Realty, metal, auto shares worst hit in market slide

Weak global cues casted their shadow on the domestic bourses which ended sharply lower following a late sell-off in index pivotals. European markets were trading lower ahead of rate decisions from the European Central Bank and the Bank of England later in the global day. US index futures were also sharply lower. The BSE 30-share Sensex lost 271.10 points or 1.64%, off 283.27 points from the day's high and up 36.15 points from the day's low.

The market breadth was weak after swinging between positive and negative zone. Realty shares declined on selling pressure. Auto stocks declined on fears a hike in fuel price may crimp demand. IT pivotals declined after an industry body cut the sector's export forecast for 2010/11. Telecom stocks declined on reports the 3G auctions will be delayed.

Infrastructure stocks fell on fears of lower government spending on infrastructure after a lower-than-expected response to NTPC's follow-on public offer. Metal stocks, too, edged lower as metal prices fell on the London Metal Exchange on Wednesday, 3 February 2010.

The market was volatile. Stocks drifted lower in early trade tracking weak Asian stocks. It cut losses later. The market weakened again with the Sensex hitting a fresh intrday low in morning trade. It soon cut losses. However, after a strong intraday rebound in mid-morning trade, the market once again lost ground in early afternoon trade. Fresh selling in mid-afternoon trade pulled key benchmark indices to the day's low.

India VIX, a volatility index based on the S&P CNX Nifty index option prices, jumped 5.99% to 27.07. India VIX is a measure ofthe market's expectation of volatility over the next 30 calendar days

Following rising prices of potato and pulses, food inflation rose to 17.56% in the week ended 23 January 2010 from 17.40% in the previous week, government data released today showed. The inflation for primary articles, which include food and non-food items, marginally eased to 14.56% in the reporting week from 14.66% in the previous week. The fuel price index rose 5.88%.

Pronab Sen, the country's chief statistician, said on Wednesday the government should wait till May to roll back stimulus, as the strength of the demand recovery visible in available data may not be for real, pulling the finance minister, Pranab Mukherjee, away from a policy direction which the Reserve Bank of India (RBI) desires.

The advance estimates on economic growth for the current fiscal ending March 2010 will be released on Monday. It will be based on the provisional data for the first half of the year and partial data for third quarter and no data on the fourth quarter, which contributes the highest to the annual Gross Domestic Product.

Meanwhile, non-banking finance companies (NBFC) and housing finance companies (HFC) can no longer resort to short-term foreign currency borrowings. Citing prevailing macroeconomic conditions and improvements in domestic credit and liquidity conditions, the Reserve Bank of India (RBI) has withdrawn the borrowing facility with immediate effect. The latest move by the RBI is seen as part of its efforts to gradually reverse its soft money policy.

In October-November 2008, the RBI had, as a temporary measure, allowed systemically important non-deposit taking NBFCs and HFCs to raise short-term foreign currency borrowings not exceeding 50% of their net-owned funds or $10 million, whichever was higher, for refinancing their short-term liabilities.

As regards government's divestment plan, Rural Electrification Corporation (REC) will be the next Government- owned entity to come out with a follow-on public offer (FPO). Its 17.1-crore share FPO will open on 19 February 2010 and will close on 23 February 2010. This will be followed by NMDC's FPO.

As per reports, in the next fiscal, the Government is likely to divest its stake in state-run firms such as Engineers India, Coal India through initial public offers (IPOs) and Power Grid and Sail through FPOs.

European shares Thursday resumed a downward trend from the previous session, as worries about the debt levels of Greece and Portugal refused to go away. Key benchmarki indices in Germany, France and UK were down by between 0.65% to 0.83%.

The losses came as credit-default swaps on Portugal rose over the 200 level for the first time after Portugal's finance ministry on Wednesday cut the volume on its T-bill auction to 300 million euros from 500 million euros.

Asian shares declined today after Australian retail sales unexpectedly fell in December and commodity prices declined. The key benchmark indices in Taiwan, Hong Kong, Japan, China and Singapore were down by between 0.08% to 1.84%. However South Korea's Seoul Composite index rose 0.09%

Australian retailers dropped after the Bureau of Statistics said retail sales in December 2009 sank 0.7% from November 2009. This was lower than median forecast of economists for a 0.2% gain.

US markets snapped a two-day winning streak on Wednesday, 3 February 2010, as Pfizer's disappointing outlook weighed on the health sector, and President Obama's pledge to complete banking and healthcare reform revived fears of increased regulation. The key indices ended on a mixed note. The Dow Jones Industrial Average fell 26.30 points or 0.26% to 10,270.55, the S&P 500 index slipped 6.04 points or 0.55% to 1,097.28. However the Nasdaq Composite rose marginally by 0.85 points to 2,190.91

In economic news, the ISM Non-Manufacturing index rose to 50.5 in January from 49.8 in December, but fell short of economists expectations of 51. On the jobs front, ADP reported that 22,000 jobs were lost from private payrolls in January.

