Market ekes out small gains

Key benchmark indices eked out small gains as world stocks rose after the Greek government over the weekend approved unpopular austerity measures needed to secure a second bailout. The barometer index, BSE Sensex, rose 24.15 points or 0.14%, off 76.80 points from the day's high and up 106.95 points from the day's low. The market breadth was positive. Nine of 13 sectoral indices on BSE logged gains. Index heavyweight Reliance Industries (RIL) edged higher on reports that the company has signed a pact with France's Dassault Aviation for partnering in the defence and homeland security sector in India.

The Sensex has jumped 579.29 points or 3.36% in February 2012 so far. The barometer index has surged 2317.92 points or 14.99% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,636.98 points or 17.42%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,038.30 points or 10.28%.



Coming back to today's trade, State Bank of India (SBI) dropped in volatile trade as the bank's bad loans rose in Q3 December 2011. Sun Pharmaceutical Industries and Coal India advanced after reporting strong Q3 results. Realty major DLF turned positive, reversing initial slide triggered by poor Q3 results. Most auto stocks gained on fresh buying. IT stocks edged lower. Airline, tyre and fertilizer stocks rose on fresh buying.

The market reversed initial gains triggered by higher Asian shares. A bout of volatility was witnessed as key benchmark indices once again slipped into the red after regaining strength to hit fresh intraday highs in early trade. Intraday volatility continued as key benchmark indices once again slipped into the red after moving into positive zone from negative zone in mid-morning trade. The Sensex hit a fresh intraday low in early afternoon trade. The market pared losses in afternoon trade. The market moved into positive zone in mid-afternoon trade. The market pared gains after hitting fresh intraday high in late trade.

The BSE Sensex advanced 24.15 points or 0.14% to settle at 17,772.84, its highest closing level since 9 February 2012. The index jumped 100.95 points at the day's high of 17,849.64 in late trade. The index fell 82.80 points at the day's low of 17,665.89 in early afternoon trade.

The S&P CNX Nifty advanced 8.60 points or 0.16% to settle at 5,390.20, its highest closing level since 9 February 2012. Nifty hit a high of 5,421.05 and low of 5,351.40 in intraday trade.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,531 shares advanced and 1,412 shares declined. A total of 103 shares were unchanged.

The BSE Mid-Cap index rose 0.46% and the BSE Small-Cap index rose 0.18%. Both these indices outperformed the Sensex.

The total turnover on BSE amounted to Rs 3097 crore, lower than Friday's (10 February 2012) Rs 3632.95 crore.

Among the 30-member Sensex pack, 19 gained while the rest declined.

Index heavyweight Reliance Industries (RIL) rose 0.69% to Rs 848, off day's high of Rs 857.80. The stock rose on reports that the company has signed a pact with France's Dassault Aviation for partnering in the defence and homeland security sector in India. India is the world's largest arms importer with plans to spend $100 billion on weapons over the next decade.

RIL said market hours on Friday, 10 February 2012, that one of the crude trains at Jamnagar complex has been shut down on 10 February 2012 for undertaking planned maintenance and inspection activities. This opportunity is being taken for replacement of catalyst and implementation of productivity improvement measures in some of the secondary processing units. The shutdown is expected to be completed in the first week of March 2012. Rest of the Jamnagar complex continues to operate as normal, RIL said.

India's largest oil exploration firm by market capitalization ONGC fell 0.34%. The government reportedly plans to put its derailed disinvestment drive back on track this week with a likely 5% stake sale in ONGC to raise Rs 12000 crore through an auction on the stock exchanges. An empowered group of ministers (EGoM) is scheduled to meet this week to decide the price band and methodology of ONGC's share sale, reports added.

Oil India declined 0.99%. The company's board recommended a liberal 3:2 bonus at the time of announcing Q3 December 2011 results on Saturday, 11 February 2012. The company's net profit rose 11.7% to Rs 1013.98 crore on 4.51% growth in net sales to Rs 2496.29 crore in Q3 December 2011 over Q3 December 2010.

