BSE Mid-Cap, Small-Cap indices advance over 1% each

Key benchmark indices edged higher for the second straight day as data showing resumption of buying by foreign funds on Tuesday, 24 January 2012, boosted investor sentiment. The barometer index, BSE Sensex, settled above the psychological 17,000 level for the first time in more than 10 weeks. The 50-unit S&P CNX reached its highest closing level in more than 10-1/2 weeks. The Sensex advanced 81.41 points or 0.48%, up close to 60 points from the day's low and off about 55 points from the day's high. The market breadth, indicating the overall health of the market, was strong. BSE Mid-Cap and Small-Cap indices rose more than 1% each, outperforming the Sensex.

The Sensex advanced for the fifth day in a row today, 25 January 2012. From a recent low of 16,451.47 on 18 January 2012, the Sensex has jumped 625.71 points or 3.8% in five trading sessions. The Sensex has jumped 1,622.26 points or 10.49% so far in this month. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,733.96 points or 13.8%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,941.32 points or 12.82%.



Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher for the second day in a row. But, another index heavyweight ICICI Bank declined. Most metal stocks rose as global commodity prices rose. IT stocks gained after strong first quarter results by US tech major Apple Inc. FMCG stocks rose after good Q3 results announced by FMCG companies recently. Capital goods stocks declined on profit taking after recent gains. Sugar stocks rallied on firm global sugar prices.

Interest rate sensitive auto stocks gained for the second straight day after RBI on Tuesday said its latest reduction in cash reserve ratio (CRR) requirement for banks can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates. Rural Electrification Corporation surged after good Q3 results.

Key benchmark indices hit their highest level in more than ten weeks at the onset of the trading session. The market regained strength after trimming initial gains to hit fresh intraday low in morning trade. The market strengthened further in mid-morning trade. The market retained positive zone in early afternoon trade. Key benchmark indices hit fresh intraday highs in afternoon trade. A bout of volatility was witnessed as key benchmark indices regained strength after paring gains after hitting fresh intraday high in afternoon trade as European stocks opened firm. The market trimmed gains in choppy late trade as European stocks reversed initial gains.

Data showing resumption of buying by foreign funds underpinned sentiment. Foreign institutional investors (FIIs) bought shares worth Rs 801.29 crore on Tuesday, 24 January 2012, as per provisional data from the stock exchanges. FIIs had sold shares worth Rs 58.80 on Monday, 23 January 2012, after buying shares worth Rs 5261.21 crore in nine trading sessions from 10 to 20 January 2012, as per provisional data from the stock exchanges.

The BSE Sensex advanced 81.41 points or 0.48% to settle at 17,077.18, its highest closing level since 14 November 2011. The index jumped 134.47 points at the day's high of 17,130.24 in mid-afternoon trade. The index rose 20.92 points at the day's low of 17,016.69 in morning trade.

The S&P CNX Nifty advanced 30.95 points or 0.6% to settle at 5,158.30, its highest closing level since 11 November 2011. The index hit a high of 5,174.15 and a low of 5,130.25 in intraday trade.

The BSE Mid-Cap index rose 1.25% and the BSE Small-Cap index gained 1.11%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 2780 crore, lower than Rs 4673.08 crore on Tuesday, 24 January 2012.

The market breadth, indicating the overall health of the market, was strong. On BSE, 1,810 shares advanced and 1,050 shares declined. A total of 120 shares were unchanged.

Among the 30-member Sensex pack, 18 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) rose 0.89% to Rs 790.10. The stock was volatile. The scrip hit a high of Rs 794.80 and a low of Rs 783. The stock extended Tuesday's 1.58% gains triggered by the company announcing share buyback schedule. RIL said its share buyback programme will begin on 1 February 2012 and close on 19 January 2013. Its controlling shareholders, who own 44.7% of the equity, will not participate in the offer. RIL had said last week that it will buyback up to 12 crore shares at a maximum price of Rs 870 and payable in cash upto an aggregate amount not exceeding Rs 10440 crore from the open market through stock exchanges.

