Auto, banking shares drop in volatile market

Volatility in index heavyweights Reliance Industries (RIL), Larsen & Toubro (L&T), Infosys and banking stocks caused volatility in the key benchmark indices. The BSE 30-share Sensex rose 5.98 points, or 0.06%, shedding close to 80 points from the day's high and up about 55 points from the day's low.

After opening on positive note on firm Asian stocks, the Indian market gyrated between the positive and negative zone. The market firmed up in late trade tracking firm European stocks before witnessing a sell-off.

European stocks rose on Monday as recently-hammered banks such as Barclays bounced back, buoyed by news of a fresh UK rescue plan for the ailing sector, while higher metal prices helped lift mining shares. Key benchmark indices in France, Germany and UK were up by between 1.1% to 1.64%.

The UK government will allow banks to insure against steep losses and guarantee their debt to stop the credit crunch pushing the economy into a deep slump. The plan raises the government's stake in Royal Bank of Scotland which said it lost over 20 billion pounds last year, and also lays the framework for the Bank of England to boost money supply.

Asian stocks rose as investors looked for US President-elect Barack Obama to quickly roll out hefty economic stimulus spending and a revived plan to buy bad bank assets. Key benchmark indices in China, Singapore, Hong Kong, Taiwan, and South Korea rose by between 0.02% to 1.65%.

Japan's Nikkei 225 index rose 0.32%. The Japanese industrial output plunged a record 8.5% in November 2008 from the previous month, the Japanese government said today, 19 January 2009. An initial estimate released last month had been for a drop of 8.1%. It is the biggest fall since comparable records began in 1953.

Obama is set to take office on Tuesday following a US national holiday on Monday, and many investors have hoped for weeks that he will act aggressively to try to pull the economy out of its deep, year-long recession.

US stocks rose on Friday, 16 January 2009, after Bank of America received a new capital injection of $20 billion in exchange for stocks and a $118-billion asset guarantee from the Federal government. The Dow Jones industrial average advanced 68.73 points, or 0.84%, to 8,281.22. The Standard & Poor`s 500 index added 6.38 points, or 0.76%, to 850.12. The Nasdaq composite rose 17.49 points, or 1.16%, to 1,529.33.

The BSE 30-share Sensex was up 5.98 points, or 0.06%, to 9,329.57. The Sensex gained 85.92 points at day's high of 9,409.51 in late trade. The Sensex lost 50.12 points at the day's low of 9,273.47 in early trade.

The S&P CNX Nifty rose 17.75 points, or 0.63%, to 2,846.20.

The market breadth, indicating the overall health of the market, was positive on BSE with 1377 shares advancing as compared with 1,047 that declined. 40 shares remained unchanged.

Among the 30-member Sensex pack, 13 advanced while the rest declined.

The BSE clocked a turnover of Rs 2603 crore today 19 January 2009 lower than Rs 2,943.30 crore on Friday, 16 January 2009.

Nifty January 2009 futures were at 2833, at a discount of 13.20 points as compared to the spot closing of 2846.20. Turnover in NSE's futures & options (F&O) segment was Rs 26,461.81 crore, much lower than Rs 32,716.71 crore on Friday, 16 January 2009.

The BSE Realty index (up 2.17%), the BSE Metal index (up 1.85%), the BSE Oil & Gas index (up 1.46%), the BSE Capital Goods index (up 1.32%), the BSE PSU index (up 0.79%), the BSE Power index (up 0.57%), the BSE Teck index (up 0.47%), the BSE Consumer Durables index (up 0.12%) outperformed the Sensex.

The BSE Bankex (down 0.97%), the BSE IT index (down 0.75%), the BSE HealthCare index (down 0.48%), the BSE Auto index (down 0.38%), the BSE FMCG index (down 0.23%), underperformed the Sensex.

The BSE Sensex has lost 317.74 points or 3.29% so far in 2009 from its close of 9647.31 on 31 December 2008. The barometer index had lost 10639.68 points or 52.44% in the calendar year 2008

As per the provisional data on BSE, the foreign institutional investors (FIIs) sold shares worth Rs 363.37 crore today, 19 January 2009 and domestic funds bought shres worth Rs 275.97 crore.

India's largest private sector company by market capitalization and oil refiner Reliance Industries (RIL) rose 0.92% to Rs 1,229.65, extending a 6.56% surge on Friday, 16 January 2009. But the stock was volatile. It moved between a high Rs 1,249.50 and a low of Rs 1,208.30.

The company during market hours on Thursday, 15 January 2009 said its unit Reliance Petroleum (RPL) will start fuel exports from its new refinery this month. RPL, last month, commissioned its 5,80,000-barrels-per-day only for exports refinery at Jamnagar in Gujarat.

PSU OMCs rose on a sharp slide in crude oil prices. HPCL and Indian Oil Corporation rose by between 0.98% to 2.12%. But BPCL fell 0.09%. Lower oil prices will reduce losses of the state-run oil firms on domestic sale of LPG and kerosene at a controlled price. The oil marketing firms are making profit on sale of petrol and diesel thanks to a sharp slide in oil prices from a record high of $147 a barrel struck in July 2008.

Indias largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 1.45% to Rs 728 off the day's high of Rs 735.80 on reports the company continues to be interested in acquiring Satyam Computer Services. L&T holds 4% stake in fraud-hit Satyam.

Metal stocks rose on higher metal prices on the London Metal Exchange. Tata Steel, National Aluminum Company, Hindalco Industries, Steel Authority of India, Sterlite Industries, rose by between 0.55% to 4.55%.

