BSE Small-Cap, Mid-Cap indices shed over 3% each

Key benchmark indices edged lower to reach their lowest closing level in more than a week as weakness in European stocks triggered profit booking on the domestic bourses after recent strong rally in share prices. The barometer index, BSE Sensex, and the 50-unit S&P CNX Nifty retracted after hitting 30-week highs at the onset of the trading session. The Sensex lost 283.36 points or 1.54%, off close to 380 points from the day's high and up about 50 points from the day's low. The market breadth was weak. Except BSE IT index, all the other 12 sectoral indices on BSE were in the red. BSE Small-Cap and Mid-Cap indices slumped more than 3% each.

Index heavyweight Reliance Industries (RIL) declined more than 1%. State Bank of India (SBI) tumbled nearly 8% on reports that the bank has committed around Rs 1200 crore to beleaguered Kingfisher Airlines. Shares of many other state-run banks slumped. Metal and realty stocks dropped.



The Sensex has jumped 951.70 points or 5.53% in February 2012 so far. The barometer index has surged 2,690.33 points or 17.4% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3009.39 points or 19.88%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 1,665.89 points or 8.4%.

Coming back to today's trade, the market pared gains after hitting 30-week high at the onset of the trading session. The market reversed direction and slipped into the red to hit fresh intraday low in morning trade. The market trimmed losses after sliding to hit fresh intraday low in mid-morning trade. The market moved in a narrow range in the negative terrain in early afternoon trade. Key benchmark indices pared losses in afternoon trade. A bout of volatility was witnessed as key benchmark indices slumped to hit fresh intraday lows after moving into positive zone for a brief period in mid-afternoon trade. The market extended losses to hit fresh intraday low in late trade.

The market may remain volatile tomorrow, 23 February 2012, as traders roll over positions in futures & options (F&O) segment from the near-month February 2012 series to March 2012 series. The near-month February 2012 F&O contracts expire tomorrow, 23 February 2012.

The BSE Sensex lost 283.36 points or 1.54% to settle at 18,145.25, its lowest closing level since 14 February 2012. The index jumped 95.17 points at the day's high of 18,523.78 in early trade, its highest level since 27 July 2011. The index fell 332.80 points at the day's low of 18,095.81 in late trade.

The S&P CNX Nifty lost 101.80 points or 1.82% to settle at 5,505.35, its lowest closing level since 14 February 2012. Nifty hit a high of 5,629.95 in intraday trade, its highest level since 26 July 2011. The index hit a low of 5,491.35 in intraday trade.

The BSE Mid-Cap index tumbled 3.46% and the BSE Small-Cap index shed 3.24%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 3839 crore, higher than Rs 3537.89 crore on Tuesday, 21 February 2012.

The market breadth, indicating the overall health of the market, was weak. On BSE, 2,208 shares fell and 769 shares rose. A total of 106 shares were unchanged. The market breadth was positive earlier in the day.

Among the 30-share Sensex pack, 24 fell while rest of them gained.

Index heavyweight Reliance Industries (RIL) fell 1.02% to Rs 833.20, off the day's high of Rs 855.70. The company said after market hours on Tuesday, 21 February 2012, that it has agreed to form a joint venture with Russian petrochemical company SIBUR to make 100,000 metric tonnes of butyl rubber a year in Jamnagar in Gujarat. The stock had surged nearly 3% ahead of the announcement on Tuesday, 21 February 2012. RIL will own a 74.9% stake in the joint venture, which will be named Reliance Sibur Elastomers. SIBUR will hold the remaining 25.1% stake. The joint venture will invest $450 million to build the facility, which is expected to be commissioned by the middle of 2014.

The JV will cater to the demand for synthetic rubber from the Indian automotive industry of over 75,000 tonnes per year, which is currently satisfied by imports. Investment in the JV is in line with RIL's vision of emerging as a significant player in the global synthetic rubber market, RIL said in a statement.

ONGC rose 0.19%, with the stock extending Tuesday's 3.7% jump. Last week, a ministerial panel approved auctioning a 5% stake in the state-run explorer.

