An adventure is only an inconvenience rightly considered. An inconvenience is an adventure wrongly considered.
The adventures of the bulls are taking a backseat as investors and traders are getting inconvenient with the current state of affairs. The wall of liquidity had stood solid in recent months and pygmied the Wall of Worry. FII outflows would mean some melting all over. Don’t be surprised if you find people saying ‘we told you so’, as the market turns volatile and loses some ground. A correction has been long overdue as the key indices have doubled since early March.
The main indices are set to open lower given the weak global cues. Fund flows too have turned a little choppy off late. Technical and derivative indicators are also pointing to some cooling. Dow industrials suffered triple-digit loss after rising initially. Financials paced the fall on Wall Street and a stronger dollar battered commodity shares. Stocks in Europe closed lower in a topsy-turvy session. Asian markets are mostly in the red.
All eyes will be on the RBI. The central bank may not tinker much with policy rates, but is expected to warn about rising inflation and interest rates having bottomed out. The RBI said on Monday that it's professional forecasters survey points to downward revision to the GDP growth outlook from 6.5% to 6% in FY10. On inflation, it says that notwithstanding the low year-on-year WPI inflation so far, the outlook is conditioned by the pressures of emerging high inflation in essential commodities as well as elevated and expanding consumer price inflation (CPI).
Wipro has just announced its Q2 FY10 numbers. Net profit has come in at Rs11.62bn versus Rs10.15bn in the previous quarter. Net sales for the July-Sept quarter are Rs69.40bn as against Rs62.89bn in the first quarter.
The company's Q2 FY10 Global IT Services revenue stood at $1006mn. It expects Q3 FY10 Global IT Services revenue at $1092-1113mn.
Results Today: 3M India, Aventis Pharma, Cadila, CEAT, Crompton Greaves, Deepak Fertilizers, Dish TV, Emco, Everest Kanto, Finolex Cables, Fortis Healthcare, Gillette India, Gokaldas Exports, GTL, HCL Tech, Himatsingka, IFCI, Indraprastha Gas, Inox, IPCA Labs, Ispat Industries, Jagran Prakashan, Jai Corp., Jet Airways, Jyothy Labs, Jyoti Structures, Kansai Nerolac, Kingfisher Airlines, Kotak Mahindra, Lanco Infra, Madras Cement, Maharashtra Seamless, Mcleod Russell, PFC, RNRL, Reliance Power, SpiceJet, Tata Steel, Trent, Unity Infra, UTV Software and Zensar Tech.
FIIs were net sellers in the cash segment on Monday at Rs27.4mn on a provisional basis. The local funds were net sellers of Rs1.71bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net buyers at Rs3.48bn. On Friday, the foreign funds were net sellers of Rs488mn in the cash segment. Still, their net investments in Indian stocks this year remains above $14bn. Mutual Funds were net sellers at Rs3.08bn on Friday.
US stocks erased early gains to end in the red on Monday. The Dow Jones Industrial Average climbed above the 10,000 level in early going only to slip below that by the closing bell. A stronger dollar battered commodity shares and the financial sector took it on the chin.
The Dow lost 104 points, or 1%, to 9,867.96 after having gained as much as 100 points in the morning. The S&P 500 index fell 13 points, or 1.2%, to 1,066.95. The Nasdaq Composite index dropped 13 points, or 0.6%, to 2,141.85.
Financials spearheaded a broad-based selloff, with 27 of 30 Dow components falling.
The dollar turned higher on the back of a stronger-than-expected Treasury auction, pressuring dollar-traded commodities and big multi-nationals that benefit from the weak dollar.
The financial sector was hit by reports over the weekend that Bank of America's plans to repay federal bailout money may have hit some roadblocks. Regional banks Fifth Third Bancorp and SunTrust were both downgraded to "sell" by Rochdale Securities.
Since bottoming at a 12-year low on March 9, the S&P 500 has gained nearly 60%, with any modest selloff being met with renewed buying interest.
Dow component Verizon Communications said profit tumbled 30% as higher costs countered an increase in revenue from its strong wireless business. Nonetheless, earnings topped expectations. The company also reported higher quarterly revenue. But shares slipped, getting dragged down in the bigger selloff.
Just shy of 140 components of the S&P 500 are due to report quarterly results this week. With 206 companies, or 41% of the S&P 500 having already reported, profits are currently on track to have fallen 18.3% from a year ago, according to Thomson Reuters. So far, results have been soundly above forecasts, with 81% of companies topping expectations, 7% meeting and 12% missing.
Capmark Financial, one of the country's largest commercial real estate lenders, filed for bankruptcy protection Sunday, reflecting the major problems in the business property sector.
Dutch financial services firm ING said it plans to spin off its insurance business and sell $11.3 billion of stock to pay back some of what it took in bailout money from the government last year.
Treasury prices tumbled, raising the yield on the 10-year note to 3.54% from 3.48% late on Friday.
Yields jumped as the government completed the first few auctions in a record week for debt sales. Treasury sold $30 billion in six-month notes, $29 billion in 3-month notes and $7 billion in five-month Treasury Inflation Protected Securities, or TIPS. All three saw strong demand.
The dollar gained versus the euro, after falling to a 14-month low last week. The dollar gained versus the yen as well.
The stronger dollar pressured dollar-traded commodity prices.
US light crude oil for December delivery fell $1.82 to settle at $78.68 a barrel on the New York Mercantile Exchange.
COMEX gold for December delivery fell $13.60 to settle at $1,042.80 an ounce. Gold has surpassed records repeatedly this month due to the weak dollar and longer-term worries about inflation.
Tuesday brings quarterly results from BP and Valero Energy and economic reports on durable goods orders in September, the Case Shiller home price index for August and the October Consumer Confidence index.