RIL's net profit fell 13.6% to Rs 4440 crore on 40.2% growth in turnover to Rs 87480 crore in Q3 December 2011 over Q3 December 2010. RIL announced the results after trading hours on Friday, 20 January 2012.

Cairn India fell 1.69%, reversing initial gains on profit taking. The company announced after market hours on Tuesday, 24 January 2012, that consolidated net profit rose 12.52% to Rs 2261.93 crore on 12.13% growth in total income to Rs 3510.58 crore in Q3 December 2011 over Q3 December 2010.

Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said: "The commencement of production from the Bhagyam field is yet another significant milestone for the Cairn-ONGC Joint Venture in Rajasthan. With the support of the Government of India and the Government of Rajasthan, the Cairn-ONGC Joint Venture is well placed to further develop the hydrocarbon-rich Barmer Basin in Rajasthan, increase of production and create value for our nation. Our successive discoveries in Sri Lanka have established a working hydrocarbon system in the frontier Mannar Basin. This success demonstrates Cairn India's strong skill set, which we will continue to leverage for future opportunities. We have also notified the Sri Lankan Government about our intention to enter the second phase of exploration. With the new board now in place, Cairn India remains well poised for the next phase of growth".

Rural Electrification Corporation surged 4.36% after the company announced during market hours today that net profit rose 15.87% to Rs 769.51 crore on 24.07% increase in total income to Rs 2699.12 crore in Q3 December 2011 over Q3 December 2010.

Sugar stocks rallied on firm global sugar prices. Shree Renuka Sugars, Bajaj Hindusthan and Balrampur Chini Mills surged by between 4.4% to 7.92%.

IT stocks rose after strong first quarter results by US tech major Apple Inc on Tuesday. India's largest software services exporter by revenue TCS rose 0.84%. TCS, last week, reported 21.8% growth consolidated net profit to Rs 2803 crore on 13.5% growth in revenue to Rs 13204 crore in Q3 December 2011 over Q2 September 2011. The company's management at a post-result conference call said that out of a total of 130 discretionary projects that the company is pursuing, 50% are facing delays in decision making even as there are no project cancellations so far. The management also said that out of a total of 120 top clients surveyed, two-thirds have flat or marginally increased budgets and remaining one-thirds has reduced budgets. The company said the pipeline is intact but discretionary spend may lag ramp up in volumes in Q4 March 2012.

India's second largest software services exporter by revenue Infosys gained 1.51%, with the stock gaining for the third straight day. The company has given a muted guidance for Q4 March 2012. The company has projected a marginal 1.25% growth in non-annualised earnings per American Depositary Share at $0.81 in Q4 March 2012 over Q3 December 2011. The company has projected a flat to 0.22% growth in consolidated revenue in dollar terms at $1.806 billion to $1.81 billion in Q4 March 2012 over Q3 December 2011.

India's third largest software services exporter by revenues Wipro was flat. Wipro, last week, reported 12% growth in consolidated net profit to Rs 1456.40 crore on 10% growth in sales to Rs 9997.20 crore in Q3 December 2011 over Q2 September 2011. Wipro expects revenues from IT services business to grow 1% to 3% at $1.52 billion to $1.55 billion in Q4 March 2012 over Q3 December 2011.

iGATE Patni rose 0.88% after consolidated net profit surged 122.02% to Rs 200.42 crore on 12.14% increase in net sales to Rs 997.30 crore in Q4 December 2011 over Q3 September 2011.

Zensar Technologies jumped 16.96% after consolidated net profit rose 30.5% to Rs 52.29 crore on 17.5% growth in net sales to Rs 480.83 crore in Q3 December 2011 over Q2 September 2011. Zensar Technologies' board of directors at a meeting held on Tuesday, 24 January 2012, recommended payment of interim dividend of Rs 3 per equity share of the company for the year ending March 2012. The interim dividend will be paid on or around 15 February 2012, the company said. The company has set 4 February 2012 record date for payment of interim dividend.

