Market hits 14 month closing low

The key benchmark indices fell for the third straight day to hit more than 14 month closing lows as weak European stocks and lower US index futures weighed on the sentiment. The caution prevailed ahead of the key eurozone crisis meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris later in the global day. Latest domestic data showing inflation remaining at elevated levels raised concerns that central bank may further hike interest rates to contain high inflation. The BSE Sensex was down 108.69 points or 0.65%, off close to 305 points from the day's high and up close to 60 points from the day's low. BSE Sensex settled well below the psychological 17,000 mark after briefly moving past that mark at the onset of the day's trade. BSE Mid-Cap and Small-Cap indices underperformed the Sensex.



The market breadth, indicating the overall health of the market, was weak. Index heavyweight Reliance Industries edged lower, reversing initial gains. Jaiprakash Associates slumped to hit 52 week low on reporting poor Q1 results on Saturday, 13 August 2011. Realty stocks declined on worries higher interest rates could dent demand for residential and commercial properties. Bank stocks fell on concerns higher interest rates may crimp loan growth. Auto stocks fell on concerns higher interest rates could crimp sales of automobiles. Metal stocks declined across the board. Wipro and Tata Steel too hit 52 week low today. Coal India gained after strong Q1 result. Reliance Communications tumbled after poor Q1 results.

The market trimmed gains after a firm start. It further trimmed gains to hit fresh intraday low in morning trade. It regained strength from the day's low in mid-morning trade. It pared gains to hit fresh intraday lows in early afternoon trade. Market pared further gains in afternoon trade to slide to fresh intraday low. It slipped into the red to hit fresh intraday low in mid-afternoon trade. It trimmed losses after hitting one week low in late trade.

Market had remained closed on Monday, 15 August 2011 on account of Independence Day.

The BSE Sensex was down 108.69 points or 0.65% to 16,730.94, its lowest closing level since 9 June 2010. The Sensex gained 195.86 points at the day's high of 17,035.49 in early trade. The index declined 166.11 points at the day's low of 16,673.52 in late trade.

The S&P CNX Nifty was down 37.15 points or 0.73% to 5,035.80, its lowest level since 9 June 2010. Nifty hit low 5,015.40 in late trade.

The BSE Mid-Cap index fell 1.79% and the BSE Small-Cap index shed 2.1%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2095 crore lower than Rs 2691.01 crore on Friday, 12 August 2011.

The market breadth, indicating the overall health of the market, was weak after being positive upto early afternoon trade. On BSE, 2007 shares declined while 844 shares gained. A total of 93 shares remained unchanged.

Among the 30-share Sensex pack, 22 fell and the rest rose. Bhel, Tata Motors and ITC rose by between 0.86% to 2.3%.

Index heavyweight Reliance Industries (RIL) fell 0.24% to Rs 759, off the day's high of Rs 771.80. The stock hit low of Rs 755. The stock had hit a 52-week low of Rs 754.25 in intraday trade on Tuesday, 9 August 2011. RIL on Tuesday, 9 August 2011, said it has received the government's formal approval to sell a 30% stake in 21 oil and gas production sharing contracts to BP PLC. "Following the approval, Reliance and BP will work together to conclude the deal expeditiously," RIL said in a statement.

The initial proposal was for RIL to sell the stake in 23 blocks to BP for $7.2 billion plus another $1.8 billion linked to exploration success. However, the government cleared only 21 blocks and RIL had said it would continue to seek approval for the remaining two blocks.

The prized KG-D6 fields of RIL produced 31% less than previously projected natural gas output in the April-June 2011 quarter, the Oil Ministry said recently. The average gas production during April-June 2011 from KG-DWN-98/3 (KG-D6) block was 48.60 million metric standard cubic meters per day (mmscmd), less than the approved Field Development Plan (FDP) rate of 70.39 mmscmd, the ministry said.

IT stocks rose on bargain hunting after the recent sharp losses. India's largest software services exporter TCS gained 2.4% and was the top gainer from the Sensex pack. India's second largest software services exporter Infosys rose 0.77% to Rs 2392.65. The stock hit 52 week low of Rs 2343.70 on Friday, 12 August 2011. India's third largest software services exporter Wipro fell 0.66% to Rs 340.75. The stock hit 52 week low of Rs 337.35 today.

Reliance Communications tumbled 8.19% after consolidated net profit fell 37.2% to Rs 157 crore on 6% decline in net sales to Rs 4712 crore in the quarter ended June 2011 over the quarter ended June 2010. The result was announced on Saturday, 13 August 2011.

