Small-cap, mid-cap indices buck slide in Sensex

After trading within a narrow range earlier in the day, the market declined in late trading as US stock futures indicated lower opening on the Wall Street on Monday, 5 May 2008. Dow futures were down 105 points and S&P 500 futures were down 6.80 points.

Realty and healthcare stocks outperformed the market. Consumer durables and IT stocks dropped. Small-cap and mid-cap counters were active throughout the session with their barometer indices outperforming the Sensex.

European markets, which opened after Indian market, were mixed. France’s CAC 40 was down 0.29% whereas Germany’s DAX was up 0.02%. The stock market in UK was closed for a holiday.

Asian markets, which opened before Indian market, were mostly in green. Key indices in China, and Singapore were up 0.37% to 1.84%. However, Taiwan’s Taiwan Weighted Index was down 1.41% and Hong Kong’s Hang Seng was down 0.22%. Markets in Japan, and South Korea were closed for holiday.

The 30-share BSE Sensex fell 109.22 points or 0.62% at 17,490.90. Sensex gained 135.58 points at day’s high of 17,735.70, hit in the early afternoon trade. The index lost 142.85 points at day’s low of 17,457.27, hit in the late trade.

The broader based S&P CNX Nifty was down 35.95 points or 0.69% at 5192.25. Nifty May 2008 futures were at 5205.10, at a premium of 12.85 points as compared to spot closing.

As per provisional data, foreign funds sold shares worth a net Rs 236.81 crore today. Domestic funds bought shares worth a net Rs 457.16 crore.

The market breadth was strong on BSE with 1613 shares advancing as compared to 1118 stocks that declined. 45 stocks remained unchanged.

The BSE Mid-Cap index rose 0.85% to 7,299.26 and BSE Small-Cap index rose 0.27% to 8,845.35. Both these indices outperformed the Sensex.

BSE clocked a turnover of Rs 6350 crore as against Rs 6,606.18 on Friday, 2 May 2008.

The NSE's futures & options (F&O) segment turnover was Rs 32972.85 crore, which was lower than Rs 36304.41 crore on Wednesday, 30 April 2008.

India’s largest private sector firm by market capitalisation and oil refiner Reliance Industries fell 0.34% to Rs 2,665.70.

India’s largest engineering and construction firm by revenue Larsen & Toubro fell 0.25% to Rs 3133.10. The stock had earlier touched a high of Rs 3262. The firm is reportedly set to revamp its corporate structure to create a dozen operating companies under the direction of a separate board of directors. Effective 1 July 2008, the move will lead to L&T becoming the umbrella organisation with a board to administer the performance of all businesses and ownership of the brand, pegged at around $2 billion.

The BSE Bankex outperformed the Sensex, sliding 0.13% to 9,130.61. Kotak Mahindra Bank (up 5.81% at Rs 869.45), Federal Bank (up 2.78% at Rs 260.60), Union Bank of India (up 2.77% at Rs 168.75) and Yes Bank (up 2.49% at Rs 178.85), spurted.

Public sector lender Allahabad Bank rose 6.78% at Rs 92.95. Net profit of Allahabad Bank rose 34.8% to Rs 169.51 crore on 30.3% increase in operating income to Rs 1980.17 crore in Q4 March 2008 over Q4 March 2007.

India’s largest private sector bank by assets ICICI Bank fell 0.25% at Rs 933.15.

India's largest commercial bank State Bank of India declined 2.36% to Rs 1781.90. The bank reported 26.1% rise in net profit to Rs 1883.25 crore on 26.7% growth in operating income to Rs 16393.93 crore in Q4 March 2008 over Q4 March 2007.

The BSE Realty index outperformed the Sensex, gaining 0.26% to 8,741.39. Unitech (up 4.01% at Rs 330.90), Penland (up 3.37% at Rs 108.95), Mahindra Lifespace Developers (up 2.14% at Rs 560.95), and Purvankara Projects (up 1.66% at Rs 300.45), edged higher.

However, India's largest real estate developer by market capitalisation DLF fell 2.10% to Rs 705.05.

The BSE IT index underperformed the Sensex, falling 0.95% to 4,317.34. i-Flex Solutions (down 5.36% at Rs 1,345.25), HCL Technologies (down 2.70% at Rs 288.10), Wipro (down 2.41% at Rs 490.10), TCS (down 1.72% at Rs 924.55), Satyam Computer (down 1.34% at Rs 487.50) and Infosys Technologies (up 0.12% at Rs 1,787.35), slipped.

The BSE Auto index underperformed the Sensex, slipping 1.01% to 4,812.13. Hero Honda Motor (down 3.48% at Rs 818.15), TVS Motor (down 2.08% at Rs 44.65), and Maruti Suzuki (down 0.46% at Rs 784.40), declined.

