Sensex off 1.82% in two days as Greece debt stirs new fears

Key benchmark indices dropped for the second consecutive session as softer-than-expected Chinese manufacturing data and fresh worries about the euro-zone debt crisis caused global risk aversion. The BSE Sensex fell 224.18 points or 1.27%, off 181 points from the day's high and up 58 points from the day's low. All the 13 sectoral indices on BSE were in the red. The market breadth was negative.

The Sensex has lost 323.97 points or 1.82% in the past two trading sessions from 17,804.80 on 28 October 2011. 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 Indias indication of a pause in interest rate hikes. The Sensex has slumped 3,028.26 points or 14.76% in calendar 2011. From a 52-week high of 21,108.64 on 5 November 2010, the Sensex has lost 3,627.81 points or 17.18%. From a 52-week low of 15,745.43 on 4 October 2011, the Sensex has risen 1,735.40 points or 11.02%.



Coming back to today's trade, index heavyweight Reliance Industries fell after the company refuted speculation that it is considering acquiring Valero Energy, Inc. Two other index heavyweights ICICI Bank and L&T fell. Car maker Maruti Suzuki reversed intraday losses on bargain hunting. FMCG giant Hindustan Unilever hit a fresh record high, with the stock extending Monday's 7.38% rally triggered by strong Q2 results. Shares of steel makers were hit after credit-rating firm Standard & Poor's downgraded Korean steel giant Posco to A- from A with a negative outlook.

The market recovered soon after a weak start triggered by mostly lower Asian shares. The market weakened again in morning trade. Weakness continued in mid-morning trade. The market extended intraday losses in early afternoon trade. A bout of volatility was witnessed in afternoon trade as key benchmark indices extended losses in afternoon trade. The market extended losses in mid-afternoon trade. The market came off lows in late trade.

The BSE Sensex fell 224.18 points or 1.27% to settle at 17,480.83, its lowest closing level since 26 October 2011. The index fell 282.54 points at the day's low of 17,422.47 in late trade. The index fell 43.23 points at the day's high of 17,661.78 in morning trade.

The S&P CNX Nifty shed 68.65 points or 1.29% to 5,257.95, its lowest closing level since 26 October 2011. The Nifty hit a low of 5,238.30 in intraday trade. The Nifty high of 5,310.85 in intraday trade.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,609 shares fell and 1,177 rose. A total of 129 shares were unchanged.

BSE clocked a turnover of Rs 2231 crore, higher than Rs 2190.68 crore on Monday, 31 October 2011.

From the 30 share Sensex pack, 23 fell and the remaining shares rose.

India's largest private sector bank by net profit ICICI Bank fell 3.8% to Rs 895.15. 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.

Among other banking shares, IndusInd Bank, IDBI Bank, Yes Bank, Axis Bank, Union Bank of India, HDFC Bank, Kotak Mahindra Bank and State Bank of India fell by 0.24% to 3.24%.

Bank of Baroda jumped 3.52%, extending Monday's 4.41% rally triggered by strong Q2 results. Net profit rose 14.40% to Rs 1166.08 crore on 36.74% increase in total income to Rs 7985.78 crore in Q2 September 2011 over Q2 September 2010. The result was announced during trading hours on Monday, 31 October 2011.

Punjab National Bank (PNB) rose 3.78% after net profit rose 12.14% to Rs 1205.03 crore on 37.18% increase in total income to Rs 9840.87 crore in Q2 September 2011 over Q2 September 2010. The result was announced today, 1 November 2011.

Punjab & Sind Bank rose 1.99% after net profit rose 35.47% to Rs 147.76 crore on 30.2% rise in operating income to Rs 1711.27 crore in Q2 September 2011 over Q2 September 2010. The result was announced on Monday, 31 October 2011.

Metal shares declined as LMEX, a gauge of six metals traded on the London Metal Exchange, fell 1.57% to $3,526.10 on Monday, 31 October 2011. Hindustan Zinc, Nalco and Hindalco Industries were down by 0.37% to 4.06%.

India's largest copper maker by sales Sterlite Industries (India) lost 3.22% to Rs 123.35. During market hours today, 1 November 2011, the company clarified on a media report regarding increase in its stake in associate company, Vedanta Aluminium (VAL) that the report contains several misleading statements. The company would like to clarify that it does not expect any change in its shareholding in VAL, which currently stands at 29.5%. As and when the capital structure of VAL is finalized, part of the loans/quasi-equity from Sterlite Industries would get converted to equity of VAL in order to achieve the target debt-equity ratio of VAL and maintain Sterlite's 29.5% shareholding in VAL. This situation remains unchanged, the company added.

Steel makers were hit after credit-rating firm Standard & Poor's downgraded Korean steel giant Posco to A- from A with a negative outlook. "Posco's results in the third quarter of 2011 were below our expectations, and we forecast a further deterioration over the next 12 months, based on signs of slowing demand for steel and a rise in competitive pressures," S&P said. Bhushan Steel (down 2.66%), JSW Steel (down 2.49%), Tata Steel (down 2.34%), Sail (down 1.34%) and Jindal Steel & Power (down 1.10%), declined.

