The Sensex, which had opened weak, kept sliding as the day progressed. Squaring up of long positions and covering of short positions today itself, ahead of the expiry of January 2007 derivatives contracts on Thursday (25 January 2007), contributed to the fall. Shares of cement makers, banks and FMCG firms were the major losers.
The 30-shares BSE Sensex lost 168 points (1.18%), to end at 14,041.24. It had opened a bit higher, at 14,212.12 (also the day’s high), but started declining due to heavy selling. It also plunged to a low of 14,025.74, in the late-afternoon session of trade.
The S&P CNX Nifty was down 36.35 points (0.89%), to 4,066.10.
The market-breadth was weak, as a host of small-cap and mid-cap stocks came under pressure. For 1,723 shares that declined, only 913 advanced and 60 scrips remained unchanged on BSE.
The total turnover on BSE amounted to Rs 4040 crore, higher than Rs 3,719 crore on Monday.
Among the 30-Sensex pack, 28 declined and only 2 eked out gains.
Cement shares were drubbed by the lifting of customs duty on all varieties of the commodity. ACC (down 6.97% to Rs 1038) was the top loser. It had also slipped to a low of Rs 1031.
Gujarat Ambuja Cements tanked 6.78% to Rs 136.80. It had slipped to a low of Rs 135.10. The counter clocked 39.13 lakh shares on BSE.
Other cement shares to suffer were Grasim (down 2.93% to Rs 2810), Mangalam Cement (down 8.93% to Rs 224.35), Mysore Cement (down 6.97% to Rs 62), Birla Corporation (down 7.83% to Rs 338), Ultratech Cement (down 4.65% to Rs 1060), Shree Cement (down 4.54% to Rs 1425), JK Lakshmi Cement (down 4.42% to Rs 173.15), Anjani Portland (down 13.53% to Rs 36.10), India Cement (down 8.73% to Rs 220.65) and Madras Cement (down 4.86% to Rs 3455).
The customs duty on all varieties of cement, except white cement, has been cut to zero from 12.5%. Analysts reckon that cement prices in only a few regions, mainly restricted to Bangladesh, and to some extent Sri Lanka, could be impacted due to increase in imports following the lifting of the import duty. Cement being a bulky commodity, freight costs account for a large portion of its retail cost. Prices in the interior regions are unlikely to be affected as a result.
Dr Reddy’s Lab (DRL) plunged 5.28% to Rs 767.10, after results missed street expectations. The drugmaker reported a surge in net profit in December 2006 quarter after trading hours on Monday. However, the stock managed to recover from a low of Rs 772.
The Hyderabad-based drugmaker, which acquired Germany's Betapharm last year, said quarterly net profit rose to Rs 188 crore from Rs 62.80 crore in December 2005 quarter. Total revenue jumped to Rs 1540 crore from Rs 590 crore.
DRL's foreign acquisitions and better sales of generics in the United States drove growth, while overseas sales are seen rising as drugs with annual sales of $30 billion are likely to go off patent in the next two years. Dr Reddy's Labs generics revenue rose to Rs 768 crore from Rs 83.10 crore.
PSU bank SBI declined 4.53% to Rs 1168.75. Its third quarter net profit stood at Rs 1,065 crore, down 4.5% from Rs 1,115.1 crore in the corresponding quarter of the previous year. The bank’s net profit (excluding exceptional items) was at Rs 1065 crore versus loss of Rs 620 crore. SBI had extraordinary income of Rs 2,048 crore in Q3 last year. Its Q3 NII declined 6.4% to Rs 3951 crore (Rs 4219.8 crore). The NII (Excluding Extraordinary Income) was up 46%, to Rs 3,951 crore.
SBI's provisions and contingencies stood at Rs 1166 crore, compared to Rs 470 crore in the corresponding period of the previous fiscal. SBI's CAR was 11.86% versus 12.49%.
Index heavyweight Reliance Industries (RIL) was down 1.05% to Rs 1359, on a volume of 3.65 lakh shares. It had also struck a high of Rs 1381.
Bharti Airtel was the top gainer, up 1.60% to Rs 687.15, on a volume of 3.93 lakh shares. The company posted a net profit of Rs 1043.69 crore for the quarter ended December 2006, compared to Rs 538.68 crore for the quarter ended December 2005. Total revenue increased to Rs 4723.68 crore (Rs 2936.03 crore).
A solid surge in user base in the world's fastest growing mobile market, sent Bharti Airtel's shares to a life high of Rs 700.80. The company’s consolidated net profit, as per Indian GAAP, zoomed over 90% to Rs 1,033.34 crore for the third quarter ended December 2006, when compared with Rs 543.54 crore in the quarter ended December 2005.
Chairman Sunil Mittal said demand for telecom services continued to be strong. The company, India's top mobile services firm, added five million new subscribers in the three months to December, the highest-ever in a quarter.
The board of Bharti Airtel approved transferring the company's towers for mobile communications and related infrastructure, to a wholly-owned subsidiary, Bharti Infratel, for better operational efficiency.
The company also announced commencement of Direct-To-Home (DTH) services to address the fast-growing home entertainment segment through Bharti Telemedia, another wholly-owned subsidiary. It also approved acquisition of a submarine network cable system from Network i2i (jointly owned by Singtel and a Bharti group company) for an overall consideration of $ 110 million.
The BSE Bankex fell 162.09 points (2.17%), to 7,314.61. UTI Bank (down 7.25% to Rs 505.60), Canara Bank (down 5.03% to Rs 249.20), Bank of India (down 4.11% to Rs 196), Kotak Mahindra Bank (down 4.54% to Rs 460), and Bank of Maharashta (down 3.76% to Rs 44.75), ended with losses.