Bank stocks were mixed. India's largest commercial bank by net profit and branch network State Bank of India (SBI) lost 2.19% to Rs 2,125 in volatile trade after unveiling Q3 results during market hours today, 13 February 2012. The stock hit a high of Rs 2,181 and a low of Rs 2,097. The bank's net profit rose 15.38% to Rs 3263.04 crore on 20.46% growth in total income to Rs 29787.37 crore in Q3 December 2011 over Q3 December 2010. SBI's provisioning for non-performing assets jumped 84.16% to Rs 3006.12 crore in Q3 December 2011 over Q3 December 2010.

The bank's ratio of net non-performing assets rose to 2.22% as on 31 December 2011 from 2.04% as on 30 September 2011 and 1.61% as on 31 December 2010. The ratio of gross non-performing assets rose to 4.61% as on 31 December 2011 from 4.19% as on 30 September 2011 and 3.17% as on 31 December 2010.

On a consolidated basis, SBI posted 16.37% growth in net profit to Rs 4318.08 crore on 16.74% rise in total income to Rs 43155.95 crore in Q3 December 2011 over Q3 December 2010.

India's largest private sector bank by branch network ICICI Bank rose 0.40%.

India's second largest bank by net profit HDFC Bank gained 0.83% to Rs 520.50. The stock had hit a record high of Rs 525.70 on Friday, 10 February 2012.

Rising bad loans of Indian banks don't raise any immediate concerns, but the central bank will still meet the representatives of the lenders to discuss the issue, a deputy governor of the Reserve Bank of India said on Monday, 13 February 2012. The sectors that are putting stress on banks and the issues are well known, K.C. Chakrabarty told reporters on the sidelines of a conference. The central bank will meet bank representatives either later this month of early March, he added.

Aditya Birla Nuvo shed 2.33%. The company reported 8.2% fall in consolidated net profit to Rs 252.39 crore on 25% increase in total income to Rs 5765.46 crore in Q3 December 2011 over Q3 December 2010. The company said the net profit was affected primarily due to higher depreciation and interest costs relating to 3G investments in the telecom business. The result was announced on Saturday, 11 February 2012.

Commenting on the results, Dr. Rakesh Jain, Managing Director, Aditya Birla Nuvo said, "Aditya Birla Nuvo continues to post strong earnings despite the difficult macro-economic environment. While some of the businesses did get affected due to sector specific challenges, other businesses supported the overall earnings growth of the company. This reflects the strength of its conglomerate model."

Mr. Sushil Agarwal, Whole-Time Director and CFO, Aditya Birla Nuvo said, "Amidst challenging market conditions, Aditya Birla Nuvo has strengthened its positioning in the financial services, telecom and fashion and lifestyle businesses."

India's largest pharma company by market capitalization Sun Pharmaceutical Industries advanced 1.79% to Rs 551. During market hours today, the company reported 90.86% growth in consolidated net profit to Rs 668.30 crore on 37% growth in net sales/income from operations to Rs 2145 crore in Q3 December 2011 over Q3 December 2010.

Coal India rose 1.33%. During market hours today, 13 February 2012, the company reported 53.75% growth in net profit to Rs 4037.76 crore on 20.98% growth in net sales to Rs 15349.28 crore in Q3 December 2011 over Q3 December 2010.

India's largest private sector aluminium maker by sales Hindalco Industries rose 1.99%, halting two-day 4.88% slide triggered by weak Q3 results. The company announced during market hours on Thursday that net profit fell 1.95% to Rs 451 crore on 11% growth in net sales and operating revenue to Rs 6647 crore in Q3 December 2011 over Q3 December 2010. Hindalco said that volatile LME prices and foreign exchange fluctuations along with spiraling energy cost are posting a major challenge for the company in the short term context. Hindalco said its portfolio of LME neutral copper smelting operation and its integrated aluminium operation is providing the strategic balance in the volatile commodity cycle.

Hindalco said capacity expansions under implementation will enable the company to grow at a rapid pace and consolidate its leadership even further. The company said its focus continues to be on timely completion of the projects and successful ramp-up of production.