Most metal stocks rose as global commodity prices rose. Sail, Tata Steel, Sterlite Industries, JSW Steel, NMDC, Nalco and Bhushan Steel, rose by between 1.91% to 4.29%. Sesa Goa gained 5.65% ahead of its Q3 results today. Hindustan Zinc Hindalco Industries and Jindal Steel & Power fell by between 0.12% to 1.67%.

FMCG stocks rose after good Q3 results announced by FMCG companies recently. Marico, United Spirits, ITC and Godrej Consumer Products gained by between 0.34% to 13.96%. Hindustan Unilever fell 0.27%

India's largest engineering and construction firm by sales, L&T, fell 1.35% on profit taking after recent strong rally triggered by good Q3 results. The company announced during market hours on Monday, 23 January 2012 that recurring profit after tax (PAT) rose 22% to Rs 992 crore on 23% growth in gross revenue to Rs 14155 crore in Q3 December 2011 over Q3 December 2010. The company said that order inflow rose 28% to Rs 17129 crore in Q3 December 2011 over Q3 December 2010. The company's order book stood at Rs 145768 crore as on 31 December 2011.

Among other capital goods stocks, BEML, Siemens, Alstom Projects and Bharat Electronics shed by between 0.67% to 2.64%.

Biocon fell 3.25% after company announced after market hours on Tuesday that consolidated net profit fell 15.79% to Rs 84.85 crore on 2.65% growth in total income to Rs 532.18 crore in Q3 December 2011 over Q3 December 2010.

Grasim fell 0.31% on profit taking. The company's consolidated net profit jumped 33% to Rs 669 crore on 17% growth in revenue to Rs 6364 crore in Q3 December 2011 over Q3 December 2010. The results was announced after trading hours on Tuesday, 24 January 2012.

Interest rate sensitive auto stocks gained for the second straight day after RBI on Tuesday said its latest reduction in cash reserve ratio (CRR) requirement for banks can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.2%. Reports on Tuesday, 17 January 2012, indicated the company will reopen bookings for its latest sport-utility vehicle, XUV500, from 25 January 2012 to meet higher demand. M&M in September introduced the XUV500 and received 8,000 bookings within 10 days, prompting it to stop taking fresh orders as it was working on monthly output of 2,000 units.

India's largest truck maker by sales Tata Motors rose 3.78%. Tata Motors' global sales rose 33% to 99,853 units in December 2011 over December 2010. Its UK-based Jaguar Land Rover unit sold 30,981 vehicles in December, up 45% from a year earlier. Sales of Jaguar sedans grew 9% to 4,726 autos while those of Land Rover sport-utility vehicles surged 54% to 26,255 units. Tata Motors said it sold 48,099 trucks and buses globally in December, up 28% from a year earlier.

India's largest car maker by sales Maruti Suzuki India rose 2.44%. The company's Chairman R.C. Bhargava said recently that the steep fall in the company's Q3 December 2011 earnings represents the bottom of a period of bad news and that the company would fare better in Q4 March 2012. The company announced during market hours on Monday that net profit fell 63.6% to Rs 205.60 crore on 17.4% decline in net sales (net of excise) to Rs 7663.60 crore in Q3 December 2011 over Q3 December 2010.

Maruti Suzuki said its total vehicle sales in the domestic market declined 29.43% to 2.11 lakh units in Q3 December 2011 over Q3 December 2010. Total exports fell 11.02% to 27,725 units. Maruti said vehicle sales during the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates. Additionally, the company lost around 40,000 units in production due to labour unrest at the Manesar plant. The company said depreciation of rupee during the quarter adversely impacted the bottomline through higher cost of imports for the company and its vendors and royalty.

