HINDUJA BANK (SWITZERLAND) LTD BUILDING WEALTH, ENABLING ENTERPRISE 1 April 2014 DAILY MARKET COMMENTS INDIA SUMMARY Trading for the new financial year began on positive note as key benchmark indices edged higher on firm Asian and European stocks. The S&P BSE Sensex garnered 60.17 points or 0.27%. The market breadth was positive. Auto stocks were mixed. Mahindra & Mahindra (M&M) rose after reporting sales volume data for March 2014. Maruti Suzuki India declined on weak sales in March. Bank and Realty stocks declined after the Reserve Bank of India (RBI) left key policy rates unchanged after monetary policy review today, 1 April 2014. The RBI said it will continue to monitor the liquidity conditions and actively manage liquidity to ensure adequate flow of credit to the productive sectors. Capital goods stocks declined on profit booking after recent strong gains. Sugar shares rallied on expectations of higher demand during the summer season from bulk consumers such as ice-cream makers in the spot market. Dabur India rose 4.62% after hitting a record high of Rs 188.35 in intraday trade. PSU OMCs fell as petrol prices were reduced by 75 paise a litre (excluding state levies) effective 1 April 2014. PSU OMCs suffer under-recoveries on domestic sale of diesel, LPG and kerosene at government controlled prices. HIGHLIGHTS IN THE HEADLINES TODAY Markets end higher led by IT heavyweights RBI keeps rates unchanged in its first bi-monthly policy review RBI allows foreign investors to hedge currency risks India's potential growth rate below 6%: RBI report Maruti March sales dip 5.5% to 113,350 units M&M domestic sales marginally down in March Gati soars as Japanese firm Kintetsu World Express buys 5% stake INSTITUTIONAL ACTIVITY ON NSE & BSE Category Buy Value (Rs bn) Sell Value (Rs bn) Net Value (Rs bn) Foreign Institutional Investors (FII) 35.69 31.83 3.86 Domestic Institutional Investors (DII) 11.59 14.07 (2.48)
INDEX MOVEMENTS Index Close Open High Low Close Gain / Loss Var. S&P BSE Sensex 22,386 22,455 22,486 22,296 22,446 60.17 0.27 CNX Nifty 6,704 6,730 6,732 6,675 6,721 16.85 0.25 CNX 500 5,225 5,244 5,244 5,199 5,233 8.00 0.15 CNX Nifty Junior 13,469 13,529 13,529 13,328 13,423 (45.85) (0.34) CNX Midcap 8,612 8,640 8,640 8,542 8,587 (25.15) (0.29) CNX IT 9,298 9,332 9,458 9,325 9,440 141.75 1.52 CNX 100 6,597 6,623 6,623 6,563 6,608 11.10 0.17 BANK Nifty 12,742 12,806 12,806 12,510 12,589 (153.55) (1.21) NIFTY GAINERS Company Curr. Gain WIPRO 562 543 3.46 CAIRN 344 333 3.35 POWERGRID 108 105 2.81 BANKBARODA 736 721 2.12 TCS 2,175 2,133 1.98 NIFTY LOSERS Company Curr. Loss BPCL 446 460 (3.09) HINDALCO 138 142 (2.72) KOTAKBANK 763 781 (2.31) MARUTI 1,927 1,972 (2.27) ASIANPAINT 536 548 (2.14) COMMODITIES & CURRENCIES Commodity (Futures) Day Curr. Day Brent Crude (USD / bbl) 107.76 107.60 Gold (USD / t. Oz) 1,283.80 1,285.80 Silver (USD / t. Oz) 19.79 19.80 Currency Curr. Rate USD / INR 59.92 EUR / INR 82.68 ASIAN MARKETS Index Closing Gain / Loss Var. Hang Seng 22,448 297.48 1.34 Nikkei-225 14,792 35.84 0.24 Shanghai Composite 2,047 14.15 0.70 Straits Times 3,198 9.90 0.31 Taiwan TAIEX 8,873 23.87 0.27 100 Yen / INR 57.98