India's largest cigarette maker by sales ITC fell 2.35% on reports the finance ministry is exploring plans to raise excise duty on cigarettes and diesel cars to raise revenue. ITC's net profit rose 21.46% to Rs 1514.31 crore on 18.22% rise in total income to Rs 6266.02 crore in Q2 September 2011 over Q2 September 2010. The company announced the results on 24 October 2011.

Tractor and SUVs maker Mahindra & Mahindra fell 3.38% to Rs 834.05. 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.

India's largest car maker by sales Maruti Suzuki India rose 0.44% to Rs 1130.60, up from the day's low of Rs 1112.20. 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.

India's largest truck maker by sales Tata Motors fell 2.49%, reversing early gains. Commercial vehicles maker Ashok Leyland fell 3.49%. TVS Motor Company (down 4.07%), Bajaj Auto (down 1.05%) and Hero MotoCorp (down 1.13%), edged lower.

India's largest engineering & construction firm by order book, L&T fell 1.63% to Rs 1390.20. The company cut its order growth guidance for the current fiscal year to 5%, from 15% earlier at the time of announcing second quarter results on 21 October 2011. Order flow is being hampered by investment slowdown, project deferrals and higher competition, Chief Financial Officer R Shankar Raman said at the time of announcing the second quarter results.

India's second largest software services exporter Infosys fell 1.32%. 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 third largest software services exporter Wipro rose 1.83%. 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 largest FMCG firm by sales Hindustan Unilever (HUL) gained 3.52% to Rs 388.45 after striking a record high of Rs 393.20 in intraday trade today and was the top gainer from the Sensex pack. The stock extended Monday's 7.38% rally triggered by strong Q2 results. Net profit rose 21.69% to Rs 688.92 crore on 17.75% rise in total income to Rs 5610.48 crore in Q2 September 2011 over Q2 September 2010. The results was announced during trading hours on Monday.

Drug maker Sun Pharmaceutical Industries rose 0.15% to Rs 504.05. The company has received approval from the US health regulator to market generic Diltiazem HCl extended-release capsules used for treating hypertension and angina in the American market.

The company's subsidiary has been granted approval by the United States Food and Drug Administration (USFDA) for the abbreviated new drug application (ANDA) to market generic Diltiazem HCl extended-release capsules, Sun Pharma said in a statement after market hours on Monday, 31 October 2011. These Diltiazem HCl extended release capsules are generic equivalent to Valeant International's Cardizem CD capsules in the strengths of 20 milligram (mg), 180 mg, 240 mg, 300 mg and 360 mg, it added. The company said that annual sale in the US for these strengths is approximately $300 million.

Cement major ACC fell 0.95% after the company said that the supply of domestic coal has been grim, affecting cement as well as the power production. During market hours today, 1 November 2011, the company reported 84.57% rise in consolidated net profit to Rs 159.31 crore on 29.8% growth in sales turnover to Rs 2283.42 crore in Q3 September 2011 over Q3 September 2010. The overall outlook for coal in terms of both availability and pricing is not favorable, ACC said in a statement. Coal is a key raw material.

ACC said a pick-up in demand for cement is likely post monsoon. However, the company does not expect the demand pick-up to be very robust in view of concerns about a slowdown in economic growth. ACC expects long term positive outlook for cement demand.

EIH, owner of the Oberoi chain of hotels, rose 1.54%. The company after market hours on Monday, 31 October 2011 reported net profit of Rs 16.59 crore for the quarter ended September 2011 as against net loss of Rs 14.97 crore for the quarter ended September 2010. Net sales rose 8.79% to Rs 216.99 crore in the quarter ended September 2011 over the quarter ended September 2010.

EIH cut its debt, resulting in a lowering of the interest charges to Rs 11.88 crore in Q2 September 2010 from Rs 40.20 crore in Q2 September 2010. In March 2011, EIH had raised Rs 1178 crore through rights issue of shares, and used Rs 896 crore (upto 30 September 2011) to cut its debt.

Meanwhile, the company said it inducted Nita Ambani, Manoj Harjivandas Modi, Renu Sud Karmad and Robert Henry Burns as additional directors of the company. Nita Ambani is wife of Mukesh Ambani, whose Reliance Industries holds 14.8% in the company.

United Breweries fell 3.23% after net profit declined 10.91% to Rs 19.52 crore on 30.37% rise in net sales to Rs 733.19 crore in Q2 September 2011 over Q2 September 2010. The result was announced on Monday, 31 October 2011.

Havells India jumped 6.88% after net profit rose 19.9% to Rs 70.24 crore on 28.6% growth in net sales to Rs 850.39 crore in Q2 September 2011 over Q2 September 2010. The company announced the results after market hours on Monday, 31 October 2011.

