Bank stocks edge higher in volatile market

Key benchmark indices eked out small gains in a volatile trading session. The barometer index, BSE Sensex, rose 52.83 points or 0.3%, off close to 95 points from the day's high and up about 130 points from the day's low. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. Pharma major Sun Pharmaceutical Industries hit record high. Bank stocks rose on bargain hunting after recent slide.

The barometer index has lost 115.88 points or 0.65% in March 2012 so far (till 2 March 2012). The Sensex had jumped 559.13 points or 3.25% in February 2012. The index has surged 2,181.88 points or 14.11% in calendar 2012 so far (till 2 March 2012) on the back of heavy inflow from foreign funds. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,500.94 points or 16.52%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,174.34 points or 10.97%.



Coming back to today's trade, L&T rose after the company said its construction division bagged orders worth Rs 1306 crore across various business segments in February 2012. ONGC dropped as a one-day auction of 5% government stake-sale in the firm just scraped through on Thursday, 1 March 2012. IT stocks were mixed. FMCG stocks declined. ACC and Ambuja Cements rose after reporting higher cement shipments for February 2012. Auto stocks dropped.

The market reversed direction after a positive start triggered by firm Asian shares. The market came off lows later. Key benchmark indices recovered from intraday lows and alternately moved between positive and negative terrain in morning trade. The market surged to hit fresh intraday high in mid-morning trade. The market moved in a tight range in positive zone in early afternoon trade. Key benchmark indices pared gains after hitting fresh intraday highs in early afternoon trade. Volatility continued as key benchmark indices slipped into the red once again in mid-afternoon trade after moving into positive terrain from the negative terrain for a brief period. The market regained positive zone in late trade.

The stock exchanges are holding a special 1-1/2 hour trading session tomorrow, 3 March 2012, as the Bombay Stock Exchange (BSE) is testing its Disaster Recover Site (DR). Trading will begin at 11:15 IST and conclude at 12:45 IST on that day.

The BSE Sensex advanced 52.83 points or 0.3% to settle at 17,636.80, its highest closing level since 29 February 2012. The index jumped 147.91 points at the day's high of 17,731.88 in afternoon trade. The index fell 79.59 points at the day's low of 17,504.38 in early trade.

The S&P CNX Nifty advanced 19.60 points or 0.37% to settle at 5,359.35, its highest closing level since 29 February 2012. The index hit a high of 5,392.55 and a low of 5,315.05 in intraday trade.

The BSE Mid-Cap index declined 0.12% and the BSE Small-Cap index shed 0.09%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2936 crore, higher than Rs 2848.45 crore on Thursday, 1 March 2012.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,485 shares declined and 1,411 shares rose. A total of 127 shares were unchanged.

From the 30-share Sensex pack, 16 rose and the rest fell.

Index heavyweight Reliance Industries (RIL) rose 0.49% to Rs 814.35. The stock hit a high of Rs 817.95 and a low of Rs 805.60. RIL along with BP PLC will reportedly submit a joint plan to the government to develop the D6 natural gas block and its satellite fields as an integrated unit. The proposal, which will be submitted in the next few weeks, will seek to maximise the use of existing infrastructure to develop all the fields which haven't been worked on yet, BP India chief Sashi Mukundan said early this week. The proposal is significant in that it will seek approval to develop an entire block as one unit, rather than follow the current practise of getting clearance for one oil or natural gas field at a time.

In 2011, BP purchased a 30% stake in 21 RIL's oil and gas blocks across India, including D6, which is India's biggest gas discovery so far. RIL is facing declining output at D6 due to reservoir complexity, a natural decline in reserves and delays in developing satellite fields. Output at the D1, D3 and MA fields in the D6 block has plunged to about 38 million metric standard cubic meters a day (MMSCMD) from 60 MMSCMD in June 2010. It is estimated that output will fall further to 27.60 MMSCMD in the next financial year starting April, and to 22.60 MMSCMD in the year after that.

