Market ekes out small gains

Key benchmark indices recovered after hitting their lowest level in nearly two weeks in afternoon trade. The market eked out small gains, snapping a three-day losing streak. Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. The barometer index, BSE Sensex, was up 42.81 points or 0.25%, off close to 95 points from the day's high and up close to 105 points from the day's low. Realty stocks edged higher on renewed buying. Auto stocks were mostly lower.

From a recent high of 17,919.30, the BSE Sensex had lost 645.93 points or 3.6% in three trading sessions to 17,273.37 on Monday, 19 March 2012. The barometer index has fallen 436.50 points or 2.45% in March 2012 so far (till 20 March 2012). The index has surged 1,818.45 points or 11.76% in calendar 2012 so far (till 20 March 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,280.32 points or 14.4%. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 2,494.96 points or 12.59%.



Coming back to today's trade, capital goods and bank stocks were mixed. Shares of UB Group, promoted by Vijay Mallya, were under pressure on reports that the government may cancel group company -- Kingfisher Airlines' licence if safety norms and financial viability conditions are not met. The market breadth was negative.

The market edged higher in early trade. The Sensex extended initial gains to hit fresh intraday high in morning trade. The market trimmed gains in mid-morning trade. The market moved in a tight range in positive terrain in early afternoon trade. Key benchmark indices slipped into negative territory to hit fresh intraday lows in afternoon trade. The Sensex and the 50-unit S&P CNX Nifty hit their lowest level in nearly two weeks. A bout of volatility was witnessed in mid-afternoon trade as key benchmark indices pared gains after reversing intraday losses.

The BSE Sensex was up 42.81 points or 0.25% to settle at 17,316.18, its highest closing level since 16 March 2012. The index declined 61.64 points at the day's low of 17,211.73 in afternoon trade, its lowest level since 7 March 2012. The index gained 136.76 points at the day's high of 17,410.13 in morning trade.

The S&P CNX Nifty was up 17.80 points or 0.34% to 5,274.85, its highest closing level since 16 March 2012. The index hit a low of 5,233.25 in intraday trade, its lowest level since 7 March 2012. The index hit a high of 5,297.35 in intraday trade.

The BSE Mid-Cap index rose 0.56% and outperformed the Sensex. The BSE Small-Cap index fell 0.03% and underperformed the Sensex.

BSE clocked turnover of Rs 2491 crore, higher than Rs 2401.46 crore on Monday, 19 March 2012.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,542 shares fell and 1,335 shares rose. A total of 122 shares were unchanged.

From the 30-share Sensex pack, 18 stocks rose and the rest declined.

Index heavyweight Reliance Industries (RIL) rose 0.73% to Rs 760.40. The stock was volatile. The stock hit a high of Rs 766.40 and a low of Rs 750.50. RIL's largest gas fields in its flagging KG-D6 block have reportedly hit an all-time low production of about 28 million standard cubic meters per day as the firm shut six wells due to water and sand ingress. Dhirubhai-1 and 3 gas fields in the eastern offshore KG-DWN-98/3 or KG-D6 block, which started production in April 2009 at the rate of 30 mmscmd, saw output plummet to 28.16 mmscmd in the week ended March 4.

RIL's unit Infotel Broadband Services reportedly plans to launch voice and data services by September 2012. Initially, the services will be launched in a few cities.

Banking stocks were mixed after sliding for last two trading sessions post budget. PSU bank stocks gained across the board. SBI, Bank of India, Bank of Baroda and Punjab National Bank rose by between 0.36% to 3.3%. The finance minister said in the budget that to protect the financial health of Public Sector Banks and Financial Institutions, Rs 15,888 crore is proposed to be provided for capitalisation in FY 2013.

Among private sector banks, Axis Bank and ICICI Bank fell by between 0.12% to 0.94%. HDFC Bank rose 2.08%.

Auto stocks were mostly lower on worries increase in vehicle prices following a hike in excise duty in Union Budget 2012-13 will dampen demand. Tata Motors fell 4.21%. The company has increased the prices of its commercial vehicles and passenger vehicles following hike in excise duty announced in Union Budget 2012-13 last week.

Small-car maker Maruti Suzuki India shed 0.37% after the government announced an across the board hike in excise duty for passenger vehicles in Union Budget 2012-13 last week.

Among two wheeler makers, Bajaj Auto (down 1.24%), TVS Motor Company (down 2.34%) and Hero MotoCorp (down 0.5%), edged lower.

