Metal, cement shares lead 1.4% decline in Sensex

The key benchmark indices slumped, extending losses for the second straight day, as world stocks fell. The BSE 30-share Sensex shed 248.94 points or 1.43%, off close to 330 points from the day's high. Banking, capital goods, IT, metal and realty stocks fell. Index heavyweight Reliance Industries (RIL) declined in volatile trade. The market breadth was weak, in complete reversal of a strong breadth earlier in the day. All the sectoral indices on BSE were in the red. The Sensex has lost 421.57 points or 2.4% in the last two trading sessions from its close of 17,558.71 on 30 April 2010.

Stocks were volatile. The market trimmed gains in early trade as Asian stocks gave away initial gains. The market came off the lower level in morning trade. It regained strength in mid-morning trade. The intraday recovery proved short-lived. The market slipped into the red to hit fresh intraday low in early afternoon trade. The market extended losses to hit fresh intraday lows in afternoon trade after moving between the positive and negative terrain. The market witnessed a steep slide in mid-afternoon trade. The market extended losses in late trade.

NSE's volatility index India VIX rose for the second day in a row. The index rose 5.24% to 23.30 as stock prices fell on profit taking. The index had jumped 8.8% on Monday, 3 May 2010. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days. The index is calculated based on the S&P CNX Nifty options prices.

European stocks fell on Tuesday as markets remained unconvinced by Greece's bailout and on concerns debt crisis may spill to other euro zone countries. The key benchmark indices in France, Germany and UK fell by between 0.76% to 1.44%.

Euro-region ministers on Sunday, 2 May 2010, agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency's 11-year history from spreading through the rest of the bloc.

Asian markets fell on Tuesday on Greece's bailout worries and China's policy tightening. The key benchmark indices in Taiwan, Singapore, Indonesia, Hong Kong and South Korea were down by between 0.06% to 1.46%. Markets in Japan were closed for a public holiday.

In China, the Shanghai Composite fell 1.23% as a survey showed Chinese manufacturing slipped to a six-month low in April 2010, two days after policy makers reined in lending.

Australia's central bank raised its key cash rate by 25 basis points to 4.5% on Tuesday in line with market expectations.

Trading in US index futures indicated that the Dow could fall 46 points at the opening bell on Tuesday, 4 May 2010.

US stocks staged a broad rally on Monday after manufacturing, consumer spending and construction data instilled confidence that the economic recovery is gaining traction. The Dow Jones Industrial Average rose 143.22 points, or 1.30% to 11,151.83. The Standard & Poor's 500 Index gained 15.57 points, or 1.31% to 1,202.26. The Nasdaq Composite Index added 37.55 points, or 1.53% to 2,498.74.

Closer home, the fourth quarter corporate results announced so far have been fairly encouraging. The combined net profit of a total of 1034 companies rose 28.2% to Rs 37960 crore on 30.7% rise in sales to Rs 350014 crore in the quarter ended March 2010 over the quarter ended March 2009.

A recent industry body report showed that business confidence in India improved on the back of economic recovery. The bi-annual Business Outlook Survey of the Confederation of Indian Industry (CII) showed that the Business Confidence Index (BCI) of the Indian industry increased by 1.5 points for the April-September 2010 period, compared to the past six months.

However, on the flip side, as per another survey a drop in new orders and output has resulted in the country's manufacturing expanding at a slower pace for the second month in a row. The HSBC Markit Purchasing Managers' Index, based on a survey of 500 companies, fell to 57.2 in April 2010 from 57.8 in March 2010. A figure of 50 separates contraction from expansion.

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 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 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.

The RBI at its annual policy review on 20 April 2010 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.

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.

The BSE 30-share Sensex fell 248.94 points or 1.43% to 17,137.14. The index rose 78.74 points at the day's high of 17,464.82 in early trade. The Sensex lost 284.12 points at the day's low of 17,101.96 in late trade.

The S&P CNX Nifty fell 74.25 points or 1.42% to 5,148.50.

