The market suffered another setback today due to weakness in Asian markets and as investors exhibited caution before earning reports start trickling in. The weakness accentuated after the Nifty broke the key support level of 3,900.
The benchmark index plunged 204.17 points (1.5%) to settle at 13,362.16, its lowest closing since 20 December 2006. The S&P CNX Nifty lost 61.10 points (1.5%), to settle at 3,850.30.
The market has fallen sharply from record highs last week. At 14,014.92 on 3 January 2007, the Sensex has hitherto lost 652.76 points (4.6%) in the past five trading sessions. Nifty has lost 173.75 points (4.3%) during this same period.
Japan's Nikkei lost 1.7% on Wednesday, recording its biggest one-day percentage decline since Nov. 20. Hong Kong’s Hang Seng was down 1.6%. Reports suggest that a 9% fall in crude prices since the start of calendar 2007 had forced some hedge funds betting on higher oil prices to cut their losses and sell assets across markets. Nymex crude was down 69 cents at $54.95 on Wednesday. Crude had recovered from a lower level on Tuesday, after striking an 18-month low of $53.88 intra-day.
Emerging markets were additionally hit after Venezuela nationalised some major oil projects and other industries, and measures by Thailand to tighten rules on majority-owned foreign companies, which prompted investors to move out of riskier assets. Among Asian emerging markets, Indonesia’s Jakarta Composite was down nearly 4% and South Korea’s Seoul Composite shed 1.3%.
Back home, recent data showed heavy FII sales. As per provisional data, FIIs were net sellers to the tune of Rs 361 crore on 9 January. They were net buyers to the tune of Rs 201 crore in index-based futures and net sellers worth Rs 167 crore in individual stock futures on the same day. FIIs were net sellers of stocks worth Rs 3076 crore on Monday (8 January 2007), which apparently included shares tendered by FIIs in Oracle’s open offer for additional shares of i-flex. Oracle’s open offer for i-flex got over late last month.
The market-breadth was weak today. Against 1,699 shares declining on BSE, 942 rose. Just 45 shares were unchanged. BSE clocked a turnover of Rs 3632 crore, lower than Tuesday’s Rs 5167 crore.
Accrording to technical analysts, the next support level of Sensex is at 13,182 level. If that level is broken, the Sensex may slip to 12,800 they reckon.
Selling was conspicuous today in banking shares. ICICI Bank, with a 9.3% weigtage in the Sensex, lost 3% to Rs 883. SBI lost 3.3% to Rs 1135.
HDFC Bank was down 1.5% to Rs 998. HDFC Bank unveils Q3 results tomorrow. Five brokerages have forecast between 27.4 - 31.8% growth in HDFC Bank’s Q3 December 2006 net profit, between Rs 285.90 crore and Rs 295.90 crore, compared to a net profit of Rs 224.40 crore in Q3 December 2005.
ONGC lost 3% to Rs 890. Newly-listed Cairn India lost nearly 3% to Rs 133.55. A massive 75.7 lakh shares changed hands in Cairn India.
PSU power equipment major Bhel plunged 4.5% to Rs 2146. The stock was the biggest loser from among the 30-Sensex scrips.
Telecom scrips ran out of steam. Reliance Communications shed 3.5% to Rs 408 despite reports of 1.4 million new mobile subscribers in December 2006. Bharti Airtel shed 2% to Rs 611.
Wipro led an intra-day rebound in IT shares. It rose 2.2% to Rs 594. Satyam Computer gained 0.03% to Rs 467.90, off the session’s low of Rs 456. However, TCS (down 1.7% to Rs 1234) lost heavily.
Infosys ended just 0.2% down to Rs 2185.70, off the session’s low of Rs 2158. Infosys announces Q3 results tomorrow. Eight brokerages have predicted between 4.1 - 7.3% sequential growth in Infosys’ Q3 consolidated net profit, between Rs 973.50 crore and Rs 996.70 crore, compared to a net profit of Rs 929 crore in Q2 September 2006. These brokerages expect between 5.7 - 10.7% sequential growth in Infosys’ consolidated sales, between Rs 3646.60 crore and Rs 3819.20 crore, compared to the net sales of Rs 3451 crore in Q2 September 2006.