India's largest utility vehicles and tractors maker by sales Mahindra & Mahindra fell 0.46%, with the stock reversing initial gains. M&M said during market hours today that its board of directors has re-appointed AnandMahindra as Vice-Chairman & Managing Director for a period of five years with effect from 4 April 2012. The board has also re-appointed Bharat Doshi as the Executive Director and Group Chief Financial Officer (CFO) for a period with effect from 28 August 2012 to 31 March 2015.

Capital goods stocks were mixed. Bhel, ABB, Siemens and Punj Lloyd rose by between 0.77% to 2.86%. L&T, Thermax and BEML dropped by between 0.54% to 3.29%. Union Budget 2012-13 disappointed power equipment makers which were anticipating that the government might impose an import duty of 14%-19% on mega/UMPP projects. A status quo on existing concessional import duty for mega and UMPP power projects means that domestic equipment makers who are augmenting their capacity continue to face strong competition in the domestic market.

Realty stocks edged higher on renewed buying. DLF, Unitech, Sobha Developers and HDIL rose by between 1.37% to 4.14%. Union Budget 2012-13 apart from providing some tax sops for affordable homes has not done anything to resurrect the demand for real estate sector.

The finance minister in the budget said government will allow external commercial borrowing (ECB) for low cost housing projects. He also proposed setting up of a Credit Guarantee Trust Fund to ensure better flow of institutional credit for housing loans. The Minister also proposed extending the scheme of interest subvention of 1% on housing loan up to Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh, for another year.

Shares of UB Group, promoted by Vijay Mallya, were under pressure on reports that the government may cancel group company -- Kingfisher Airlines' licence if safety norms and financial viability conditions are not met. Vijay Mallya has been asked by the Directorate General of Civil Aviation (DGCA) to present a clear picture of the cash-strapped private carrier. Kingfisher Airlines (down 5.22%), United Breweries Holdings (down 4.82%), United Spirits (down 2.63%) edged lower. United Breweries roe 0.38%.

Dr. Reddy's Laboratories (DRL) fell 0.04% after the company said it has been informed of an inspection by the US Food and Drug Administration of its Mexico facility during the last week of this month. The drug regulator had in June last year banned imports into the US of some active pharmaceutical ingredients and steroids made at Dr. Reddy's Mexico unit, citing violation of manufacturing practice rules.

DRL, in a filing with the US Securities and Exchange Commission, also said it is working collaboratively with the FDA to resolve the regulatory issues concerning the Mexican facility. DRL has been in talks with the US drug regulator for some time now to get it to lift the import ban, which would happen once the FDA has inspected the facility and found that the issues have been resolved to its satisfaction. The Mexico facility, which produces drug ingredients and intermediates, is part of DRL's pharmaceutical services and active ingredients business.

IT stocks were mixed. India's third largest software services exporter by revenues Wipro gained 0.33%. India's second largest software services exporter by revenue Infosys shed 0.27%.

India's largest software services exporter by revenue TCS rose 1.2% after the company announced during market hours today the official opening of its Center of Excellence for Oracle Exadata Database Machine.

Union Budget 2012-13 has nothing on the table to bring cheer to the Information Technology and ITES sectors which pleaded for relief from Minimum Alternate Tax (MAT) imposed on SEZ units and boost to the small & medium enterprises (SME) sector.

Shares of media and entertainment companies rose on renewed buying. Fame India, Saregama India, Sri Adhikari Brothers, Eros International Media and Crest Animations rose by between 0.54% to 9.96%. But, media major Zee Entertainment Enterprises was 1.17% lower.

In Union Budget 2012-13, the government has extended exemption of services tax on copyrights relating to recording of cinematographic films.

Cement stocks gained across the board on reports cement firms have hiked prices by Rs 7 to Rs 10 per bag of 50 kilogram, effective 17 March 2012, after the finance minister announced rationalization of excise duty on packaged cement. UltraTech Cement, Jaiprakash Associates, ACC, India Cements and Ambuja Cements rose by between 0.54% to 3.78%.

Cigarettes major ITC rose 1.29% to Rs 223.30, with the stock gaining for the third straight day. The stock had hit a record high of Rs 224.95 in intraday trade on Friday, 16 March 2012.

Budget imposed an additional ad-valorem excise on cigarettes, while keeping the fixed rate structure constant. The additional levy is at the rate of 10% on 50% of retail selling price (MRP), which effectively works out to 5% of MRP. This additional levy is on cigarettes above 65 mm of length, which covers almost the entire cigarette portfolio of ITC. Analysts reckon that ITC may go for medication of length of some of its lower-end brands (reduce the length to sub-65mm) to avoid the additional levy on some part of its portfolio.

