Post Session: Quick Review

Infosys’ good set of Q4 numbers failed to infuse any strength at Dalal Street, wherein market-participants made a bee-line to cash out their profits ahead of Retail Inflation i.e. CPI data, slated to be announced later in the day. Squandering a positive start, benchmarks soon succumbed to selling pressure on the back of weakness of rate sensitive counters, while absence of positive global cues also intensified sentiment further. There appeared no sign of recovery as benchmarks kept losing ground steadily, though some buying was witnessed in fag end of trade, but too little to be termed recovery.

Earlier in the day, markets made a positive start after IT bellwether Infosys reported better-than-expected margins and profits for the March quarter, though sales were flat. Country’s second largest outsourcer said its dollar revenues are likely to grow at 7-9% in the current fiscal, sending its shares higher by as much as 4.2% in early deals. This optimism in Infosys stocks was sensed across entire IT space, which provided a floor to bourses’ losses.

However, trade took a turn for worse after annual rate of inflation, based on monthly WPI, accelerated to three months high at 5.70%, from multi month low at 4.68% (provisional) in month of February, 2014, as compared to 5.65% during the corresponding month of the previous year, thereby limiting the ability of RBI to support growth and ease key monetary policy rates. By close of trade, both Sensex and Nifty settled below the crucial 22,500 and 6,750 levels respectively, with loss of around 3/4 of a percent. Meanwhile, broader indices too succumbing to selling pressure ended with loss of over quarter of a percent.

On the global front, nerves got better of Asian share markets on Tuesday as they turned lower after an upbeat US retail sales report was eclipsed by soft data from China, providing a stark reminder to investors of the headwinds facing the world's second-largest economy. Additionally, European shares  extended losses on Monday, with a major index slipping to its lowest level in three weeks, as fresh tension in Ukraine prompted investors to shun cyclical sectors such as travel, autos and technology.

Closer home, losses at Dalal Street were most by the stocks belonging to Realty, Metal and banking counters, ending with loss of over 2%. All the rate sensitive counters, Realty, Auto and Banking counters got beaten blue in trade on diminished chances of rate cut post dismal headline inflation data. Meanwhile, high beta metal stocks too took a beating on account of weak Chinese data, which is word’s single largest consumer of base metal. On the flip side, Information Technology (IT) and Technology counters, were the only gainers of the session on the back of good showing of IT bellwether Infosys. The market breadth on the BSE ended negative; advances and declining stocks were in a ratio of 1318: 1466, while 127 scrips remained unchanged. (Provisional)

The BSE Sensex lost 144.03 points or 0.64% to settle at 22484.93. The index touched a high and a low of 22737.31 and 22416.24 respectively. Among the 30-share Sensex, 8 stocks gained, while 22 stocks declined. (Provisional)

The BSE Mid cap and Small cap indices ended lower by 0.36% and 0.29% respectively. (Provisional)

On the BSE Sectoral front, IT up by 2.16%, Teck up by 1.62% and FMCG up by 0.27%, were the only gainers, while Realty down by 2.99%, Metal down by 2.81%, Bankex down by 2.07%, Consumer Durables down by 1.31% and PSU down by 0.98% were the top losers in the space. (Provisional)

The top gainers on the Sensex were TCS up by 4.13%, Wipro up by 3.92%, Hero MotoCorp up by 2.69%, Infosys up by 1.21% and Hindustan Unilever up by 0.84%, while, Hindalco down by 5.16%, SSLT down by 3.68%, HDFC down by 3.45%, Axis Bank down by 3.44% and  Tata Steel down by 3.11% were the top losers in the index. (Provisional)

Meanwhile, limiting central bank’s scope for easing policy rates, the annual rate of inflation, based on monthly WPI, accelerated to three months high of 5.70% in March, 2014 from its multi month low level of 4.68% (provisional) seen in February, 2014 and as compared to 5.65% during the corresponding month of the previous year. The figures were higher than street expectation of 5.20%. However, January inflation figures were revised upwards to 5.17% against 5.05% earlier. Meanwhile, build up inflation rate in the financial year so far was 5.70% compared to a build up rate of 5.65% in the corresponding period of the previous year.

The acceleration in headline inflation figure was on account of rise in prices of food articles group, which rose by 1.0 percent to 235.3 (provisional) from 232.9 for the previous month that lifted Primary article index, which occupies 20.12% weight in the overall headline index, higher by 0.7% to 240.2 (provisional) from 238.6 (provisional) for the previous month. The index for Non-Food Articles group declined by 0.1% to 217.2 (provisional) from 217.4 (provisional) for the previous month.

