundamentals are going wrong. At a time when the purchasing managers’ indices (PMIs) for the US and UK signal expansion, the HSBC emerging markets index for July fell to 49.4, indicating a contraction from the previous month and a new post-crisis low. The HSBC India Composite Output index for July showed that private sector output contracted for the first time since April 2009.

All emerging markets have been hit and the Brazilian currency market, which must have taken the FOMC minutes into account, saw a 2.5% sell-off on Wednesday, while its Bovespa stock index fell 0.2%. The rise in US bond yields after the disclosure of the FOMC minutes point to a continuation of fund flows out of emerging markets and a continuation of recent weakness in their currencies and equities.

This morning, the China HSBC flash manufacturing PMI came in at 50.1, a four-month high and indicating a slight expansion. That is likely to support Chinese equities, which have rebounded in the past few weeks. But the Chinese and Indian markets have moved in opposite directions recently.

Reasons for Fall in Indian Rupee

In the last few days we are daily listening news of falling rupee against dollar. On popular demand in this post we have tried to explain some of the likely reasons for fall in the rupee. We have tried to keep it very simple for better understanding of our visitors.

• One important reason behind the fall of the rupee is an increased demand for dollars due to a spurt in crude oil prices and the flight of foreign funds from the Indian market. In simple words since demand of dollars has increased hence we now have to pay more rupees to purchase a dollar which has resulted in fall of rupee.
• On the other hand demand for rupees has dipped because capital inflows are down.
• Foreign institutional investors are believed to have sold Indian equities worth more than $500 million in just a few trading sessions. The rupee has been under tremendous pressure as foreign investors are getting out of the Indian markets due to the current slowdown in the nation’s economy and rising global uncertainties.

Explanation on why FII are pulling out:  
     Due to falling Rupee rate against dollar, FII’s pulling out their investments from Indian market. Why so? It can be understood with the help of an example,
        Say, an investor invests $500 in Indian market. If market grows by 10%, his valuation becomes $550. But, talking in rupee terms, he invests $500 (25000 for 50per dollar).Now with 10% increase, it becomes 25000+2500 =27500.But, with falling rate of rupee, now rate becomes, say 55 per dollar.

Now, when he wants his money back in dollars, he would get 27500/55=$500. That means no profits for foreign investor. That’s why, FII (Foreign institutional investors) are withdrawing their money from Indian markets and investing in more attractive destinations like China. This has lead to more decline in dollars in Indian economy.

• India’s imports are increasing and exports are decreasing due to large population. That simply means that much more dollars are being spent, as compared to their earnings. This is also a big factor for fall in the rupee.
• Dollar inflows into the Indian economy are falling because of global troubles such as Euro zone crisis (Greece with a debt more than its economy, making dollar strong) and high valuation of Indian companies.
• Reasons like the global crisis are common to all currencies and it affects the rupee as well. Investors are wary about the comparatively riskier emerging market currencies. In addition to this are India’s internal problems of high inflation rates coupled with high interest rates.

So what is the way out?
        The country’s central bank, Reserve Bank ofIndia, can step into the foreign exchange markets and boost the rupee. But the Deputy Governor of RBI has clearly stated that the bank has no such intentions. It will intervene only in the event of excessive volatility. And with the RBI clearly stating that it will not intervene, it looks like rupee will continue its free fall for a while.

Chennai Petroleum to increase efficiency with Rs 3,110-crore upgradation project

Chennai Petroleum Corporation is likely to make stronger its bottom line with the implementation of an Rs 3,110-crore resid upgradation project. The project has received environment clearance earlier this year and will be in place by December 2015. The oil refinery, a part of the Indian Oil Corporation has also implemented a 42-inch new pipeline between Chennai Port and the refinery at Manali to the North of Chennai.

The main products of the company are LPG, motor spirit, superior kerosene, aviation turbine fuel, high speed diesel, naphtha, bitumen, lube base stocks, paraffin wax, fuel oil, hexane and petrochemical feed stocks.

Mahindra Lifespace rises on plan to develop second integrated city in Chennai

Mahindra Lifespace Developers, the real estate and infrastructure development arm of the Mahindra Group is planning to develop second integrated city in Chennai. In this regard, the company is looking for land in the north part of Chennai. The proposed project will attract an investment of around Rs 4,000 crore, including from the tenants who would occupy space inside the city and will create around 33,000 jobs.

