Market drifts lower on weak global cues

The key benchmark indices edged lower, snapping last five days' gains, on weak global stocks. The BSE 30-share Sensex fell 54.66 points or 0.31%, off close to 80 points from the day's high and up close to 10 points from the day's low. The market breadth, indicating the overall health of the market was weak. That was in contrast to positive breadth earlier in the day. Banking, auto, metal and realty stocks fell. Index heavyweight Reliance Industries (RIL) extended Monday's losses triggered by disappointment from Q4 March 2010 results.

Stocks were volatile as traders rolled over positions in the derivatives segment from the April 2010 series to the May 2010 series ahead of the expiry of the near-month April 2010 contracts on Thursday, 29 April 2010. The market recovered from lower level after an initial slide triggered by weak Asian stocks. The market moved into positive zone from negative zone in morning trade as intraday recovery gathered steam. The market moved between positive and negative terrain near the flat line in mid-morning trade. The market once again weakened in early afternoon trade. The market extended losses in afternoon trade. The market trimmed losses later. It weakened once again in mid-afternoon trade. The Sensex hit a fresh intraday low in late trade.

NSE's volatility index India VIX rose 0.15% to 19.82. The current low level of the index indicates that investors are willing to take risk.

The latest data showed infrastructure sector output jumped 7.2% in March 2010 from a year earlier, higher than an upwardly revised rise of 4.7% in February 2010.

The Q4 March 2010 corporate earnings announced so far have been good. The combined net profit of a total of 322 companies rose 30.7% to Rs 24064 crore on 43.4% rise in sales to Rs 209691 crore in the quarter ended March 2010 over the quarter ended March 2009.

Politics is in focus as the Congress-led United Progressive Alliance government faces Opposition sponsored cut motion in parliament today against a hike in petrol and diesel prices in the Union Budget 2010-2011. Prime Minister Manmohan Singh on Monday said he is confident that his government will defeat the cut-motions on the Budget proposals. BSP chief and Uttar Pradesh Chief Minister Mayawati today said she would back the government and not support the cut motion. BSP has 21 MPs in the Lok Sabha. If the cut motion is adopted, the government will have to step down.

European stocks were lower Tuesday, as uncertainty over the health of other indebted euro-zone nations weighed on sentiment following Greece's debt crisis. The key benchmark indices in France, Germany and UK fell by between 0.79% to 1.58%.

Confidence in Greek assets sank to a new low on Monday, as German Chancellor Angela Morkel kept up the Mpressure on Greece, insisting on tougher austerity measures. Questions persist about when and how the aid package to Greece of up to 45 billion euros ($60 billion) might be delivered.

Asian stock markets declined Tuesday after a directionless day on the Wall Street on Monday and as commodity prices declined. The key benchmark indices in China, Hong Kong, Indonesia, South Korea, Singapore and Taiwan fell by between 0.14% to 2.07%. But, Japan's Nikkei rose 0.42%.

South Korea's economic growth accelerated more than estimated in the three months through March 2010. Gross domestic product increased 1.8% in the first quarter from the previous three months, when it rose 0.2%.

US index futures reversed early gains. Trading in US index futures indicated that the Dow could fall 26 points at the opening bell on Tuesday, 27 April 2010.

Most US stocks edged lower on Monday as bank shares fell on fears that financial reform making its way through Congress will curb profits, while Caterpillar's strong results buoyed the Dow. The Dow Jones Industrial Average edged up 0.75 point, or 0.01%, to close at 11,205.03. The Standard & Poor's 500 Index dropped 5.23 points, or 0.43% to 1,212.05. The Nasdaq Composite Index lost 7.20 points, or 0.28% to 2,522.95.

US Treasury Secretary Timothy Geithner said on Monday there were some signs that a sustained job recovery was beginning, but he conceded that Americans still face difficult economic conditions.

The US Federal Reserve is likely to keep interest rates near zero and it is also likely to repeat its vow of an extended period of very low rates at the conclusion of a two-day policy meeting on Wednesday, 28 April 2010. The Fed has kept the Fed funds rate in a range of zero to 0.25% since December 2008.