The company has reportedly increased call charges by 20% for both GSM and CDMA services in most of its operating circles.

Bank stocks fell on concerns higher interest rates may crimp loan growth. HDFC Bank declined 2.51% reversing initial gains. The bank reportedly on Friday raised its base rate by 50 basis points to 10% and its benchmark prime-lending rate (BPLR) to 18.5%. The bank also decided to raise fixed deposit rates by up to 75 basis points on the select maturities effective from Friday.

India's largest private sector bank by net profit ICICI Bank fell 0.49% reversing initial gains. The bank said on Thursday it will raise its base rate upwards by 50 basis points to 10% with effect from 13 August 2011. The bank has also announced an increase of 0.50% in its benchmark prime lending rate and in its Floating Reference Rate (FRR) for consumer loans (including home loans).

State Bank of India rose 0.23%. The bank's consolidated net profit fell 25.34% to Rs 2512.47 crore on 19.25% rise in total income to Rs 39126.06 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results on Saturday, 13 August 2011.

HPCL fell 1.67% after the company after market hours on Friday reported that net loss stood at Rs 3080.26 crore for Q1 June 2011, higher than a net loss of Rs 1884.29 crore for Q1 June 2010. The company's total income rose 39.33% to Rs 41056.57 crore in Q1 June 2011 over Q1 June 2010.

India's largest dam builder by sales Jaiprakash Associates lost 7.83% to Rs 57.10 and was the top loser from the Sensex pack after net profit declined 79.26% to Rs 107.04 crore on 1% decline in net sales to Rs 3142.33 crore in Q1 June 2011 over Q1 June 2010. The company announced the results on Saturday, 13 August 2011. The stock hit 52 week low of Rs 56.20 today.

Realty stocks tumbled on worries higher interest rates could dent demand for residential and commercial properties. Purchases of both residential and commercial property are largely driven by finance. Sunteck Realty, Unitech, Indiabulls Real Estate and HDIL shed by between 4.64% to 11.72%.

DLF tanked 5.92% on reports competition watchdog CCI today imposed a penalty of around Rs 600 crore on realty major for abusing its dominant market position. The penalty, which amounts to 7% of the company's average annual turnover of last three years, was imposed as DLF has been proven guilty of violating section 4(2) of the Competition Act, 2002. A company violates Section 4(2)(a) of the Competition Act when it directly or indirectly imposes unfair or discriminatory conditions or prices with respect to the purchase or sale of goods or services.

Coal India gained 0.6% after consolidated net profit rose 64.05% to Rs 4143.92 crore on 28.29% rise in total income to Rs 16057.97 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results after market hours on Friday, 12 August 2011.

Metal stocks declined across the board. National Aluminum Company shed 3.8%, reversing initial gains. The net profit rose 32.66% to Rs 376.84 crore on 35.14% rise in total income to Rs 1889.10 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results on Saturday, 13 August 2011.

Hindalco Industries fell 4.31%, reversing initial gains. The net profit rose 20.5% to Rs 644 crore on 18.32% rise in total income to Rs 6208.78 crore in Q1 June 2011 over Q1 June 2010. The company announced Q1 results after market hours on Friday, 12 August 2011.

Sail, Jindal Steel & Power, JSW Steel, Sterlite Industries and Hindustan Zinc fell by between 1.01% to 4.71%.

Tata Steel fell 1.56% to Rs 468.90, extending Friday's 1.69% losses. The company announced during market hours on Friday said that consolidated net profit surged 192.91% to Rs 5346.55 crore on 35.33% rise in total income to Rs 36882.43 crore in Q1 June 2011 over Q1 June 2010. The stock hit 52 week low of Rs 466.50 today.

Tata Steel's net profit zoomed due to 6445.71% jump in other income to Rs 3882.26 crore in Q1 June 2011 over Q1 June 2010. The other income includes profit of Rs 2879.29 crore on disposal of Tata Steel Global Mineral Holding's investment in Riversdale Mining. The other income also includes profit of Rs 511.01 crore on sale of part of investment in Tata Refractories. The other income also includes Rs 597.71 crore relating to arbitration with the Teeside Cast Products Consortium.

Jindal Saw fell 5.22% after net profit fell 45.2% to Rs 82.80 crore on 0.2% decline in net sales to Rs 1133.07 crore in Q1 June 2011 over Q1 June 2010.