India's largest commercial vehicles maker by sales Tata Motors slipped 0.71% at Rs 685.55. Tata Motors on Friday, 2 May 2008, reported a decline of 5.8% in automobile sales, including exports, at 38,149 units for April 2008 compared with 40,486 units in the same month last year, largely on account of dip in passenger car segment and exports. Passenger vehicle sales saw a decline of 12%, with total sales of 14,843 units in the domestic market in April 2008

India's leading tractor maker by sales Mahindra & Mahindra slipped 1.86% at Rs 677.50. Goldman Sachs will invest Rs 700 crore in Mahindra & Mahindra (M&M) by picking up convertible debentures which will give it a 3.68% stake in the auto major.

Drug maker Suven Life Sciences surged 2.12% to Rs 36.05 after the company said it has received European product patent from European Patent Office for its clinical candidate SUVN-502.

Jewellery maker Surana Corporation was locked at upper limit of 4.97% to Rs 47.55 on reporting 371.03% surge in net profit to Rs 6.11 crore on 37.44% growth in total income to Rs 619.33 crore in Q4 March 2008 over Q4 March 2007.

Real estate developer Housing Development and Infrastructure (HDIL) fell 1.54% to Rs 832.95. The company has reportedly received Maharashtra state government's approval for the Mumbai airport slum rehabilitation programme.

Telecom service provider Spice Communications surged 5.90% to Rs 42.20 on reports Telekom Malaysia is looking at increasing its stake in the company to at least 51% through a combination of open offer and acquisition of shares the co-promoters.

Titagarh Wagons clocked the highest turnover of Rs 225.07 crore on BSE. Housing Development and Infrastructure (HDIL) (Rs 198.60 crore), Reliance Industries (Rs 197.27 crore), Unitech (Rs 166.97 crore) and Jaiprakash Associates (Rs 154.87 crore), were the other turnover toppers on BSE in that order.

Tata Teleservices (Maharastra) reported the highest volume of 1.86 crore shares on BSE. Kashyap Technologies (1.47 crore shares), Ispat Industries (1.40 crore shares), IFCI (1.22 crore shares) and Reliance Natural Resources (1.09 crore shares), were the other volume toppers on BSE in that order.

US market ended with modest gains on Friday, 2 May 2008 after the latest non-farm payroll data showed 20,000 jobs were lost in April 2008, a far better result than an expected loss of 75,000 jobs. Dow Jones Industrial Average gained 48.2 points or 0.4% at 13,058.20, the Nasdaq Composite index fell 3.72 or 0.2%, to 2,476.99 and the S&P 500 ended up 4.56 points to 1,413.90.

High inflation remains the biggest concern for the Indian stock market. The measures taken by the Union government to control inflation have also added to uncertainty on corporate profit. Finance Minister P Chidambaram on Tuesday, 29 April 2008, said government will impose export tax on basmati rice and some steel products, and cut import duties on key inputs like ferro alloys and metallurgical coke. He said the measures were being taken to improve domestic supplies and to moderate prices. The government has already banned export of cement and non-basmati rice.

Given that parliamentary elections are scheduled next year (in May 2009), the government may leave no stone unturned in its attempt to rein in inflation. This is bad news for commodity scrips like cement, steel etc.

In a bid to rein in inflation, the Reserve Bank of India, on Tuesday, 29 April 2008, raised cash reserve ratio (CRR) by 25 basis points to 8.25%, to suck out excess liquidity in the banking system, in its annual monetary policy review. While the central bank has mentioned price stability as its key priority, the overall undertone of the policy is not as hawkish as market had feared. The RBI governor Y V Reddy expects inflation to moderate in the next 2-3 months.

Good Q4 results March 2008 results and firm global markets, triggered a solid rebound in the Indian market over the past few days. Buying by domestic institutions has supported the market. From a recent low of 14,809.49 on 17 March 2008, the Sensex climbed 2,790.63 points or 18.84% to 17,600.12 on 2 May 2008.

The structural growth drivers of the Indian economy remain intact – India’s economy is expected to witness a decent-to-strong growth for a long period of time due to favourable demographics. Acceleration in infrastructure creation will be another driver of strong growth in India’s economy. Rating agency CRISIL in its latest outlook for Indian economy for the year through March 2009 has stated that the overall growth scenario is expected to remain strong with investment as the main driver.

Another pointer to the fact that the long term India growth story remains intact is the outcome of the latest 2008 US-India Business Council (USIBC) survey, according to which, India is, and will continue to be, a premier destination for investment by US firms, with a large number of respondents rating future economic growth in India as highly sustainable.