Back home, the Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The latest data showed the annual food and fuel inflation ticked higher, raising worries central bank may raise interest rates before the next scheduled policy review in July 2010. The food price index rose 17.65% in the year to 10 April 2010. The fuel price index rose 12.45% and the primary articles index rose 14.14% in the year to 10 April 2010, the latest government data showed.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

Indian stocks rose for a fifth day in a row on Monday, 26 April 2010, after the Reserve Bank of India (RBI) raised interest rates on 20 April 2010 by less than some economists had expected and forecast inflation will slow. From a recent low of 17400.68 on 19 April 2010, the BSE Sensex jumped 345.60 points or 1.98% to 17745.28 on Monday, 26 April 2010. Optimism about the fourth quarter corporate earnings and hopes of a normal monsoon this year aided the rally

The RBI said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

The BSE 30-share Sensex today lost 54.66 points or 0.31% to settle at 17,690.62. The Sensex rose 23.97 points at the day's high of 17,769.25 in mid-morning trade. The index fell 66.72 points at the day's low of 17,678.56 in late trade.

The S&P CNX Nifty declined 14.10 points or 0.26% at 5,308.35.

The BSE Mid-Cap index fell 0.31% and matched the Sensex's fall. The BSE Small-Cap index fell 0.06% and outperformed the Sensex.

Sectoral indices were mixed. BSE FMCG index (up 0.57%), Healthcare index (up 0.3%), Power index (up 0.26%), Oil & Gas index (up 0.1%), PSU index (up 0.1%), IT index (up 0.06%), Teck Index (up 0.03%), Capital Goods index (down 0.23%) outperformed the Sensex.

BSE Realty index (down 1.44%), Bankex (down 0.85%), Auto index (down 0.81%), Metal index (don 0.68%), Consumer Durables index (down 0.51%), underperformed the Sensex.

The market breadth, indicating the overall health of the market, was weak. The breadth was positive earlier in the day. On BSE, 1289 shares advanced as compared with 1616 that declined. A total of 87 shares were unchanged.

From the 30 share Sensex pack, 20 stocks fell while the rest gained.

BSE clocked turnover of Rs 4477 crore, higher than Rs 3961.18 crore on Monday, 26 April 2010.

Index heavyweight Reliance Industries (RIL) fell 0.81%, extending Monday's 1.61% losses as net profit rose a lower-than-expected 29.9% to Rs 4710 crore in Q4 March 2010 over Q4 March 2009. The Q4 result was announced after trading hours on Friday, 23 April 2010.

Interest rate sensitive auto stocks fell on profit taking. Vehicle sales in India should grow 10-15% in the fiscal year to March 2011, an industry body said on 9 April 2010. In 2009/10, a total of 1.23 crore vehicles were sold in the country, up 26.4% from the previous fiscal year, data from the Society of Indian Automobile Manufacturers (SIAM) showed.

India's largest car maker by sales Maruti Suzuki India fell 3.88% extending Monday's 1.97% decline. The stock was the top loser from the Sensex pack. Net profit surged 170.04% to Rs 656.55 crore in Q4 March 2010 over Q4 March 2009. The company announced result during market hours on Monday, 26 April 2010.

Maruti said profit surged in Q4 March 2010 due to a lower base effect. The car maker also said profit for Q4 March 2010 was negatively impacted to some extent from cost of upgradation of its full range of cars to meet new emission norms, launch of new models, higher raw material prices and adverse foreign exchange movement

India's largest commercial vehicle maker by sales Tata Motors fell 0.46% on profit taking after the stock gained for five days in a row. The company said on 15 April 2010 that its global vehicle sales rose 39% to 101,712 units in March 2010 over March 2009. This includes sales of UK-based Jaguar and land Rover brands that rose 43% to 23,538 vehicles in March 2010 over March 2009.

But, India's largest tractor maker by sales Mahindra & Mahindra rose 1.64%, with the stock gaining for the third straight day on reports the company has expressed interest in buying South Korea's cash-strapped sports utility vehicle manufacturer Ssangyong Motor Company.

Mahindra & Mahindra said on 16 April 2010 that it is buying out Renault's stake in a joint venture that makes the Logan sedan. The Renault name and logo will continue to be used on the Logan till the end of calendar 2010.

Most carmakers increased vehicle prices from 1 April 2010 after 13 cities across the country switched over to Bharat Stage IV emission norms. Earlier in February 2010, following the 2% increase in excise duty on all non-oil products to 10% in the Budget, auto players had hiked prices of vehicles by up to Rs 70,000.

India's second largest bike maker by sales Bajaj Auto fell 2.93%, with the stock falling for the second straight day. Bajaj Auto on 16 April 2010 said it has raised its stake in KTM Power Sports AG, Europe's second largest motorcycle maker.

Motorbike maker Hero Honda Motors fell 0.48%. Net profit jumped 48.8% to Rs 598.81 crore on 19.6% rise in total income to Rs 4191.81 crore in Q4 March 2010 over Q4 March 2009. The company announced the results on 19 April 2010.