GLOBAL MARKET OVERVIEW European stocks edged higher today after the latest data showed growth in euro-area manufacturing stayed close to the highest level in almost three years in March. Key benchmark indices in UK, Germany and France were up 0.42% to 0.81%. Asian stocks edged higher after China's official PMI survey showed manufacturing managed to continue expanding in March, and dovish comments from Federal Reserve Chair Janet Yellen. Key benchmark indices in Hong Kong, South Korea, China, Singapore, Japan and Taiwan were up 0.27% to 2.22%. Japan's Nikkei Average was off 0.24%. GLOBAL NEWS Growth in euro-area manufacturing stayed close to the highest level in almost three years in March, adding to signs the region's recovery is gathering pace. An index based on a survey of purchasing managers slipped to 53 from 53.2 February, matching an initial estimate released last week, London-based Markit Economics said today. The index has been above 50, indicating expansion, since July. Gauges for the region's four largest economies all indicated growth. A policy meeting of the Governing Council of the European Central Bank (ECB) will be held on Thursday, 3 April 2014, in Frankfurt to decide euro zone interest rates. ECB President Mario Draghi has consistently reassured listeners that the euro zone isn't heading for deflation, but that the central bank stands ready to act if needed. China's official Purchasing Managers' Index (PMI) increased to 50.3 in March from February's 50.2. Above 50 indicates expansion, below 50 signifies contraction. A separate PMI HSBC Holdings Plc and Markit Economics pointed to weakness in the world's second-biggest economy. Chinese Purchasing Managers' Index fell to 48 in March, the lowest reading since July, from 48.5, HSBC Holdings Plc and Markit Economics said today, 1 April 2014. ECONOMIC AND POLITICAL NEWS As expected, Reserve Bank Governor Raghuram Rajan today kept the key policy rate (repo) unchanged since retail inflation still remains "sticky" but introduced steps to increase liquidity and contain volatility in the money market. The RBI, in its first bimonthly monetary policy statement, left the short-term lending rate or repo rate unchanged at 8% and the cash reserve ratio static at 4%. It halved the overnight call money rate to 0.25% and increased the 7-day and 14-day repo limits to 0.75% from 0.50%. "At the current juncture, it is appropriate to hold the policy rate, while allowing the rate increases undertaken during September 2013-January 2014 to work their way through the economy," said Rajan, who had in previous policy announcements surprised the markets with policy rate changes. With growth trending below the 5% mark for three successive quarters, the Reserve Bank today pegged economic expansion at less than 6% from the earlier expectation of over 8%. It said a decline in financial savings, sluggish growth in capital formation over successive quarters, persistently highinflation and low business confidence are the major reasons for the revised estimate. However, it said a modest recovery is likely to take shape in 2014-15. Further softening of vegetable prices is unlikely and the impact of the El Nino weather phenomenon on the monsoon could have an adverse bearing on inflation, the Reserve Bank of India said today. "Vegetable prices have entered their seasonal trough and further softening is unlikely...there are risks to the central forecast of 8% CPI inflation by January 2015 stemming from a less-than-normal monsoon due to possible El Nino effects," the RBI said. Wholesale price-based inflation eased to a nine-month low of 4.68% in February, while retail inflation slowed to a 25-month low of 8.1%.
