Sensex, Nifty near 1-1/2-week closing lows

Key benchmark indices fell for the third straight day to reach their lowest closing level in almost 1-1/2 weeks. The barometer index, BSE Sensex, fell below the psychological 18,000 level as higher oil prices hit sentiment adversely. The Sensex lost 154.93 points or 0.86%, up close to 75 points from the day's low and off about 275 points from the day's high. The market breadth was weak.

India imports about 80% of its total oil consumption and the rise in prices could worsen a widening trade deficit. Oil advanced for the seventh day in a row today, 24 February 2011, the longest winning streak since January 2010, on signs of economic recovery from the US to Germany and concern escalating tension with Iran threatens crude supplies. Nymex crude oil for April delivery was up 35 cents to $108.18 a barrel.



From a 30-week high of 18,428.61 on 21 February 2012, the Sensex has lost 505.04 points or 2.74% in three trading sessions. The Sensex has jumped 730.02 points or 4,24% in February 2012 so far. The barometer index has surged 2,468.65 points or 15.97% in calendar 2012 so far. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2787.71 points or 18.41%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 1,887.57 points or 9.52%.

Coming back to today's trade, index heavyweight Reliance Industries (RIL) declined over 2%. Banking, auto and capital goods stocks edged lower on profit taking after recent strong gains. HDFC fell more than 3% after large block deals were executed in the stock on NSE at the onset of the trading session. ABB tumbled nearly 6% after the company warned of margin pressure at the time of announcement of Q4 December 2011 results on Thursday.

The market trimmed gains after an initial surge. Key benchmark indices slipped into the red to hit their lowest level in nearly 1-1/2 weeks in morning trade. The Sensex fell below the psychological 18,000 level. The market trimmed losses after hitting fresh intraday low in mid-morning trade. Weakness continued in early afternoon trade. Volatility ruled the roost as key benchmark indices slumped to hit their fresh lows in mid-afternoon trade after staging a strong intraday rebound in afternoon trade. The market trimmed losses in late trade.

The BSE Sensex shed 154.93 points or 0.86% to settle at 17,923.57, its lowest closing level since 14 February 2012. The index fell 229.57 points at the day's low of 17,848.93 in mid-afternoon trade. The index rose 119.65 points at the day's high of 18,198.15 in early trade.

The S&P CNX Nifty shed 54 points or 0.98% to settle at 5,429.30, its lowest level since 14 February 2012. Nifty hit a low of 5,405.90 and a high of 5,521.40 in intraday trade.

The BSE Mid-Cap index fell 0.64% and the BSE Small-Cap index declined 0.71%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 2885 crore, lower than Rs 3223.17 crore on Thursday, 23 February 2012.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,820 shares fell and 1,095 shares rose. A total of 123 shares were unchanged. The breadth was positive earlier in the day.

Among the 30-share Sensex pack, 16 declined while rest of them gained.

Index heavyweight Reliance Industries (RIL) fell 2.12%. RIL at the fag end of the trading session today announced that its wholly-owned subsidiary Reliance Holding USA, Inc. priced a $500 million reopening of its existing 5.4% Guaranteed Senior Notes due 2022. The additional notes will be consolidated and form a single series with the $1,000 million 5.4% Guaranteed Senior Notes due 2022 and will be fully and unconditionally guaranteed by RIL.

The transaction was approximately 7.5 times over-subscribed with an order book aggregating $3.73 billion from high quality investor accounts, RIL said in a statement. RIL said the additional notes were priced at 325 basis points over the 10-year US Treasury Note, at a price of 101.018% to yield 5.267%. The additional notes will bear fixed interest of 5.4% per annum, with interest payable semi-annually in arrears. Reliance Holding USA, Inc. will apply the net proceeds to fund its ongoing capital expenditure, to make business investments, to refinance its existing debt and for general corporate purposes.

PSU OMCs reversed initial gains as crude oil prices rose. BPCL HPCL and Indian Oil Corporation fell by between 0.62% to 4.08%. Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

Housing finance major HDFC fell 3.45% to Rs 676.20. The stock saw massive volumes on NSE, with 15.84 crore shares exchanging hands in the counter. Citigroup Inc. has sold 14.53 crore shares, or its entire 9.85% stake in HDFC via block deals executed on NSE at the onset of the trading session today, 24 February 2012. The HDFC sale marks the culmination of Citigroup's seven-year investment in India's largest mortgage lender by assets.

Realty stocks reversed initial gains. DLF, HDIL and Prestige Estates fell by between 1.15% to 4.09%. But, Unitech rose 0.62%, with the stock reversing initial losses.

Most auto stocks fell on profit taking after recent strong gains. India's largest truck maker by sales Tata Motors dropped 1.14%.

India's largest motorcycle maker by sales Hero MotoCorp declined 0.65%. The company said after trading hours on Wednesday, 22 February 2012, that it has entered into a partnership with US-based motorcycle company Erik Buell Racing (EBR). As part of the partnership, Hero MotoCorp will receive support in terms of technology and design to develop future models from EBR -- the East Troy, Wisconsin-based firm, which specializes in designing and manufacturing powerful and high-speed motorcycles. Hero MotoCorp exited a 26-year-long joint venture with Japan's Honda Motor Company in March 2011.

India's second largest motorcycle maker by sales Bajaj Auto fell 0.88% to Rs 1767.25. The stock had hit a record high of Rs 1,838.90 in intraday trade on Wednesday, 22 February 2012.

