Huge quake in Indonesia triggers volatility on the bourses

Key benchmark indices edged lower after an earthquake of 8.6 magnitude struck Indonesia at mid-afternoon. Nevertheless, the market staged an intraday rebound in volatile late trade on higher European stocks. With a small decline for the day, the barometer index BSE Sensex, and the 50-unit S&P CNX Nifty both registered their lowest closing level in almost two weeks. The Sensex shed 44.44 points or 0.26%, up about 120 points from the day's low and off almost equal points from the day's high. The market breadth was negative.

The Sensex has fallen 204.80 points or 1.17% so far in April 2012 (till 11 April 2012). The index has surged 1,744.48 points or 11.28% in calendar 2012 so far (till 11 April 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 2,063.54 points or 13.63%. From a 52-week high of 19,737.33 on 13 April 2011, the Sensex has lost 2,537.93 points or 12.85%.



Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged lower in volatile trade. Interest rate sensitive banking stocks reversed initial losses in choppy trade. Pharma stocks edged higher. Metal stocks slipped as global metal prices declined on Tuesday, 10 April 2012. FMCG stocks moved up for the second straight day on reports that monsoon may arrive on time this year. Cigarette major ITC and food products firm Nestle India hit record highs. Interest rate sensitive realty stocks edged lower ahead of Reserve Bank of India's (RBI) monetary policy review on 17 April 2012. Capital goods stocks extended recent losses.

The market edged lower in early trade to hit its lowest level in almost two weeks. Weakness continued in morning trade. Key benchmark indices weakened again after trimming intraday losses to hit fresh intraday highs in morning trade. Weakness continued in early afternoon trade. The market trimmed losses in afternoon trade as European stocks edged higher in early trade. The market moved into positive zone in mid-afternoon trade. A bout of volatility was witnessed in late trade as the Sensex recovered and provisionally closed flat after slipping into the red soon after news reports that an earthquake of 8.6 magnitude struck Indonesia.

Coastal territories surrounding the Indian Ocean basin were on tsunami alert Wednesday after a powerful earthquake struck off the west coast of Indonesia at mid-afternoon. A magnitude 8.2 aftershock struck the same areas about two hours after the initial quake, according to the US Geological Survey. The second temblor reportedly spurred a second round of tsunami warnings across the western coast of Indonesia.

In India, the Earth sciences ministry and the National Disaster Management Authority issued a tsunami warning for Andaman and Nicobar Island and an alert to coastal areas of Andhra Pradesh and Tamil Nadu. Later, in subsequent bulletins, the two organizations virtually ruled out tsunami in Andaman and Nicobar Islands

The BSE Sensex shed 44.44 points or 0.26% to settle at 17,199.40, its lowest closing level since 29 March 2012. The index rose 75.31 points at the day's high of 17,319.15 in mid-afternoon trade, its highest level since 9 April 2012. The index fell 167.95 points at the day's low of 17,075.89 in early trade.

The S&P CNX Nifty shed 16.75 points or 0.32% to settle at 5,226.85, its lowest closing level since 29 March 2012. The Nifty hit a high of 5,263.65 in intraday trade, its highest level since 9 April 2012. The Nifty hit a low of 5,190.80 in intraday trade.

The BSE Mid-Cap index fell 0.63% and the BSE Small-Cap index declined 0.27%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2368 crore, higher than Rs 2297.76 crore on Tuesday, 10 April 2012.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,525 shares fell and 1,260 shares rose. A total of 124 shares were unchanged. The market breadth alternately swung between positive and negative throughout the day.

From the 30-share Sensex pack, 18 stocks fell and rest of them rose.

Index heavyweight Reliance Industries (RIL) declined 1.36% to Rs 732.90. The stock hit a high of Rs 739 and a low of Rs 728.45. RIL is seen reporting weak Q4 earnings due to falling refining margins and reduced output from its KG-D6 gas blocks.

RIL early last week said its Jamnagar manufacturing unit is planning to take Maintenance and Inspection (M&I) shutdown of one of the diesel hydro treating unit for approximately three weeks duration from 2 April 2012. Routine activity of catalyst replacement is planned to be carried out during this shutdown and the opportunity will also be utilized to carry out revamp jobs so as to further enhance BS-IV grade diesel production capability from DTA refinery, RIL said. Remaining units of refinery, including crude processing units, are planned to operate at full throughput during this period, RIL said.

