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PSU OMCs in demand

Capital Market/ 14:18 , Feb 26, 2014

Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade. The market breadth, indicating the overall health of the market once again turned positive from negative in mid-afternoon trade. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both hit their highest level in more than 4-1/2 weeks. The Sensex was up 115.72 points or 0.55%, up 108.17 points from the day's low and off 8.33 points from the day's high. The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 25 February 2014.

Index heavyweight and cigarette major ITC extended intraday gains. Shares of PSU OMCs rose. Among IT shares, Polaris Financial Technology galloped to 52-week high on high volume after the company denied media reports that it is up for sale. Paper Products surged after the company's Indian promoter sold his entire 3.01% stake in the firm to his foreign partner Huhtavefa BV at a substantial premium to ruling market price. Clariant Chemicals (India) tumbled after the company reported reverse turnaround in Q4 December 2013.

Among side counters, Ajanta Pharma scaled record high. Amtek Auto and Bharat Forge hit 52-week high.

Key benchmark indices edged higher amid initial volatility. The Sensex soon extended initial gains. The Sensex pared gains in morning trade. Key benchmark indices hovered in positive zone in early afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in afternoon trade. Key benchmark indices extended gains and hit fresh intraday high in mid-afternoon trade. The Sensex and the 50-unit CNX Nifty, both hit their highest level in more than 4-1/2 weeks.

The market sentiment was boosted by data showing that foreign funds remained net buyers of Indian stocks on Tuesday, 25 February 2014. Foreign institutional investors (FIIs) bought shares worth a net Rs 423.41 crore on Tuesday, 25 February 2014, as per provisional data from the stock exchanges.

The market may remain volatile during the remaining part of the trading session as traders roll over positions in the futures and options (F&O) segment from the near-month February 2014 series to March 2014 series. The near month February 2014 F&O contracts expire today, 26 February 2014. The stock market remains closed tomorrow, 27 February 2014, on account of Mahashivratri.

At 14:15 IST, the S&P BSE Sensex was up 115.72 points or 0.55% to 20,968.19. The index jumped 124.05 points at the day's high of 20,976.52 in mid-afternoon trade, its highest level since 24 January 2014. The index rose 7.55 points at the day's low of 20,860.02 in early trade.

The CNX Nifty was up 30.25 points or 0.49% to 6,230.30. The index hit a high of 6,231.45 in intraday trade, its highest level since 24 January 2014. The index hit a low of 6,202.10 in intraday trade.

The BSE Mid-Cap index was up 5.08 points or 0.08% at 6,467.40 and the BSE Small-Cap index was up 18.78 points or 0.29% at 6,440.48. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market once again turned positive from negative in mid-afternoon trade. On BSE, 1,286 shares rose and 1,267 shares dropped. A total of 144 shares were unchanged. The breadth alternately swung between positive and negative zone since afternoon trade.

Among the 30-share Sensex pack, 22 stocks gained and rest of them declined. GAIL (India) (up 2.48%), Wipro (up 2.39%) and Dr. Reddy's Laboratories (up 2.09%) edged higher from the Sensex pack.

Index heavyweight and cigarette major ITC rose 1.71% to Rs 327.40, with the stock extending intraday gain. The stock hit high of Rs 327.60 and low of Rs 322.40 so far during the day.

PSU OMCs rose on renewed buying. BPCL (up 2.19%), HPCL (up 2.54%) and Indian Oil Corporation (up 1.33%) gained.

Polaris Financial Technology galloped 12.81% to Rs 163 after striking a 52-week high of Rs 164.90 in intraday trade. High volumes accompanied the rally in the stock. On BSE, so far 35.16 lakh shares were traded in the counter as against average daily volume of 1.26 lakh shares in the past one quarter.