Hindalco Industries also said that the board of directors of the company has approved the issuance of up to 15 crore warrants to promoters/promoter group companies on preferential allotment basis, entitling the holder(s) of each warrant to apply for and obtain allotment of one equity share against such warrant.

Sail lost 3.27%. During market hours today, 13 February 2012, the company reported 42.92% slide in net profit to Rs 632.12 crore on 4.93% fall in net sales to Rs 10593.84 crore in Q3 December 2011 over Q3 December 2010.

IT stocks edged lower. India's third largest software services exporter by revenues Wipro fell 2.66% to Rs 436.20 and was the top loser from the Sensex pack. India's second largest software services exporter by revenue Infosys declined 0.10%.

India's largest software services exporter by revenue TCS shed 0.37%. TCS said on Wednesday, 8 February 2012, that it has formed a new joint venture (JV) with Mitsubishi Corporation for the Japanese market. Nippon TCS Solution Center will offer a full service suite of IT, BPO and infrastructure services to Japanese corporations. TCS Japan will have 60% stake with Mitsubishi Corporation holding 40% stake in JV. The new joint venture will also establish a near-shore delivery center in Japan.

The main industry body -- the National Association of Software and Services Companies (Nasscom) last week said that the pace of revenue growth of the sector will likely moderate next fiscal year amid continued global economic uncertainty. Exports from the IT sector may grow 11%-14% in the year that starts on 1 April 2012 to $76 billion-$78 billion, compared with an estimated $68.7 billion this fiscal year, an increase of about 16%, Nasscom said. The body said it will review its export forecasts in October 2012.

With its large English-speaking and relatively cheap workforce, India remains a preferred outsourcing destination for companies in developed markets. India's share in global outsourcing was 58% in 2011, up from 55% in 2010, Nasscom said.

HCL Technologies fell 0.39%. The company during trading hours today, 13 February 2012 said Statoil has selected the company for providing strategic infrastructure management services. The company will also open a delivery centre in Stavanger, Norway to service Statoil, in line with its model of Glocal Centers of Excellence. HCL will deliver services across 36 countries handling the end to end monitoring and management of Statoil.s entire IT infrastructure across all global locations including offshore production sites. The engagement includes managing Compute, Storage, Database and Telecom (network & security) environments along with desktop support, the company said.

Most auto stocks gained on fresh buying. India's largest commercial vehicle maker by sales Tata Motors rose 0.74% to Rs 259. The stock had hit a 52-week high of Rs 261.80 in intraday trade on Friday, 10 February 2012. The company has reportedly raised prices of most of its passenger vehicle models to offset higher input costs. The company has raised prices of all vehicle models except for the Nano small car and the Aria multipurpose vehicle by between Rs 7,000 and Rs 12,000. Tata Motors makes and sells the Indica hatchback, the Indigo sedan, the Safari sport-utility vehicle and the Sumo utility vehicle.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) rose 1.45%. India's largest car maker by sales Maruti Suzuki India fell 1.66%.

Shares of two-wheeler makers gained on fresh buying. India's largest motorcycle maker by sales Hero MotoCorp advanced 2.45% to Rs 2018 and was the top gainer from the Sensex pack. The company reported 11.5% growth in sales to 5.20 lakh units in January 2012 over January 2011. The company announced the monthly sales data early this month.

Bajaj Auto gained 0.49%. The company early this month said its total vehicle sales rose 8% to 3.37 lakh units in January 2012 over January 2011.

Private sector power generation major Tata Power Company lost 2.57% after the company reported a sharp fall in net profit in Q3 December 2011 after market hours on Friday, 10 February 2012. On a consolidated basis, the company reported 40.6% fall in net profit to Rs 262.67 crore on 50.6% growth in net sales to Rs 6645.87 crore in Q3 December 2011 over Q3 December 2010.

Commenting on the company's performance, Anil Sardana, Managing Director, Tata Power, said: "Our strong financial and operational performance for the quarter is driven by all our business divisions. All Tata Power operations and subsidiaries have done well this quarter as compared to the corresponding period last year. Our key projects under implementation are progressing well. We have successfully synchronized India's first 800 MW sized super critical Unit 1 of our 4,000 MW Mundra Ultra Mega Power (UMPP) Project; commissioned Unit 1 of 1,050 MW Maithon Power Project and also synchronized our 25 MW solar plant at Mithapur, one of the largest in the country. Our growth opportunities continue to be on course. We are also looking forward to a sustainable solution for Mundra UMPP."