Interest rate sensitive realty stocks edged lower ahead of Reserve Bank of India's (RBI) monetary policy review on 17 April 2012. Unitech, HDIL, Godrej Properties, DLF, and D B Realty fell by between 0.41% to 1.22%.

Capital goods stocks extended recent losses. India's largest engineering and construction firm, L&T, declined 0.33%, with the stock falling for the fourth straight day. L&T during trading hours on Monday said that L&T Construction, part of the L&T conglomerate, has commissioned India's largest solar photo voltaic based power plant (40 MWp) owned by Reliance Power at Dhursar village in Jaisalmer district of Rajasthan. With the commissioning of this plant, L&T Construction has installed 114 megawatts (MW) of utility scale solar PV power plants over the last fiscal -- a benchmark in India's solar EPC industry, L&T said.

L&T last week said its Electrical & Automation business has completed the share sale formalities for the acquisition of UK-based Thalest Group, which is engaged in offering integrated platform management system and integrated bridge system solutions for naval warships, mercantile marine ships, vessels and floating systems.

India's largest power equipment maker by order book Bharat Heavy Electricals (Bhel) dropped 1.92%, with the stock falling for the third straight day. Bhel's provisional net profit rose 14.25% to Rs 6868 crore on 13.76% growth in turnover to Rs 49301 crore in the year ended March 2012 over the year ended March 2011. Bhel's order inflow fell 63.48% to Rs 22096 crore in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). The company announced the provisional results during trading hours on 3 April 2012.

Separately, Bhel said on that day it had withdrawn draft red herring prospectus (DRHP) filed with the capital market regulator, Securities and Exchange Board of India (Sebi), for the proposed follow-on public offer. The government was planning to divest 5% of its stake through a follow-on public offer in Bhel, which was approved by the Cabinet in 2011. The Government of India (GoI) owns 67.72% stake in Bhel.

Metal stocks declined across the board as LMEX, a gauge of six metals traded on the London Metal Exchange dropped 2.97% on Tuesday, 10 April 2012. Jindal Steel & Power, Sail, JSW Steel and Hindalco Industries shed by between 0.37% to 2.92%.

Sesa Goa dropped 2.21%, with the stock extending Tuesday's 1.77% losses triggered by the company reporting decline in iron ore production and sales in Q4 March 2012. Sesa Goa said during market hours on Tuesday its iron ore sales fell 21% to 5.2 million tonnes in Q4 March 2012 over Q4 March 2011 due to the continued mining ban in Karnataka and transport and logistics bottlenecks in Goa. The company said it is expanding existing roads and establishing road corridors in Goa to reduce these bottlenecks. Production of iron ore declined 11% to 4.9 million tonnes in Q4 March 2012 over Q4 March 2011.

Sterlite Industries fell 1.97% and its subsidiary Hindustan Zinc declined 0.27%. Sterlite said during market hours on Tuesday that the company clocked record production of lead, silver and power in Q4 March 2012.

India's largest steel maker by sales Tata Steel declined 1.35%. The company early this week said sales from its Indian operations rose 3.3% to 1.77 million tonnes in Q4 March 2012 over Q4 March 2011. The Indian operations account for about a quarter of the group's total annual global capacity of about 28 million tonnes, which includes unit Corus, Europe's second-largest steelmaker. The company's crude steel production in India rose 2.6% to 1.82 million tonnes in Q4 March 2012 over Q4 March 2011. Sales from Indian operations rose 3.4% for the financial year ended March 2012 (FY 2012) to 6.63 million tonnes, helped by a 6% jump in sales of flat products, used in cars and consumer goods.

Pharma stocks edged higher. Cipla, Lupin, Ranbaxy Laboratories and Sun Pharmaceutical Industries rose by between 0.02% to 2.21%.

Dr Reddy's Laboratories rose 0.7% on reports the company is set to take its limited-competition drug fondaparinux sodium to the European market. The company has made regulatory submission in Europe to market the drug. It will reportedly take 12 to 18 months to get the approval from the European regulator.

Interest rate sensitive banking stocks reversed initial losses. India's biggest private sector bank in terms of net profit, ICICI Bank, rose 0.05%. India's second largest bank by net profit HDFC Bank gained 0.33%.