The key factor to watch is the operating profit margin. Citigroup expects a marginal uptick in Infosys’ operating margins. It reckons that better pricing and lower selling, general & administration costs would offset margin pressure arising from an appreciating rupee.
Cement shares, too, staged an intra-day recovery. Gujarat Ambuja Cements ended 0.3% down at Rs 139, off the session’s low of Rs 136.10. Grasim lost 0.6% to Rs 2809, off the session’s low of Rs 2757.50.
Reliance Industries shed 0.7% to Rs 1271.50.
Zee News closed at Rs 34.40 and Wire and Wireless (India) ended at Rs 120.80, on their debut. It maybe recalled that Zee Telefilms had demerged its cable distribution subsidiary into Wire & Wireless (India) (WWIL) and its regional and news broadcasting undertaking into Zee News (ZNL), in a restructuring scheme. Ahead of the listing of Zee News, RBI on Tuesday said foreign portfolio funds will not be permitted purchases of Zee News scrip without obtaining prior permission from the bank. The foreign portfolio limit in Zee News had reached the maximum permissible limit of 26%, RBI said.
Shree Ashtavinayak Cine Vision closed at Rs 226.50 on its debut on Wednesday, higher than its issue price of Rs 160.
IFCI jumped 21.6% to Rs 16.40 after it, along with other shareholders, sold part of their holdings in the National Stock Exchange to NYSE Group and other foreign investors.
Chemicals maker BASF India plunged 7% to Rs 232.50, after the company's net profit fell 25% for Q3 December 2006 to Rs 8.83 crore from Rs 11.74 crore a year ago.
Sintex Industries dropped 6% to Rs 213. The company today reported 27% growth in net profit for October-December 2006 quarter at Rs 25.90 crore (Rs 20.40 crore).
Newspaper publisher Deccan Chronicle Holdings rose nearly 6% to Rs 821.90 after the company called a board meeting on 19 Jan 2006 to consider splitting each share into five.
Nestle India rose almost 5% to Rs 1215. The company said on Tuesday, its board will meet on 15 January 2007 to consider a scheme formulated under Sections 391 to 394 of the Companies Act, 1956 read with Sections 100 to 102 of the Companies Act, 1956 for distributing a part of the general reserves and the share premium account to shareholders.
Construction firm Atlanta rose 5% to Rs 1142.75, after its Oct - Dec 2006 net profit surged. Its board will meet on 16 Jan 2006, to consider splitting each share into five.
PVR rose 0.5% to Rs 232, after its multiplexes at Latur and Aurangabad, in Maharashtra, were granted exemption from entertainment tax for five years.
Praj Industries rose nearly 4% to Rs 234.95. The stock had slipped a bit on Tuesday, even as it reported outstanding Q3 results.
Electrical appliance maker Asian Electronics dropped 1.5% to Rs 559.50. The company said on Wednesday Citigroup Global Markets (Mauritius) bought an additional 1.36% stake in the company, thus raising its stake to 6.34%.
Dolphin Offshore dropped 2% to Rs 345.10. The stock came sharply off an intra-day high of Rs 374. Today was the last day for the scrip to trade cum-bonus (for 3:5 bonus issue). The company has set 12 January 2007 as record date for the bonus issue.
iGate Global Solutions ended flat at Rs 401. iGate Global Solutions reported a standalone net profit of Rs 17.05 crore for Q3 December 2006 compared to a net profit of Rs 9.27 crore for Q3 December 2005. Net sales rose 33.3% to Rs 196.03 crore (Rs 146.95 crore).
Tanla Solutions gained 2% to Rs 402.95, the maximum permissible level of the day. The stock has hit 2% upper limit in each of the last past four trading sessions from the day of its debut on 5 January 2007. The stock had debuted at Rs 379.80 on BSE on 5 January compared to the IPO price of Rs 265.
Gas cylinder maker Everest Kanto Cylinder shed 3% to Rs 738. As per reports, the company won an order worth Rs 40 crore from defence authorities.
Television software producer Baba Arts rose 5% to Rs 51.10, after its board approved raising up to $20 million and increasing foreign fund holding to 74%.