Market closes flat for the second straight day ahead of G20 summit

Key benchmark indices closed the volatile trading session with tiny gains after staging a sharp recovery in last one hour of trade tracking rebound in European shares. US index futures reversed initial losses. The BSE Sensex was up 17.08 points or 0.1%, up close to 195 points from the day's low and off close to 45 points from the day's high. Index heavyweight Reliance Industries gained in volatile trade. Power stocks rose. Interest rate sensitive realty stocks extended recent gains as the Reserve Bank of India (RBI) indicated pause on rate increases recently. IT stocks edged lower weighed as European leaders fail to find a final solution to end Euro zone debt crisis. Europe is the second largest outsourcing market for the Indian IT firms. The market breadth was negative. Sail fell on weak Q2 results.



Weak Asian stocks, sharp jump in food inflation for the penultimate week of October coupled with a downbeat reading on the nation's service sector output had weighed on the sentiments in the initial trade.

The Sensex jumped 1,251.25 points or 7.6% in October 2011 on a European Union plan to tackle the 2-year old euro-zone debt crisis and on Reserve Bank of India's indication of a pause in interest rate hikes. The Sensex has slumped 3,027.16 points or 14.76% in calendar 2011. From a 52-week high of 21,108.64 on 5 November 2010, the Sensex has lost 3,626.71 points or 17.18%. From a 52-week low of 15,745.43 on 4 October 2011, the Sensex has risen 1,736.50 points or 11.02%.

Coming back to today's trade, the market trimmed losses after a weak start. It weakened to hit fresh intraday low in morning trade. It extended initial losses to hit fresh intraday low in mid-morning trade. It continued the downtrend to hit fresh day's low in early afternoon trade. Market extended decline in afternoon trade. It came off the intraday low in mid-afternoon trade. It reversed initial losses to hit fresh intraday highs in late trade.

The BSE Sensex was up 17.08 points or 0.1% to 17,481.93. The index lost 186.82 points at the day's low of 17,278.03 in afternoon trade. The index gained 62.25 points at the day's high of 17,527.10 in late trade.

The S&P CNX Nifty was up 7.30 points or 0.14% to 5,265.75. The Nifty hit a high of 5,281.60 and a low of 5,201.85 in intraday trade.

The BSE Mid-Cap index fell 0.04% and the BS Small-Cap index was flat. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2192 crore lower than Rs 2220.86 crore on Wednesday, 2 November 2011.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1469 shares declined while 1341 rose. A total of 129 shares were unchanged.

From the 30 share Sensex pack, 17 fell while the rest rose.

Power stocks gained. Bhel, Reliance Power, NTPC, Reliance Infrastructure and Tata Power Company rose by between 0.15% to 3.23%.

Interest rate sensitive realty stocks extended recent gains as the Reserve Bank of India (RBI) indicated pause on rate increases recently. Purchases of both residential and commercial property are largely driven by finance. DLF, HDIL, Indiabulls Real Estate, and Sunteck Realty rose by between 0.36% to 3.92%.

Index heavyweight Reliance Industries (RIL) rose 1.51% to Rs 884.60. The stock was volatile. The stock hit a high of Rs 888 and a low of Rs 863.15. The stock extended Wednesday's 1.27% gains on reports company is likely to use the towers and fibre optic cables of a telecom company, Reliance Communications controlled by Anil Ambani to provide high-speed data services, marking the first major collaboration between the two Ambani brothers after they carved out the Reliance empire between themselves in 2005. In May 2010, the Ambani brothers terminated a non-compete agreement that had been in place for five years, allowing RIL's re-entry into telecom. RIL is controlled by Anil Ambani's elder brother Mukesh Ambani.

RIL on Tuesday, 1 November 2011, refuted speculation that it is considering acquiring Valero Energy, Inc. RIL said before trading hours on Tuesday that while it is the policy of RIL not to comment on market rumors, in light of the materiality of the rumored transaction, RIL wishes to dispel the rumors and announce that it is not in discussions with Valero nor otherwise considering an acquisition of Valero. Reliance undertakes no obligation to update this statement and intends to adhere to its "no comment" policy in the future, it said. Valero Energy is a Fortune 50 company based in San Antonio, and through its subsidiaries is the world's largest independent petroleum refiner and marketer.