India's largest car maker by sales Maruti Suzuki India rose 0.41%.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) rose 0.64%. 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.

Capital goods stocks edged lower on profit taking. Bhel, Thermax, Siemens and L&T shed by between 0.47% to 3.6%.

ABB tumbled 5.45% after the company said at the time of announcing Q4 December 2011 results during trading hours on Thursday, 23 February 2012, that rising input costs, tight liquidity situation, forex volatility and low price realization as witnessed in some sectors may continue to put pressure on the margins. ABB said that the company is continuing to take measures such as lowering its cost base and increasing operational performance and productivity to address any market developments and challenges.

ABB's profit after tax surged 842.6% to Rs 64.10 crore on 5.8% growth in revenue to Rs 2169.60 crore in Q4 December 2011 over Q4 December 2010. ABB said that the company is well positioned with a strong order backlog of Rs 9128.80 crore as on 31 December 2011, providing necessary visibility to future revenues.

Bank stocks edged lower on profit taking after recent strong gains. India's largest private sector bank by branch network ICICI Bank fell 1.29%, with the stock falling for the third straight day.

India's second largest bank by net profit HDFC Bank declined 1.84% to Rs 522. The stock had hit a record high of Rs 538.85 in intraday trade on Wednesday, 22 February 2012.

State Bank of India fell 2.41%, with the stock reversing initial gains. The bank said after market hours on Thursday that based on the floor price of Rs 2,191.69 per share determined on the relevant date of 17 February 2012, the Executive Committee of Central Board (ECCB) of the bank at its meeting held on 23 February 2012 has fixed the issue price at Rs 2,191.69 for the preferential allotment of equity shares to Government of India (GoI). It may be recalled that the ECCB of the bank at its meeting held on 31 January 2012, had accorded its approval to increase the issued capital of the bank by way of preferential allotment of equity shares to GoI aggregating to the extent of approximately Rs 7900 crore.

Bank of Baroda fell 1.62%, with the stock reversing initial gains. The bank said after market hours on Thursday, 23 February 2012, that a meeting of the board of directors of the bank will be held on 27 February 2012, to consider proposed preferential issue of equity shares in favour of Life Insurance Corporation of India (LIC)/mutual funds.

IndusInd Bank, Yes Bank and Punjab National Bank shed by between 3.42% to 3.97%.

Metal stocks bucked the weak trend on firm global commodity prices. Tata Steel, Jindal Steel & Power, JSW Steel, Sail, Hindustan Zinc, and Hindalco Industries rose by between 0.53% to 2.27%. Global commodities climbed to at least six-month highs this week after euro-area finance ministers approved 130 billion euros ($173 billion) in aid for Greece to avert an economic collapse. China said on 18 February 2012 that it will cut banks' reserve requirements to boost growth. China is the world's largest consumer of copper and aluminum.

Sterlite Industries (India) rose 3.17% on bargain hunting after recent sharp losses. As per media reports, 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.

FMCG stocks rose on defensive buying. ITC, Dabur India, Marico and Nestle India rose by between 0.22% to 0.75%. Hindustan Unilever fell 0.4%.

IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. India's second largest software services exporter by revenue Infosys rose 0.42%.

India's largest software services exporter by revenue, TCS rose 0.79% to Rs 1269.15. The stock hit a record high of Rs 1,279.20 in intraday trade today, 24 February 2012. The Ministry of External Affairs (MEA), the Government of India in partnership with TCS on Thursday, 23 February 2012, announced the launch of citizen-centric Passport Seva Kendras for applications and issuance of passports in the National Capital Territory.

But, India's third largest software services exporter by revenues Wipro fell 0.73%, reversing initial gains.

Lanco Infratech clocked highest volume of 1.81 crore shares on BSE. Cals Refineries (1.18 crore shares), Prraneta Industries (91.39 lakh shares), Firstsource Solutions (88.36 lakh shares) and Suzlon Energy (80.61 lakh shares) were the other volume toppers in that order.

HDFC clocked highest turnover of Rs 208.43 crore on BSE. SBI (Rs 185.66 crore), Oracle Financial Services Software (Rs 91.50 crore), Tata Steel (Rs 76.66 crore) and L&T (Rs 56.78 crore) were the other turnover toppers in that order.

Foreign institutional investors (FIIs) bought shares worth a net Rs 104.55 crore on Thursday, 23 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 14483.61 crore in this month so far (23 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 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 on Wednesday, 22 February 2012. 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.

The initial public offer (IPO) of commodity exchange Multi Commodity Exchange of India (MCX) was subscribed a massive 52.75 times by 16:00 IST on the last day of bidding for the IPO today, 24 February 2012. The company on Tuesday, 21 February 2012, raised Rs 95.62 crore from 12 anchor investors.

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. The counting of the votes takes place on 6 March 2012, with the results due on the same day.

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 stocks edged higher on Friday, with banks and oil stocks leading gains. Key benchmark indices in France, Germany and UK rose by between 0.01% to 0.83%.

Most Asia markets rose in a choppy session on Friday, extending their recent strong gains, on strong US economic data. Key benchmark indices in Singapore, Taiwan, Hong Kong, China, South Korea and Japan rose by between 0.12% to 1.25%. Indonesia's Jakarta Composite fell 1.62%.

Trading in US index futures indicated that the Dow could gain 25 points at the opening bell on Friday, 24 February 2012. US stocks advanced on Thursday as better-than-expected jobs and home-price data buoyed sentiment.