India's largest bank by branch network State Bank of India rose 0.43%. The bank's Managing Director A Krishna Kumar on Saturday, 7 April 2012, said that the bank is aiming for growth of 20% to 25% in credit and deposit in financial year that began April 2012. The bank is expecting a major improvement in its asset quality for the recently ended fiscal year, he said.

FMCG stocks moved up for the second straight day on reports that monsoon may arrive on time this year. FMCG major Hindustan Unilever (HUL) rose 0.22%, with the stock gaining for the third straight day. HUL and entities of Piramal Realty (Ajay Piramal Group) have signed an agreement for assignment of HUL's leasehold rights of the land and building named "Gulita" situated at Worli Sea Face, Mumbai, for a transaction value of Rs 452.50 crore. The consideration includes both fixed and variable components, HUL said after trading hours on Wednesday, 4 April 2012. HUL will declare its year ended March 2012 results on 1 May 2012.

Among other FMCG stocks, Nestle India rose 1.72% to Rs 4865.75. The stock hit a record high of Rs 4900 today.

Cigarette maker ITC rose 0.07% to Rs 229.10. The stock hit a record high of Rs 230 today.

Report suggested that conditions indicate that the monsoon season will arrive in India by the first week of June 2012, which is considered on time. FMCG firms derive substantial sales from rural India. Good monsoon may boost farm incomes and consumer spending. India achieved a bumper farm output in 2011 largely because of sufficient monsoon rains. Foreign institutional investors (FIIs) sold shares worth Rs 328.66 crore on Tuesday, 10 April 2012, as per provisional data from the stock exchanges. Their outflow totaled Rs 598.09 crore in two trading sessions on 9 and 10 April 2012.

Cement stocks fell across the board on reports Competition Commission of India, or CCI is likely to come out with its report on cement cartelization by Thursday, 12 April 2012. ACC, India Cements, UltraTech Cements, Jaiprakash Associates and Ambuja Cements fell by between 0.52% to 7.73%

IT pivotals were mixed. India's third largest software services exporter by revenues Wipro rose 0.14%. The company last week said rating agency Standard and Poor (S&P) has upgraded the long term corporate credit rating of Wipro from BBB (outlook positive) to BBB+ (outlook stable).

India's second largest software services exporter by revenue Infosys gained 0.92%. The company announces Q4 March 2012 results on Friday, 13 April 2012.

India's largest software services exporter by revenue Tata Consultancy Services (TCS) fell 1.31%. The company announces FY 2012 results on 23 April 2012.

Meanwhile, the rupee fell to its weakest in nearly three months against the dollar on Wednesday as investors pruned riskier holdings on jitters over global growth prospects. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

Interest rate sensitive auto stocks mostly declined ahead of Reserve Bank of India's (RBI) monetary policy review on 17 April 2012. India's largest commercial vehicle maker by sales Tata Motors fell 0.44%. Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in March 2012 were 1,00,414 vehicles, a growth of 20% over 83,363 vehicles sold in March 2011. The company's monthly sales crossed 1,00,000 mark for the first time. The company's domestic sales of Tata commercial and passenger vehicles for March 2012 were 95,047 units, a 23% growth over 77,431 units sold in March last year.

Tata Motors clocked record sales of commercial vehicles and passenger vehicles in the year ended March 2012 (FY 2012).

India's largest utility vehicles and tractors maker by sales Mahindra & Mahindra (M&M) rose 0.2%. The company posted 25% increase in sales at 47,001 units in March 2012 over March 2011. This is the highest ever monthly sales number in the history of the company.

M&M's total tractor sales rose 10.2% to 2.35 lakh units in the year ended March 2012 (FY 2012) over the year ended March 2011 (FY 2011). Domestic tractor sales rose 10% to 2.21 lakh units in FY 2012 over FY 2011. For the month of March 2012, the total tractor sales stood at 17,405 units. Exports for the month registered an impressive growth of 33% at 1,485 units, M&M said. The company said it maintained its leadership position in the tractor industry in FY 2012.

India's largest car maker by sales Maruti Suzuki India shed 0.21%. The company said last week that its total sales rose 3.3% to a record 1,25,952 units in March 2012 over March 2011. The company's domestic sales rose 2.1% to a record 1,12,724 units in March 2012 over March 2011.

The country's largest two-wheeler maker Hero MotoCorp fell 0.25%. The company reported 2.41% increase in its sales at 5,28,290 units in March 2012 over March 2011.