RIL, last month, neither confirmed nor denied media reports of a likely suspension of oil and gas drilling operations. RIL said on 17 October 2011 that RIL has always communicated any material event to the stock exchanges first before disseminating to the media. Media reports had suggested recently that RIL may suspend oil and gas drilling operations for an unspecified time until an internal valuation of its exploration and production strategy.

Shares of Anil Ambani controlled Reliance Communications rose 2.02%, extending Wednesday's 5.49% surge.

IT stocks edged lower weighed as European leaders fail to find a firm solution to end Euro zone debt crisis. Europe is the second largest outsourcing market for the Indian IT firms. India's largest software services exporter TCS fell 0.26%, with the stock falling for the fourth straight day.

India's third largest software services exporter Wipro declined 0.95%. The company announced before market hours on Monday, 31 October 2011 that non-GAAP adjusted net profit as per International Financial Reporting Standards (IFRS) rose 2% to Rs 1306 crore on 18% rise in total revenue to Rs 9094 crore in Q2 September 2011 over Q2 September 2010. The company expects 7.91% to 10.07% growth in revenue from IT services business at between $1.5 billion to $1.53 billion in Q3 December 2011 over Q2 September 2011.

Wipro said that in the current macro-economic environment, corporations across the globe are looking to maximize the potential of technology deployments and are increasingly relying on business models and technologies to variabilize their IT spends, enabling more differentiating investment for IT based innovation.

Wipro said it is seeing traction with clients on cloud and variabilized business model offerings. State Street Corporation, one of the world's leading providers of financial services to institutional investors, has entered into a multi-year agreement with Wipro to provide application maintenance and support services Wipro will deploy pioneering lean methodologies delivered through its award winning CIGMA platform for this IT transformation engagement.

India's second largest software services exporter Infosys fell 0.94%. The company's consolidated net profit as per International Financial Reporting Standards (IFRS) rose 10.68% to Rs 1906 crore on 8.2% growth in revenue to Rs 8099 crore in Q2 September 2011 over Q1 June 2011. The company announced the results on 12 October 2011.

Infosys has forecast 9.72% to 11.11% growth in non-annualized earnings per American Depositary Share at $0.79 to $0.80 in Q3 December 2011 over Q2 September 2011. It has forecast 3.2% to 5.3% growth in revenue at $1.802 to $1.84 billion in Q3 December 2011 over Q2 September 2011.

The company has for the second quarter in a row revised upwards its dollar earnings guidance for the year ending March 2012 (FY 2012). The company expects 15.3% to 16.8% growth in earnings per American Depositary Share at $3.02 to $3.06 in FY 2012 over the year ending March 2011 (FY 2011). However, the company has revised downwards dollar revenue growth guidance for FY 2012. The company expects 17.1% to 19.1% growth in revenue at $7.08 billion to $7.20 billion in FY 2012 over FY 2011.

Sail tumbled 3.06% after company announced during market hours today that net profit fell 54.62% to Rs 494.64 crore on 3.12% rise in total income to Rs 11469.88 crore in Q2 September 2011 over Q2 September 2010.

Among other metal stocks, Jindal Saw, Sesa Goa, JSW Steel, Hindalco Industries, Jindal Steel & Power and Hindustan Zinc rose by between 0.55% to 4.77%. NMDC, Nalco, Tata Steel, and Sterlite Industries dropped by between 0.37% to 1.7%.

Oil exploration stocks fell along with crude oil prices. Cairn India, and ONGC declined by between 0.11% to 0.27%. Lower crude oil prices will result in lower realizations from crude sales for oil exploration firms.

India's largest cement producer Ultratech Cement rose 0.96% reversing initial losses. The shipments in October fell 6.8% from a year ago to 3.19 million tonnes.

