Realty, oil stocks pull market lower; breadth weak

The key benchmark indices ended a choppy trading session lower, extending losses for the second straight day as weak global stocks weighed on investor sentiment. The BSE 30-share Sensex fell 11.57 points or 0.07%, off close to 115 points from the day's high and up close to 50 points from the day's low. Realty, health care, PSU, FMCG, oil exploration and PSU OMC stocks fell. But metal stocks rose. The market breadth was weak. The Sensex had lost 155.02 points or 0.88% to 17,486.06 on Tuesday, 19 January 2010.

Coming back to today's trade, the market was volatile. Stocks surged at the onset of the trading session tracking overnight rally in US stocks. It pared gains later. The market came off the lower level later in mid-morning trade. The market regained positive terrain after slipping into the red for a brief period in early afternoon trade. The market moved between positive and negative zone later. It slumped to hit fresh intraday low in mid-afternoon trade. The market cut losses later in volatile trade.

Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said.

Food prices will cool off in 1-2 months and inflation will turn around, finance ministry's chief economic advisor Kaushik Basu said in a newspaper interview published on Wednesday. The Reserve Bank of India will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank. Food prices rose near 20% in December from a year earlier, their highest in 11 years.

Monthly inflation may touch double digits by March 2010, Chief Statistician Pronab Sen told Television media on Tuesday. The wholesale price index rose to 7.31% in December from a year earlier, driven by higher food prices.

Economic growth will accelerate this year, Commerce and Industry Minister Anand Sharma said on Tuesday as he demanded better access to China's markets to help exports. Sharma's call for greater access for goods comes amid a widening trade gap between the two countries. Trade between the two grew rapidly to $50 billion in 2008, making China India's second-largest trading partner, but fell back to $43 billion in 2009 as global trade declined. Sharma called for more Chinese direct investment in India, especially in infrastructure, while noting that Indian firms are already present in China.

The Reserve Bank of India (RBI) on Tuesday allowed the introduction of currency futures in euro, yen and pound sterling, a move would improve liquidity in the derivatives market.

Meanwhile, the initial public offer (IPO) of fast-food chain Jubilant Foodworks was subscribed 30.68 times by 16:00 IST today. The company has fixed IPO price band of Rs 135-Rs 145 per share. Today is the last day of bidding for the IPO

European shares fell on Wednesday on mounting concerns about bank lending restrictions in China. The key benchmark indices in Germany, France and UK fell by between 0.23% to 0.37%

Most Asian markets ended lower Wednesday, as concerns China may step up its tightening measures to cool a rapidly growing economy hit banking and resource shares hard. The key benchmark indices in Singapore, Japan, Taiwan, China, Hong Kong fell by between 0.25% to 2.93%. The Shanghai Composite index was the biggest loser in the region with a near 3% fall. But, key benchmark indices in South Korea and Indonesia rose by between 0.04% to 0.24%.

China's banking regulator said the nation's banks were expected to make fewer loans this year than in 2009. China's top banking regulator Liu Mingkang said Chinese banks were expected to issue about 7.5 trillion yuan ($1.1 trillion) in new loans in 2010 compared to 9.59 trillion yuan in 2009, reflecting efforts to rein in bank lending which nearly doubled last year

US index futures fell as Republican Scott Brown's Massachusetts Senate seat election victory raised concerns over the political and economic outlook in the US. Trading in US index futures indicated the Dow could fall 42 points at the opening bell on Wednesday, 20 January 2010. Brown's victory is seen as dealing a blow to President Barack Obama's legislative plan, including any further needed stimulus down the road, as the Democrats would no longer have 60 seats in Senate, which is needed to block filibusters and get bills enacted.

After an extended weekend, US stocks opened the week on an encouraging note on Tuesday 19 January 2010. Stocks rose to fresh 15-month highs led by healthcare stocks as a key senate-seat vote in Massachusetts on Wednesday could change the course of healthcare reforms. Technology stocks got a boost from anticipation of strong earnings from IBM. IBM's results which were out after the bell were well ahead of expectations. In other earnings, Citigroup hit its earnings target but missed on revenue.