The country's second largest two-wheeler maker Bajaj Auto declined 0.83%. The company's total sales rose 9% to 3.35 lakh units in March 2012 over March 2011. Total sales rose 14% to a record 43.49 lakh units in FY 2012 over FY 2011. The data was announced during market hours on Tuesday, 3 April 2012.

Domestic passenger car sales rose by 19.66% to 2,29,866 units in March 2012, from 1,92,105 units in the same month last year. Motorcycle sales in the country grew by 1.15% during the month to 8,50,619 units from 8,40,944 units in the same month last year. Total two-wheeler sales in March increased by 8.27% to 11,83,407 units from 10,93,004 units in the same month last year. Sales of commercial vehicles climbed by 14.82% to 90,415 units from 78,745 units in the year-ago period.

Total sales of vehicles across categories registered 10.11% growth to 16,08,216 units in March 2012, from 14,60,498 units in the same month last year.

Oil exploration scrips declined along with fall in crude oil prices. India's biggest state-run oil exploration firm by revenue ONGC declined 0.08%. Cairn India lost 0.4%. India's second biggest state-run oil and gas exploration firm by revenue Oil India shed 1.92%. Fall in crude oil prices will result in lower realizations from crude sales for oil exploration firms.

State-run oil marketing companies (PSU OMCs) rose as crude oil prices declined. HPCL (up 0.28%) and BPCL (up 0.33%), edged higher. But, Indian Oil Corporation (IOCL) fell 0.22%.

Lower crude oil prices could reduce 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.

Airline stocks surged for the second straight day on reports the cabinet is likely to take a decision tomorrow, 12 April 2012, on a proposal to allow foreign airlines to pick up stake in domestic carriers, most of which are facing a financial crisis. Jet Airways (up 5.26%), Kingfisher Airlines (up 6.43%), and SpiceJet (up 5.45%), edged higher Currently, India does not permit foreign airlines to buy stake in domestic airlines, although foreign investors are allowed to hold 49%. The cash-strapped Indian airlines are facing several problems including rising fuel prices and strong competition.

The civil aviation ministry had in January recommended that the government allow foreign airlines to buy stakes of up to 49% in Indian carriers. The proposal, however, needs approvals from the trade ministry and the cabinet to become law.

Lower crude oil prices also supported airline stocks. Crude-oil futures prices settled at a two-month low on Tuesday, pressured by fresh worries over signs of slowing Chinese oil demand. The world's second-biggest oil consumer after the US reported a drop in oil imports in March, albeit from a record-high February level. Light sweet crude for May delivery on the New York Mercantile Exchange settled $1.44, or 1.4%, lower at $101.02 a barrel, the lowest level since 14 February 2012. 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.

Shares of Vijay Mallya promoted UB Group companies jumped on reports that the Bangalore-based alcoholic beverages conglomerate is undertaking a major debt restructuring through sale of assets. According to market buzz, the Mukesh Ambani-owned Reliance Industries (RIL) may be close to buying the ailing Kingfisher Airlines. RIL would also get Mangalore Chemicals and Fertilizers, in which the UB group has a 30.44% stake, as part of the deal. Kingfisher Airlines (up 6.43%), United Breweries Holdings (up 1.2%), United Spirits (up 0.46%), rose. But, United Breweries fell 4.7%. Shares of Mangalore Chemicals and Fertilisers rose 1.39%.

Bharti Airtel fell 2.27%. The company is reportedly in advanced discussions with US chipmaker Qualcomm to buy its fourth-generation licences for about Rs 6000 crore, an acquisition that will allow the country's largest telecom firm to quickly launch 4G services in the key markets of Delhi and Mumbai. Fourth-generation, or 4G, services offer users Internet access at three times the speed of 3G and require broadband airwaves. The company on Tuesday launched wireless broadband services in Kolkata, becoming the first company to offer high-speed Internet services using fourth-generation technology in India.

Kingfisher Airlines clocked highest volume of 2.49 crore shares on BSE. SpiceJet (1.27 crore shares), IVRCL (87.54 lakh shares), Avance Technologies (76.63 lakh shares) and Cals Refineries (72.62 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 133.32 crore on BSE. Indraprastha Gas (Rs 72.91 crore), IVRCL (Rs 61.93 crore), Kingfisher Airlines (Rs 49.61 crore) and Tata Steel (Rs 46.85 crore) were the other turnover toppers in that order.