At the time of announcing the Q4 results, Hero Honda managing director and CEO Pawan Munjal said factors like movement in commodity prices, inflation and interest rate scenario will play a crucial role in the growth and profitability of the two-wheeler industry, going ahead. He said Hero Honda has set ambitious milestones for the current year after vehicle sales surpassed the company's target in the year ended March 2010 (FY 2010).

He said the company is looking forward to a series of defining initiatives in the year ending March 2011 (FY 2011), including aggressively expanding geographical reach, building on production capacities and augmenting strong brand portfolio.

Unitech fell 1.55%, with the scrip falling for the second straight day. The board of directors at a meeting held on 20 April 2010 approved demerger of non-core operations comprising of telecommunications, hotels, special economic zones, logistics, transmission towers and others into a separate entity called Unitech Infra. For every one share of Unitech, the shareholders will get one share of Unitech Infra, which will be listed at a later date.

India's largest realty player by sales DLF fell 1.81% extending Monday's 2.52% decline after the company said on Saturday 24 April 2010 that its subsidiary, Caraf Builders & Constructions, acquired 24.52 crore compulsorily convertible preference shares (CCPS) in group company DLF Assets from PE firm SC Asia for Rs 3,084.68 crore. With this, Caraf's stake in DLF Assets has risen to 91.90%. DSIPL (a company owned by SC Asia) would continue to hold 2.72 crore CCPS, representing an economic interest of 4.59% in DAL, it said.

Among other realty stocks, Sobha Developers, Orbit Corporation and Indiabulls Real Estate fell by between 0.27% to 2.96%.

Mining and metal stocks fell as copper prices declined on the London Metal Exchange. Hindalco Industries, Sesa Goa, National Aluminum Company, Hindustan Zinc, Steel Authority of India fell by between 0.08% to 2.04%.

India's largest private sector steel maker by sales Tata Steel fell 1.44%. The company said recently its sales in the year ended on 31 March 2010 rose 18% from a year ago to 6.17 million tonnes.

Copper maker Sterlite Industries fell 1.57% on profit taking. The stock had jumped 5.95% on Monday after the company's board recommended issue of bonus shares in the ratio of 1:1 and a 2-for-1 stock split at the time of announcing Q4 results during trading hours on Monday, 26 April 2010. Consolidated net profit surged 130.82% to Rs 1380.90 crore in Q4 March 2010 over Q4 March 2009.

Bank stocks fell on profit taking. India's second largest private sector bank by net profit HDFC Bank fell 0.58%. The stock had risen 2.39% on Monday as net profit rose 32.61% to Rs 836.62 crore in Q4 March 2010 over Q4 March 2009. The stock had hit all-time high of Rs 1997.85 on Monday. The result was announced on Saturday, 24 April 2010.

India's biggest commercial bank in terms of branch network State Bank of India fell 1.6% on profit taking after recent strong gains triggered by brokerage upgrades on the counter. A prominent foreign brokerage has reportedly raised its rating on the stock to 'neutral' from 'sell'. Another foreign brokerage has reportedly predicted a re-rating of the counter on the back of an expected lending growth.

India's largest private sector bank by net profit ICICI Bank fell 1.43%, with the scrip falling for the second straight day. Its ADR fell 4.48% on Monday. Net profit rose 35.2% to Rs 1005.57 crore in Q4 March 2010 over Q4 March 2009. The result was announced on Saturday, 24 April 2010.

India's largest mortgage finance firm by total income Housing Development Finance Corporation (HDFC) rose 1%, with the stock gaining for the second straight day. The company recently launched a Dual Rate Product-2 (DRHL-2) in which home loan interest rates will be fixed rate at 8.25% annually up to 31 March 2011, 9% for the period between 1 April 2011 and 31 March 2012, and the applicable floating rate for the balance term. The offer is for loan application made before 30 April 2010 and at least part-disbursement taken before 30 June 2010.

IDFC fell 2.81% on equity dilution worries after the infrastructure financier said it plans to raise up to Rs 3500 crore for meeting future growth needs. The funds will be raised through issue of appropriate equity or quasi-equity instruments in one or more tranches over the next 12 months, the company said in a statement at the time of announcing Q4 March 2010 results during trading hours.

Consolidated net profit jumped 96.3% to Rs 228.11 crore on 8.30% rise in total income to Rs 1033.30 crore in Q4 March 2010 over Q4 March 2009.

Some infrastructure stocks rose on the government's thrust to improve the ailing infrastructure of the country. Punj Lloyd, IVRCL Infrastructure & Projects, Nagarjuna Construction Company rose by between 0.21% to 2.87%.