The Dow gained 115.78 points, or 1.1%, to 10,725.43. The Standard & Poor's 500 index added 14.20 points, or 1.3%, to 1,150.23. The Nasdaq composite index rose 32.41 points, or 1.4%, to 2,320.40 on Tuesday.

The world's economy is recovering more strongly than expected and the projected growth rate in 2010 is likely to beat the forecast 3%, Dominique Strauss-Kahn, the head of the International Monetary Fund, said on Wednesday. But he said the recovery was patchy and various regions were rebounding at a varying pace.

Unemployment rates will likely peak in most US cities in 2010, but it will be many more years before jobless rates hit their lows of the last decade, a report released by a US mayors group shows. In some areas, such as California's central valley and cities in Nevada, unemployment rates will stay at or above 10% through 2013, according to the report published on Wednesday by the US Conference of Mayors and research group Global Insight. The mayors group released the report a day ahead of a meeting with US President Barack Obama in which it will seek federal financial aid for small and large cities.

Closer home, the BSE 30-share Sensex fell 11.57 points or 0.07% to 17,474.49. At the day's high of 17,590.59, the Sensex rose 104.53 points at the onset of the trading session. The Sensex fell 61.01 points at the day's low of 17,425.05 in mid- afternoon trade.

The S&P CNX Nifty fell 3.95 points or 0.08% to 5221.70. Nifty January 2010 futures were at 5,214.55, at a discount of 7.15 points as compared to the spot closing of 5,221.70. Turnover in NSE's futures & options (F&O) segment increased to Rs 65565.50 crore from Rs 63,441.87 crore on Tuesday, 19 January 2010.

The market breadth, indicating the overall health of the market, was weak. The breadth was strong earlier in the day. On BSE, 1707 shares declined compared with 1199 that advanced. The remaining 62 stocks remained unchanged.

The BSE Mid-Cap index fell 0.2% and underperformed Sensex. The BSE Small-Cap index rose 0.07% and outperformed Sensex

Secotoral indices on BSE were mixed. BSE Metal index (up 0.46%), BSE Auto index (up 0.43%), BSE Power index (up 0.21%), BSE Capital Goods index (up 0.17%), and BSE IT index (up 0.14%) outperformed the Sensex. The banking sector index Bankex ended flat for the day, outperforming the Sensex which fell 0.07%.

BSE Realty index (down 1.91%), BSE Oil & Gas index (down 1.31%), BSE PSU index (down 1.25%), BSE FMCG index (down 0.29%), BSE Healthcare index (down 0.18%), and BSE Consumer Durables index (down 0.11%), underperformed the Sensex.

Among the 30-member Sensex pack, 12 rose while the rest fell

BSE clocked a turnover of Rs 6157 crore, lower than Rs 6376.80 crore on Tuesday, 19 January 2010.

India's largest mortgage lender by total income HDFC rose 0.55% as net profit jumped 22.75% to Rs 671.25 crore in Q3 December 2009 over Q3 December 2008. The results were announced during market hours today.

Index heavyweight Reliance Industries (RIL) fell 0.69%. RIL last week raised $763 million through a block sale of 3.3 crore shares. RIL, which is bidding for bankrupt LyondellBasell Industries, had previously sold treasury shares to state-owned insurer Life Insurance Corp of India raising $577 million. As per reports last week, RIL had sweetened its offer to buy a controlling stake that valued LyondellBasell at $13.5 billion. RIL will announce its Q3 result on Friday, 22 January 2010.

State-run oil marketing stocks declined on reports the Government has no plans to raise fuel prices as of now. HPCL (down 3.74%), BPCL (down 4.5%), and Indian Oil Corporation (down 2.06%), edged lower.

With global crude prices hovering near $80 per barrel a hike in crude oil price was imminent, reports added. Accordingly, the matter is to be considered next month, based on the recommendations of Kirit Parikh Committee.

Meanwhile, the government has announced Rs 12,000 crore in cash as compensation for the losses incurred by oil-refining companies. But the compensation was insufficient to offset the loss on the sale of subsidized cooking gas and kerosene alone for April-December last year.