India's second largest bike maker by sales Bajaj Auto gained 0.51%. Profit after tax (PAT) jumped 19% to Rs 795 crore on 21% growth in turnover to Rs 5154 crore in Q3 December 2011 over Q3 December 2010. The company said PAT before exceptional items jumped 25% to Rs 834 crore in Q3 December 2011 over Q3 December 2010. The company announced the results during trading hours on Thursday, 19 January 2012.

Bajaj Auto said in a challenging business environment, the company has improved its operating EBITDA margin from 20.1% in Q2 September 2011 to 21% in Q3 December 2011. The improvement in margin was primarily due to higher realization from exports. The company said its operating EBITDA margin of 21% is the best in the industry.

Bajaj Auto said sales of motorcycles during the festive season were satisfactory. However, towards the end of November 2011, the industry witnessed a slowdown, the company said. The company said the overall demand for commercial vehicles remains strong. Bajaj Auto said exports sales continue to be robust and ahead of the company's plan. Overseas markets now contribute over 35% of Bajaj Auto's vehicle sales. Bajaj Auto said it is on course to exceed its target of 1.5 million of exports for the year ending March 2012 (FY 2012).

India's largest two-wheeler maker by sales Hero MotoCorp fell 1.43%. During market hours on Thursday, 19 January 2012, the company reported 42.89% growth in net profit to Rs 613.03 crore 16.85% growth in turnover to Rs 6031.45 crore in Q3 December 2011 over Q3 December 2010. Hero MotoCorp said it notched up highest ever quarterly turnover (net sales plus other operating income) in Q3 December 2011.

Interest rate sensitive realty stocks gained for the second straight day after RBI on Tuesday said its latest reduction in cash reserve ratio (CRR) requirement for banks can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates. Purchases of both residential and commercial property are largely driven by finance. HDIL, DLF, and Indiabulls Real Estate rose by between 0.16% to 6.81%.

Some construction stocks edged higher. Jaiprakash Associates, Patel Engineering, NCC and Hindustan Construction Company rose by between 0.27% to 5.52%.

Interest rate sensitive banking stocks were mixed after Tuesday's rally triggered by the Reserve Bank of India (RBI) cutting the cash reserve ratio (CRR) for banks by 50 basis points to 5.5% from 6%. The reduction in the CRR would ease tight liquidity in the banking system.

Bank of Baroda fell 1.24% as the ratio of bad loans rose. The state-run bank's ratio of net non-performing assets (NPAs) as on 31 December 2011 was at 0.51%, higher than 0.47% as on 30 September 2011 and 0.36% as on 31 December 2010. The state-run bank announced during market hours today that net profit rose 20.67% to Rs 1289.85 crore on 39.08% increase in total income to Rs 8821.32 crore in Q3 December 2011 over Q3 December 2010. The bank's capital adequacy ratio as on 31 December 2011 was 13.45% as against 12.45% as on 31 December 2010.

Union Bank of India fell 2.87% after bank announced during market hours today that net profit fell 66% to Rs 197 crore on 27.14% increase in total income to Rs 5966.82 crore in Q3 December 2011 over Q3 December 2010.

The state-run bank's board of directors on Tuesday, 24 January 2012, approved issue of up to 1.16 crore equity shares to Government of India (GoI) on preferential basis at the price as may be arrived at in accordance with SEBI (ICDR) Regulations and subject to any directions of GoI and In terms of SEBI guidelines as amended from time to time or otherwise and subject to approval of shareholders in the Extraordinary General Meeting.

Kotak Mahindra Bank fell 0.29%, after jumping 3.72% on Tuesday. Consolidated net profit rose 20.61% to Rs 462.62 crore on 16.88% increase in total income to Rs 3123.30 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Monday.

India's largest private sector bank by branch network ICICI Bank declined 0.85% on profit taking after recent strong gains. The bank unveils Q3 results on 31 January 2012.

Axis Bank rose 2.65%, extending Tuesday's 3.57% rally. Net profit rose 23.66% to Rs 1102.27 crore on 44.54% increase in total income to Rs 7206.77 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Friday, 20 January 2012.