India's largest oil exploration firm by sales ONGC rose 2.86%, after the company said after market hours on Monday it added 83 million tonnes of oil and oil equivalent gas reserves in the year ended March 2010, the highest in two decades.

NTPC, the country's largest thermal power producer by sales rose 0.41%. Provisional net profit rose 5.5% to Rs 8656.53 crore in the year ended March 2010 over the year ended March 2009. Net sales jumped 11.28% to Rs 46504.47 crore. The provisional result was announced during market hours on 23 April 2010.

NTPC has approved capital expenditure of Rs 22350 crore for the year ending March 2011, and plans to add 4,150 megawatts of capacity during the year.

IT stocks were mixed. India's third largest IT exporter by sales, Wipro fell 0.26%. The board announced a 2:3 bonus late last week. Consolidated net profit under International Financial Reporting Standards jumped 21% Rs 1209 crore on 8% rise in total revenue to Rs 6983 crore in Q4 March 2010 over Q4 March 2009. The results were announced on Friday, 23 April 2010.

Wipro has projected revenue from the IT services business to be in the range of $1.19 billion to $1.215 billion in Q1 June 2010. The company said it won several large deals in Q4 March 2010. Commenting on the fourth quarter results, Wipro Chairman Azim Premji said there was a broad-based, volume led growth during the fourth quarter. There was a good recovery in technology and telecom verticals. The business environment is returning to normal, he added.

India's largest information technology services provider by sales, TCS rose 0.28%, with the stock gaining for the second straight day. The company posted 9.7% growth in consolidated net profit as per Indian accounting standards to Rs 2,001 crore on 1.17% rise in revenues to Rs 7738 crore in Q4 March 2010 over Q3 December 2009. The result was announced on 19 April 2010.

At the time of announcing the results, TCS chief executive officer and managing director N Chandrasekaran said the company's sales and execution machine is primed and the company has laid a solid platform for growth. There is a significant traction for TCS' strategy of full services which together with TCS' global engagement model positions the company well for accelerated growth, Chandrasekaran said.

India's second largest software exporter by sales, Infosys Technologies, was flat.

HCL Technologies fell 0.55% on profit taking after recent strong gains triggered by robust Q3 March 2010 results. Consolidated net profit as per US accounting standards rose 15.9% to Rs 344 crore on 1.4% growth in revenue to Rs 3075.70 crore in Q3 March 2010 over Q2 December 2009. The company announced the result on 21 April 2010.

India's largest mobile services provider by sales Bharti Airtel rose 0.3% ahead of its Q4 result on Wednesday, 27 April 2010. India's second largest mobile services provider by sales Reliance Communications fell 0.18%.

Cement major ACC fell 0.51%, reversing early gains. Consolidated net profit declined 1.6% to Rs 392.88 crore in Q1 March 2010 over Q1 March 2009. The result was announced during trading hours on 22 April 2010.

India's largest engineering and construction firm by sales Larsen & Toubro (L&T) rose 0.35%, with the scrip gaining for the third straight day. The company recently received an order worth Rs 1,060 crore from Gujarat State Petroleum Corporation (GSPC) to build an offshore oil platform.

But, India's largest power equipment maker by sales Bharat Heavy Electricals fell 1.15% on profit taking after a three-day rise.

FMCG stocks rose on expectation of good Q4 results. ITC, Marico, Dabur India, Nestle India rose by between 0.49% to 1.3%.

Sun Pharmaceutical Industries fell 0.43%, extending Monday's 4.77% slump after a US District Court for New Jersey on Friday, 23 April 2010, rejected claims by Teva Pharmaceutical Industries and Sun Pharmaceuticals Industries that the patent on Pfizer's Protonix acid reflux drug should be declared invalid. The original patent on Protonix, known chemically as pantoprazole, is held by Swiss drugmaker Nycomed and was licensed to Wyeth, which is now owned by Pfizer. Nycomed and Wyeth filed their patent infringement lawsuit against Teva Pharmaceutical Industries and Sun Pharma in May 2004.

FCS Software clocked the highest volume of 1.91 crore shares on BSE. Visa Steel (1.53 crore shares), Cals Refineries (1.39 crore shares), Asahi Infrastructure (88 lakh shares) and Birla Power Solutions (76 lakh shares) were the other volume toppers in that order.

ARSS Infra clocked the highest turnover of Rs 113.76 crore on BSE. Maruti Suzuki India (Rs 76.49 crore), Sesa Goa (Rs 75.28 crore), Visa Steel (Rs 69.16 crore), Sterlite Industries (Rs 62.32 crore) were the other turnover toppers in that order.