Oil exploration stocks declined on decline in crude oil prices. Oil India (down 0.87%), ONGC (down 2.92%), and Cairn India (down 0.74%), slipped.

Fall in crude oil prices will result in lower realisation from crude sales for oil exploration firms. Crude oil for February 2010 delivery fell as much as 65 cents, or 0.8%, to $78.37 a barrel on concerns China may step up efforts to curb credit growth

Metal stocks rose after LMEX, a gauge of six metals traded on the London Metal Exchange, rose 0.35% on Tuesday, 20 January 2010. Steel Authority of India, Hindalco Industries, Jindal Steel & Power, rose by between 1.39% to 2%.

Tata Steel, the world's eighth-largest steelmaker rose 2.49%. The company said on 5 January 2010 sales from its Indian operations rose 73% in December 2009 to 636,000 tonnes from a year earlier. The Indian operations account for about a quarter of the group's total annual global capacity of 30 million tonnes, which includes unit Corus, Europe's second-largest steelmaker

But, JSW Steel fell 0.19%. The company today reported net profit of Rs 54.23 crore in Q3 December 2009 compared to a net loss of Rs 127.50 crore in Q3 December 2008.

Rate sensitive realty stocks fell on reports the finance ministry has rejected a proposal by the Department of Industrial Policy and Promotion (DIPP) that had suggested dropping the mandatory three-year lock-in for foreign direct investment in the real estate sector, affecting the prospects of the sector raising funds from overseas.

Unitech, Omaxe, Indiabulls Real Estate, Phoenix Mills fell by between 0.23% to 2.87%.

India's largest realty player by market capitalization DLF fell 1.76%. DLF has reportedly decided to exit from its mutual fund venture, DLF Pramerica Mutual Fund, by selling its entire stake to the overseas partner in the venture, the US-based Prudential Financial, as the company seeks to focus on its core business. Prudential Financial (PFI) is expected to buy DLF's 39% stake in the asset management company that is yet to start operations.

India's largest drugmaker by sales Ranbaxy Laboratories fell 1.92%. The company on Tuesday signed an agreement to acquire product rights and manufacturing facility of Bangalore-based Biovel Lifesciences, for an undisclosed sum.

Among other healthcare stocks, Piramal HealthCare, Biocon, Sun Pharmaceutical Industries fell by between 0.45% to 3.2%.

Dr Reddy's Laboratories rose 1.76% as net profit rose 62.45% to Rs 168.42 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours today.

FMCG stocks fell on profit taking. ITC, Dabur India, United Spirits, Tata Tea fell by between 0.76% to 1.24%.

Shares of consumer durable also fell on profit taking. Videocon Industries, Gitanjali Gems, Asian Star Company, Blue Star fell by between 1.1% to 3.36% .

India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) was flat. Analysts expect strong Q3 December 2009 results from Bhel, helped by large order book and stable execution. The profitability is likely to surge on the back of increased volumes and lower-cost inventory being used.

A total of seven brokerages expect a between 29% to 47.7% growth in Bhel's net profit at between Rs 1016.90 crore to Rs 1167.60 crore in Q3 December 2009 over Q3 December 2008. Bhel had reported net profit of Rs 790.60 crore in Q3 December 2008. Bhel announces Q3 results on Thursday, 21 January 2010.

India's largest engineering & construction firm by sales Larsen & Toubro (L&T) fell 0.45%. L&T will reportedly invest around Rs 25000 crore to build its thermal power business in the next five years. L&T Power, the wholly-owned subsidiary of L&T, will have a generation capacity of 5,500 megawatts (MW), including hydro power, by 2015. The company will announce its Q3 result on Thursday, 21 January 2010.

The company said recently it has received contracts worth Rs 2,325 crore for commercial and residential construction in Maharashtra, Gujarat, West Bengal and Chandigarh

Among other capital goods stocks, Thermax, BEML, Praj Industries fell by between 0.38% to 4.88%.