India's second largest bank by net profit HDFC Bank rose 0.33% in volatile trade. During market hours on Thursday, 19 January 2012, the bank reported 31.4% growth in net profit to Rs 1429.70 crore on 35.6% increase in total income to Rs 8622.64 crore in Q3 December 2011 over Q3 December 2010.

HDFC Bank said its core CASA deposit ratio, adjusted for one-off current account balance of about Rs 4000 crore, was at 47.7% of total deposits as on 31 December 2011. The private sector bank said its asset quality remains healthy. The bank's capital adequacy ratio (CAR) remained strong at 16.3% as on 31 December 2011, against the regulatory minimum of 9%. The bank's Tier-I CAR was 11.2% as on 31 December 2011.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) rose 0.75%, extending Wednesday's 5.19% gains. SBI has received Finance Ministry's approval for a capital infusion of Rs 6000 crore to Rs 8000 crore, a television channel reported early last week, citing the bank's chairman. The capital infusion will be made by 31 March 2012, Pratip Chaudhuri was reported as saying.

At its third quarter policy review on Tuesday, 24 January 2012, RBI scaled down non-food bank credit growth projection to 16% for 2011-12 from 18% earlier. RBI said that non-food bank credit growth moderated from 21.3% at end-March 2011 to 15.7% by end-December 2011. Credit deceleration was particularly sharp for public sector banks, with growth moderating from 21% to about 15% during the same period, RBI said.

Idea Cellular rose 0.54%, extending 10.73% rally in the preceding two trading sessions triggered by strong Q3 results. Consolidated net profit jumped 90.03% to Rs 200.98 crore on 8.95% increase in net sales to Rs 5,020.37 crore in Q3 December 2011 over Q2 September 2011. The Q3 result was announced during market hours on Monday, 23 January 2012.

Deepak Fertilisers & Petrochemicals Corporation surged 4.76% as the company's profit after tax rose 23% to Rs 49.65 crore on 60% growth in total revenue to Rs 601.49 crore in Q3 December 2011 over Q3 December 2010.

Prraneta Industries clocked highest volume of 2.79 crore shares on BSE. Cals Refineries (98.28 lakh shares), Resurgence Mines (87.72 lakh shares), Suzlon Energy (62.90 lakh shares) and Indiabulls Real Estate (50.41 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 128.91 crore on BSE. Reliance Infrastructure (Rs 72.40 crore), Tata Motors (Rs 68.03 crore), United Spirits (Rs 66.75 crore) and L&T (Rs 59.80 crore) were the other turnover toppers in that order.

The Reserve Bank of India (RBI) on Tuesday cut the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at Third Quarter Review of Monetary Policy 2011-12. The central bank said that as a result of the reduction in the CRR by 50 basis points, around Rs 32000 crore of primary liquidity will be injected into the banking system. The central bank said the large structural deficit in the system presents a strong case for injecting permanent primary liquidity into the system.

The RBI kept its key lending rate viz. the repo rate unchanged at 8.5%. RBI has cut the baseline projection of GDP growth for 2011-12 to 7% from 7.6%. The growth-inflation balance of the monetary policy stance has now shifted to support growth, while at the same time ensuring that inflationary pressures remain contained, the central bank said.

The reduction in CRR can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates, RBI said. However, the timing and magnitude of future rate actions is contingent on a number of factors, RBI said. In the absence of credible fiscal consolidation, the Reserve Bank of India will be constrained from lowering the policy rate in response to decelerating private consumption and investment spending, it said. The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way, the RBI said.

Investors' focus is currently on Q3 results. Bharat Heavy Electricals (Bhel), NTPC, Bank of India, Pfizer and Canara Bank unveil Q3 results on Friday, 27 January 2012. LIC Housing Finance, and Indian Bank unveil Q3 results on 30 January 2012. ICICI Bank, Punjab National Bank, IDBI Bank, Dabur India, TVS Motor, NMDC and Siemens unveil quarterly results on 31 January 2012.