Mahindra Lifespace has pioneered the concept of integrated business city through Mahindra World City development in Chennai and Jaipur.

Idea Cellular inches up on adding 3 lakh mobile subscribers in July

Idea Cellular, the country’s biggest cellular carrier has added 3 lakh mobile subscribers in July, 2013. Following the addition, the company’s total subscriber count stood at 12.52 crore with a market share of 18.62%.

Idea Cellular, an AV Birla group company, provides Global System for Mobile communications (GSM)-based wireless service at the pan-India level, it is present in all 22 telecom circles

Bharti Airtel gains on adding 4.76 lakh subscribers in July

Bharti Airtel, a leading global telecommunications company with operations in 20 countries across Asia and Africa, has added 4.76 lakh users in July, 2013. Following this, the company’s total customer base has increased to 19.13 crore with a market share of 28.45%.

Bharti Airtel is a leading integrated telecommunications company with operations in 20 countries across Asia and Africa. The company ranks amongst the top 5 mobile service providers globally in terms of subscribers.

Welspun India’s business arm - WEL unveils a 55-MW solar plant in Rajasthan

Welspun India’s business arm - Welspun Energy (WEL), the country’s biggest developer of solar projects has unveiled a 55-MW solar plant in Rajasthan, on August 21, 2013. This Rs 500-crore project was formally inaugurated by Union Minister for New and Renewable Energy, Farooq Abdullah, and Rajasthan Chief Minister Ashok Gehlot.

The company is likely to invest Rs 15,000 crore to set up 1,750 MW of renewable energy projects in the next three years. Currently, it has an operating capacity of around 150 MW, which expected to go up to 400 MW by the end of the current fiscal

L&T Constructions Wins Orders Valued Rs.1504 Crs

L&T Construction has won new orders valued at  Rs. 1504cr across various business segments in August 2013.

The power transmission & distribution business has secured new orders worth  Rs. 1071 crores. A major order has been received from the Tamil Nadu Transmission Corporation Limited for supply, erection, testing and commissioning of 400 kV double circuit quad line of a total length of 274 km in Tamil Nadu. The order involves turnkey construction along with supply of towers, conductors, insulators etc. The project is scheduled to be completed in 18 months.

Another turnkey order has been received from the Purvanchal Vidyut Vitran Nigam Limited for carrying out rural electrification works in Jaunpur District of Uttar Pradesh under the Rajiv Gandhi Grameen Vidyutikaran Yojna Phase –II.

Sesa Goa, Sterlite gains ahead of merger

Sesa Goa and Sterlite Industries (India) are trading higher by up to 6% ahead of merger of Sterlite Industries into Sea Goa.

Every equity shareholder of Sterlite holding 5 equity shares in Sterlite of Re 1 each fully paid up as of the Record Date shall be entitled to be issued 3 shares of face value Re 1 each, at par, credited as fully paid up, of the Sesa Goa.

“28 August 2013 has been fixed as the Record date for determining the shareholders to whom the equity shares of Sesa Goa will be allotted as per terms of the scheme,” Vedanta Group said in a filing.

Meanwhile, the Bombay Stock Exchange (BSE) in its notice dated August 21, 2013 said that Sesa Goa shall be added to all proposed indices including S&P BSE Sensex with effect from August 27, 2013 with current outstanding shares.

HDFC Bank inaugurates 11 mini branches in Andhra Pradesh

HDFC Bank, the country’s second largest private sector bank has inaugurated 11 mini branches in rural locations across Andhra Pradesh. These mini branches comprising two persons will complement the bank’s existing traditional branch set up in the state. This branch aims to reach out to more people in rural geographies.

With this initiative, bank aims to bring 10 million families (40 million Indians) within the banking fold. After opening these branches bank now has 25 two-person branches in the state, which takes the total number of branches in Andhra Pradesh to 228.

Madhu Kapur’s suit can’t be accepted under banking laws: Yes Bank

 Yes Bank cites Banking Regulation Act which says that ‘every appointment duly made shall be final and not called into question in any court

Yes Bank Ltd on Wednesday told the Bombay high court that Madhu Kapur’s suit against the appointment of the bank’s board of directors cannot be accepted under the banking regulation law.

Lawyer Ravi Kadam, appearing on behalf of the bank, cited section 10 (A) (6) of the Banking Regulation Act, 1949, which says that “every appointment, removal or reconstitution duly made and every election duly held under this sections shall be final and shall not be called into question in any court.”