Trading in US index futures showed the Dow could fall 63 points at the opening bell on Thursday, 4 February 2010.

Closer home, the two top stock exchanges, the National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) have decided to hold a special trading session on Saturday, 6 February 2010, as NSE is testing an upgraded trading system. Trading will begin at 11:00 IST and end at 12:30 IST.

The BSE 30-share Sensex was down 271.10 points or 1.64% to 16,224.95. The index fell 307.25 points at the day's low of 16,188.80 in late trade. The Sensex rose 12.17 points at the day's high of 16,508.22 in early trade.

The S&P CNX Nifty was down 86.50 points or 1.75% to 4845.35 as per provisional closing

The market breadth, indicating the overall health of the market, was weak. Breadth swung between positive and negative repeatedly on numerous occasions during in the day. On BSE, 2009 shares declined as compared with 864 that advanced. A total of 59 shares remained unchanged.

The total turnover on BSE amounted to Rs 4335 crore as compared with Rs 4771 crore on Wednesday, 3 February 2010.

The BSE Mid-Cap index fell 1.95% to 6,517.14, underperforming the Sensex. The BSE Small-Cap index declined 1.61% to 8,344.74, outperforming the Sensex.

All the sectoral indices on BSE settled lower with chief losers being the BSE Metal index (down 3.36%), the BSE Realty index (down 3.89%), and the BSE Auto index (down 2.12%).

Among the 30-member Sensex pack, 27 declined while the only 3 of them managed gains. ITC (up 0.55%), and HDFC Bank (up 0.31%), edged higher from the Sensex pack

Metal stocks declined after LMEX, a gauge of six metals traded on the London Metal Exchange, lost 2.53% on Wednesday, 3 February 2010.

India's largest private sector aluminium maker by sales Hindalco Industries tumbled 5.83% to Rs 147 and was the top loser from the Sensex pack.

Tata Steel (down 4.26%), Sterlite Industries (down 3.14%), National Aluminium Company (down 4.37%), Sesa Goa (down 1.98%), and Hindustan Zinc (down 4.81%), edged lower

Shares of infrastructure sector declined on concern the government will raise less than expected from share sales to fund infrastructure following a lower-than-expected res ponce to the follow-on public offer of NTPC.

Jaiprakash Associates (down 4.51%), Larsen & Toubro (down 0.54%), Bharat Heavy Electricals (down 0.37%), Gammon India (down 1.60%), and Punj Lloyd (down 2.73%), declined.

India's largest mortgage lender by total income Housing Development Finance Corporation (HDFC) lost 2.71% after the Reserve Bank of India (RBI) announced withdrawing the borrowing facility with immediate effect citing prevailing macroeconomic conditions and improvements in domestic credit and liquidity conditions. As a result, housing finance companies can no longer resort to short-term foreign currency borrowings.

Index heavyweight Reliance Industries (RIL) fell 1.33% to Rs 1020, easing from day's high of Rs 1045. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.

India's largest power utility firm by sales NTPC fell 1.43%. NTPC's follow-on pubic offering (FPO) was subscribed 0.79 times as at 15:00 IST, with most of the bids at Rs 209 a piece. The 41.2-crore share issue received bids for 32.46 crore shares. The floor price had been fixed at Rs 201 a share. For retail and high net worth individuals the floor price had been fixed at Rs 201 while qualified institutional buyers (QIB) could bid any price above this level. The FPO which opened for bidding on 3 February 2010 closes on 5 February 2010.

IT pivotals declined after a report showed the US services industry expanded less than forecast. US is a key market for Indian IT firms. India's second largest IT exporter by sales Infosys slipped 1.99%

India's third largest software services exporter Wipro declined 2.50%. Wipro Consumer Care and Lighting, the FMCG arm of Wipro, is reportedly in advanced talks to buy Nigeria-based skincare company, Tura International.

India's largest IT exporter by sales Tata Consultancy Services fell 1.53%. Reportedly TCS' Passport Seva Project, which aims to issue passports in flat three days, is all set to be launched in a week or two.

The National Association of Software and Service Companies (Nasscom) has projected export revenue to grow 13% to 15% to $56-$57 billion in the year to March 2011, below the previous outlook for $60-$62 billion.

Telecom stocks declined on reports the auction for the much awaited third-generation mobile-phone services may not be held by 31 March 2010

India's largest mobile services provider by sales Bharti Airtel fell 1.13%. India's second largest mobile services provider by sales Reliance Communications declined 3.65%.