Balaji Amines rose 5.25%. Net profit of Balaji Amines rose 6.41% to Rs 10.63 crore on 14.18% rise in net sales to Rs 104.17 crore in Q2 September 2011 over Q2 September 2010. The company announced the results after market hours on Monday, 31 October 2011.

Gulf Oil Corporation rose 3.23%. Net profit of Gulf Oil Corporation rose 5.76% to Rs 13.03 crore on 6.94% decline in net sales to Rs 228.03 crore in Q2 September 2011 over Q2 September 2010. The company announced the results after market hours on Monday, 31 October 2011.

Apar Industries tumbled 6.04%. Net profit of Apar Industries declined 85.72% to Rs 4.89 crore on 10.56% rise in net sales to Rs 737.64 crore in Q2 September 2011 over Q2 September 2010. The company announced the results after market hours on Monday, 31 October 2011.

Usha Martin tumbled 3.18% after the company reported net loss of Rs 71.80 crore in Q2 September 2011 as against net profit of Rs 32.50 crore in Q2 September 2010. Net sales rose 7.29% to Rs 686.31 crore in Q2 September 2011 over Q2 September 2010.

Shree Ashtavinayak Cine Vision clocked highest volume of 1.07 crore shares on BSE. Cals Refineries (62.93 lakh shares), Suryachakra Power Corporation (47.21 lakh shares), Unitech (46.63 lakh shares) and Tata Motors (40.57 lakh shares), were the other volume toppers in that order.

State Bank of India clocked highest turnover of Rs 88.70 crore on BSE. Tata Motors (Rs 80.03 crore), Hindustan Unilever (Rs 75 crore), ICICI Bank (Rs 72.18 crore) and Indiabulls Financial Services (Rs 60.22 crore), were the other turnover toppers in that order.

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.

"Tight capacity is evident from a rising backlog of work, lengthening supplier delivery times and reported difficulties filling vacancies," said Leif Eskesen, chief economist for India and Asean at HSBC. "Not surprisingly, input and output prices continued to rise at a rapid pace," he added. HSBC said the pace of growth in new orders in October was the fastest in three months, but still remained below the historic average as export demand was muted.

The recent data show employment in the Indian manufacturing sector fell for the third straight month and demand for higher wages made it difficult to fill vacant positions. But input prices rose substantially in October, suggesting that inflationary pressures remain firmly in place.

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 sank early on Tuesday after Greek prime minister called a referendum on the latest bailout deal, risking a new euro zone crisis, while data showed China's factory activity slowed to a near three-year low. Key benchmark indices in UK, France and Germany were sharply down by 2.55% to 4.33%.

Greek Prime Minister George Papandreou late Monday unexpectedly called for a referendum on the latest bailout plan in the face of growing public anger over further austerity measures and a deepening recession. The move comes after European leaders last week announced a three-pronged plan to cut Greece's debt load by writing down 50% of the value of government bonds held by banks and other private investors, recapitalizing European banks and boosting the firepower of the euro-zone bailout fund.

Italian and Spanish bonds yields surged on Monday as the post-European Union summit enthusiasm in risky assets fizzled out.

The Group of 20 leaders will convene Nov. 3-4 in Cannes, France, a week after euro-area authorities pledged to magnify the capacity of their rescue fund to 1 trillion euros ($1.4 trillion) and look beyond their borders for help in combating the debt turmoil posing the biggest threat to global economic growth. Europe has the capability to overcome its difficulties, Chinese President Hu Jintao said at a briefing yesterday in Vienna.

World stocks surged last month after Europe's agreement on Greece boosted confidence the region's sovereign-debt crisis would be contained, US economic growth accelerated and China hinted at easing monetary policy.

Asian stocks fell on Tuesday as softer-than-expected Chinese manufacturing data and fresh worries about the euro-zone debt crisis dulled the appeal of risk assets. Key benchmark indices in Hong Kong, Indonesia, Japan and Singapore were down by between 1.70% to 2.79%. Key benchmark indices in China, South Korea and Taiwan were up 0.03% and 0.45%.

Two closely watched measures of Chinese manufacturing released Tuesday showed the sector growing in October, albeit at a slow rate. China's official manufacturing Purchasing Managers Index (PMI) fell to 50.4 in October, slowing from the prior month's reading of 51.2, but still above the 50 level that separates expansion from contraction. However, the result was well below market expectations. A privately compiled version of the PMI, published by HSBC, printed at 51, rising from a mildly contractionary 49.9 reading in September. Both PMI surveys showed a drop for input prices, easing concerns about Chinese inflation.

Trading in US index futures indicated that the Dow could fall 150 points at the opening bell on Tuesday, 1 November 2011. Around 105 US companies are set to report earnings this week, including Comcast Corp. on Wednesday, 2 November 2011 and Prudential Financial on Thursday, 3 November 2011.

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. Economic data on Friday, 28 October 2011, showed US consumer sentiment improved in October for the second month in a row as consumers felt more upbeat about the economy's prospects.