For the upmove to remain intact the Nifty should manage to keep itself above 6,320
The market struggled to stay in the green zone for the entire morning session. However, in the noon session the indices remained mostly in the positive till the end of the trading session. On Wednesday, we had mentioned that the Sensex, Nifty are on a slow uptrend and the Nifty has to close strongly below 6,310 so that the uptrend may pause. Today, for the entire session the index managed to keep itself above this level.
The Sensex and the Nifty opened at 21,320 and 6,326. The Sensex moved up to the level of 21,265 from the level of 21,410 and closed at 21,374 (up 36 points or 0.17%). The Nifty moved in the range of 6,316 and 6,356 and closed at 6,346 (up 7 points or 0.11%). The NSE recorded a volume of 50.95 crore shares. For the second consecutive session Sensex closed at it all time high.
Among the other indices on the NSE, the top five gainers were Infra (1%); Finance (0.37%); Pharma (0.33%); FMCG (0.23%) and Service (0.14%) while the top five losers were Auto (1.03%); Smallcap (0.73%); Energy (0.54%); Dividend Opportunities (0.53%) and Commodities (0.48%).
Of the 50 stocks on the Nifty, 25 ended in the green. The top five gainers were LT (2.66%); Jindal Steel (2.48%); Axis Bank (2.19%); Sun Pharma (2.10%) and Gail (2.07%). The top five losers were M&M (2.89%); HCL Technologies (1.96%); ONGC (1.69%); PNB (1.25%) and Coal India (1.22%).
Of the 1,518 companies on the NSE, 605 companies closed in the green, 815 companies closed in the red and 98 closed flat.
Larsen & Toubro after market hours on Wednesday gave out its December 2013 quarter result. The margins beat estimates and presence in the diverse sectors, healthy order book, proven track record and strong balance sheet were the key enablers for the company to steer through the near to medium challenges and meet its growth aspirations. The stock came out as the top performer today in both Sensex 30 stocks and Nifty 50 stocks.
Congress party chief Sonia Gandhi has written to the government, to ask for a cut in the record import duty on gold and for other restrictions to be eased, a television channel said citing sources that it did not identify.
Planning Commission Deputy Chairman Montek Singh Ahluwalia today said the next government will have to take forward the process of fiscal consolidation to keep the economic momentum intact. He also said that India has the potential to grow over 6% and even 7.5% in the long term.
US indices closed flat yesterday.
Except for Jakarta Composite (up 0.41%) all the other Asian indices closed in the red. Hang Seng was the top loser which fell 1.51%.
A Chinese manufacturing index showed a slowdown in January as output and orders cooled. The preliminary reading of 49.6 for a Purchasing Managers' Index released today by HSBC Holdings Plc and Markit Economics, a six-month low, compares with a final figure of 50.5 in December.
South Korea's economic growth slowed in the final quarter of last year on weaker construction spending. Gross domestic product rose a seasonally adjusted 0.9% in the October-December period from the previous quarter, when the economy expanded 1.1%, the Bank of Korea said today.
European indices were trading in the negative. The US Futures too were trading lower.
Markit Economics said today that the manufacturing output for the euro area rose to 53.9 in January, the highest since May 2011. Its measure of services rose to 51.9 from 51 the previous month.
The UPA chairperson has reportedly sent a letter to the government for reducing import duty on gold and relaxing the 80:20 import-export rule
As India tries to get out of an economic mess, more and more people are dispensing expert economic advice. After Baba Ramdev peddled the muddled idea of abolishing all taxes and replacing it with only banking transaction tax, Sonia Gandhi, the president of Congress and chairperson of United Progressive Alliance (UPA) has sent a letter to Ministry of Commerce to reduce duty on gold imports. According to a news channel, the Congress president has even asked the government, which she indirectly controls, to relax the 80:20 gold import-export rule. There are two aspects of this whole episode. One, Sonia Gandhi is de-facto chief of the UPA government and thus can issue an order instead of writing a letter and two, both the decisions, to increase import duty on gold and implementing 80:20 rule (20% of total gold import should be used for export) were taken to achieve certain objects under the economic situation of the country. But then as the wise says in times of general elections, prudent economic decisions always go for a toss.