Further, index of Fuel & Power, too contributed to the rise of overall headline inflation number. The group’s index, which has weight of 14.91% in the overall index, rose by 0.2% to  213.1 (provisional) from 212.6 (provisional) for the previous month due to higher price of high speed diesel and petrol (1% each).  However, the price of kerosene (2%), bitumen and LPG (1% each) declined.

Additionally, the index of Manufactured Products, which occupies 64.97% of weight in the overall index, rose by 0.5% to 153.5 (provisional) from 152.7 for February.

The latest figure would reduce scope of Reserve Bank of India (RBI) supporting the industries with any rate cuts amid fresh signs of slowdown. India has been battling a prolonged spell of high inflation and low growth, which is expected to remain stubborn as food inflation may yet again see a rise in the coming month with El Nino hitting the monsoon.

India VIX, a gauge for markets short term expectation of volatility gained 9.21% at 31.87 from its previous close of 29.18 on Friday. (Provisional)

The CNX Nifty lost 45.90 points or 0.68% to settle at 6,730.40. The index touched high and low of 6,813.40 and 6,711.75 respectively. Out of the 50 stocks on the Nifty, 12 ended in the green, while 38 ended in the red.

The major gainers of the Nifty were United Spirits up 11.62%, TCS up by 4.18%, Wipro up by 3.94%, Hero MotoCorp up by 2.39% and HCL Tech up by 1.74%.

The key losers were DLF down by 6.41%, Hindalco down by 5.26%, Jindal Steel down by 4.48%, Bank of Baroda down by 3.68% and IDFC down by 3.44%. (Provisional)

European markets were trading in red; France’s CAC 40 was down 0.30%, UK’s FTSE 100 was down 0.29% and Germany’s DAX was down by 0.80%.

The Asian markets concluded Tuesday’s trade mostly in green with major indexes following the US gains while Hong Kong and Shanghai are the standouts, taking a slam from the latest liquidity draining of China’s central bank. China’s foreign exchange reserves rose by $129 billion in the first quarter to $3.95 trillion at the end of March. Shanghai’s Consumer Price Index rose 2.5 percent from a year earlier in March, down from the 2.7 percent gain in February. Food costs remained the biggest contributor as they rose 4.3 percent in March while prices of transport, healthcare and clothing all dropped. The confidence of Chinese households continued to be strong despite China’s economy softening. The China Wealth Index to gauge sentiment among Chinese households remained flat at 130 in April, a similar reading to that in January but it was up from 127 in November of last year. Shanghai’s new home sales fell for the second consecutive week as buyers and developers adopted a wait-and-see stance. The purchases of new homes, excluding government-subsidized affordable housing, shrank 28.7 percent week on week to 146,900 square meters. In Hong Kong, the Exchange Fund’s foreign assets increased by $6.4 billion in March to $2.6308 trillion. The Monetary Base amounted to $1.2557 trillion.

Mentha oil futures edge lower on lackluster demand in spot markets

Mentha oil futures edged lower tracing the lackluster demand of the commodity in the spot markets. Trading sentiment weakened further due to adequate stocks position in the physical market following increased arrivals from producing region. Moreover, the international mint consuming segments are shifting towards synthetic mentha oil, which is also driving mentha oil prices lower.

The contract for April delivery was trading at Rs 846.70 /Kg, down by 0.39% or Rs 3.30 from its previous closing of Rs 850.00 /Kg. The open interest of the contract stood at 3838.00 lots.

The contract for May delivery was trading at 858.00/Kg, down by 0.49% or Rs 4.20 from its previous closing of Rs 862.20 /Kg. The open interest of the contract stood at 1145.00 lots on MCX.