PSU OMCs gained on recent reports the prices of auto and cooking fuels are likely to shoot up steeply in the first week of March 2012 once the assembly elections are over. BPCL, HPCL and Indian Oil Corporation rose by between 0.51% to 1.94%. The hike could be Rs 4 per litre for petrol, Rs 3 for diesel and Rs 50 per cylinder for cooking gas.

Oil marketing companies -- Indian Oil, Bharat Petroleum and Hindustan Petroleum -- are currently losing Rs 4 a litre on petrol, Rs 14 on diesel and Rs 390 on every cylinder of liquefied petroleum gas (LPG), report said. Oil marketing companies (PSU OMCs) incur under-recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

NTPC fell 1.91%. NTPC is set to place orders for 11 supercritical boilers and an equal number of turbines of 660 MW each with the Supreme Court ruling that Ansaldo Caldaie Boilers India, a unit of Italian boiler maker Ansaldo Caldaie SpA, had failed to technically qualify for the bidding process. The bidding process for the supercritical boilers was delayed by more than a year after Ansaldo Caldaie moved the Delhi High Court following its disqualification on technical grounds. The high court had upheld Ansaldo's plea that it was wrongly disqualified, against which NTPC moved the Supreme Court.

NTPC had floated tender in October 2009 for the supply of 11 supercritical boilers -- nine for its own projects and two for Damodar Valley Corporation (DVC). These projects are envisaged for implementation under the 12th Five-year capacity addition programme. Besides Ansaldo, three bidders -- Bharat Heavy Electricals (Bhel), a consortium of Larsen & Toubro Power and Mitsubishi Heavy Industries and a JV between BGR Energy and Hitachi Power Europe GmbH -- had qualified in the first phase of bidding. NTPC will now invite price bids for supercritical boilers from these three bidders.

Shares of power equipment maker fell on profit taking after recent strong gains. India's largest power equipment maker by sales Bhel slumped 3.57%. Among other capital goods stocks, Suzlon Energy, Praj Industries and Punj Lloyd dropped by between 7.19% to 8.45%.

India's biggest engineering & construction firm by order book, Larsen & Toubro, fell 1.5%. L&T said during trading hours on Tuesday, 21 February 2012, that its Metering & Protection Systems business has agreed to form a strategic partnership with UK-based Cyan Holdings to collaborate in the development, supply and delivery of advanced metering solutions comprising L&T electricity meters integrated with Cyan's wireless communication modules for AMI, Smart Metering and Smart Grid Pilot projects.

Shares of power equipment makers had surged recently as a favourable court ruling has paved the way for state-run power generation major NTPC to place bulk orders for boilers based on supercritical technology.

FMCG stocks dropped. United Spirits, Hindustan Unilever, Dabur India and Nestle India shed by between 0.25% to 14.26%. Cigarette maker ITC rose 0.6%.

Bank stocks edged lower on profit taking after recent strong gains. India's largest private sector bank by branch network ICICI Bank declined 3.42%.

State Bank of India (SBI) fell 7.91% on reports that the bank has committed around Rs 1200 crore to beleaguered Kingfisher Airlines, including working capital of Rs 400 crore, bank guarantee of Rs 500 crore and loan repayment extension worth Rs 250-300 crore.

Bank of India dropped 7.72%. The bank said that its board of directors has approved the raising of capital by issue of up to 7 crore fresh equity shares to Government of India (Promoters) and Life Insurance Corporation of India or to any other investors, as permitted on preferential basis, subject to the approval of the shareholders and regulatory authorities.

Shares of many other state-run banks fell. Oriental Bank of Commerce, United Bank of India, Syndicate Bank, Vijaya Bank, Allahabad Bank, Dena Bank, Union Bank of India, Canara Bank, Bank of Baroda, and Punjab National Bank lost 4.62% to 8.53%

India's second largest bank by net profit HDFC Bank rose 0.12% to Rs 531.75. The stock hit a record high of Rs 538.85 in intraday trade today, 22 February 2012.