Mahindra Satyam and RCF unveil Q3 results on 1 February 2012. ONGC, Marico and Corporation Bank announce Q3 results on 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation and HPCL report Q3 results on 3 February 2012. Hindustan Unilever, National Aluminium Company and India Cements announce Q3 results on 6 February 2012.

Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. Hindalco, ACC and Ambuja Cements unveil quarterly results on 9 February 2012. Tata Power, BPCL and Britannia Industries unveil Q3 results on 10 February 2012. Aditya Birla Nuvo and Ashok Leyland announce Q3 results on 11 February 2012. Steel Authority of India (Sail) unveils Q3 results on 13 February 2012. Shipping Corporation of India announces Q3 results on 14 February 2012.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on 2 January 2012. State elections are scheduled between the end of January and early March 2012. The annual budget is usually presented on the last working day of February. The Election Commission on 24 December 2011 announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.

The Euro-zone debt crisis is escalating and dragging down the world economy, the International Monetary Fund (IMF) said on Tuesday, as it sharply cut its outlook for global growth and called for policies to restore confidence. The IMF chopped its 2012 forecast for global growth to 3.3% from 4% just three months ago, saying the outlook had deteriorated in most regions. It projected world growth would strengthen to 3.9% in 2013. The Washington-based lender said economic activity was decelerating but not collapsing. However, it warned that global growth would come in about 2 percentage points below its already soft forecast if European leaders allowed the crisis to fester.

Global foreign direct investment flows jumped by 17% in 2011 despite worldwide economic turmoil and there is reason to be cautiously optimistic of another rise in 2012, a United Nations report said on Tuesday.

European stocks reversed initial gains on Wednesday, 25 January 2012, ahead of the outcome of a two-day meeting of the Federal Reserve later in the global day. Key benchmark indices in France, Germany and UK fell by between 0.39% to 1.01%.

Preliminary data out Tuesday showed that private-sector economic activity in the euro-zone unexpectedly ticked up in January, with the Markit euro-zone composite purchasing managers index rising to 50.4 from 48.3 in December.

Asian shares rose on Wednesday, 25 January 2012, after strong earnings from US technology giant Apple, on stabilising European money markets and on falling euro zone debt yields. Key benchmark indices in Japan, Singapore and South Korea rose by between 0.12% to 1.48%. Indonesia's Jakarta Composite fell 0.78%.

The Chinese markets are closed for the whole of this week, while Hong Kong bourses are shut for three days starting Monday, 23 January 2012, for Lunar New Year holidays. The stock market in Taiwan which has been shut since 19 January 2012 for Lunar New Year holidays remains closed for the whole of this week.

Japan logged its first annual trade deficit in 2011 for over 30 years as the aftermath of the March earthquake raised fuel import costs even as slowing global growth and the yen's strength hit exports, threatening to erode the country's ability to fund its huge public debt with domestic savings. Japan logged a trade deficit of 2.49 trillion yen for 2011, Ministry of Finance data showed on Wednesday, the first annual deficit since 1980. Total exports shrank 2.7% last year while imports surged 12.0% reflecting reduced earnings from goods and services and higher spending on crude and fuel oil.

Trading in US index futures indicated that the Dow could fall 35 points at the opening bell on Wednesday, 25 January 2012. US stocks closed with losses for two of three main indexes on Tuesday, 24 January 2012, as investors mulled a European standoff over Greece's debt and the latest slew of earnings, though the Nasdaq Composite closed higher ahead of a batch of tech results.

A two-day meeting of Federal Open Market Committee (FOMC) on US interest rates began on Tuesday, 24 January 2012. FOMC has held its funds rate target inside a record-low range of 0% to 0.25% since December 2008. The committee at its past four policy meetings indicated it intends to hold the rate stable until at least the middle of 2013. For the first time, the committee is slated to release forecasts made by individual members for the central bank's interest-rate target. The members will also provide views on the likely timing of the first rate hike by the Fed.