Most Auto stocks rose on expectation of good Q3 result. India's largest car maker by sales Maruti Suzuki rose 2.62%. The company said on Saturday 16 January 2010 it has raised the prices of some of its models to recover the rise in input costs. It said the price increases, effective immediately, varied from 0.12% to 1.9% with an average price rise of 0.6%. There was no increase in prices of its recently launched five-seater multipurpose vehicle Eeco, the petrol version of its Swift hatchback and its Gypsy utility vehicles, it said in its statemen. "For some models the increase in the costs are being absorbed by the company, in the light of market situation," it said. Maruti, in which Japan's Suzuki Corp has a 54.2% stake, sells one of every two cars in India.

Maruti Suzuki India reported 50.6% increase in total vehicle sales to 84,804 units in December 2009 over December 2008. Domestic sales rose 36.5% to 71,000 units, while exports surged 223.7% to 13,804 units.

Tata Motors, India's largest commercial vehicle maker by sales, was flat. The company said on Friday 15 January 2010 it sold 74,707 vehicles globally in December 2009, a rise of 84 % from a year earlier. This included sales of Jaguar and Land Rover, which rose 33% from a year earlier to 21,134 vehicles, it said in a statement.

Bajaj Auto rose 2.36% extending gains for the forth day in a row. Net profit surged 189.20% to Rs 507.29 crore on 57.9% spurt in net sales to Rs 3165.84 crore in Q3 December 2009 over Q3 December 2008. The company announced the result after market hours on Tuesday, 12 January 2010. TVS Motor Company rose 2.84%.

India's largest motorcycle maker by sales Hero Honda Motors rose 0.62%. Hero Honda will comfortably exceed its fiscal 2009/10 sales target of 40 lakh units, its managing director Pawan Munjal said to media on 7 January 2010. Sales jumped 74% to 375,838 units in December 2009 over December 2008.

TVS Motor Company rose 1.29% after it reported net profit of Rs 23.53 crore in Q3 December 2009 compared to a net loss of Rs 0.95 crore in Q3 December 2008.

But, India's top truck maker by sales India's largest tractor marker by sales Mahindra & Mahindra (M&M) fell 1.23%. M&M marked its entry into the heavy commercial vehicle (HCV) segment with its unveiling of 25 and 31 tonne trucks with its US-based joint venture partner Navistar Inc.

Mahindra & Mahindra, reported 122% rise in its domestic sales to 22,754 units in December 2009 over December 2008. The company sold a total of 24,001 vehicles (domestic plus exports) in December 2009 as against 11,172 vehicles sold in December 2008.

Power stocks rose after the power minister said government will float request for qualification for 2 ultra mega power projects in 15 days. NTPC, India's largest utility by sales, rose 0.79% snapping last two days losses. The government may reportedly raise as much as Rs 10,300 crore by selling 5% of NTPC, a valuation more than four times at which it first sold shares in 2004, reflecting the soaring demand of the state-run company. NTPC shares in the follow-on offer may be priced between Rs 245 and Rs 250 apiece.

The empowered group of ministers (EGoM) headed by finance minister Pranab Mukherjee will meet on 1 February 2010 to approve the price, reports said. Meanwhile, NTPC reportedly plans to set up a new entity for acquiring coal assets abroad to secure fuel supplies for its coal-based plants. A proposal in this regard is likely to be moved before the company's board soon.

Tata Power Company rose 0.1% as net profit jumped 40.37% to Rs 141.89 crore in Q3 December 2009 over Q3 December 2008. The company announced the result during market hours on Tuesday.

Telecom stocks rose on reports the latest policy flip-flop by the Department of Telecom (DoT) could drive away foreign players from the upcoming 3G auctions by denying them a fair chance of getting 2G spectrum, vital for offering a full complement of telecom services. Absence of foreign players means Indian bidders could get the scarce airwaves for less. India's largest mobile services provider by sales Bharti Airtel rose 3.41%. The company will announce its Q3 result on Friday, 22 January 2010.

India's second largest mobile services provider by sales Reliance Communications rose 0.24%.