The market breadth, indicating the overall health of the market, was weak. That was in complete contrast to strong breadth earlier in the day. On BSE, 782 shares advanced as compared with 2107 that declined. A total of 76 shares remained unchanged.

From the 30 share Sensex pack, 28 stocks fell while only two rose.

The BSE Mid-Cap index and the BSE Small-Cap index fell 1.75% each. Both these indices underperformed the Sensex.

All the sectoral indices on BSE were in the red. BSE Metal Index (down 3.93%), Realty index (down 2.76%), Capital Goods index (down 1.69%), Bankex (down 1.55%), and Consumer Durables index (down 1.47%), underperformed the Sensex. BSE Healthcare index (down 0.48%), Oil & Gas index (down 0.61%), IT index (down 0.93%), Auto index (down 1.03%), PSU index (down 1.08%), FMCG index (down 1.14%), and Power index (down 1.42%), outperformed the Sensex.

BSE clocked turnover of Rs 4713 crore, higher than Rs 3599.65 crore on Monday, 3 May 2010.

Index heavyweight Reliance Industries (RIL) fell 0.26% to Rs 1020.90. The stock was volatile. It hit a high of Rs 1039 and low of Rs 1008. RIL said 28 April 2010 it had discovered oil in one of its exploration blocks in the Cambay basin on India's western coast, the block in which it holds 100% controlling interest. This is its fourth oil discovery in the region.

The Supreme Court may pronounce a judgement on the gas dispute between Reliance Industries (RIL) and Reliance Natural Resources (RNRL) shortly as the Chief Justice of India KG Balakrishnan retires on 11 May 2010. The RIL-RNRL gas dispute has been heard by a three-member Supreme Court bench led by the Chief Justice of India. The tussle relates to supply of gas to Reliance Natural Resources (RNRL) from the D6 block in the Krishna-Godavari eastern offshore fields of Mukesh Ambani-led Reliance Industries (RIL).

The dispute landed in the Supreme Court after seeing many twists and turns in lower courts. The two sides - RIL and RNRL had approached Supreme Court challenging a decision by the Bombay High Court. The Bombay High Court, in its order dated 15 June 2009 had directed that RNRL will get assured supply of 28 mmscmd of gas from RIL's Krishna-Godavari basin for 17 years at $2.34 per million British thermal units (mBtu). The gas price was 44.28% lower than the price fixed by the government for gas sale from the RIL block in the KG basin at $4.2 mBtu.

Jaiprakash Associates fell 3.01%, reversing early gains triggered by strong cement dispatches in the month just gone by. Cement shipments jumped 57% to 1.25 million tonnes in April 2010 over April 2009.

UltraTech Cement fell 3.01% and Grasim declined 3.71%, with both the counters reversing initial gains. The Aditya Birla Group's cement shipments rose 6.2% to 3.38 million tonnes in April 2010 over April 2009. UltraTech and Grasim are a part of the Aditya Birla Group.

India's largest cement maker by sales ACC fell 2.71% ahead of the release of its April cement shipment figures.

Capital goods stocks fell on profit taking. India's largest engineering and construction firm by sales Larsen & Toubro fell 2.34%, reversing early gains. The company announced during market hours today it has formed a joint venture with UK's Howden for axial fans and air pre-heaters businesses in India. The joint venture will invest around Rs 100 crore for setting up industrial facility and related infrastructure.

Among other capital goods stocks, Bharat Heavy Electricals, Thermax, ABB, SKF India fell by between 0.44% to 5.67%.

Metal and mining stocks fell as base metal prices declined. Copper led a decline in industrial metals on Tuesday, dropping to the lowest price in seven weeks in London and Shanghai as a survey showed Chinese manufacturing slipped to a six-month low in April 2010. National Aluminum Company, Hindalco Industries, Tata Steel, Sterlite Industries, Steel Authority of India, Hindustan Zinc, JSW Steel and Sesa Goa fell by between 1.67% to 6.4%.