India's largest motorcycle maker by sales Hero MotoCorp fell 0.88%, extending Wednesday's 2.84% losses on reports that oil companies plan to raise petrol prices by Rs 1.50 a litre, the 13th hike since June last year, as PSU OMCs have reported losses for the second consecutive quarter. Hero MotoCorp on Tuesday reported 1.3% growth in its October sales at 5.12 lakh units. The company had sold 5.05 lakh units in the corresponding month last year.

Maruti Suzuki India rose 0.4%. The company clarified that the decision to purchase land in Gujarat is towards building additional capacity. Further it said it has no linkage whatsoever with the recent industrial unrest situation faced by the company. The company's plan to invest in Gujarat started much before the industrial unrest situation at Manesar. The company clarified this after certain sections of media reported on Maruti Suzuki's decision to purchase land in Gujarat, as "moving out of Haryana and shifting its base to Gujarat'.

The board of directors approved the purchase of land in Gujarat for future capacity requirements of the company, last week. The logistics for reaching the finished cars to the large domestic markets in West and South India and the close proximity of the Mundra port for future exports, played an important role in the decision. The company also clarified that its investment plans for Haryana stay on course. These include installation of the 2.5 lakh capacity Assembly line in Manesar (Manesar C), a world class R&D Center and test course in Rohtak. The company has lined up a direct investment of over Rs. 3,400 crores towards these facilities In addition to company's investment, its vendors and joint venture partners will continue to appropriately invest in Haryana for the future expansion.

The company's total sales slumped 53.2% to 55,595 units in October 2011 over October 2010. Domestic sales fell 52.2% to 51,458 units while exports tumbled 63.6% to 4,137 units in October 2011 over October 2010. Labour unrest at Maruti's Manesar unit during October 2011 adversely impacted the company's sales. The firm lost production of 40,000 units during the month. Maruti announced the monthly sales data during trading hours on Tuesday, 1 November 2011.

Bajaj Auto rose 0.36% in volatile trade. The company announced during market hours on Wednesday that its total sales rose 7% to 3.95 lakh unit in October 2011 over October 2010. The company said that there was production loss of 25,000 motorcycles at Pantnagar plant as curfew imposed in the region in early October constrained sales.

India's largest commercial vehicle maker by sales Tata Motors declined 1.74%, with the stock falling for the fourth straight day. Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in October 2011 were 68,009 vehicles, higher by 5% over October 2010. The company's domestic sales of Tata commercial and passenger vehicles for October 2011 were 63,838 units, higher by 9% over 58,806 units, sold in October last year.

Tractor and SUVs maker Mahindra & Mahindra fell 0.05% in volatile trade. The company's total sales rose 20.3% to 41,506 units in October 2011 over October 2010. Domestic sales rose 21.1% to 39,352 units while exports rose 7.5% to 2,154 units in October 2011 over October 2010.

Interest rate sensitive banking stocks were mixed. India's largest private sector bank by net profit ICICI Bank fell 0.98%. ICICI Bank's consolidated net profit rose 43% to Rs 1992 crore in Q2 September 2011 over Q2 September 2010. Standalone profit after tax increased 22% to Rs 1503 crore in Q2 September 2011 over Q2 September 2010. Net interest income increased 14% to Rs 2506 crore in Q2 September 2011 over Q2 September 2010. Fee income increased 7% to Rs 1700 crore in Q2 September 2011 over Q2 September 2010. Provisions decreased 50% to Rs 319 crore in Q2 September 2011 over Q2 September 2010. The result was announced during trading hours on Monday, 31 October 2011.

ICICI Bank's current and savings account (CASA) ratio stood at 42.1% as on 30 September 2011. Net non-performing asset ratio decreased to 0.8% as at 30 September 2011 from 1.37% as at 30 September 2010 and 0.91% as at 30 June 2011.