Across the Atlantic too, the financial sector weighed on European markets after ING revealed the steep price they will pay after getting aid from the Dutch government. With rises of as much as 0.6% and losses of as much as 1.4%, the pan-European Dow Jones Stoxx 600 index finished 1.3% lower to 241.84.
The UK's FTSE 100 index dropped 1% to 5,191.74, while Germany's DAX index skidded 1.7% to 5,642.16, and the French CAC-40 index fell 1.7% to 3,744.45.
Markets ended in the red after a volatile day, starting off the new week on a negative note. Global cues were ignored as quarterly earnings from India Inc. took center stage. Traders and investors turned cautious ahead of the RBI’s mid year policy review.
Huge stock specific action was seen, scrips like Punj Lloyd and Aban offshore plunged on poor earnings while, DLF, Hindalco and JP Associates were among the other heavyweight losers.
The BSE Sensex slipped 70 points at 16,740 after touching a high of 17,938 and a low of 16,706. The index opened at 16,808 against the previous close of 16,810. The NSE Nifty was down 26 points to shut shop at 4,970.
In Asia, the Nikkei in Japan was up 0.8%, while Australia's S&P/ASX ended lower by 0.6% at 4,830. Shanghai SE Composite ended flat and Hang Seng index in Hong Kong was closed on account of holiday.
In Europe, stocks were in the positive terrain. The FTSE in the UK was up 0.5%, The DAX in Germany was up 0.9% and the CAC 40 index in France was up 0.7%.
Coming back to India, among the BSE sectoral indices, the Realty index was the top loser, shedding 4.5%, followed by the Consumer Durables index that was down 2.3% and the BSE Bankex index was down 1.7%.
Among the major gainers were, BSE FMCG index was up 0.9% and BSE Pharma index up 0.9%.
The BSE Mid-Cap index fell 1.8% and the BSE Small-Cap index was down 1.3%.
Among the 30-components of Sensex, 16 stocks ended in the red and 14 ended in the positive terrain. DLF, JP Associates, Hindalco, RCom, Reliance Infra and SBI were among the major losers.
On the other hand, among the major gainers were Tata Motors, Tata Steel, ITC and HDFC.
Outside the frontline indices, the big losers in the broader market were Punj Lloyd, Aban Offshore, Indian Bank, Union Bank and PTC. On the other hand, gainers included Zee Ent, Oracle Fin, Balrampur Chini and IDBI Bank.
Punj Lloyd fell over 16% to Rs217 after the company’s net profit fell 52% to Rs418.8mn for the quarter ended September 30, 2009 from Rs880.5mn for the quarter ended September 30, 2008.
Total Income has increased from Rs15.83bn for the quarter ended September 30, 2008 to Rs18.61bn for the quarter ended September 30, 2009.
The Group has posted a profit after minority interest & Share of Profits of Associates of Rs528.5mn for the quarter ended September 30, 2009 as compared to Rs1.44bn for the quarter ended September 30, 2008. Total Income has decreased from Rs29.54bn for the quarter ended September 30, 2008 to Rs28.72bn for the quarter ended September 30, 2009.
Shares of Aban Offshore plunged by over 10% to Rs1381 after the group’s net profit sank 73% YoY to Rs714.4mn for the quarter ended September 30, 2009 as compared to Rs2.67bn for the quarter ended September 30, 2008.
Total Income has decreased from Rs9.84bn for the quarter ended September 30, 2008 to Rs7.09bn for the quarter ended September 30, 2009.
On the other hand, the company posted a net profit for the period of Rs873.3mn for the quarter ended September 30, 2009 as compared to Rs813.4mn for the quarter ended September 30, 2008.
Total Income has increased from Rs2.90bn for the quarter ended September 30, 2008 to Rs3.26bn for the quarter ended September 30, 2009.
Shares of Ranbaxy Laboratories advanced by 2.5% to Rs381 after the Company posted a net profit after tax of Rs1.86bn for the quarter ended September 30, 2009 as compared to net loss of Rs(3.52)bn for the quarter ended September 30, 2008.
Total Income has increased from Rs12.02bn for the quarter ended September 30, 2008 to Rs13.65bn for the quarter ended September 30, 2009.
The stock opened at Rs374 and made an intra-day high of Rs387 and a low of Rs373. Total traded volumes stood at 0.62mn shares.
Shares of Union Bank of India declined by over 6.5% to Rs248. The bank posted a net profit of Rs5.05bn up 40% for the quarter ended September 30, 2009 as compared to Rs3.61bn for the quarter ended September 30, 2008.
Total Income has increased from Rs31.14bn for the quarter ended September 30, 2008 to Rs37.60bn for the quarter ended September 30, 2009.
The stock opened at Rs267 and made an intra-day high of Rs267 and a low of Rs245. Total traded volumes stood at 0.41mn shares.
Shares Oriental Bank of Commerce advanced by 1.3% to Rs263 after the bank posted a net profit of Rs2.7bn for the quarter ended September 30, 2009 as compared to Rs2.36bn for the quarter ended September 30, 2008.
Total Income has increased from Rs23.61bn for the quarter ended September 30, 2008 to Rs28bn for the quarter ended September 30, 2009.
Shares of Lupin erased gains and ended lower by 1% to Rs1239. The company announced its Q2 net profit at Rs1.6bn as against Rs1.16bn registering a growth of 38% YoY. While, net sales rose by 22% to Rs11.1bn as against Rs1.1bn in the same period last year.
The stock opened at Rs1277 and made an intra-day high of Rs1308 and a low of Rs1222. Total traded volumes stood at 0.1mn shares.