RIL last week said 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 will 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. 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.

ONGC declined 2.22% to Rs 281.45 as a one-day auction of 5% government stake-sale in the firm just scraped through on Thursday, 1 March 2012. Investors bid for 42.04 crore shares of ONGC of a total of 42.77 crore shares on offer in an auction of 5% government stake-sale in the firm through the stock exchanges mechanism on Thursday, 1 March 2012. The Government of India's stake in ONGC will decline to 69.22% from 74.14% if all the shares tendered in the auction are accepted.

The ONGC auction was completed in a single trading session using the secondary market mechanism created by NSE and BSE. The final demand was for 42.04 crore shares against an offer of 42.77 crore shares. A joint press release issued by NSE and BSE after trading hours on Thursday, 1 March 2012, stated that while the buy orders at both exchanges reflected a demand of 29.22 crore shares around the market lose, there were certain buy orders which were not immediately confirmed or were erroneously rejected by custodians due to a mismatch at the custodian end, even though, the orders were funded. After rectification of these errors, the final demand was for 42.04 crore shares.

Monies and orders received after normal market close have not been considered by the exchanges in auction, the release stated. The exchange systems operated normally and smoothly and there were no glitches, the stock exchanges said.

Most auto shares fell. India's largest bike maker by sales Hero MotoCorp fell 0.1% in volatile trade. The company reported a 10.89% growth in total sales at 5.23 lakh units in February 2012 over February 2011. "We have been consistently clocking over five lakh units in sales, and our performance in the first two months -- January and February -- has maintained that trend in both despatch and retail sales," Hero MotoCorp Senior Vice-President (Marketing and Sales) Anil Dua said.

Bajaj Auto fell 1.56% on muted sales growth in February 2012. The company said during market hours today its total sales rose 5% to 3.43 lakh units in February 2012 over February 2011.

India's largest commercial vehicles maker by sales Tata Motors declined 0.07%. The company's total sales rose 19% to 92,119 units in February 2012 over February 2011. The company announced the monthly sales data during trading hours on Thursday, 1 March 2012.

India's largest utility vehicles maker Mahindra & Mahindra (M&M) fell 0.26%, with the stock extending Thursday's 3.67% losses. The company's total sales rose 29% to 43,087 units in February 2012 over February 2011. The company announced the monthly sales data during trading hours on Thursday, 1 March 2012.

India's largest car maker by sales Maruti Suzuki India rose 0.65%, with the stock extending Thursday's 4.64% gains. The company said during market hours on Thursday that total sales rose 6.5% to 1.18 lakh units in February 2012 over February 2011.

TVS Motor Company lost 2.11% after total sales declined 3.01% to 1,72,061 units in February 2012 over February 2011.

Sun Pharmaceutical Industries rose 3.11% to Rs 566.90. The stock hit a record high of Rs 570 today.

Realty major DLF tumbled 5.03%, with the stock extending Thursday's 5.17% losses after a Canadian research firm, reputed for hauling up investor-unfriendly firms, slammed the company for its accounting methods, business model and management integrity.

ACC gained 0.83% after the company said during market hours today that its cement dispatches rose 7.5% to 2.15 million tonnes in February 2012 over February 2011. Production rose 8.62% to 2.14 million tonnes in February 2012 over February 2011

Ambuja Cements rose 2.25%, with the stock extending Thursday's 2.56% gains as the company's shipments grew 12.7% to 20 lakh tonnes in February 2012 over February 2011. Production rose 11.27% to 19.93 lakh tonne in February 2012 over February 2011.

IT stocks were mixed. India's third largest software services exporter by revenues Wipro rose 0.74%, with the stock reversing initial losses.