Earlier in October, the Indian government hiked the gold import tariff value to $442 per 10 grams from $436 per 10 grams. This step was taken to contain the widening current account deficit (CAD). In addition, Reserve Bank of India (RBI) also restricted the import of gold on a consignment basis by banks. However, these measures gave rise to gold smuggling as the increase in import duty on gold to 10% by India created a gap in gold prices with places such as Dubai and Thailand where the duty is just 1%.
Both the World Gold Council (WGC) as well as RBI governor, Raghuram Rajan, admitted a spurt in gold smuggling into India, after the government imposed curbs on gold imports. While admitting an increase in gold smuggling in India, the RBI governor said it has been on a very low base and the shrinking of CAD had largely to do with the restrictions places on gold imports.
According to WGC report, Thailand is being used as a route to channel gold into other markets, notably India and Vietnam. The increasing prevalence of small gold bars within jewellery retailers across the Asian region supported demand in Thailand. At the same time, in India, the main focus of demand during the quarter was on small gold bars; indeed, a shortage of 100gms gold bars pushed premiums on these products significantly higher by the end of September, the WGC said in a report.
Last year, the RBI introduced the 80:20 rule for limiting gold imports and thus contain the CAD. Following the tightening measures by the central bank, India's trade deficit widened in December, but imports continued to fall, driven by curbs on gold. The trade deficit stood at $10.14 billion compared with $9.22 billion in November. However, trade deficit for December eased significantly on a year-on-year basis.
Earlier this month, the RBI allowed gold loan companies to give higher amount of loan against gold jewellery pledged by borrowers. NBFCs can now give up to 75 %, up from 60 % now, of the value of the gold jewellery pledged as loan. The RBI has clarified that only the intrinsic value of gold contents should be taken into account for determining the value.
Meanwhile, Gold imports in the current financial year could be lower by 40% at 515 tonnes against 846 tonnes a year ago, says a report from a brokerage.
Amara Raja Batteries, during December quarter, posted net profit of Rs95.01 crore despite subdued demand in other segments
Amara Raja Batteries, a Chennai based manufacturer of automotive batteries, in its December quarter posted 17% higher net profit, contributed by double digit sales growth of its automotive battery business. However, its original equipment manufacturer (OEM), uninterruptible power supply (UPS) and industrial battery businesses suffered due to subdued demand.
For the quarter to end-December, Amara Raja Batteries reported 17% increase in its net profit to Rs95.01 crore from Rs80.91 crore a year ago period. Its total sales grew 13% to Rs862.93 crore compared with Rs760.68 crore a year ago period.
“The automotive battery business reported double digit growth in revenue, aided by strong volume expansion in two-wheeler batteries and marginal volume growth in four-wheeler batteries. While OEM demand continued to be sluggish, the trading volume in home UPS business suffered due to unfavourable season,” said Amara Raja Batteries in a release.
“Its heartening to deliver a consistent good performance despite challenging economy, volatile rupee and sluggish demand in the automotive OEM and UPS sectors,” said Jayadev Galla, vice chairman and managing director, Amara Raja Batteries.
According to Moneylife analysis, Amara Raja Batteries net sales growth rate for the December quarter stood at 13%, which is 5% lower than its three-quarter year-on-year growth rate of 18%. Amara Raja Batteries operating profit growth rate stood at 23%, slightly lower than its three-quarter year-on-year growth rate of 25%. Amara Raja Batteries’ return on networth stood at 33% while its market capitalisation is nine times its operating profit.
During the last one year, foreign institutional investors have been steadily increasing their stake in Amara Raja Batteries. FIIs shareholding grew to 13.35% from 6.82% in a same period a year ago, while domestic institutional investors (DIIs) shareholding fell to 12.75% from 17.62% in a year ago period. However, promoter shareholding has remained the same, at 52.06%.
During the December quarter, Amara Raja Batteries commissioned the MVRLA battery plant at Chittoor, Andhra Pradesh.
Amara Raja Batteries was trading 3.13% up on Thursday at Rs342.45 on the BSE, while the 30-share benchmark was flat at 21,392.
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