India's largest realty firm by land bank DLF rose 0.56% to Rs 232, off sharply from day's low of Rs 218.80. The company reported weak Q3 results after market hours on Friday, 10 February 2012. On a consolidated basis, DLF reported 44.5% fall in net profit to Rs 258.35 crore on 18% fall in net sales to Rs 2034.37 crore in Q3 December 2011 over Q3 December 2010.

DLF said it has progressed well with its non-core divestment program with two major transactions viz. sale of Noida IT park and Pune special economic zone (SEZ) completed during the quarter. However, the company's core operations continued to face some headwinds in Q3 December 2011 due to both domestic and global macro-economic conditions. DLF said that with macro environment continuing to remain unfavorable with high interest rates, commodity and labour cost inflation, the company's strategy shall require patience and caution to execute. Given these uncertainties, the company expects longer than anticipated time for its initiatives to take fruition, DLF said.

DLF said that while the company continues to remain fully committed and focused to its strategy of launching plotted land developments, premium housing, and divestment of non-core assets and reduction of debt, it believes that due to the current macro environment, it may take a few more quarters for the company to regain full momentum.

Airline stocks rose on fresh buying. SpiceJet (up 1.43%), Jet Airways (India) (up 2.38%), and Kingfisher Airlines (up 0.75%), edged higher. A government panel had recently recommended up to 49% foreign direct investment by foreign airlines and direct import of jet fuel by airlines. Currently, India allows up to 49% FDI in domestic airlines through the automatic route while NRIs can invest up to 100%. Foreign airlines are, however, barred from investing in domestic airlines.

Tyre stocks rose across the board as auto companies reported good sales for January 2012. Goodyear India (up 2.05%), JK Tyre & Industries (up 1.14%), Apollo Tyres (up 3.57%), MRF (up 0.69%) and CEAT (up 5.69%), edged higher.

Fertiliser shares gained on reports the Fertiliser Ministry has requested the Petroleum Ministry to allocate 24.2 million standard cubic meter per day of gas from 2015-16 fiscal to facilitate setting up of new plants and capacity expansion. National Fertilizers (up 10%), Rashtriya Chemicals and Fertilizers (up 6.8%), Deepak Fertilisers and Petrochemicals Corporation (up 4.18%), Chambal Fertlisers and Chemicals (up 4.38%), Zuari Industries (up 4.98%), Gujarat State Fertilizers Company (up 2.32%) and Tata Chemicals (up 1.42%), edged higher.

The request made by the Fertiliser Ministry will be taken up by the Empowered Group of Ministers (EGoM) on gas. About 80% of the country's urea production is gas-based. The EGoM was earlier scheduled to meet tomorrow, 14 February 2012 to consider changes in the natural gas allocation policy, but the meeting has been postponed and is likely to take place by the end of this month, reports added.

Gitanjali Gems jumped 5.75%. The board of Gitanjali Gems will meet on Tuesday, 14 February 2012, to consider Q3 December 2011 results.

Reliance Infrastructure rose 5.13%. The board of Reliance Infrastructure will meet on Tuesday, 14 February 2012, to consider Q3 December 2011 results.

Pantaloon Retail (India) lost 6.94% after the company reported consolidated net loss of Rs 7.96 crore in Q2 December 2011, compared with net profit of Rs 12.40 crore in Q2 December 2010. Net sales rose 3.7% to Rs 3174.80 crore in Q2 December 2011 over Q2 December 2010. The company announced the results after trading hours on Friday, 10 February 2012.

Pantaloon Retail (India)'s board of directors, at a meeting held on Friday, 10 February 2012, formed a Review Committee with a mandate to consider various options for realignment and divestments, with specific objective to ensure unlocking of shareholder's value, achieve substantial reduction in debt and create consolidation of value chain in retail business. The Review Committee is required to submit proposals at various stages of execution to the board for speedy consideration and implementation, Pantaloon said in a statement.