India's largest software services exporter by revenue, TCS shed 0.34%. The company announced after market hours on Tuesday that its universal financial services platform, TCS BaNCS, has been selected by South Africa's Nedgroup Insurance Company, (NedIC) -- a short-term insurer specializing in homeowner's cover, personal accident and vehicle-related, value-added insurance products. TCS BaNCS Insurance, a part of the TCS BaNCS universal financial services platform, will serve as the new policy administration system for NedIC's short-term insurance services. TCS BaNCS serves the top banks in Africa through its banking and capital markets suite of solutions; this will be TCS BaNCS' first insurance customer in Africa.

India's second largest software services exporter by revenue Infosys shed 0.08% in volatile trade. Infosys expects its outsourcing business to face as tough a time in the next fiscal year starting 1 April as it did this year, with the global economic uncertainty making customers go slow on spending. Clients are likely to continue committing smaller portions of their technology budgets for shorter periods in the next fiscal year, a news agency on Tuesday quoted Infosys Chief Financial Officer V. Balakrishnan as saying. The European economy is in a "mess" and it will take a long time to fix it, Mr. Balakrishnan said. Also, businesses fear that the signs of a recovery in the US may not indicate a sustainable economic rebound, he added.

Infosys announced during market hours on Monday, 27 February 2012, that Bharti Airtel has chosen the company as its partner for 'airtel money' -- the country's first of its kind mobile wallet service by a mobile operator. Under this partnership, Infosys WalletEdge -- the mobile commerce platform will enable the ubiquitous mobile wallet service to support cashless payments and settlements needs of diverse customer segments.

FMCG stocks declined. Marico, United Spirits, and ITC dropped by between 0.32% to 0.77%. FMCG major Hindustan Unilever rose 0.63%, with the stock reversing initial losses.

Bank stocks edged higher. India's biggest private sector bank in terms of branch network, ICICI Bank, rose 2.08% to Rs 902.75, off the day's low of Rs 875.50.

India's second largest bank by net profit HDFC Bank rose 0.81% to Rs 518.30, off the day's low of Rs 508.40.

State Bank of India gained 1.17% to Rs 2245.70, off the day's low of Rs 2185.25. The bank on Monday, 27 February 2012, cut interest rates on education loans. Loans of up to Rs 4 lakh will now be charged an interest rate of 13.50%, down from 13.75% earlier, while those between Rs 4 lakh and Rs 7.5 lakh will be charged 13.25%, instead of 14.25% earlier. Loans above Rs 7.5 lakh will be given at an interest rate of 12.00%, a quarter percentage point less than earlier.

Among other banking stocks, Yes Bank, Federal Bank, and Axis Bank rose by between 1.48% to 3%.

IDBI Bank rose 2.65% after the bank said during market hours today that the board of directors of the bank at its meeting held today, 2 March 2012, approved issue of 18.85 crore equity shares at a price of Rs 112.99 per share aggregating to Rs 2130.50 crore upon conversion of Tier I bonds held by Government of India (Gol). The board also approved preferential issue of up to 5.86 crore equity shares of Rs 10 each at a price of Rs 112.99 per share aggregating to Rs 662.79 crore to Life Insurance Corporation of India. The board also approved preferential issue of up to 22.12 crore equity shares at a price of Rs 112.99 per share aggregating to Rs 2500 crore to GoI in terms of the final approval letter to be received from Gol in this regard.

L&T rose 1.56% after the company said during market hours today that its construction division bagged orders worth Rs 1306 crore across various business segments in February 2012.

The company has lost in a bidding race for a large NTPC contract for super-critical boilers. L&T was reportedly the third lower bidder for the NTPC contract.

BGR Energy Systems said after market hours on Wednesday, 29 February 2011, that it has emerged as the lowest bidder in all five projects for NTPC's 11 x 660 megawatts (MW) super-critical boiler tender. As per tender conditions of NTPC, BGR Energy would be awarded contracts worth Rs 6500 crore for 7 boilers. Shares of BGR Energy rose 0.11%.

State-run power equipment major, Bhel, was the second lowest bidder for the contract and it will get orders for the remaining 4 boilers, reports suggest. Shares of Bhel fell 0.82%, with the stock extending recent losses. Bhel said during market hours today that the board of directors in its meeting held today has decided and approved payment of interim dividend of 136% or Rs 2.72 per equity share for the financial year 2011-12.

