DLF tumbles in a weak market

A broad based sell off was witnessed in key benchmark indices on Thursday as investors remained cautious ahead of the outcome of meetings of G-20 world leaders in South Korea on Thursday and Friday. The market fell for the second straight day. US index futures edged lower. Index heavyweight Reliance Industries declined. Telecom, banking, IT FMCG and capital goods stocks fell. DLF slumped more than 4% on poor Q2 result. The market breadth turned weak from strong breadth seen earlier in the day. All the sectoral indices on BSE fell. The BSE 30-share Sensex was down 286.62 points or 1.37%, off close to 345 points from the day's high up close to 45 points from the day's low.



The market pared gains after a firm start. It reversed gains to hit fresh intraday lows in morning trade. It cut losses in mid-morning trade. It slumped to hit fresh intraday lows in early afternoon trade. It remained weak in afternoon trade. It extended losses to hit fresh intraday lows in mid-afternoon trade. It further continued its downward trend to hit fresh intraday lows in late trade.

Food price index rose 12.30%, while the fuel price index climbed 10.67% in the year to 30 October 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 12.85% and 10.67%, respectively. The primary articles price index was up 14.87% in the latest week compared with an annual rise of 15.43% a week earlier.

India's food inflation is due to supply shortage, C. Rangarajan, chairman of the Prime Minister's Economic Advisory Council said on Thursday. Capital inflows of up to $70 billion should not pose a problem in India, he added. He also said there was no need to act on capital inflows at the moment.

European stocks gained tracking gains in Asia after strong Chinese economic data supported commodity prices and Wall Street rebounded on Wednesday. The key benchmark indices in Germany and UK rose by between 0.21% to 0.34%. But, France's CAC 40 fell 0.4%.

Asian markets mostly climbed Thursday as higher oil and metals prices boosted commodity stocks and President Barack Obama called on world leaders at the Group of 20 summit to work together to advance the economic recovery. The key benchmark indices in China, Hong Kong, Japan and Singapore rose by between 0.13% to 1.04%. But, key benchmark indices in Indonesia South Korea and Taiwan fell by between 0.16% to 2.7%.

Ratings agency Moody's Investors Service upgraded its view Thursday on Chinese government bonds to Aa3 from A1 and said it would maintain its positive outlook on the nation's debt. It cited what it described as the "resilient performance" of the Chinese economy since the onset of the financial crisis, as well as exceptional growth in the nation's external payment position as reasons for the upgrade.

Commodity stocks gained in Asia after China's industrial production grew 13.1% in October from a year earlier. A double-digit jump in food costs drove China's inflation rate to a 25-month high of 4.4% in October despite a government clampdown on credit and efforts to cool living costs.

The Dow Jones industrial average rose 0.1% to close at 11,357.04, recovering from losses earlier in the day, while the Standard & Poor's 500 index added 0.4% to 1,218.71.Stocks were checked by concerns of a backlash over the U.S.

The U.S. economy showed signs of pulling out of a slow-growth rut as initial jobless benefit claims hit a four-month low last week and the trade gap narrowed more than expected in September.

Trading in US index futures indicated that the Dow could fall 16 points at the opening bell Thursday, 11 November 2010. Meetings of world leaders in South Korea on Thursday and Friday and in Japan on the weekend provided the background to trading. Tensions over currencies and trade gaps are overhanging the Group of 20 and APEC summits as America's move to flood its sluggish economy with $600 billion of cash and weaken the dollar triggers alarm in export-reliant nations from China to Germany.

Back home, the $ 1.7 billion follow-on public offer of state-run Power Grid Corporation was subscribed 9.47 times by 16:00 IST on the third day of bidding, data on NSE showed. The issue closes on Thursday 11 November 2010 for the qualified institutional bidders and on Friday 12 November 2010 for all other bidders. Follow-on offer price band is fixed between Rs 85 to Rs 90 per Share, and 5% discount will be available to Retail investors and eligible employees at the issue price on allotment.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. After Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the other companies that are planning large share sales in coming months.

Meanwhile, share sales by the Indian government in state run firms Manganese Ore India (MOIL) and Shipping Corporation of India are likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December, Disinvestment Secretary Sumit Bose said

On the corporate front, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 2405 firms surged 36.3% to Rs 91988 crore on 19.7% growth in sales to Rs 735692 crore in Q2 September 2010 over Q2 September 2009.

Back home, India's services sector expanded last month at a faster rate than in September 2010, bringing an end to a 3-month decline in the key business activity index, a survey showed on Wednesday, 3 November 2010. The manufacturing sector expanded in October 2010 at a much faster pace than in September 2010, supported by strong output and a sharp rise in new business, a purchasing managers' index (PMI) showed on Monday, 1 November 2010.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on Tuesday, 2 November 2010, hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, theReserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. "However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment," he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. "We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability", the policy statement said.

The BSE 30-share Sensex was down 286.62 points or 1.37%, to 20,589.09. At the day's high of 20937.38 hit in early trade, index rose 61.67 points. The index fell 331.49 points at the day's low of 20544.22 in late trade.

The S&P CNX Nifty was down 81.45 points or 1.3% to 6,194.25.

The BSE Mid-Cap index fell 1.12%. The BSE Small-Cap index rose 0.47%. Both the indices outperformed the Sensex.

The market breadth, indicating the health of the market turned weak from strong breadth earlier in the day. On BSE, 1719 shares fell while 1296 shares rose. A total of 88 shares remained unchanged.

From the 30 share Sensex pack 25 fell and rest rose.