“This court has no jurisdiction to entertain this suit because the respondent is a bank governed by Banking Regulation Act just like companies are governed by the Companies Act,” Kadam said, citing some instances when corporate cases were not heard in the civil court. “(I am sure) this civil court in its wisdom will not sit over the jurisdiction of this case,” Kadam said.

Kadam’s argument was contested by Madhu Kapur’s counsel J.P. Sen, who protested that the maintainability of the suit should have been contested by the bank earlier before the arguments started and not after four days of arguments.
Madhu Kapur and her family have taken Rana Kapoor and Yes Bank to court demanding the right to nominate a director on the bank’s board citing the articles of association of the bank which was founded by her late husband Ashok Kapur. Rana Kapoor is also Madhu Kapur’s brother-in-law, having married her sister Bindu.

The Madhu Kapur group has also challenged the appointment of Yes Bank independent directors Diwan Arun Nanda, M.R. Srinivasan, Ravish Chopra and newly appointed wholetime executive directors Rajat Monga, Sanjay Palve and Pralay Mondal because they have not been appointed with the mutual consent of both the promoters.
The hearing will continue on Thursday.

BNP Paribas sells 6 lakh shares of MCX for Rs 16.96 crore

BNP Paribas Arbitrage has sold 6 lakh shares of Multi Commodity Exchange (MCX) through an open market transaction. The financial service firm has sold the shares at an average price of Rs 282.70 a piece valuing the deal for Rs 16.96 crore. The shares were sold on National Stock Exchange (NSE) on August 21, 2013.

Earlier this week, BNP Paribas had picked up 5.66 lakh MCX shares for an estimated Rs 14.5 crore. Besides, on August 16, the financial service firm had bought 6.4 lakh MCX shares for more than Rs 15 crore.

MCX, the leading commodity bourse, largely offers futures trading in non-agricultural commodities. The exchange contributes maximum business to the total turnover of the commodity futures market.

IOC to spend Rs 8,000 crore for capacity expansion at Koyali oil refinery

State-owned Indian Oil Corporation (IOC) is planning to spend around Rs 8,000 crore for capacity expansion at its Koyali oil refinery in Gujarat to 18 million tonnes per annum (mtpa) from 13.7 mtpa by 2016-17. The expansion will improve distillate yield which enables production of more value added products from the refinery.

Also, the increase in the high sulphur crude processing capability will lead to improvement in refinery margins and profitability.

Further, the company is setting up a new gas turbine to augment the operational reliability. The expansion will help the unit raise its processing of high sulphur crude, which are cheaper.

IOC is the largest enterprise in the country and the foremost ranked Fortune Global 500 Company in India and has presence in the complete hydrocarbon value chain from downstream refining & marketing, pipeline transportation, Petrochemicals, E&P and Gas Marketing.

The Fed meeting minutes and emerging markets

FOMC minutes had little by way of a firmer indication whether tapering of stimulus would start in September.

Here are the references to emerging markets in the much-awaited the Federal Open Market Committee (FOMC) minutes of the 30-31 July, out last night. They say, “A slower pace of expansion in many emerging market economies (EMEs), including China, since the beginning of the year offset an increase in the average rate of economic growth in the advanced foreign economies.”

On currencies, the minutes say, “The foreign exchange value of the dollar was little changed, on average, relative to the currencies of the advanced foreign economies, but appreciated against EME currencies amid weak incoming data on economic activity and monetary policy easing in some EMEs,along with rising US treasury yields. Emerging market mutual funds experienced sharp outflows in recent weeks, while EME stock prices declined and EME credit spreads widened on net.”
                   The committee members also “pointed to the foreign economic outlook as an ongoing downside risk”. The change in the economic outlook for emerging and developed markets has led to money flowing out of emerging markets, hurting their currency, bond and equity markets.

The FOMC minutes had little by way of a firmer indication whether tapering of asset purchases would commence in September. All it showed was that members were comfortable with tapering later this year.
But what matters was the reaction to the minutes. After an initial sell-off, US stocks and bonds snapped back, but settled lower at the end of the trading day. The US dollar strengthened. A jump in existing home sales added to the chances that the tapering would start next month. The Fed chairman has emphasized the timing of the taper depends on the data, but that has been mixed so far.