Auto stocks fell on concerns higher interest rates could crimp sales of automobiles. Purchases of automobiles, including that of cars, two-wheelers, utility vehicles and commercial vehicles are substantially driven by financing. India's largest small car maker by sales Maruti Suzuki India fell 1.71%.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) declined 1.08%. India's second largest bike maker by sales Bajaj Auto fell 0.17%. India's largest bike maker by sales Hero MotoCorp shed 0.15%.

Tata Motors rose 0.08% after the company fixed 13 September 2011 as the record date for the purpose of 5 to 1 stock split of ordinary and 'A' ordinary shares (collectively 'the shares'). The stock had fallen 5.26% on Friday, 12 August 2011 after the company reported a muted growth in bottom line for Q1 June 2011 at the fag end of the trading session on Thursday, 11 August 2011. Consolidated net profit 0.55% to Rs 2000 crore on 24.1% growth in net revenue to Rs 33572 crore in Q1 June 2011 over Q1 June 2010.

Sugar stocks tanked on profit taking. Balrampur Chini, Bajaj Hindusthan and Shree Renuka Sugars shed by between 7.79% to 8.76%. The Centre has reportedly decided to allow export of an additional five lakh tonnes (lt) on sugar under open general license (OGL) for the current 2010-11 season (October-September). This is over and above the already permitted 10 lt, cleared through two equal instalments on April 19 and June 28. The go-ahead for export of an additional five lt quantity was given at a meeting of the Empowered Group of Ministers (EGoM) under the Finance Minister, Mr Pranab Mukherjee, here on Friday.

Cals Refineries clocked highest volume of 3.65 crore shares on BSE. K S Oils (1.98 crore shares), SpiceJet (93.59 lakh shares), Inventure Growth Securities (67.42 lakh shares) and L& Finance Holdings (65.57 lakh shares) were the other volume toppers in that order.

Inventure Growth Securities clocked highest turnover of Rs 156.04 crore on BSE. State Bank of India (Rs 154.03 crore), Tata Steel (Rs 62.47 crore), Jubilant Foodworks (Rs 46 crore) and DLF (Rs 39.99 crore) were the other turnover toppers in that order.

The wholesale price index (WPI) for the month of July 2011 came in at 9.22% versus 9.44% seen in the month of June 2011.Primary articles stood at 11.3% versus 12.22% seen in the previous month. Fuel inflation came in at 12.04% versus 12.85% seen in the previous month. Manufacturing inflation came in at 7.49% versus 7.43% seen in the previous month. May WPI revised to 9.56% versus 9.06%

Industrial production grew 8.8% in June 2011 from a year earlier, helped by strong growth in manufacturing output, data released by the government on Friday, 12 August 2011, showed. The reading was sharply higher than the upwardly revised 5.95% industrial output growth in May 2011. The June reading also beat market expectations by a wide margin.

Manufacturing output, which has a 75.5% weight in the index, rose 10% on year in June, compared with a revised 6.1% rise in May. Mining output grew 0.6%, compared with a revised 1.3% rise in May. Industrial output growth data in June 2011 is encouraging, Finance Minister Pranab Mukherjee told reporters on Friday, 12 August 2011.

Monetary policy will help in moderating inflation, Finance Minister Pranab Mukherjee told to reporters on Tuesday. He hoped that good monsoons would moderate inflation. The central bank has raised interest rates 11 times since March 2010 to tame inflation.

European markets were subdued on Tuesday, 16 August 2011 as caution prevailed ahead of the key eurozone crisis meeting between French President Nicolas Sarkozy and German Chancellor Angela Merkel in Paris. The key benchmark indices in UK, Germany and France were down by between 0.8% to 2.36%.

The data showed Germany's seasonally adjusted gross domestic product grew just 0.1% during the second quarter, which was weaker-than-expected.

Most Asians stocks reversed initial gains on Tuesday, 16 August 2011. The key benchmark indices in China, Hong Kong, Singapore, Indonesia and Taiwan fell by between 0.25% to 1.45%. The key benchmark indices in Japan and South Korea rose 0.23% and 4.83% respectively.

Trading in US index futures indicated that the Dow could fall 83 points at the opening bell on Tuesday, 16 August 2011.

Wall Street stocks rose for a third day on Monday on Google's offer for phone maker Motorola Mobility as investors bargain hunt the stocks after weeks of sharp selling.