The BSE Bankex rose 7.11% in the preceding six sessions to 12,838.84 on 21 February 2012, from a recent low of 11,986.92 on 10 February 2012. The BSE Bankex had outperformed the market over the past one month until 21 February 2012, gaining 17.66% compared with the Sensex's 10.09% rise. The index had also outperformed the market in past one quarter, rising 30.58% as against 15.57% rise in the Sensex.

Infrastructure Development Finance Company fell 4.41%. The lender to the infrastrcuture sector said it has filed the Offering Circular with Singapore Exchange Securities Trading for listing of notes to be issued pursuant to the company's $1.5 billion (or its equivalent in other currencies) Medium Term Notes (MTN) programme.

Airline stocks tumbled as oil rose to a nine-month high on Tuesday on Greece's bailout. Jet Airways, Kingfisher Airlines and SpiceJet shed by between 6.53% to 9.05%. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.

Metal stocks reversed initial gains. Jindal Steel & Power, JSW Steel, Sail, Hindustan Zinc, Tata Steel, and Hindalco Industries fell by between 2.53% to 4.82%.

Sterlite Industries (India) slumped 6.62% and Sesa Goa fell 4.18% on media reports that the Vedanta Resources group may merge iron ore firm Sesa Goa with copper and aluminium maker Sterlite Industries to simplify and consolidate its corporate structure.

Bhushan Steel fell 1.6%. The company said its board approved a rights issue of 1.41 crore equity shares in the ratio of 1:15 (one equity share for every 15 equity shares held) at Rs 335 each. The announcement was made during trading hours today, 22 February 2012.

Realty stocks reversed initial gains on profit taking. DLF, HDIL and Unitech dropped by between 7.69% to 8.31%. From a recent low of 1370.23 on 2 January 2012, the BSE Realty index jumped 58.36% to 2169.96 on 21 February 2012.

IT stocks were mixed. India's second largest software services exporter by revenue Infosys rose 0.53%. India's third largest software services exporter by revenues Wipro shed 0.32%.

India's largest software services exporter by revenue, TCS rose 1.46% to Rs 1251.90. The stock scaled a record high of Rs 1,266 in intraday trade today, 22 February 2012. The company's chief executive N. Chandrasekaran said in a recent media interview that the company expects business momentum to strengthen next fiscal year as clients have started loosening their purse strings despite economic uncertainties.

Sun Pharmaceutical Industries rose 1.24% after the US drug regulator reached a limited, temporary arrangement to import Lipodox from the company and its distribution subsidiary, Caraco Pharmaceutical Laboratories. Lipodox is a generic of Johnson & Johnson's cancer drug Doxil. According to reports, Doxil has been in short supply since about mid-2011. Caraco, a generic-drug maker based in Detroit, will temporarily import the drug Lipodox from its India-based parent, Sun Pharmaceutical Industries, the FDA said.

Auto stocks fell across the board on profit taking. India's largest car maker by sales Maruti Suzuki India declined 0.23%. Commercial vehicles maker Ashok Leyland shed 4.29%.

India's largest motorcycle maker by sales Hero MotoCorp declined 0.14%.

India's second largest motorcycle maker by sales Bajaj Auto declined 0.55% to Rs 1800.85. The stock hit a record high of Rs 1,838.90 in intraday trade today, 22 February 2012.

India's largest truck maker by sales Tata Motors shed 1.27%, with the stock reversing initial gains. The company's chief financial officer said the company plans to double investments in its Jaguar Land Rover brands to 1.5 billion pounds a year to help launch new products and variants.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) shed 2.39%. M&M's consolidated net profit, adjusted for extra-ordinary items, rose 13.2% to Rs 831.80 crore on 27.6% growth in gross revenue and other income to Rs 16488.40 crore in Q3 December 2011 over Q3 December 2010. Mahindra Satyam, Mahindra Finance and Mahindra Forgings led the improved performance of the Mahindra Group in Q3 December 2011. M&M announced the consolidated results during trading hours on Tuesday, 21 February 2012.