Index heavyweight Reliance Industries (RIL) fell 1.85%. RIL's net profit rose 27.80% to Rs 4923.00 crore on 22.69% rise in net sales to Rs 57479.00 crore in Q2 September 2010 over Q2 September 2009. Its gross refining margin (GRM) for quarter was at $7.9 per barrel as against $6 per barrel in the corresponding period of the previous year.

India's largest realty player by sales DLF fell 4.41% after company announced before market hours today that its net profit fell 4.85% to Rs 418.38 crore in Q2 September 2010 over Q2 September 2009. The stock was the top loser from the Sensex pack.

Among other realty stocks, Omaxe, Indiabulls Real Estate, Phoenix Mills, HDIL and Unitech fell by between 0.86% to 4.04%.

Bharti Airtel fell 3.26%, extending Wednesday's 1.77% losses, after consolidated net profit fell 26.59% to Rs 1661.20 crore on 46.50% increase in consolidated total income to Rs 15231.90 crore in Q2 September 2010 over Q2 September 2009.

Idea Cellular and Reliance Communications fell 0.87% and 1.81% respectively.

FMCG stocks fell on profit taking. United Spirits, ITC, Hindustan Unilever, Dabur India and Nestle India fell by between 0.75% to 3.28%.

Capital goods stocks also fell on profit taking. SKF India, BHEL, ABB, SKF India and Larsen & Toubro fell by between 1.1% to 2.66%.

India's largest software services exporter by sales TCS fell 2.49%. India's second largest software services exporter by sales Infosys fell 0.92%. Infosys is eyeing acquisitions in Japan as India's second-largest outsourcer looks for growth outside its main markets in the United States and Europe its chief executive S Gopalkrishnan said. But, India's third largest software services exporter by sales Wipro fell 1.29%.

India's largest bank by branch network and net profit State Bank of India fell 1.2%, with the stock falling third straight day triggered after lower than expected Q2 result. On a consolidated basis, State Bank of India's net profit fell 22.52% to Rs Rs 2363.95 crore on 14.57% increase in total income to Rs 37925.44 crore in Q2 September 2010 over Q2 September 2009. State Bank of Indore merged with State Bank of India with effect from 26 August 2010. Hence, the results for the quarter ended 30 September 2010 is not comparable with the corresponding period of the previous year. The bank announced Q2 result after market hours on Monday, 8 November 2010.

India's second largest private sector bank by net profit HDFC Bank fell 1.64%.

India's largest private sector bank by net profit ICICI Bank fell 1.32%. The stock on 5 November 2010 scaled a 52-week high of Rs 1,277.

Ranbaxy Laboratories rose fell 3.48%. The company's net profit rose 19.17% to Rs 221.17 crore in Q3 September 2010 over Q3 September 2009.

Copper maker Hindalco Industries rose 2.65% after falling 1.6% on Wednesday. Net profit of Hindalco Industries rose 26.09% to Rs 433.81 crore on 18.66% rise in net sales to Rs 5802.76 crore in the quarter ended September 2010 over the quarter ended September 2009. The company announced the result after market hours on Tuesday.

But, other metal stocks fell. Hindustan Zinc, Steel Authority of India, JSW Steel, Sterlite Industries, Jindal Steel & Power, National Aluminum Company and Tata Steel fell by between 0.09% to 1.01%

Tata Motors, India's largest auto maker by sales fell 1.97%. The stock had jumped 2.49% on Wednesday after company posted a 100-fold jump in consolidated net profit due to a buoyant local market and a surge in sales at UK subsidiary Jaguar Land Rover (JLR). The stock hit record high of Rs 1350 on Wednesday. Net profit rose to Rs 2,222.99 crore for the Q2 September 2010 compared with Rs 21.78 crore in the corresponding quarter a year ago. On a standalone basis, company's net profit declined 40.66% to Rs 432.70 crore on 44.51% rise in net sales to Rs 11449.61 crore in the quarter ended September 2010 over the quarter ended September 2009. The result was announced after market hours on Tuesday.

India's largest bike maker by sales Hero Honda Motors rose 0.12%. The company reported its highest ever monthly sales at 5,05,553 units in October 2010, registering a jump of 42.75% over the same month last year.

India's top small car maker by sales Maruti Suzuki India fell 0.31%, reversing initial gains. The company's total sales rose 39.2% to 1.18 lakh vehicles in October 2010 over October 2009.

Bajaj Auto fell 0.59%, reversing initial gains. The company reported 32% surge in total sales to a 3.7 lakh units in October 2010 over October 2009. The company clocked record motorcycle and commercial vehicle sales in the recently concluded month.

India's largest tractor maker by sales Mahindra & Mahindra rose 1% after surging 3.05% on Wednesday. The stock hit record high of Rs 826.40 today. The company's auto sales rose 34% to 34,495 units in October 2010 as against 25,670 units during October 2009.

Car sales in India rose an annual 37.9% in October, an industry body said on Wednesday. Firms sold 1,82,992 cars in the month, data from the Society of Indian Automobile Manufacturers (SIAM) showed. Sales of trucks and buses, a barometer of economic activity, rose 18.17% to 50,835 units in October, SIAM said.

HPCL Clocked highest volume of 2.61 crore shares on BSE. Delta Corp (2.06 crore shares), Birla Power Solutions (1.99 crore shares), Alok Industries (1.72 crore shares) and Cals Refineries (1.64 crore shares) were the other volume toppers in that order.

Coal India clocked highest turnover of Rs 290.69 crore on BSE. Delta Corp (Rs 273.51 crore), State Bank of India (Rs 182.71 crore), Reliance Power (Rs 166.93 crore) and Neha International (Rs 143.93 crore) were the other turnover toppers in that order.