Market ends choppy trading session lower

Volatility was at the forefront as key benchmark indices reversed direction and slipped into the red once again in late trade as European stocks and US index futures reversed initial gains. The BSE Sensex was provisionally down 33.45 points or 0.19%, off close to 170 points from the day's high and up close to 110 points from the day's low. The market breadth was negative. Index heavyweight Reliance Industries (RIL) trimmed initial gains. Another index heavyweight L&T edged lower in volatile trade.

Interest rate sensitive banking stocks were mixed. Realty stocks edged lower in volatile trade. IT stocks were mixed. Reliance Communications jumped on reports RIL is likely to use the towers and fibre optic cables of Reliance Communications controlled by Anil Ambani to provide high-speed data services. Other Anil Dhirubhai Ambani Group (ADAG) shares also edged higher.



The market recovered soon after a weak start triggered by lower Asian shares. The market came off highs later. The market moved into positive zone for a brief period in morning trade as Asian stocks came off lows. A bout of volatility was witnessed as key benchmark indices once again moved into the positive terrain to hit fresh intraday highs in mid-morning trade. The market surged to hit fresh intraday high in early afternoon trade as intraday recovery in Asian shares gathered steam. The market pared gains in a sudden slide later. The market came off lows in afternoon trade. The market moved in a tight range in positive terrain in mid-afternoon trade. The market reversed direction and slipped into the red once again in late trade as European stocks and US index futures reversed initial gains.

As per provisional figures, the BSE Sensex was down 33.45 points or 0.19% to 17,447.38. The index rose 135.09 points at the day's high of 17,615.92 in afternoon trade. The index fell 143.18 points at the day's low of 17,337.65 in early trade, its lowest level since 26 October 2011.

The S&P CNX Nifty was down 4.50 points or 0.09% to 5,253.40 as per provisional figures. The Nifty hit a low of 5,204.95 in intraday trade, its lowest level since 26 October 2011. The Nifty hit a high of 5,300.10 in intraday trade.

BSE clocked turnover of Rs 1984 crore, lower than Rs 2238.26 crore on Tuesday, 1 November 2011.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,323 shares rose and 1,495 fell. A total of 117 shares were unchanged.

From the 30-share Sensex pack, 18 fell and the remaining rose.

Index heavyweight Reliance Industries (RIL) rose 1.32% to Rs 871.90 and was the top gainer from the Sensex pack. But, the stock came off the day's high of Rs 880.90. RIL is reportedly 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 today 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 4.84%. Many other Anil Dhirubhai Ambani Group shares rose. Reliance Infrastructure, Reliance Capital, Reliance MediaWorks and Reliance Power gained by between 1.16% to 3.16%.

IT stocks were mixed. India's largest software services exporter TCS fell 0.47%, reversing initial gains.

India's third largest software services exporter Wipro rose 0.33% extending Tuesday's 1.83% rise. 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 0.36%. 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.

India's largest motorcycle maker by sales Hero MotoCorp fell 2.51% 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.

India's largest car maker by sales Maruti Suzuki India fell 0.46%. 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.

India's largest commercial vehicle maker by sales Tata Motors declined 0.83%. 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 rose 0.36% on bargain hunting after Tuesday's 3.38% slide triggered by reports that the finance ministry is exploring plans to raise excise duty on diesel cars and cigarettes to raise revenue. 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.

Bajaj Auto rose 0.08% after company announced during market hours today 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.

Shares of state-run oil marketing companies rose on reports oil companies plan to raise petrol prices by Rs 1.50 per litre to combat the continued rupee depreciation and hardening of crude oil prices. HPCL (up 1.1%), and Indian Oil Corporation (up 0.89%), edged higher. A weak rupee impacts PSU OMCs adversely as the crude oil that that refineries process is either imported or priced on import-parity.

BPCL was flat. The company posted a net loss of Rs 3229.27 crore in Q2 September 2011, compared with a net profit of Rs 2142.22 crore in Q2 September 2010. The company's total income rose 18.66% to Rs 42680.59 crore in Q2 September 2011 over Q2 September 2010. The company announced the results during trading hours on Monday.