     For emerging markets, the fundamentals are going wrong. At a time when the purchasing managers’ indices (PMIs) for the US and UK signal expansion, the HSBC emerging markets index for July fell to 49.4, indicating a contraction from the previous month and a new post-crisis low. The HSBC India Composite Output index for July showed that private sector output contracted for the first time since April 2009.
All emerging markets have been hit and the Brazilian currency market, which must have taken the FOMC minutes into account, saw a 2.5% sell-off on Wednesday, while its Bovespa stock index fell 0.2%. The rise in US bond yields after the disclosure of the FOMC minutes point to a continuation of fund flows out of emerging markets and a continuation of recent weakness in their currencies and equities.
This morning, the China HSBC flash manufacturing PMI came in at 50.1, a four-month high and indicating a slight expansion. That is likely to support Chinese equities, which have rebounded in the past few weeks. But the Chinese and Indian markets have moved in opposite directions recently.

FDI increases by 16% to $1.44 billion in June

Giving some respite to the policy makers and showing signs that the steps taken by the government are helping in improving the investment environment in the country, foreign direct investment (FDI) into India increased by about 16 percent year-on-year to $1.44 billion in June 2013, compared to $1.24 billion, though the numbers still are the lowest figure during the calender year.

For the April-June quarter, foreign direct investment into the country grew by 22 percent to $5.39 billion from $4.42 billion during the same period of previous year.The sectors that received the maximum inflows during the first quarter of the fiscal include, pharmaceuticals $1 billion, services $ 945 million, automobile industry $ 515 million and computer software and hardware $171 million

Region wise, the maximum FDI during the quarter came from Singapore of $1.85 billion, followed by Mauritius $1.09 billion, Germany $510 million, the Netherlands $ 408 million and the US $ 315 million.

FDI inflows which plunged in 2012-13 to about $ 22.42 billion from $36.50 billion in 2011-12, raised concern of the government which requires a huge investment to mend its fiscal deficit and to fund infrastructure such as ports, airports and highways to boost growth. In this regard, the government recently has liberalised FDI policy in as many as 12 sectors which include telecom, tea and petroleum and natural gas.

Asian Paints' arm acquires additional 25.72% stake in BIL

Asian Paints’ wholly owned subsidiary - Asian Paints (International) (APIL) has acquired additional 25.72% stake in Berger International, Singapore (BIL), an indirect subsidiary of Asian Paints, through an off- market transaction. As a result, the shareholding of APIL in BIL has increased to 75.82%.

Further, APIL is eyeing to come out with a voluntary unconditional cash offer to acquire the balance 24.18% shares of BIL with an intention to make BIL a wholly owned subsidiary of APIL and delist from Singapore Exchange Securities Trading (SGX-ST). BIL is listed on the Singapore Exchange and is an indirect subsidiary of the company.

Asian Paints is India’s largest paint company and Asia’s third largest paint company. The company along with its subsidiaries has operations in 20 countries across the world and 28 paint manufacturing facilities, servicing consumers in 65 countries through Berger International, SCIB Paints-Egypt, Asian Paints, Apco Coatings and Taubmans.

Rupee hits 65/dollar

Pre-Market: Shares may fall; Asia muted on Fed minutes

At 08.00 hrs Indian Standard Time the SGX Nifty was down 52 points at 5,260.

Markets are likely to extend losses for 5th consecutive trading session tracking global cues.

The markets ended at 11-month closing low yesterday after the rupee touched a fresh all-time low.

The rupee plunged to a record low on heavy dollar demand from importers and as traders fretted over mixed signals from the RBI over its efforts to prop up the currency without choking off economic growth

At 800 hrs Indian Standard Time the SGX Nifty was down 52 points at 5,260.

According to technical experts, the Nifty may seek support around 5,215-5,155, while face resistance around 5,390-5,450.

U.S. stocks ended lower in choppy trading on Wednesday after minutes from the U.S. Federal Reserve's July meeting offered few clues on the timing of a reduction in its bond-buying program.

The Dow Jones industrial, Standard & Poor's 500 and Nasdaq Composite Index was down 0.3-1%.

Asian markets took a spill on Thursday after minutes from the Federal Reserve's July policy meeting showed it was still on track to start tapering stimulus as early as next month, sending Treasury yields to two-year highs.


In early trading MSCI's index of Asia-Pacific shares outside Japan.  Korean shares were down 1 percent. Japan's Nikkei fell 1.1 percent.