New York: 15:34 || London: 20:34 || Mumbai: 00:04 || Singapore: 02:34

Reports India

Indian stock market and companies daily report (January 01, 2014, Wednesday)

January 1, 2014, Wednesday, 05:20 GMT | 00:20 EST | 09:50 IST | 12:20 SGT
Contributed by Angel Broking

Indian Markets are expected to open flat today tracking flattish opening in the SGX Nifty, which is trading marginally up by 9 pts.

US Markets ended a strong year on an upbeat note, as stocks moved mostly higher over the course of the trading day on Tuesday. Some buying interest was generated by the release of a report from the Conference Board showing a bigger than expected rebound by consumer confidence. The Conference Board said its consumer confidence index jumped to 78.1 in December from 72.0 in November as against economists expectation of a climb to 76.8 from the 70.4 originally reported for the previous month. European markets ended the trading session on Tuesday in positive territory on a light trading day. Investors were pleased with the increase in U.S. consumer confidence, following the disappointing pending home sales report on Monday.

Meanwhile, Indian Markets ended a volatile session modestly higher on Tuesday, with firm global cues and continued FII buying underpinning sentiment. The other Asian markets ended mixed in light trading as a flat close on Wall Street overnight and a lack of positive triggers rendered investor mood somewhat cautious heading into the New Year.

Markets Today

The trend deciding level for the day is 21,175 / 6,303 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 21,227 - 21,283 / 6,318 - 6,333 levels. However, if NIFTY trades below 21,175 / 6,303 levels for the first half-an-hour of trade then it may correct up to 21,119 - 21,067 / 6,288 - 6,273 levels.

Fiscal deficit in April - November FY2014 reaches 94% of budgeted estimate

The April - November 2013 fiscal deficit has already reached 93.9% of budgeted estimate (BE) for FY2014 as a whole as compared to 80.4% of BE in the corresponding period of the previous year. The revenue deficit for April -November 2013 has exceeded the budgeted estimate at 103.5% of the BE as against 91.2% of the BE in the similar period for FY201 3.

On the receipts side, the widening of the deficit can be attributed to slippage on tax revenues as well as slow progress on disinvestment. The sluggish pace of growth has impacted tax revenues and resulted in net tax revenues coming in at 44.8% of BE in FY2014 so far as against 47.9% of BE during the corresponding period during FY2013. The slow progress on disinvestment is reflected in capital receipts on that account coming in at merely 2.8% of BE in April - November 2013 as against 7.3% of BE during the corresponding period in FY2013. On the expenditure side, total public spending incurred in the eight months of FY2014 has come in at 61.3% of the BE of FY2014 as against 58.2% of BE during the corresponding period during FY2013.

We believe that progress on the divestment program going forward and cuts in plan spending and austerity measures announced by the Finance Ministry are likely to aid in containing the fiscal deficit to some extent hereon. We note that the government is taking measures to reduce plan expenditure similar to its efforts at the same during FY2013. For FY2013 as a whole, the government curtailed plan expenditure to merely 79.5% of BE of the fiscal year. At present, in the eight month period it stands at 52.4% of the BE for FY2014. However, revenues are unlikely to keep pace with budgeted levels and hence we expect a slippage of 0.2-0.4% of GDP in the fiscal deficit.

ITC increases prices of wills navy cut by 17%

As per media reports, ITC has increased the price of its Wills navy cut cigarette by 17%. Post the price hike, each 20-stick packet of the Navy Cut brand would cost '138. Recently, the company had also increased price of its Gold Flake sleek line kings cigarette by 9.1%. Following this price-hike, every 16-stick pack of Gold Flake sleek line kings now costs Rs 120. ITC has increased the prices of its cigarettes by ~20% in FY2014 through multiple price hikes to offset the 18% hike in the excise duty and increase in VAT by some states. We believe these price hikes despite the volume pressures (volume de-growth of ~5% in 1HFY2014) faced by the company would aid the company in maintaining its operating margins. We continue to remain neutral on ITC.

Economic and Political News

- Growth in eight core sector industries slows to 1.7% in Nov

- Govt. Dumps Nelp, proposes new model

- CCI may take up 3 hydro power projects at next meeting

Corporate News

- CCCL applies for corporate debt restructuring

- Glenmark Pharma faces patent infringement suit in US

- Oil ministry may throw a spanner in Coal India's CBM partnership plan

- DCGA team to inspect Air Asia's training facilities