A ministerial panel is likely to meet later in November to review diesel and cooking fuel prices, Oil Minister S. Jaipal Reddy said on Wednesday. Mr. Reddy said the meeting will happen before the winter session of parliament. The session is expected to be convened from Nov. 22. The government controls diesel and cooking fuel prices, but the three state-run fuel retailers –HPCL, BPCL and Indian Oil Corp. -- can change petrol prices in line with market rates.

India's largest engineering & construction firm by order book, L&T fell 0.27% in volatile trade. The company announced during trading hours that its construction division has bagged new orders valued over Rs 1620 crore in the buildings and factories segment.

Interest rate sensitive banking stocks were mixed. India's largest private sector bank by net profit ICICI Bank fell 1.2% in volatile trade. 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 rose 0.06%. 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 0.3%. The bank announces Q2 results on 9 November 2011.

Karur Vysya Bank rose 0.49% after net profit rose 10.4% to Rs 113.31 crore on 41.9% growth in total income to Rs 846.76 crore in Q2 September 2011 over Q2 September 2010.

Interest rate sensitive realty stocks fell in volatile trade. DLF, HDIL, and Unitech fell by between 0.21% to 1.18%.

Hyderabad Industries rose 1.08% after net profit rose 26.3% to Rs 7.59 crore on 13.4% growth in net sales to Rs 166.88 crore in Q2 September 2011 over Q2 September 2010.

FDC fell 3.1% after net profit declined 26.86% to Rs 36.82 crore on 3.31% decline in net sales to Rs 197.15 crore in Q2 September 2011 over Q2 September 2010.

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.

Sun TV Network, Ashok Leyland and TVS Motor report Q2 results tomorrow, 3 November 2011. 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 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.

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.

Food inflation has accelerated to a six-month high, propelled by soaring vegetable prices and highlighting limitations of the Reserve Bank of India's monetary intervention after it raised rates for the 13th time in 19 months recently. Data released by the government last week showed food inflation rose to 11.43% year on year for the week to October 15, compared with 10.6% in the preceding week, driven by a 25% jump in vegetable prices even as prices of food articles increased 0.25%.

European stocks reversed initial gains on Wednesday ahead of emergency talks among European Union leaders to discuss Greece's call for a confidence vote and referendum on EU plans to stem the region's debt crisis. The key benchmark indices in Germany and UK fell by between 0.19% to 0.58%. France's CAC 40 rose 0.32%.

Greece's prime minister surprised markets at the start of the week by announcing a confidence vote to be held on Friday, 4 November 2011, as well as a referendum on the latest European proposals to get the country's debt under control. The referendum could be held as soon as January. The proposals acted to stoke fears about the possibility of a Greek debt default, just days after a package of measures was announced in order to curb Europe's debt troubles.

European Union leaders will hold talks in Cannes, France before the start of the Group of 20 summit tomorrow, 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. German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece yesterday and in a joint statement called on Europe to implement the package of measures.

The European Central Bank will take a call on whether to cut rates or not on at a policy meeting on interest rates on Thursday, 3 November 2011.

Most Asian stocks reversed initial losses on Wednesday, 2 November 2011, on speculation that the Federal Reserve might hint at new stimulus measures for the US economy as it concludes its two-day policy meeting. Key benchmark indices in China, Hong Kong, Indonesia and Singapore rose by between 1.38% to 2.12%. Key benchmark indices in Japan South Korea, and Taiwan were down by between 0.31% to 2.21%.

US index futures reversed initial gains. Trading in US index futures indicated that the Dow could fall 20 points at the opening bell on Wednesday, 2 November 2011. The two-day meeting of Federal Open Market Committee on US interest rates ends today, 2 November 2011.

US stocks dropped 2.8% yesterday, extending its two-day retreat as Greece said it will proceed with plans to submit the Greek financing package to a referendum and a report showed US manufacturing grew less than economists' estimates. The US Institute for Supply Management's factory index dropped to 50.8 last month from 51.6 in September, the Tempe, Arizona-based group's data showed yesterday.

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.