India's second largest private sector bank by net profit HDFC Bank shed 0.47%. The bank's net profit rose 31.48% to Rs 1199.35 on 37.4% rise in total income to Rs 7929.38 crore in Q2 September 2011 over Q2 September 2010. The result was announced during market hours on 19 October 2011.

India's largest bank by branch network State Bank of India (SBI) gained 1.34%. The bank announces Q2 results on 9 November 2011.

India's largest engineering & construction firm by order book, L&T fell 0.46%. The company announced during market hours today that L&T (Oman), a subsidiary of the company won Rs 875 crore orders in urban infrastructure segment. The company had announced during trading hours on Wednesday that its construction division has bagged new orders valued over Rs 1620 crore in the buildings and factories segment.

Bharti Airtel rose 2.15% ahead of its Q2 results tomorrow.

Nu Tek India clocked highest volume of 64.38 lakh shares on BSE. Shree Ashtavinayak Cine Vision (49.37 lakh shares), Cals Refineries (47.51 lakh shares), Unitech (45.91 lakh shares) and Tata Motors (42.35 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 98.79 crore on BSE. Jubilant Foodworks (Rs 83.94 crore), Tata Motors (Rs 79.92 crore), RIL (Rs 60.06 crore), and ICICI Bank (Rs 59.71 crore) were the other turnover toppers in that order.

Stock-specific activity may dominate trade in the near-term as earnings flow in. Investors will closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook.

ONGC, Bharti Airtel and GlaxoSmithKline Pharmaceuticals unveil quarterly results on Friday, 4 November 2011.

Infrastructure Development Finance Company, ABB, Bank of India, Reliance Infrastructure and Reliance Power unveil results on 8 November 2011. State Bank of India, Ranbaxy Laboratories, Indian Oil Corporation, GMR Infrastructure, Power Finance Corporation and Bhushan Steel unveil quarterly results on 9 November 2011. Tata Steel, Hindalco, Pantaloon Retail (India), Mahindra Satyam and CEAT unveil quarterly results on 10 November 2011. Jet Airways (India), GE Shipping and Tata Chemicals unveil Q2 results on 11 November 2011. Coal India, National Aluminium Company and Shipping Corporation of India report Q2 results on 12 November 2011. Tata Motors, Mahindra & Mahindra, Tata Power, JSW Steel and India Cements unveil Q2 results on 14 November 2011.

Exports rose 36.36% to $24.82 billion in September 2011 over in September 2010. The cumulative value of exports for the first half of the current fiscal has risen 52.08% at $160.04 billion against $105.24 billion during the like period last year. Meanwhile, imports grew 17.2% to $34.58 billion in September 2011 over September 2010, resulting in a monthly trade deficit of $9.67 billion. The total imports in the current fiscal till September went up to $233.5 billion, a rise of 32.41% against $176.36 billion in the first six months of 2010-11. The trade deficit for the April-September period now stands at $73.46 billion.

India's service sector contracted for a second straight month in October, as new business grew at its weakest pace since May 2009, a survey showed on Thursday, dragged by sagging global demand and tight monetary policy. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, slumped to 49.1 in October, its lowest reading in two-and-a-half years and below the 50-mark which separates growth from contraction. It was at 49.8 in September.

India's manufacturing activity in October expanded--though modestly--indicating an improvement in business conditions from a month ago as growth in new orders accelerated, a survey showed Tuesday, 1 November 2011. The seasonally adjusted HSBC Purchasing Managers' Index, prepared by Markit, rose to 52 in October from 50.4 in September. A figure above 50 indicates expansion.

The food price index rose 12.21%, its highest in 9 months, and the fuel price index climbed 14.50% in the year to October 22, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 11.43% and 14.70% respectively. The primary articles price index was up 12.08% compared with an annual rise of 11.75% a week earlier.

India needs to guard against imported inflationary pressure as the euro-zone continues to reel under the debt crisis, Prime Minister Manmohan Singh said on Wednesday, 2 November 2011. "In an increasingly interdependent world, we have to be wary of contagion effects," Mr. Singh said in a statement before his departure to attend a conference of the Group of 20 industrial and developing economies in Cannes, France. The euro-zone debt problem is the principal concern for the global economy, Mr. Singh said. Swift and difficult decisions are needed in Europe to address the issue, he added.