INDUSTRY NEWS The Election Commission has given its approval to government's decision for increase in fixed cost of urea by up to Rs 350 per tonne, but there will not be any hike in the selling price. This move would lead to increase in subsidy by about Rs 9 bn. The increase in fixed cost will eventually push the cost of urea production, while the selling price of urea is fixed at Rs 5,360 per tonne, resulting in higher subsidy bill. To improve risk mitigating environment in the country, the Reserve Bank today allowed overseas investors to hedge their currency exposure. In its first bi-monthly policy, the RBI, in order to enhance hedging facilities for foreign investors in debt instruments, proposed to allow them to hedge the coupon receipts falling due during the next 12 months. SECTOR PERFORMANCE AND TRENDS Out of 2852 scrips traded over BSE, 1546 advanced & 1158 declined. Sector Var S&P BSE BANKEX (1.18) S&P BSE CAPITAL GOODS (0.32) S&P BSE REALTY (0.85) S&P BSE POWER 0.23 S&P BSE OIL & GAS 1.09 S&P BSE METAL 0.41 S&P BSE CONSUMER DURABLES 1.33 S&P BSE AUTO 0.19 S&P BSE TECK 1.27 S&P BSE IT 1.65 Sector Trend * Auto BFSI Construction Consumer Goods Energy Industrial Manufacturing IT Metals Telecom * Shows trend for current & previous trading sessions S&P BSE FMCG 0.13 S&P BSE HEALTHCARE 0.54 BONDS, T-BILLS & IPOs Indian companies have raised a meagre Rs 12.05 bn through initial share sale in the past financial year but IPO market may see a revival in the current fiscal (2014-15) on the back of revival in demand. According to Prime Database, nine firms had raised a total of Rs 62.89 bn through initial public offer (IPO) in 2012-13 as against Rs 12.05 bn garnered in the past fiscal. All trades in securitised debt instruments and over-the-counter (OTC) trades in corporate bonds will be have to be reported within 15 minutes of the transaction from today. As per Sebi directions to stock exchanges and market intermediaries, trades in securitised debt instruments (listed or unlisted) by mutual funds, FIIs, alternative investment funds, foreign venture capital investors and portfolio managers are to be reported on trade reporting platform of either NSE, BSE or MCX-SX, within 15 minutes of trade.
COMMODITIES India's coffee exports are likely to witness a moderate decline in 2014-15 owing to a short crop harvested for 2013-14. Though the country's exports registered a marginal growth of 2.8% in 2013-14 to 313,035 tonnes, exports in 2014-15 are likely to drop below the 300,000 tonnes mark in the current fiscal. "Even for 2013-14, we had expected a lower level of exports. However, due to sudden spurt in prices of Arabica in February and March, the exports picked up in the fourth quarter. As the harvested crop for 2013-14 is far below the expectations, the exporters will not be able to make big gains in the new fiscal. Also, the prices have seen a downward correction for May and June deliveries," said Ramesh Rajah, President, Coffee Exporters' Association of India said. Gold prices steadied on Tuesday, recovering early losses, as comments from Federal Reserve Chair Janet Yellen defending easy-money policies hurt the dollar, while a drop to seven-week lows overnight sparked interest from bargain-hunting buyers. CORPORATE ANNOUNCEMENTS Country's largest carmaker Maruti Suzuki India (MSI) today reported a 5.5% decline in total sales in March at 113,350 units as against 1,19,937 units in the same month last year. The company said its domestic sales declined by 5.2% during the month to 102,269 units as against 107,890 units in March 2013. Auto-maker Mahindra & Mahindra today reported a marginal decline in its total sales at 51,636 units in March. M&M had sold 51,904 units in the same month last year, the company said in a statement. TVS Motor Company has posted a growth of 17.45% in sales for the month of March, 2014, with sales of 1,96,826 units as against sales of 1,67,583 units during the same period of previous year. The company's exports grew by 28% during March, this year compared to the same month of last year, according to a company announcement. As part of its healthcare IT strategy, Apollo Hospitals has launched its virtual clinic model in Chennai. The company would be offering the service to an apartment complex, set up by Jain Housing and Constructions, to provide its 24 7 telemedicine services to the occupants. The company has earlier launched an android app for emergency support to smart phone users. "With over 80,000 tele-consultations in 25 different specialties, Apollo Telemedicine the largest and oldest multi-specialty TeleHealth network in South Asia has now embarked on providing healthcare in apartment complexes," informed a communication from the hospital network. The information in this publication was developed using data which Hinduja Bank () Ltd assumes to be accurate; nevertheless, Hinduja Bank () Ltd accepts no liability and offers no guarantee. The availability of such information does not constitute a recommendation to buy or sell any of the securities discussed therein. Statements made in this publication can be changed without prior notice. Moreover, the content is not intended for individuals (or entities) who (which), by reason of their nationality or domicile or for any other reason, are subject to foreign regulations prohibiting access to banking services or investment instruments via one or several distribution channels, or prohibiting or restricting the use of any information provided in this document.