The FMCG index slipped 21.91 points ( 1.11%), to 1,954.15. Colgate (down 4.06% to Rs 359.15), ITC (down 1.67% to Rs 176.15), Marico (down 1.46% to Rs 556.10), HLL (down 0.78% to Rs 222.35), Dabur India (down 1.17% to Rs 160.10), Tata Tea (down 1.07% to Rs 722), and P&G (down 0.86% to Rs 892) declined.
Among side-counters, Geodesic Information Systems rose 0.55% to Rs 245.35, after its board approved merger of the Bangalore-based wholly-owned subsidiary, Picopeta Simputers, with the company. The board also approved purchasing 100% stake in Chandamama India. Geodesic reported Q3 net profit of Rs 24.3 crore for the quarter ended December 2006, compared to Rs 21.7 crore for the quarter ended September 2006 (QoQ). Net sales increased to Rs 45.3 crore (Rs 39.1 crore).
Torrent Cables surged 5.89% to Rs 167.20. It had posted 65.6% growth in net profit for Dec-2006 quarter to Rs 7.02 crore (Rs 4.24 crore). Net sales jumped 55.1% to Rs 50.73 crore (Rs 32.70 crore).
Branded apparel major Kewal Kiran Clothing plunged 8.58% to Rs 242, after a mere 7.7% growth in net profit for Dec-2006 quarter. Kewal Kiran Clothing (KKCL)’s net profit rose 7.7% in December 2006, to Rs 3.62 crore (Rs 3.36 crore). Net sales rose 20.6% to Rs 31.56 crore (Rs 26.16 crore).
The company, however, said the results were not strictly comparable. After restructuring, the apparel manufacturing and marketing business is vested in the company. The results for FY-2006 (year ended 31 March 2006) includes the effect of the above for part of the year, and hence the previous year figures are not strictly comparable, the company warned.
National Aluminium Company gained 4.14% to Rs 221.50, on reporting 46% growth in net profit for Dec-2006 quarter to Rs 572.60 crore (Rs 393.03 crore). Net sales rose 9.3% to Rs 1448.57 crore (Rs 1324.91 crore). Nalco posted results after trading hours on Monday (22 January 2007).
Zee Entertainment Enterprises surged 4.6% to Rs 316.10. On Monday, Zee had reported 175% surge in net profit in December 2006 quarter, to Rs 87.53 crore (Rs 31.86 crore). The scrip rose 2.3% to Rs 301.95 on Monday (22 January) following announcement of results during trading hours.
Asahi India Glass rose 4% to Rs 142.35, after the company reported a surge in net profit in December 2006 quarter, to Rs 13.92 crore (Rs 2.88 crore).
Orchid Chemicals rose 4% to Rs 225.40, after its betalactam unit in Maharashtra received regulatory approval from the UK. The approval for this plant, from UK's Medicines and Healthcare products Regulatory Agency, will help Orchid market its betalactam product, Piperacillin-Tazobactam, across Europe.
TRF jumped 9% to Rs 468, after the company posted 154.4% surge in net profit for Dec-2006 quarter to Rs 4.96 crore (Rs 1.95 crore). Net sales rose 100.1% to Rs 80.37 crore (Rs 40.16 crore).
Suven Life Sciences jumped 5% to Rs 167.25, after its board decided to consider sub-division of equity shares along with a bonus issue on 29 Jan 2007.
The Central Government on Monday cut customs duty on key inputs with immediate effect. The customs duty on ferro-alloys stainless steel and other alloy steel was cut to 5% from 7.5%; calcined alumina to 5% from 7.5%; pipes and tubes of aluminium, copper and zinc to 7.5% from 12.5%.
Other cuts include project imports to 7.5% from 12.5%; specified capital goods and their parts to 7.5% from 12.5%. The reduced customs duty of 7.5% on project import has now been extended to airport development and metro rail projects. A government statement read the step will reduce the cost of manufacturing and infrastructure development.
The Nikkei average closed little changed on Tuesday, as Nippon Steel Corp jumped after a rival hiked product price, offsetting losses in tech shares including Advantest Corp.
The tech-sensitive Nikkei ended down 15.61 points (0.09%), at 17,408.57, after rising as high as 17,442.00 late in the afternoon. The broader TOPIX index added 0.02% to 1,730.76.
FIIs were net buyers to the tune of Rs 77 crore on Friday (19 January), the day when the Sensex lost 35 points. FIIs have resumed buying after heavy inflows earlier during the month, which triggered a sharp market fall. FIIs were net buyers in 6 out of 7 trading sessions, from 11 January to 19 January. As per provisional data, FIIs were net buyers to the tune of Rs 218 crore on Monday (22 January), the day when the Sensex rose 27 points.
FIIs were net buyers to the tune of Rs 288 crore in index-based futures on 22 January. They were net sellers to the tune of Rs 85 crore in individual stock futures that day.
US stocks slid on Monday as investors sold shares of technology firms on worries about their earnings outlook, while a brokerage downgrade hurt shares of aircraft maker Boeing Company, pushing the blue-chip Dow average down to record its steepest one-day drop in two months.
The Dow Jones fell 88.37 points, or 0.70%, to end at 12,477.16. The Standard & Poor's 500 Index declined 7.55 points, or 0.53%, to finish at 1,422.95. The Nasdaq Composite Index lost 20.24 points, or 0.83%, to close at 2,431.07.
Oil prices slipped slightly in Asian trading hours due to a build-up in US stockpiles, easing concerns about heating fuel demand during the winter in the northern hemisphere.
The New York Mercantile Exchange's main contract, light sweet crude for delivery in March, was down $0.04 at $52.54 a barrel, from its level of $52.58 in late trading in the US overnight. The February contract expired at $51.13. Brent North Sea crude for March was at $54.64, down $0.06.