Swelect Energy Systems strengthens on commencing 15 MW SPV Solar Power Park

Swelect Energy Systems is currently trading at Rs. 256.00, up by 11.30 points or 4.62 % from its previous closing of Rs. 244.70 on the BSE. The scrip opened at Rs. 241.50 and has touched a high and low of Rs. 256.00 and Rs. 241.50 respectively. So far 5214 shares were traded on the counter. The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 251.95 on 07-Apr-2014 and a 52 week low of Rs. 126.10 on 24-Jul-2013. Last one week high and low of the scrip stood at Rs. 251.95 and Rs. 235.00 respectively. The current market cap of the company is Rs. 255.17 crore. The promoters holding in the company stood at 65.29 % while Institutions and Non-Institutions held 0.66 % and 34.06 % respectively. Swelect Energy Systems has successfully completed design, installation and commissioning of its 15 MW SPV Solar Park on April 11, 2014 located at Monjanur Village, Aravakurichi Taluka, Karur District in state of Tamil Nadu. The park is generating power to its near full capacity and Evacuation of Power made through a 33 KV dedicated feeder to TANGEDCO Sub-Station and further stepped - up to 110 KV in to the grid. The above SPV Park has been commissioned in two stages - 12 MW by March 28, 2014 and 3 MW by April 11, 2014. The final overall cost of the SPV Park with all the other remaining civil works will cost approximately Rs 110 crore. Swelect Energy was formerly Numeric Power Systems, a major player in the Uninterruptible Power Supply business. Last year, Numeric Power sold its UPS business and decided to concentrate on solar power and was renamed Swelect Energy.

CMC to expand its foot print in Education and Training business in FY15: Report

CMC is reportedly planning to expand its foot print in Education and Training business segment in FY15 by entering into vocational training market domestically as well as internationally. In this regard, the special initiatives are going on in the company to focus and grow its foot print in this segment to make it a broader base of knowledge management. The company’s Education and Training segment is the smallest revenue generator of the four strategic business units it has. In the quarter ended March, this segment reported consolidated revenues worth Rs 13.77 crore compared with Rs 77.44 crore from IT enabled services and the highest of Rs 398 crore from the systems integration segment. The customer services segment churned Rs 119.82 crore in the period under review. Further, the company is planning to invest more on research and development in the current financial year and will keep a budget 15% higher from last year. CMC is leading system engineering and Integration Company in India and is a subsidiary of Tata Consultancy Services, Asia’s largest software company. Operating out of 18 offices and 180 services locations in the country, CMC employs over 10,000 people and has a wholly owned subsidiary in USA called CMC Americas, Inc.

Benchmarks continue weak trade; Realty, Metal drag

Indian equity benchmarks continued their weak trade in the late afternoon session on account of selling in frontline blue chip counters taking cues from European counterparts. The sentiments were on pessimistic note after the WPI snapped a three-month easing trend which would give the Reserve Bank of India (RBI) less scope to support the economy amid fresh signs of slowdown. The annual rate of inflation, based on monthly WPI, edged higher to 5.70%, from multi month low at 4.68% (provisional) in month of February, 2014, as compared to 5.65% during the corresponding month of the previous year. Traders were seen piling positions in IT and TECK stocks while selling was witnessed in Realty, Metal and Bankex sector stocks. In scrip specific development, Yes Bank was trading under pressure after foreign brokerage firm downgraded the stock to underweight from overweight, saying absolute valuations are not that attractive in the context of slowing earnings. Clariant Chemicals (India) was trading firm after the company signed an agreement to sell land in Thane for Rs 1,154.25 crore. On the global front, most of the Asian markets were trading in green, while the European markets were trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,750 and 22,500 levels respectively. The market breadth on BSE was negative in the ratio of 1190:1421 while 126 scrips remained unchanged. The BSE Sensex is currently trading at 22454.91, down by 174.05 points or 0.77% after trading in a range of 22737.31 and 22416.24. There were 7 stocks advancing against 23 stocks declining on the index. The broader indices too completely succumbed to selling pressure; the BSE Mid cap index was down by 0.21%, while Small cap index down by 0.16%. The gaining sectoral indices on the BSE were IT up by 2.07% and TECK up by 1.61% while, Realty down by 2.06%, Metal down by 1.95%, Bankex down by 1.69%, Auto down by 1.59% and Consumer Durables down by 0.92% were the losing indices on BSE.    The top gainers on the Sensex were Wipro up by 3.44%, TCS up by 3.25%, Infosys up by 1.50%, Bharti Airtel up by 1.32% and Dr. Reddy’s Lab up by 0.75%. On the flip side, HDFC down by 3.73%, Hindalco Industries down by 3.31%, Axis Bank down by 2.76%, Tata Motors down by 2.42% and SSLT down by 2.14%. Meanwhile, with an aim to accelerate exploration and production of oil and gas in the country for enhancing energy security, Oil Ministry has introduced a proposal to simplify exploration norms. The Ministry’s draft note seeks to revise the policy guidelines for exploration in the mining lease area after the expiry of the exploration period. Further, the draft also proposes to recognise such exploration activity for the purpose of cost recovery as well. Currently, production-sharing contract between the oil exploration company and the Government does not recognize such activities for the purpose of cost recovery. The proposal was circulated amid concerns about some clauses in the existing policy which has been restricting investments in the industry. If Ministry’s proposal is accepted, it would be beneficial to a lot of domestic players such as Reliance Industries and Cairn as they can search for hydrocarbons without any hassles and even after expiry of the exploration period. As per the proposal, cost recovery will be provided to contractors after resultant discovery is proved commercially and techno-economically viable with requisite computation of cash flows and profit. Further, the draft also proposed existing contractors to continue to apply for development and production relating to such discoveries. However, the approval for further exploration, development and production will not confer any right on the contractors for further extension in the tenure of the contract, except as provided. Further, the contractors will also be permitted to develop and monetise existing discoveries in the mining lease area which have not been monetized or developed earlier. The draft also noted that the contractors will have to get the Management Committee’s approval for quarterly allocation of cost petroleum and profit petroleum. Till now, the Government has signed 254 PSCs under nine rounds of the New Exploration Licensing Policy (NELP). Meanwhile, Oil Ministry has formulated a roadmap for cutting India's dependence on imports to meet its oil needs. India currently imports around 80 percent of its oil needs and the Ministry wants this to be cut to 50 percent by 2020 and by 25 percent in 2025 through intensive exploration and exploitation of untapped reserves. Presently, only 0.93 million sq km area in India is held under exploration and production in 19 basins as compared to total estimated sedimentary area of 3.14 million square kilometres, comprising 26 sedimentary basins. The CNX Nifty is currently trading at 6,726.95, down by 49.35 points or 0.73% after trading in a range of 6,813.40 and 6,711.75. There were 12 stocks advancing against 38 declining stocks on the index. The top gainers of the Nifty were Mcdowell up by 11.76%, Wipro up by 3.59%, TCS up by 3.35%, Infosys up by 1.54% and Bharti Airtel up by 1.29%. On the flip side, DLF down by 4.14%, Jindal Steel down by 3.75%, Hindalco down by 3.73%, HDFC down by 3.59% and Axis Bank down by 2.82% were the major losers on the index. Asian equity indices were trading mostly in green; Nikkei 225 up by 0.62%, Taiwan Weighted up by 0.67%, Straits Times was up by 0.85% and Jakarta Composite up by 0.04% while, Shanghai Composite down by 1.40% and Hang Seng down by 1.60% were the losers. The European markets were trading in red; France’s CAC 40 was down 0.25%, Germany’s DAX lost 0.66% and UK’s FTSE 100 declined 0.16%.