Reliance Communications (RCom) lost 0.43% after reporting weak Q3 results after trading hours on Friday, 10 February 2012. Consolidated net profit declined 61.3% to Rs 186 crore on 1.8% fall in net sales to Rs 4737 crore in Q3 December 2011 over Q3 December 2010.

RCom said its Q3 EBITDA (earnings before interest, taxation, depreciation and amortization) margin at 31.9% was amongst the highest in the industry. RCom generated operational cash flow (EBITDA) of Rs 1611 crore in Q3 December 2011. Post payment of 3G auction fees and with peak capex behind, this is the first full year of positive free cash flow (FCF) for the company and this trend will continue in the succeeding year, RCom said.

RCom said it has tied up refinancing for maturity value of its outstanding foreign currency convertible bonds (FCCBs) of $1.182 billion. The refinancing is being funded by ICBC, CDB, and EXIM and other banks. RCom said it will benefit from extended loan maturity of 7 years and attractive interest cost of about 5%. The loan proceeds will be used for refinancing the entire redemption amount of FCCBs which are due for redemption on 1 March 2012, RCom said.

Britannia Industries jumped 4.88% after net profit jumped 44.8% to Rs 54.07 crore on 15.4% growth in net sales to Rs 1247.41 crore in Q3 December 2011 over Q3 December 2010. The company announced the results after market hours on Friday, 10 February 2012.

Commenting on the 3rd quarter results, Ms. Vinita Bali, Managing Director, Britannia Industries said, "This quarter again we have generated profitable growth, driven by a healthy blend of volume, mix, price and operational efficiencies. There is a 130 basis points improvement in profit from operations and our focus continues to be on commercializing consumption opportunities both in the bakery & dairy businesses".

Britannia has launched a range of savory products—NutriChoice Multigrain Thins, NutriChoice Multigrain Roasty and 50-50 Snackuits, which provide healthy snacking options, the company said in a statement.

Panacea Biotec lost 6.23% after the company reported net loss of Rs 71.72 crore for Q3 December 2011, compared with net profit of Rs 42.60 crore in Q3 December 2010. Net turnover fell 46.14% to Rs 153 crore in Q3 December 2011 over Q3 December 2010. The company announced the results after trading hours on Friday, 10 February 2012.

Bharati Shipyard tumbled 7.07% after net profit fell 93% to Rs 1.62 crore on 15.5% decline in net sales to Rs 324.96 crore in Q3 December 2011 over Q3 December 2010. The company announced the results after trading hours on Friday, 10 February 2012.

Suzlon Energy fell 7.32% after the company reported consolidated net loss of Rs 286.46 crore for Q3 December 2011, higher than net loss of Rs 253.57 crore in Q3 December 2010. Net sales rose 12.5% to Rs 4985.79 crore in Q3 December 2011 over Q3 December 2010. The result was announced on Saturday, 11 February 2012.

Reliance Power rose 1.61%. During market hours today, 13 February 2012, the company reported 42% growth in consolidated net profit to Rs 204 crore on 90% surge in total income to Rs 674 crore in Q3 December 2011 over Q3 December 2010. The company said its operating revenue jumped 82% to Rs 457 crore in Q3 December 2011 over Q3 December 2010.

Sun TV Network fell 6.49% after reporting 25.5% fall in net profit to Rs 167.88 crore on 28.9% fall in net sales to Rs 425.11 crore in Q3 December 2011 over Q3 December 2010. The company announced the results after trading hours on Friday, 10 February 2012.

SBI was the top traded counter on the BSE with turnover of Rs 150.41 crore followed by Tata Steel (Rs 86.52 crore), Adani Enterprises (Rs 75.85 crore), Reliance Capital (Rs 69.51 crore), and ICICI Bank (Rs 68.33 crore).

Foreign institutional investors (FIIs) bought shares worth a net Rs 196.12 crore on Friday, 10 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 8088.79 crore in first eight trading sessions this month, as per provisional data from the stock exchanges. The inflow early 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).