RBI announced a 25 basis points hike in its key policy rate viz. the repo rate to 8.5% after half-yearly review of the monetary policy on 25 October 2011. The central bank cut its GDP growth forecast for the current fiscal year through March 2012 to 7.6% from 8% earlier. But it retained its March-end inflation projection of 7%. RBI said the projected inflation trajectory indicates that the inflation rate will begin falling in December 2011 (January 2012 release) and then continue down a steady path to 7% by March 2012. It is expected to moderate further in the first half of 2012-13. This reflects a combination of commodity price movements and the cumulative impact of monetary tightening. Further, moderating inflation rates are likely to impact expectations favourably.

Pakistan has lifted barriers to imports from India, reciprocating a similar move from New Delhi 15 years ago, giving a breath of fresh air to the relationship that has been marred by acrimony and distrust for decades. To facilitate trade, Pakistan's cabinet has agreed to grant India the Most Favoured Nation (MFN) status, which means that imports from India would enjoy the same terms as those from other trade partners. It will allow import of most goods from the country instead of just a handful of items.

European shares reversed initial losses on Thursday as Greek government loses majority ahead of confidence vote. Greek ruling party lawmaker calls on PM to resign. Key benchmark indices in France, Germany and UK rose by between 0.02% to 1.58%.

The leaders of France and Germany, angered at Greece's shock move to call a referendum on its latest bailout plan negotiated last week, told Prime Minister George Papandreou on Wednesday that Athens would not receive another cent in EU aid until it decides whether it wants to stay in the euro zone.

European Union leaders will hold talks in Cannes, France before the start of the Group of 20 summit today, where they will tell Greek Prime Minister George Papandreou there is no alternative to budget cuts imposed in a bailout plan hammered out last week.

The European Central Bank will take a call on whether to cut rates or not on at a policy meeting on interest rates later in the global day today, 3 November 2011.

Asian shares fell on Thursday as fears that Europe's debt crisis could unleash financial chaos prompted investors to continue shedding riskier assets. Key benchmark indices in Hong Kong, Indonesia, South Korea, Taiwan and Singapore fell by between 0.87% to 2.49%. Japanese markets are shut today.

China's Shanghai Composite rose 0.16% after China's services sector is running at its fastest pace since June, propelled by an increase in the rate of new orders, but overall optimism in the industry lags historic levels, a survey of purchasing managers showed on Thursday. The headline business activity index in the HSBC China Services PMI climbed to a four-month high of 54.1 in October, well above September's 53.0, as new order growth accelerated for a second successive month and the new business component of the PMI also scaled a four-month peak.

US index futures reversed initial losses. Trading in US index futures indicated that the Dow could gain 25 points at the opening bell on Thursday, 3 November 2011.

U.S. stocks rebounded from two days of sharp losses on Wednesday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to stanch the panicky reaction to Europe's debt crisis.

The Federal Reserve on Wednesday left interest rates unchanged and refrained from announcing any new steps to stimulate the world's largest economy. The Federal Reserve on Wednesday slashed its forecast for growth, raised projections for unemployment and said it was mulling the possibility of buying more mortgage debt to spur a struggling recovery. While members of the U.S. central bank's policy-setting panel voted 9-1 to hold a steady course, one official urged more stimulative action now and Fed Chairman Ben Bernanke said Europe's debt crisis posed big economic risks. At a news conference after a two-day meeting, Bernanke said buying more mortgage-backed securities was an option to help the economy and added that the U.S. central bank was still looking for ways to give clearer guidance on its policy path.

Data showed U.S. private employers added more jobs than expected last month, continuing a recent pattern of better-than-expected economic data. The influential US non-farm payroll data for October 2011 is set for release on Friday, 4 November 2011. The report is expected to show non-farm payrolls rose by just 90,000 in October, after a rise of 103,000 in September.