Polaris Financial Technology issued clarification during market hours today, 26 February 2014, regarding media reports US based Fiserv in talks to acquire stake in Polaris, stating that the company is not up for sale. It further said that during its 3rd Quarter results in January 2013, the board of directors authorised the management team to explore options that would provide an impetus to the company for the next stage of its growth. The context was around leveraging untapped potential in its growth engines i.e. Services, Products and the canvas of opportunities that are available to it as a leading Specialist in the global Financial Technology arena. In line with the stringent Governance principles the company follows, stakeholders have been updated on progress. As announced, the major legs of the restructuring process have been completed last quarter in Q3 2014, Polaris said. With its singular focus on Banking & Financial Technology for over 2 decades, Polaris has built very robust and comprehensive assets to spearhead transformational projects for the BFSI vertical. The restructuring exercise has been misconstrued by a certain section of stakeholders with repeated mention of possible sale. Despite the company clarifications, these rumours continue to surface, impacting customer relationships, distracting Management and employees, Polaris said. The company said that it is poised to leverage its rich assets in banking and technology to accelerate growth of its two distinct businesses - Products (Intellect) business and IT Services business.

Paper Products surged 9.23% to Rs 91.15 after the company's Indian promoter sold his entire 3.01% stake in the firm to his foreign partner Huhtavefa BV for Rs 190.11 per share on Friday, 21 February 2014.

On 21 February 2014, Paper Products' Indian promoter, Suresh Gupta, sold 18.84 lakh equity shares, or 3.01% equity, of Paper Products in an off-market transaction to Huhtavefa BV through a negotiated private placement at an aggregate amount of Rs 35.81 crore.

The transaction price works out to Rs 190.11 per share, a sharp premium of 146.74% compared to the stock's closing price of Rs 77.05 on Friday, 21 February 2014.

Post transaction, Huhtavefa BV's stake in Paper Products has increased 63.78%, from 60.77% earlier.

Shares of Paper Products fell 1.28% to Rs 77.05 on Friday, 21 February 2014. However, the stock surged 10.97% to Rs 85.50 on Monday, 24 February 2014. It fell 2.40% to Rs 83.45 on Tuesday, 25 February 2014.

Clariant Chemicals (India) tumbled 5.02% after the company reported a net loss of Rs 6.10 crore in Q4 December 2013 as against net profit of Rs 22.05 crore in Q4 December 2012. The Q4 result was announced during trading hours today, 26 February 2014.

Clariant Chemicals (India)'s total income from operations declined 3.37% to Rs 280.60 crore in Q4 December 2013 over Q4 December 2012.

Clariant Chemicals (India)'s net profit surged 64.62% to Rs 166.77 crore on 13.82% growth in total income from operations to Rs 1247.86 crore in the year ended 31 December 2013 (FY 2013) over the year ended 31 December 2012 (FY 2012).

Clariant Chemicals (India)'s sales turnover rose 13.25% to Rs 1213.20 crore in FY 2013 over FY 2012. Considering the sale of Textile, Paper and Emulsions (TPE) business, effective from 1 October 2013, the net sales has gone up by 25.3% over the previous year, on a like-to-like basis, the company said in a statement.

Speaking on the company's financial performance, Dr. Deepak Parikh, Vice Chairman and Managing Director, Clariant Chemicals (India) said, Clariant's recent business developments are a representation of our accelerated growth plans in the market. India is our key focus region and we plan to invest in the business to explore new opportunities and improve Clariant in India's profitability to provide value to all our stakeholders. We have made tremendous progress during 2013 with the same set of highly dedicated and motivated colleagues, equipments and technology; and this unfolds our operational strength which continues to support us to succeed inspite the challenging economic environment. Our commitment remains steadfast on providing innovative and customer focussed solutions across our businesses, for a win-win situation to all.

Ajanta Pharma gained 2.73% to Rs 1,013.90 after hitting a record high of Rs 1,025 in intraday trade.

Amtek Auto jumped 6.78% to Rs 96.90 after hitting a 52-week high of Rs 97.30 in intraday trade.

Bharat Forge rose 2.12% to Rs 373 after hitting a 52-week high of Rs 376.30 in intraday trade.

In the foreign exchange market, the rupee was currently unchanged against the dollar. The partially convertible rupee was hovering at 61.945, compared with its close of 61.935/945 on Tuesday, 25 February 2014.

Government bond prices fell on worries that food inflation may remain high after Farm Minister Sharad Pawar said the weather office will give its outlook on the likely impact of El Nino on India's monsoon in mid-April. The yield on 10-year benchmark federal paper, 8.83% GS 2023, was hovering at 8.901% higher than its close of 8.8745% on Tuesday, 25 February 2014. Bond yield and bond prices move in opposite direction.