Indraprastha Gas trades with traction on the bourses

Indraprastha Gas is currently trading at Rs. 286.90, up by 6.10 points or 2.17% from its previous closing of Rs. 280.80 on the BSE. The scrip opened at Rs. 282.90 and has touched a high and low of Rs. 289.15 and Rs. 282.90 respectively. So far 13877 shares were traded on the counter. The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 328.50 on 09-May-2013 and a 52 week low of Rs. 236.00 on 28-Aug-2013. Last one week high and low of the scrip stood at Rs. 297.10 and Rs. 278.50 respectively. The current market cap of the company is Rs. 3987.90 crore. The promoters holding in the company stood at 45.00% while Institutions and Non-Institutions held 38.32% and 16.68% respectively. Indraprastha Gas (IGL) has entered into an agreement with Bharat Petroleum Corporation (BPCL) for selling BPCL’s MAK Lubricants at its Gas Stations across Delhi and adjoining towns. The agreement is initially valid for a period of 5 years. IGL currently has a network of 115 CNG Stations across Delhi/NCR and lakhs of customers visit these outlets every day. BPCL is looking to sell 100 tonnes of lubricants through IGL network in 2014-15. Indraprastha Gas, incorporated in 1998, is engaged in distribution of Compressed Natural Gas (CNG) and Piped Natural Gas (PNG) in Delhi. In 1999 the company took over Delhi City Gas Distribution Project from GAIL (India). IGL laid the network for the distribution of natural gas in the National Capital of Delhi to consumers in the domestic, transport, and commercial sectors.

Zinc futures decline on weak demand

Zinc futures were trading lower as participants indulged in reducing positions amid subdued demand in the domestic spot markets. Besides, a losing trend in overseas markets on demand concern as a measure for new credit in China, the largest metals consumer, suggested the economy was slowing, also put pressure on the Zinc futures prices. The contract for April delivery was trading at Rs 123.45, down by 0.24% or Rs 0.30 from its previous closing of Rs 123.75. The open interest of the contract stood at 2126.00 lots. The contract for May delivery was trading at Rs 124.40, down by 0.16% or Rs 0.20 from its previous closing of Rs 124.60. The open interest of the contract stood at 137.00 lots on MCX.