Meanwhile, a panel of ministers on economic affairs have deferred a decision on duties for imported power equipment, heavy industries minister Praful Patel told reporters on Thursday. In February 2010, a high-ranking government body, had recommended imposition of a 10% import duty and 4% special additional duty on all imported power gears, mainly targeted at curbing imports from China. At present, there is no duty on imported power gears for projects above 1 giga watts (GW), while a 5% duty is applicable on imported power gears for projects below 1 GW.

Metal stocks were mixed. JSW Steel, Jindal Steel & Power, Sterlite Industries, NMDC and Tata Steel rose by between 0.16% to 2.15%. Bhushan Steel, Hindustan Zinc, Sail, and Hindalco Industries dropped by between 0.29% to 1.86%.

Iron ore miner Sesa Goa declined 0.35%. The company after market hours on Thursday, 1 March 2012, said it has completed the acquisition of Goa Energy. Goa Energy owns and operates a 30 megawatt (MW) waste heat recovery power plant in Goa which utilizes the waste heat and gases from Sesa's coke making and pig iron facilities.

Sesa Goa had announced on 3 November 2011 that it had signed the definitive Share Purchase Agreement with Videocon Industries along with other shareholders of Goa Energy under which Sesa had agreed to acquire 100% of the outstanding common shares of Goa Energy for the enterprise value of Rs 101 crore on cash free debt free basis, including normative working capital of Rs 2.75 crore.

Cals Refineries clocked highest volume of 2.81 crore shares on BSE. EIH (2.2 crore shares), Suzlon Energy (1.63 crore shares), Prraneta Industries (87.23 lakh shares) and Lanco Infratech (72.21 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 202.52 crore on BSE. EIH (Rs 198.19 crore), DLF (Rs 80.66 crore), L&T (Rs 63.20 crore) and Reliance Capital (Rs 59.16 crore) were the other turnover toppers in that order.

Foreign institutional investors (FIIs) sold shares worth a net Rs 126.52 crore on Thursday, 1 March 2012, as per provisional data from the stock exchanges. FIIs bought shares worth a net Rs 25212.10 crore in February 2012, as per data from Securities & Exchange Board of India (Sebi). The FIIs had bought shares worth a net Rs 10357.70 crore in January 2012.

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

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 on Saturday, 3 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 stock markets were mixed on Friday, with a European Summit in focus. Key benchmark indices in UK and Germany fell 0.12% to 0.17%. France's CAC 40 rose 0.09%.

Unemployment in Spain reached 4.7 million in February, an increase of 112,269 from the prior month, according to government data released Friday.

Asian shares rose on Friday, as euro-zone debt worries eased after successful government bond auctions in France and Spain on Thursday, 1 March 2012 and after a trade body ruled on that day that there had not been a credit event to trigger a payout on privately held Greek government bonds. Key benchmark indices in China, Hong Kong, Taiwan, Japan, Singapore, Hong Kong and Indonesia rose by between 0.22% to 1.43%.

Japanese government data out Friday showed a sharper-than-expected drop in household spending and a modest rise in unemployment, although deflation was slightly better than forecast.

Trading in US index futures indicated that the Dow could fall 16 points at the opening bell on Friday, 2 March 2012. US stocks ended Thursday's session with gains, helped by a drop in weekly jobless claims to the lowest level since March 2008, and with financial shares among the top gainers.

The number of Americans filing first-time claims for unemployment benefits last week fell 2,000 to 351,000, the lowest since March 2008. The four-week average dropped 5,500 to 354,000, the Labor Department said. Separately, government data showed spending climbed 0.2% as incomes rose 0.3% in January, both less than expected. Another report from the government had construction spending slipping 0.1% in January, marking the first monthly drop since July. And, the Institute for Supply Management said its manufacturing index fell to 52.4% last month from 54.1% in January.