Rate sensitive real estate shares rose on hopes lower rates will spur housing demand. Akruti City, Puravankara Projects, Housing Development a & Infrastructure and Indiabulls Real Estate rose by between 1.24% to 12.24%.

Unitech rose 5.98% to Rs 31.90 on 10.8 crore shares after it witnessed multiple block deals in morning trade. More than 50 lakh shares changed hands at average Rs 27 per share. The company's board, at the Extra Ordinary General Meeting held today, 19 January 2009 approved raising of additional long-term funds upto Rs 5,000 crore in other currencies, through issuance of further securities in the company. The stock had plunged to Rs 25.75 earlier in the day.

Outsourcing focussed IT firms fell as fears a weak global economy would cut the amount firms spent on technology and on a stronger rupee. India's third largest software services exporter, Wipro fell 2.44%. The company will announce is Q3 December 2008 earnings on 21 January 2009.

India's second largest software services exporter Infosys Technologies fell 0.69% to Rs 1,259.55 off the day's high of Rs 1,280 even as its American depository receipt (ADR) rose 2.03% on Friday, 16 January 2008.

TCS, India's largest software services exporter by sales fell 0.45% to Rs 500.70 off the day's high of Rs 509.50. The company had reported a lower-than-expected rise in net profit in Q3 December 2008 with the management cautioning about the tough business environment at the time of declaring results after market hours on Thursday, 15 January 2008.

Shares of fraud-hit software firm Satyam Computer Services rose 4.09% after the newly-appointed board of the company met on 17 January 2009 and said that customers have expressed continued support and none of the deliveries have been affected. On liquidity, the board said it is in discussions with banks and financial institutions. Among other things, the board decided to meet on a weekly basis till the time the search for a CEO and CFO continues. Further, till such appointments, one of the board members would chair the meeting by rotation. Satyam's ex CEO Ramalinga Raju had resigned on 7 January 2009 after admission of accounting fraud in the company.

The Indian rupee rose today, 19 January 2009 propped up by firmer Asian stock markets but gains may be limited by importer dollar buying. The partially convertible rupee was at 48.6 per dollar, above Friday's close of 48.78/80. A stronger rupee affects operating margins of IT firms negatively as they earn most of their revenues from exports.

Banking stocks were choppy caught between fears of rising defaults in a weakening economy offset and hopes that a further fall in interest rates may boost lending growth. India's largest bank in terms of assets and branch network State Bank of India fell 1.55% to Rs 1,147.40, off the day's high of Rs 1,184.95.

India's largest private sector bank by net profit ICICI Bank fell 2.57% to Rs 413.05, off the day's high of Rs 429.25 even as its ADR rose 2.24% on Friday 16 January 2009.

India's second largest private sector bank by net profit HDFC Bank rose 0.36% to Rs 939.95 off the day's high of Rs 955 as its ADR rose 1.24% on Friday.

India's largest dedicated housing finance company HDFC fell 1.24% to Rs 1,546.50 off the day's high of Rs 1,585 after it has slashed its home loan rates by as much as 150 basis points. With this cut, the floating rate loans would be available at 9.75%.

Allahabad Bank rose 4.73% as its net profit rose 1.21% to Rs 369.46 crore on 17.89% rise in total income to Rs 2,306.44 crore in Q3 December 2008 over Q3 December 2007.

Auto stocks fell as high interest rates and sluggish consumer spending have dented demand for automobiles, including for trucks, motorcycles and scooters. Mahindra & Mahindra, Hero Honda Motors, Tata Motors and Maruti Suzuki India fell by between 0.4% to 4.58%.

Select FMCG stocks rose on defensive buying. Tata Tea, Dabur India, Hindustan Unilever, Britannia Industries were up by between 0.05% to 1.14%.

Select healthcare stocks, too, rose on defensive buying. Wockhardt, Dr. Reddy's Laboratories, Novrtis India, Pfizer gained by between 0.57% to 4.27%.

India's largest telecom services provider by sales Bharti Airtel rose 2.23% to Rs 646.95 off the day's high of Rs 652 after it launched Internet Protocol Television Services (IPTV) in India today, 19 January 2009.

India's second largest telecom services provider by sales Reliance Communications rose 1.29% to Rs 184.95 off the day's high of Rs 188.50 on reports of close to signing a deal with UAE-based telecom company Emirates Telecommunications Corporation (Etisalat) to share passive infrastructure.

Jaiprakash Associates gained 4,69% as its net profit rose 6.23% to Rs 165.51 crore on a 44.48% increase in total income to Rs 1447.12 crore in Q3 December 2008 over Q3 December 2007.

India's largest cigarette maker by sales ITC fell 0.99% on reporting a lower-than-expected rise in net profit in Q3 December 2008. The company announced the results during the mid-afternoon trade today.

Graphite India fell 3.18% after it said may have to cut output across facilities to align with slowing demand. It may also cut jobs in coming months, it added.

MRO TEK declined 2.22% after the company posted a net loss of Rs 1.27 crore in Q3 December 2008 as compared to net profit of Rs 3.72 crore in Q3 December 2007.

Unitech clocked the highest volume of 1.08 crore shares on BSE. Satyam Computer Services (21.32 lakh shares), Reliance Natural Resources (1.17 crore shares), Suzlon Energy (1.17 crore shares) and Karuturi Global (78.85 lakh shares) were the other volume toppers in that order.

Unitech clocked the highest turnover of Rs 314.40 crore on BSE .Reliance Industries (Rs 175.41 crore) ,Reliance Capital (Rs 120.99 crore), State Bank of India (Rs 117.80 crore) and Educomp Solutions (Rs 109.60 crore) were the other turnover toppers in that order.