Tata Motors, Reliance Infrastructure, Jaiprakash Associates, Videocon Industries, Essar Oil and Shipping Corporation of India unveil Q3 results tomorrow, 14 February 2012. Ranbaxy Laboratories and ABB unveil Q4 December 2011 results on 23 February 2012.

On the macro front, the government unveils monthly inflation data for January 2012 tomorrow, 14 February 2012. Headline inflation is seen falling further in January 2012. Inflation based on the wholesale price index is seen rising 6.7% in January 2012, as per the median estimate of a poll of economists carried out by Capital Market. Inflation based on the wholesale price index cooled off to two-year low of 7.47% in December 2011, from to 9.11% in November 2011. The Reserve Bank of India's mid-quarter review of Monetary Policy 2011-12 is scheduled on 15 March 2012.

Industrial production rose a slower-than-expected 1.8% in December 2011, government data showed on Friday, 10 February 2011. The growth in December 2011 was sharply lower than 5.9% growth in November 2011. Manufacturing output, which constitutes about 76% of industrial production, rose 1.8% from a year earlier, the statistics office said.

India's January exports rose 10.1% to $25.4 billion while imports rose 20.3% to $40.1 billion, leaving a trade deficit of $14.7 billion, Trade Secretary Rahul Khullar said on Thursday, 9 February 2012. India's exports reached $242.8 billion between April and January, Khullar said, citing provisional data.

The Indian economy is estimated to grow 6.9% in the current fiscal year through March 2012 (FY 2012), sharply slower than the 8.4% expansion reported last year, according to a government forecast released on Tuesday, 7 February 2012. The new expectation is due to weaker growth in manufacturing and farm output, data from the ministry of statistics and implementation showed. The government expects manufacturing output to grow 3.9% this fiscal year compared with a 7.6% increase a year earlier. Farm output is expected to rise 2.5%, compared with 7% last year. In December 2011, the government had cut its growth projection for FY 2012 to between 7.25% and 7.75% from an initial forecast of 9%.

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, Pawan Kumar Bansal, minister of parliament affairs, said recently. 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.

European markets rose on Monday, 13 February 2012, as investors got their first chance to react to news that Greece's parliament approved the austerity measures needed for a second European bailout. Key benchmark indices in UK, Germany and France were up by between 0.49% to 0.98%.

Euro-area finance ministers will convene in Brussels on Wednesday, 15 February 2012, in an extraordinary meeting that was set after they declined in a special session on 9 February 2012 to ratify the 130 billion-euro ($172 billion) package for Greece.

Rating agency Standard & Poor's (S&P) downgraded 34 of 37 Italian banks on Friday, 10 February 2012, citing a reduced ability to roll over their wholesale debt and expected weak profitability. The move follows S&P's downgrade of Italy's sovereign rating last month to BBB+, part of a mass downgrade of nine euro zone countries. S&P said weak profitability and increased cost of capital could lead Italian banks to write down a large part of the goodwill they booked during a wave of industry consolidation over the past decade.

Asian markets were trading firm on Monday, 13 February 2012, as the Greek Parliament passed austerity measures required to secure fresh aid funds and avert an impending default. Key benchmark indices in Singapore, Hong Kong, Indonesia, Japan, Taiwan and South Korea were up by between 0.50% to 1.27%. China's Shanghai Composite shed 0.01%.

Japan's economy shrank a bigger-than-expected 0.6% in October-December, hurt by slowing global growth, Thai floods and a strong yen, casting doubt about expectations that growth will resume this quarter as Europe's debt crisis clouds the outlook.

Trading in US index futures indicated that the Dow could gain 72 points at the opening bell on Monday, 13 February 2012. US stocks edged lower on Friday, 10 February 2012, on tumult over the Greek bailout, disappointing readings on the US economy and a downgrade of nearly three dozen Italian banks. The Dow Jones Industrial Average fell 89.23 points, or 0.69%, at 12801.23. The Standard & Poor's 500-stock index lost 9.31 points, or 0.69%, to 1342.64, and the Nasdaq Composite index lost 23.35 points, or 0.8%, to 2903.88.