The government had set 14 January 2010 as the tentative deadline to start taking bids for the airwaves as per its schedule announced in October last year. On 19 January 2010 Communications Minister Raja had told reporters in New Delhi the auction would be completed before the next fiscal year begins on 1 April 2010.

India's largest cement manufacturing company by sales ACC dropped 3.33%. The company reported 10.2% rise in sales to Rs 8479.55 crore and 42.2% rise in net profit to Rs 1563.91 crore in the year ended December 2009 over the year ended December 2008. The results which are on consolidated basis, were announced during market hours today.

North India's largest cement manufacturing company by sales Ambuja Cement lost 1.55% ahead of Q4 December 2009 earnings today, 4 February 2010.

Diversified major Grasim shed 2.32%. As per reports, the Aditya Birla group will invest around Rs 7,000 crore to set up three greenfield facilities which are likely to come up in the states of Chattisgarh, Andhra Pradesh and Tamil Nadu in the next three-four years. The Aditya Birla group is in the process of merging the cement business of two of its companies Grasim and UltraTech Cement.

India's largest oil exploration firm by sales Oil & Natural Gas Corporation rose 0.78% to Rs 1142 in volatile trade, recovering from day's low of Rs 1066.35. The stock had surged to day's high of Rs 1155 earlier during the day on hopes on lower subsidy burden after a report from an expert group headed by Kirit Parikh on Tuesday suggested freeing petrol and diesel prices as well as raising LPG rates by Rs 100 a cylinder and kerosene prices by Rs 6 per litre. The Parikh committee's suggestions, submitted to petroleum minister Murli Deora, would see a hike of Rs 3 per litre in petrol and Rs 3-4 per litre in diesel if implemented. It was the top gainer from the Sensex pack.

GAIL India gained 3.28% to Rs 418.75. ONGC and GAIL India together bear a majority of subsidy burden of oil marketing companies.

However, other oil exploration shares declined. Oil India (down 1.61%) and Cairn India (down 1.95%) fell.

India's largest private sector bank by net profit ICICI Bank slipped 0.50% to Rs 834. The stock rose to a day's high of Rs 849.05 after its American depository receipt (ADR) surged 3.32% to $37 on the New York Stock Exchange on Wednesday, 3 February 2010.

Rate sensitive realty shares declined on fears a hike in interest rate following inflationary pressures in the domestic economy, may crimp housing demand

DLF (down 3.90%), Unitech (down 4.09%), Ackruti City (down 2.21%), Indiabulls Real Estate (down 2.88%), Housing Development & Infrastructure (down 4.29%), declined.

Auto stocks declined on profit booking and after a panel recommenced freeing petrol, diesel prices. Petrol and diesel prices will rise if the government implements the proposal. India's largest tractor maker by sales Mahindra and Mahindra (M&M) fell 3.14%.

India's top truck marker by sales Tata Motors fell 4.25%. India's top small car maker by sales Maruti Suzuki India shed 1.60%.

Ashok Leyland jumped 2.11% as total vehicle sales surged 222% to 7,871 units in January 2010 over January 2009. The announcement was made after market hours on Wednesday, 3 February 2010.

Unichem Laboratories gained 0.48% after the company's Ghaziabad formulation facility was re-certified by Medicines & Healthcare Products Regulatory Agencies, UK. The company made this announcement during trading hours today, 4 February 2010.

Aurobindo Pharma gained 1.39% after the company got final approval from the US Food and Drug Administration for Cetirizine hydrochloride solution. The announcement was made during trading hours today.

Advanta India jumped 5.54% after the company's US unit Advanta US Inc., acquired the assets and business of Crosbyton Seed Company, Crosbyton, Texas, USA for an undisclosed sum. The company announced the overseas acquisition during trading hours today, 4 February 2010.

Falcon Tyres plunged 7.11% after Manali Properties & Finance, a promoter group company pledged 12.50 lakh shares representing 3.67% of the equity capital of the company. The company made this announcement after market hours on Wednesday, 3 February 2010.

IFCI registered highest volume of 73.18 lakh shares on the BSE. Unitech (70.55 lakh shares), Suzlon Energy (61.22 lakh shares), Reliance Natural Resources (58.35 lakh shares), and Ispat Industries (41.77 lakh shares), were the other volume toppers on the BSE.

Infinite Computer Solutions clocked the highest turnover of Rs 245.52 crore on the BSE. State bank of India (Rs 154.38 crore), Tata Steel (Rs 119.93 crore), Aban Offshore (Rs 85.44 crore), and Thinksoft Global Services (Rs 83.34 crore), were the other turnover toppers on the BSE