Pawar also said that the impact of the El Nino weather pattern is unlikely to be as severe this year as in 2009. Indian farmers depend heavily on the annual June-September monsoon rains, as 55% of farmland does not have irrigation facilities. Australia's Bureau of Meteorology and the US Climate Prediction Center have warned of increased chances of the return of the El Nino weather pattern that can trigger drought, hitting production of key foods such as rice, wheat and sugar.

The government will unveil data on gross domestic product (GDP) for Q3 December 2013 after trading hours on Friday, 28 February 2014. The GDP grew at improved pace of 4.8% in Q2 September 2013, from 4.4% growth recorded in Q1 June 2013.

Reserve Bank of India next undertakes monetary policy review on 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

On the political front, eleven regional parties formed an alliance on Tuesday, 25 February 2014, to contest general elections, presenting themselves as an alternative to the ruling Congress party and the opposition Bharatiya Janata Party. Prakash Karat, a leader of the Communist Party of India (Marxist), which is part of the new coalition, said the partnership was forged in an effort to keep the country's two major national parties out of power. Mr. Karat accused the incumbent Congress of corruption and misrule, and declared the BJP unfit to run the country because of its controversial prime ministerial candidate Narendra Modi, who Mr. Karat denounced as a challenge to the very secular edifice of India. We need an alternative, Mr. Karat said.

Among members of the new bloc are the Communist Party of India (Marxist), the Communist Party of India, Janata Dal (United), Samajwadi Party, Biju Janata Dal and the All India Anna Dravida Munnetra Kazhagam. The alliance includes regional chieftains from the politically crucial states of Bihar, Uttar Pradesh, Tamil Nadu and Orissa. The two notable exceptions are Mamata Banerjee, the powerful chief minister of West Bengal, and Kumari Mayawati, a resurgent lower caste leader in Uttar Pradesh.

European stocks edged lower on Wednesday, 26 February 2014, as investors weighed earnings and awaited a US report on new-home sales. Key benchmark indices in UK and France were off 0.07% to 0.24%. In Germany, the DAX index was up 0.02%.

Asian stocks edged higher on Wednesday, 26 February 2014, as energy shares advanced, countering declines by raw-material companies. Key benchmark indices in China, Hong Kong, South Korea and Taiwan were up 0.29% to 0.54%. Key benchmark indices in Singapore, Japan and Indonesia were off 0.54% to 1.14%.

China's central bank the People's Bank of China cut the yuan's fixing by 0.01% to 6.1192 per dollar, the weakest since Dec. 20 amid speculation it is looking to counter one-way appreciation bets on the currency.

The People's Bank of China on Tuesday, 25 February 2014, drained another 100 billion yuan ($16.4 billion) from money markets.

A meeting of China's lawmakers to set economic policy and growth targets begins next week in Beijing.

Trading in US index futures indicated that the Dow could advance 29 points at the opening bell on Wednesday, 26 February 2014. US stocks finished a choppy trading session lower on Tuesday, 25 February 2014, as gloomy reports on home prices and consumer confidence dampened the mood. The pace of US home-price growth slowed down at the end of 2013, but despite this the year saw the fastest calendar-year price growth in eight years, according to data released on Tuesday. The US consumer confidence index also dipped primarily because Americans are less certain about the economy in the next six months, even though they view the current environment as much improved, the Conference Board said on Tuesday.

About $1.7 billion was taken out of US equity exchange-traded funds on 24 February 2014, bringing total withdrawals to almost $6 billion this month, according to reports.

Federal Reserve Chair Janet Yellen will testify for the US Senate on monetary policy tomorrow, 27 February 2014.

The US Federal Reserve bought $2.66 billion of Treasuries due from February 2023 to November 2023 on Tuesday, 25 February 2014, under its quantitative-easing stimulus strategy to hold down borrowing costs and fuel economic growth.

The Federal Open Market Committee (FOMC) next undertakes monetary policy review on 18-19 March 2014. After a monetary policy review, the FOMC on 29 January 2014 announced it will reduce monthly bond purchases by another $10 billion to $65 billion.

 



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