Jindal Steel & Power fell 1.76%. Net profit jumped 54% to Rs 548.99 in Q4 March 2010 over Q4 March 2009. The result was announced during market hours today.

Interest rate sensitive banking shares declined on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. India's biggest commercial bank in terms of branch network State Bank of India fell 0.82%, reversing early gains.

India's largest private sector bank by net profit ICICI Bank fell 2.41%, reversing initial gains. India's second largest private sector bank by net profit HDFC Bank fell 1.52%, with the stock falling for the second straight day.

But, India's largest mortgage lender by total income Housing Development Finance Corporation rose 0.52%, with the stock rebounding from Monday's small decline. Net profit rose 26.31% to Rs 926.38 crore on 8.06% fall in total income to Rs 2899.32 crore in Q4 March 2010 over Q4 March 2009. The result was announced during trading hours on Monday. The company's board approved a 5-for-1 stock-split at the time of announcing the fourth quarter results.

Realty stocks reversed initial gains on fears the Reserve Bank of India may resort to further monetary tightening to counter soaring inflation. Phoenix Mills, DLF, HDIL, Indiabulls Real Estate and Unitech fell by between 0.19% to 5.13%.

IT pivotals fell on profit taking. India's third largest software services exporter Wipro fell 2.12%. India's second largest software services exporter Infosys slipped 1.02%. India's largest software services exporter TCS fell 0.78%, reversing initial gains.

FMCG stocks fell on profit taking. Hindustan Unilever, ITC, Tata Tea and United Spirits fell by between 0.66% to 3.52%.

India's largest mobile services provider by sales Bharti Airtel fell 2.44%. India's second largest mobile services provider by sales Reliance Communications fell 1.34%.

But, Idea Cellular rose 0.24% as consolidated net profit rose 56.7% to Rs 266.60 crore on 6.2% growth in revenue to Rs 3347.70 crore in Q4 March 2010 over Q3 December 2009. The company announced the result after market hours on Monday, 3 May 2010.

Idea said the company increased its revenue market share in the cellular services industry rose to 12.7% in calendar 2009 from 11.4% in calendar 2008. Idea Cellular said its area specific strategy, improving capacity utilization, sophisticated management processes supported by a power brand underscore Idea's ability to ride out current rough times in the cellular services industry with overcapacity and hyper competition.

Auto shares declined on profit taking. India's largest bike maker by sales Bajaj Auto fell 1.17%. Total vehicle sales surged 85% to 3.13 lakh units in April 2010 over April 2009.

India's largest bike maker by sales Hero Honda Motors was flat. The company's two-wheeler sales rose 0.29% to 3.71 lakh units in April 2010 over April 2009. The flat sales for the month was due to acute shortage of batteries for over two weeks during the month due to problems at the suppliers' end.

The company said these issues have now been resolved and the company has been assured of supply batteries returning to normal within a week's time. The company added that it is witnessing a steadily growing demand for its products, and is ramping up production levels accordingly.

India's largest small car maker by sales Maruti Suzuki India fell 1.5%. Total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,034 units.

India's largest utility vehicles maker by sales Mahindra & Mahindra declined 1.74%. The company's total vehicle sales rose 13% to 26,043 units in April 2010 over April 2009.

India's top truck maker by sales Tata Motors 1.56%, with the stock falling for the second straight day. Total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009. Domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137 units.

Cals Refineries clocked the highest volume of 7.2 crore shares on BSE. Reliance Natural Resources (2.64 crore shares), FCS Software (1.32 crore shares), Birla Power Solutions (84.02 lakh shares) and Well Pack Paper (48.51 lakh shares) were the other volume toppers in that order.

Reliance Natural Resources clocked the highest turnover of Rs 177.76 crore on BSE. Tata Steel (Rs 165.63 crore), Reliance Industries (Rs 165.42 crore), Sesa Goa (Rs 114.75 crore) and ARSS Infra (Rs 112.95 crore) were the other turnover toppers in that order.