Lanco Infratech clocked highest volume of 2.32 crore shares on BSE. Cals Refineries (2.26 crore shares), Suzlon Energy (1.21 crore shares), Surya Chakra Power Corporation (1.17 crore shares) and Unitech (1.11 crore shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 286.64 crore on BSE. United Spirits (Rs 105.85 crore), HDIL (Rs 76.29 crore), L&T (Rs 76.20 crore) and Reliance Capital (Rs 75.89 crore) were the other turnover toppers in that order.

The government is working with state governments for early implementation of a goods and services tax (GST), Finance Minister Pranab Mukherjee said on Wednesday, 22 February 2012.

India's economy is expected to grow an annual 7.1% in the current financial year that ends in March, and 7.5 to 8% in the next financial year, C. Rangarajan, chairman of Prime Minister Manmohan Singh's economic advisory council said. The economy has lost momentum as euro zone debt woes coupled with high interest rates and policy paralysis at home have hit capital investment. Rangarajan released the document 'Review of the Economy 2011-12' at a Press Conference in New Delhi today. He said a likely overshoot in fiscal deficit over the budgeted 4.6% of gross domestic product is a matter of concern and the government must lay out a roadmap for fiscal consolidation.

Meanwhile, the Multi Commodity Exchange (MCX) on Tuesday, 21 February 2012, raised Rs 95.62 crore from 12 anchor investors. MCX's initial public offer (IPO) opened for bidding today and will close on Friday, 24 February 2012.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1400.17 crore on Tuesday, 21 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 13549.43 crore in this month so far (21 February 2012), as per provisional data from the stock exchanges. The inflow this month comes on the top of heavy purchases last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).

The government said on Tuesday that inflation based on the consumer price index (CPI) rose 7.65% in January 2012. The annual CPI data released for the first time on Tuesday measures retail prices in major food groups, fuel, clothing, housing and education across rural and urban India. The new CPI price series is gradually expected to displace wholesale price data as the primary indicator of inflationary trends.

Finance Minister Pranab Mukherjee will present the annual budget for 2012/13 on 16 March 2012, while the railways budget will be presented on 14 March 2012. The budget session of parliament will start on 12 March 2012. The government will present on March 15 the Economic Survey for 2011/12, a document on the state of economy prepared by the economic division in the ministry of finance. The annual budget is usually presented on the last working day of February. However, the budget has been delayed this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.

Reports indicate that the finance ministry is considering a proposal to increase excise duty from 10% to 12%, although still lower than the level before the 2008 financial crisis. The move is aimed at helping the government improve its fiscal situation but it is expected to push up the cost of almost all manufactured goods from food products to consumer durables and automobiles.

European stock markets drifted lower on Wednesday on weak economic data. Key benchmark indices in France, UK and Germany shed by between 0.35% to 0.85%.

Private-sector activity across the 17-nation euro zone contracted unexpectedly in February, according to the preliminary Markit purchasing managers index for the region released Wednesday. The index declined to 49.7 from 50.4 in January. A reading of less than 50 indicates a contraction in activity.

Asian markets were mixed on Wednesday amid concerns over Europe's Greek aid deal and higher oil prices. Key benchmark indices in Hong Kong, China, South Korea, Japan and Taiwan rose by between 0.22% to 1.01%. Key benchmark indices in Indonesia, and Singapore were down by between 0.2% to 0.97%.

China's manufacturing sector contracted in February for the fourth straight month as new export orders dropped sharply in the face of the euro-area debt crisis, the HSBC flash purchasing managers index showed on Wednesday. The PMI, the earliest indicator of China's industrial activity, rose to a four-month-high at 49.7 in February from 48.8 in January. The PMI has been below 50, which demarcates expansion from contraction, for most of the last eight months.

Trading in US index futures indicated a flat opening of US stocks on Wednesday, 22 February 2012. US stocks finished mostly higher on Tuesday after European officials agreed to another round of aid for Greece, pushing the Dow Jones Industrial Average briefly above 13,000 for the first time since 2008.