The government released the revised consolidated foreign direct investment (FDI) policy on Tuesday, relaxing norms of investment by foreign institutional investors (FIIs) in commodity exchanges. Now, FIIs will not require government approval to invest in these exchanges. The cap on FII investment, however, remains at 23%. The department of industrial policy and promotion (DIPP) under the commerce and industry ministry said government approval would nonetheless be required for the FDI component of investment up to 26% in commodity exchanges.

The next major trigger for the market is Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Investors will focus on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook.

IT bellwether Infosys announces Q4 March 2012 results on Friday, 13 April 2012. Lube oil major Castrol announces Q1 March 2012 results on 16 April 2012. Private sector bank HDFC Bank unveils FY 2012 results on 18 April 2012. HCL Tech unveils Q3 March 2012 results on the same day. ACC, Ambuja Cements and Hindustan Zinc unveil quarterly results on 19 April 2012. IndusInd Bank reports FY 2012 results on the same day. Cairn India reports FY 2012 results on 20 April 2012. TCS unveils FY 2012 results on 23 April 2012.

ICICI Bank unveils FY 2012 results on 27 April 2012. Axis Bank and Siemens announces quarterly results on the same day. Maruti Suzuki India unveils FY 2012 results on 28 April 2012. Titan Industries, Godrej Consumer Products, Exide Industries and Dabur India unveil FY 2012 results on 30 April 2012. FMCG giant Hindustan Lever unveils FY 2012 results on 1 May 2012. Ranbaxy Laboratories unveils its Q1 March 2012 results on 9 May 2012. Shree Cement unveils FY 2012 results on 15 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Ranbaxy Laboratories unveils Q1 results on 9 May 2012 Colgate Palmolive (India) unveils FY 2012 results on 30 May 2012.

India should see a moderate uptick in growth during FY 2013 and FY 2014 as global conditions stabilize, but a return to the very strong performance of recent years hinges on moving the reform agenda forward, especially addressing issues that are constraining investment, says a new Asian Development Bank (ADB) report. ADB's flagship annual economic publication, Asian Development Outlook 2012 (ADO 2012) says gross domestic product growth should edge up to 7% in FY 2013 and 7.5% in FY 2014, after falling to 6.9% in FY 2012 from 8.4% the year before. The projection assumes that industrialized countries will post growth, India's monetary policy eases, the budget deficit is cut, and headway is made on long-standing structural and regulatory issues over the next two years.

Data on industrial production for February 2012 and that on inflation for March 2012 could provide cues on the central bank's likely policy stance at the monetary policy review for 2012-13 due on 17 April 2012. The government will unveil industrial production data for February 2012 tomorrow, 12 April 2012. Industrial production growth is projected at 6.5% in February 2012, according to median estimate of a poll of economists carried out by Capital Market. Industrial production grew 6.8% in January 2012.

On Friday, 13 April 2012, the government will unveil data on inflation based on the wholesale price index (WPI) for March 2012. Inflation based on the wholesale price index (WPI) is estimated at 6.7% in March 2012, according to median estimate of a poll of economists carried out by Capital Market. WPI inflation stood at 6.95% (provisional) for the month of February, 2012.

European stocks edged higher on Wednesday after US aluminum group Alcoa Inc. reported a surprise first-quarter profit on Tuesday. Key benchmark indices in UK, France and Germany were up by 0.56% to 1.4%.

Industrial production in Spain fell 5.1% in February on an annual basis, the national statistics office reported on Wednesday.

Most Asian shares fell on Wednesday as uncertainty over global growth prospects, and resurfacing worries about debt restructuring in the euro zone, prompted investors to continue trimming their risk exposures. Key benchmark indices in Hong Kong, Japan, Indonesia, and Singapore fell by between 0.48% to 1.21%. China's Shanghai Composite was up 0.13% and Taiwan's Taiwan Weighted rose 0.21%. The stock market in South Korea was closed due to national elections in the country.

Japanese core machinery orders rose 4.8% in February, the Cabinet Office said Wednesday.

Trading in US index futures indicated that the Dow could gain 81 points at the opening bell on Wednesday, 11 April 2012. US stocks fell sharply on Tuesday, building on a four-session series of declines, as worries over rising borrowing costs for European countries weighed on investor sentiment ahead of the start of earnings season