Crude palm oil futures rise on strong demand

Crude palm oil futures showed a positive trend on MCX as investors enlarged their holdings on strong demand. Trading Sentiments improved further as India's palm oil imports rose 35% in March, snapping a two-month losing streak as buyers built stocks after overseas purchases hit a near three-year low in the previous month. Moreover, the prices found some support on speculation that a rally in crude oil prices in international market to the highest level in more than six-week will boost demand for the vegetable oil as feedstock for biofuels. The contract for April delivery was trading at Rs 562.00/10Kg, up by 0.25% or Rs 1.40 from its previous closing of Rs 560.60 /10 Kg. The open interest of the contract stood at 2602.00 lots. The contract for May delivery was trading at 558.30 /10Kg, up by 0.29% or Rs 1.60 from its previous closing of Rs 556.70/10 Kg. The open interest of the contract stood at 3559.00 lots on MCX.

March WPI inflation accelerates to three-month high of 5.7%

Limiting central bank’s scope for easing policy rates, the annual rate of inflation, based on monthly WPI, accelerated to three months high of 5.70% in March, 2014 from its multi month low level of 4.68% (provisional) seen in February, 2014 and as compared to 5.65% during the corresponding month of the previous year. The figures were higher than street expectation of 5.20%. However, January inflation figures were revised upwards to 5.17% against 5.05% earlier. Meanwhile, build up inflation rate in the financial year so far was 5.70% compared to a build up rate of 5.65% in the corresponding period of the previous year. The acceleration in headline inflation figure was on account of rise in prices of food articles group, which rose by 1.0 percent to 235.3 (provisional) from 232.9 for the previous month that lifted Primary article index, which occupies 20.12% weight in the overall headline index, higher by 0.7% to 240.2 (provisional) from 238.6 (provisional) for the previous month. The index for Non-Food Articles group declined by 0.1% to 217.2 (provisional) from 217.4 (provisional) for the previous month. Further, index of Fuel & Power, too contributed to the rise of overall headline inflation number. The group’s index, which has weight of 14.91% in the overall index, rose by 0.2% to  213.1 (provisional) from 212.6 (provisional) for the previous month due to higher price of high speed diesel and petrol (1% each).  However, the price of kerosene (2%), bitumen and LPG (1% each) declined. Additionally, the index of Manufactured Products, which occupies 64.97% of weight in the overall index, rose by 0.5% to 153.5 (provisional) from 152.7 for February. The latest figure would reduce scope of Reserve Bank of India (RBI) supporting the industries with any rate cuts amid fresh signs of slowdown. India has been battling a prolonged spell of high inflation and low growth, which is expected to remain stubborn as food inflation may yet again see a rise in the coming month with El Nino hitting the monsoon.

Shree Cement gains on Rs 2,200 crore capex plan

Shree Cement is currently trading at Rs. 5844.95, up by 9.00 points or 0.15% from its previous closing of Rs. 5835.95 on the BSE. The scrip opened at Rs. 5950.00 and has touched a high and low of Rs. 5977.00 and Rs. 5802.00 respectively. So far 202 shares were traded on the counter. The BSE group 'A' stock of face value Rs. 10 has touched a 52 week high of Rs. 6699.70 on 07-Apr-2014 and a 52 week low of Rs. 3412.65 on 28-Aug-2013. Last one week high and low of the scrip stood at Rs. 6699.70 and Rs. 5482.25 respectively. The current market cap of the company is Rs. 20450.84 crore. The promoters holding in the company stood at 64.79% while Institutions and Non-Institutions held 14.01% and 21.21% respectively. Shree Cement is planning to invest Rs 2,200 crore on capex in FY15. The company will set up Rs 1,700 crore Chhattisgarh unit, which will be starting operation by April 2015. Moreover, the company’s Bihar Grinding unit is expected to start operations in three months. Further, the company is planning to increase its total capacity to 20 mtpa by April 2015. The company’s current total capacity stood at 16.5 mtpa. Shree Cement (SCL), belonging to B G Bangur - H M Bangur faction of Bangur family of Kolkata, is engaged in manufacturing of cement and power generation. SCL’s eight cement plants in Rajasthan and one grinding unit in Uttrakhand have an aggregate capacity of 13.5 mn tonnes p.a. (PPC; OPC capacity -9 mn tonnes p.a.).