Banking stocks fell on profit taking. India's largest bank by net profit and branch network State Bank of India fell 0.61% Non-performing loans (NPAs) in the small and medium enterprise sector (SME) are on the rise, chairman O.P Bhatt said recently. The state-run bank paid advance tax of Rs 1795 crore versus Rs 1700 crore.

India's largest private sector bank by operating income HDFC Bank fell 1.21% on profit taking after recent rally. The bank's net profit jumped 31.6% to Rs 818.50 crore on 5.4% growth in net total income to Rs 3076.90 crore in Q3 December 2009 over Q3 December 2008. The result exceeded market expectations. Its ADR rose 7.74% on Tuesday. The bank announced the result during market hours on Friday, 15 January 2010.

But, India's largest private sector bank by net profit ICICI Bank rose 1.59% extending recent gains. Its ADR jumped 5.39% on Tuesday. The bank will announce its Q3 result on Thursday, 21 January 2010.

After a significant moderation in systems loan growth during the period October-December 2009, the banking system credit growth has gradually started gaining momentum, as per the latest RBI data

IT stocks fell on profit taking after recent strong gains after robust result from Tata Consultancy Services and Infosys. India's third largest software services exporter Wipro dipped 1.63% on profit booking after hitting s 52-week high of Rs 753 in intra-day trade today. The company's consolidated net profit rose 21.26% to Rs 1217.40 crore on 4.17% rise in total income to Rs 7055.80 crore in Q3 December 2009 over Q3 December 2008. The company announced the results before trading hours today, 20 January 2010.

Wipro maintained margins during the December quarter despite a fall in rate realisations and a stronger rupee, the company said on Thursday. Chief Financial Officer Suresh Senapaty said in a statement that the key financial services sector had bounced back on the back of strong outsourcing demand. Its ADR rose 4.64% on Tuesday.

India's largest IT exporter by sales Tata Consultancy Services fell 0.25%. Consolidated net profit as per US accounting standard rose 11% to Rs 1822.20 basis crore on 3% growth in sales to Rs 7650.30 crore in Q3 December 2009 over Q2 September 2009. The third quarter earnings surpassed market estimates as demand for outsourcing surged and prices stabilised, fuelling hopes of recovery in the showpiece sector. The company announced the results after trading hours on Friday, 15 January 2010

But, IT bellwether Infosys rose 0.62% as its ADR rose 1% on Tuesday. Infosys, last week, raised its full-year revenue and profit outlook after strong Q3 results and on improving trend for outsourcing orders. The company's consolidated net profit as per Indian accounting standards rose 2.72% to Rs 1582 crore on 2.8% rise in consolidated revenue to Rs 5741 crore in Q3 December 2009 over Q2 September 2009. The company announced result on Tuesday 12 January 2010.

Infosys has raised earnings and revenue guidance for the year ending March 2010 (FY 2010) both in rupee and dollar terms. Infosys has forecast a 1.8% to 2% growth in consolidated dollar revenue for FY 2010 compared from a drop it had projected at the time of announcing Q2 September 2009 results. Infosys said FY 2010 consolidated revenue in dollar terms could rise to $4.75 billion to $4.76 billion, from $4.6 billion to $4.62 billion forecast earlier. The consolidated earnings per American depository share for the full year is seen rising 0.4% to $2.26, the company said in a statement.

Some PSU stocks fell on profit taking. State Trading Corporation of India, MTNL, Bharat Electronics, Chennai Petroleum Corporation, Power Finance Corporation fell by between 0.37% to 5.07%.

Cals Refineries clocked the highest volume of 2.46 crore shares on BSE. Rashtriya Chemicals & Fertiliser (1.31 crore shares), Vikas Wsp (0.98 crore shares), Mangalore Chemicals & Fertiliser (0.88 crore shares) and Birla Cotsyn (0.84 crore shares) were the other volume toppers in that order.

Hindustan Copper clocked the highest turnover of Rs 275.02 crore on BSE. Havells India (Rs 176.91 crore), Jai Corp (Rs 141..79 crore), Tata Steel (Rs 138.78 crore) and Rashtriya Chemicals & Fertiliser (Rs 138.77 crore) were the other turnover toppers in that order.