Jet Airways (India) rose 5.18% after the private airline said it will consolidate its low fare service products under the JetKonnect brand to simplify the group's service proposition and enhance the brand recall. Effective from 25 March 2012, the erstwhile JetLite and Jet Airways Konnect services will operate under the JetKonnect brand, enabling guests to avail of a single superior in-flight product in the full service (Jet Airways) and low-fare (JetKonnect) categories, Jet Airways (India) said in a statement. Jet Airways (India) and JetLite (India) will continue as distinct business entities operating under their own airline operating permits.

Metal stocks rose as LMEX, a gauge of six metal traded on London Metal Exchange, gained 0.66% on Monday, 19 March 2012. Bhushan Steel, Sterlite Industries, Sail, Tata Steel, JSW Steel, Hindustan Zinc, NMDC and Jindal Steel & Power rose by between 0.13% to 3.48%. Hindalco Industries shed 1.74%.

Union Budget 2012-13 has been positive for the steel sector in general, and the carbon steel/non alloy steel producers in particular. While hike in excise duty from 10% to 12% will increase the excise incidence, they can be passed on to the end customers. On the other hand, basic customs duty on flat rolled products like HR and CR coils of non alloy steel has been hiked from 5% to 7.5%. This should increase the landed cost of imports, and should marginally improve the pricing power of the domestic carbon steel producers like Steel Authority of India, JSW Steel, Tata Steel etc.

Steel producers will also benefit from cut in basic customs duty on capital goods, plant and equipment imported for setting up or substantial expansion of iron ore pellet plants or iron ore benefication plants from 7.5% to 2.5%. Removal of customs duty on steam coal, and cut in countervailing duty on steam coal from 5% to 1% will also bring down the cost of steam coal for the steel producers in general, and players with captive power plants in particular.

NTPC rose 0.7% after company said during market hours today it has signed a loan facility of $100 million with Mizuho Corporate Bank. The proceeds of the loan will be applied towards capital expenditure for procurement of goods and services for the ongoing and new projects, coal mining projects and renovation and modernization of stations, NTPC said. The loan has a door to door maturity of 7 years.

Tata Power Company rose 1.17% after company announced after market hours on Monday, 19 March 2012, the successful synchronization of the second unit of 525 megawatts (MW) (Unit 2) of its Maithon mega power project in Dhanbad, Jharkhand under the requisite standard requirements. The first Unit of 525 MW (Unit 1) was commissioned in September 2011. With this development, Tata Power's gross generation capacity has touched 5,297 MW, making it the largest private sector power generating company, Tata Power said.

Maithon Power (MPL), the 74:26 joint venture between Tata Power and Damodar Valley Corporation (DVC), is implementing a 2 x 525 MW coal-fired power project power in Jharkhand. MPL has firmed up fuel supplies from Coal India and its subsidiaries. Bharat Coking Coal and Central Coal Fields are committed to supplying coal to the project, Tata Power said.

Shipping Corporation of India (SCI) rose 3.2% after the company said it took physical delivery of "m.v SCI Mukta", a 1966 deadweight tonnage (DWT) (2039 GT) anchor handling, towing and supply vessel of 80 ton bollard pull capacity.

Avance Technologies clocked highest volume of 1.03 crore shares on BSE. Mahindra Satyam (79.26 lakh shares), Lanco Infratech (75.50 lakh shares), HDIL (63.16 lakh shares) and Banas Finance (60.95 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 144.70 crore on BSE. HDIL (Rs 58.30 crore), Mahindra Satyam (Rs 58.77 crore), HDFC (Rs 58.18 crore) and Reliance Infrastructure (Rs 54.67 crore) were the other turnover toppers in that order.

Foreign institutional investors (FIIs) bought shares worth a net Rs 160.87 crore on Monday, 19 March 2012, as per provisional data from the stock exchanges. FIIs have made substantial purchases of Indian stocks recently. Their inflow totaled Rs 6315.74 crore in seven trading sessions from 9 to 19 March 2012, as per provisional data from the stock exchanges.

European stock markets traded mostly lower on Tuesday as banks and miners weighed on indexes amid concerns about Chinese demand, while auto makers declined after China hiked gas prices. Key benchmark indices in France, Germany and UK shed by between 1.13% to 1.34%.

Asia markets mostly edged lower on Tuesday with financial and energy firms among the decliners as investors booked profits after recent strength. Key benchmark indices in China, Hong Kong, Indonesia, South Korea and Taiwan fell by between 0.06% to 1.38%. Singapore's Straits Times rose 0.42%. Japanese markets were closed for a public holiday.

Trading in US index futures indicated that the Dow could fall 64 points at opening on Tuesday, 20 March 2012. US stock indices on Monday wrapped up a modest-volume session with minor gains, as Apple Inc.'s dividend plans boosted the indices and as home builders' data bolstered hopes of that sector's recovery.