Infosys, weak Europe drags market to two week low

Key benchmark indices declined to hit lowest level in two weeks as weak Q4 earnings by IT bellwether Infosys and subdued European stocks dampened sentiment. Intraday volatility was high. The barometer index, BSE Sensex, was down 238.11 points or 1.37%, off about 305 points from the day's high and up close to 65 points from the day's low. The market breadth was negative. Infosys tumbled nearly 13% on disappointing Q4 results. Other IT stocks fell across the board.

The Sensex has fallen 309.69 points or 1.77% so far in April 2012 (till 13 April 2012). The index has surged 1,639.59 points or 10.6% in calendar 2012 so far (till 13 April 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1958.65 points or 12.94%. From a 52-week high of 19,700.96 on 15 April 2011, the Sensex has lost 2606.45 points or 13.23%.



Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher in volatile trade. Another index heavyweight L&T reversed initial gains. Realty stocks also reversed initial gains. Bank stocks were mostly lower. Pharma stocks edged higher on defensive buying in weak market. FMCG stocks moved up for the third straight day on reports that monsoon may arrive on time this year.

The market recovered after opening lower and moved into the positive terrain. It trimmed gains in morning trade. It strengthened to hit fresh intraday high in mid-morning trade. It held firm in early afternoon trade. Key benchmark indices pared gains in afternoon trade, tracking weakness in European market. It trimmed losses after slumping to hit lowest level in two weeks in mid-afternoon trade.

The BSE Sensex was down 238.11 points or 1.37% to 17,094.51, its lowest closing level since 29 March 2012. The index rose 65.60 points at the day's high of 17,398.22 in mid-morning trade, its highest level since 4 April 2012. The index fell 305.32 points at the day's low of 17,027.30 in mid-afternoon trade.

The S&P CNX Nifty was down 69.40 points or 1.32% to 5,207.45, its lowest closing level since 29 March 2012. The Nifty hit a high of 5,306.75 in intraday trade, its highest level since 4 April 2012. The Nifty hit a low of 5,185.40 in intraday trade.

The BSE Mid-Cap index fell 0.72% and the BSE Small-Cap index declined 0.63%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 2952 crore higher than Rs 2235.59 crore on Thursday, 12 April 2012.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1567 shares declined and 1236 shares rose. A total of 133 shares were unchanged. The breadth was strong breadth earlier in the day.

From the 30-share Sensex pack, 17 stocks fell and the rest of them rose.

Index heavyweight Reliance Industries (RIL) rose 1.12% to Rs 751.25. The stock hit a high of Rs 761.35 and a low of Rs 739. The stock had risen 1.36% on Thursday after the company said gas output is normal at its KG D6 block off the east coast after Wednesday's quake in Indonesia. 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.

IT bellwether Infosys tumbled 12.61% after company announced before market hours today that as per International Financial Reporting Standards (IFRS) its consolidated net profit after tax fell 2.4% to Rs 2316 crore on 4.8% decline in revenue to Rs 8852 crore in Q4 March 2012 over Q3 December 2011. Earnings per share (EPS) declined 2.3% to Rs 40.54 in Q4 March 2012 over Q3 December 2011. The stock was the top loser from the Sensex pack.

The company said that its consolidated revenues as per IFRS are expected to be in the range of Rs 9011 crore and Rs 9100 crore a growth of 20.4% to 21.6% in Q1 June 2012 over Q1 June 2011. EPS is expected to be Rs 36.89 in Q1 June 2012. The consolidated revenues are expected to be in the range of Rs 38431 crore and Rs 39136 crore; a growth of 13.9% to 16.0% in financial year ended March 2013 (FY 2013) over the financial year ended March 2012 (FY 2012), EPS is expected to be in the range Rs 158.76 to Rs 161.41, a growth of 9.1% to 10.9% in FY 2013 over FY 2012.

Infosys said that the board of directors of the company at its meeting held on 13 April 2012, has recommended a final dividend of Rs 22 per share and a special dividend (10 years of Infosys BPO operations) of Rs 10 per share.

The year ahead looks challenging for the IT services industry, with slow recovery in the global markets, said S. D. Shibulal, CEO and Managing Director. We are executing on our Infosys 3.0 strategy which is meant to deliver high quality growth in the medium to long term. We are making investments and have put in place a structure to deliver on this strategy, he said.

Among other IT stocks, India's third largest software services exporter by revenues Wipro fell 4.1%. India's largest software services exporter by revenue Tata Consultancy Services (TCS) shed 5.47%. MphasiS, HCL Technologies and Tech Mahindra shed by between 3% to 4.1%.

India's largest engineering and construction firm, L&T, fell 0.9%, with the stock reversing initial gains. 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.

Interest rate sensitive realty reversed initial gains. Unitech, HDIL, DLF, and D B Realty fell by between 0.3% to 3.72%.

Interest rate sensitive banking stocks also reversed initial gains. India's biggest private sector bank in terms of net profit, ICICI Bank, fell 1.54%. India's second largest bank by net profit HDFC Bank, shed 0.03%.

India's largest bank by branch network State Bank of India, fell 0.57%. 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.

Among other banking stocks, Yes Bank, Axis Bank and IDBI Bank shed by between 1.79% to 2.83%.

Pharma stocks edged higher on defensive buying in weak market. Cipla, Lupin, Sun Pharmaceutical Industries, and Dr Reddy's Laboratories rose by between 0.59% to 2.65%.

Metal stocks were mostly lower as China's pace of GDP growth eased in the first quarter. China is the world's largest consumer of industrial metals. Jindal Steel & Power, Tata Steel, Sail, Hindalco Industries, and Hindustan Zinc fell by between 0.63% to 2.58%.

Interest rate sensitive auto stocks were mixed. India's largest commercial vehicle maker by sales Tata Motors rose 1.33%. 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) declined 0.46%. 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 rose 0.82% with the stock extending Thursday's 3.13% gains after the company on Thursday, 12 April 2012, unveiled industry's first Life Utility Vehicle -- Ertiga. Maruti said Ertiga strengthens its product portfolio and also creates an all new Life Utility segment at an attractive price point. Designed primarily for India at Suzuki, Japan, Ertiga represents aspirations of young urban Indian families that are active and connected, Maruti said. The company further said that India is the first market to sell Ertiga, to be followed by other South East Asian markets.

Ertiga is launched in both petrol and diesel variants. Ertiga will have a total of six models, with ex-showroom price in Delhi ranging from Rs 5.89 lakh at the bottom end and Rs 8.45 lakh at the top end.

The country's largest two-wheeler maker Hero MotoCorp gained 1.52%. 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 fell 0.02%. 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.

FMCG stocks moved up for the third straight day on reports that monsoon may arrive on time this year. FMCG major Hindustan Unilever (HUL) rose 0.98% to Rs 424.10, with the stock gaining for the fifth straight day. The stock hit a record high of Rs 427.70 today.

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.

Cigarette maker ITC rose 0.92% to Rs 233. The stock hit a record high of Rs 240.80 today.

Nestle India rose 0.1% to Rs 4923. The stock hit a record high of Rs 4974.95 on Thursday, 12 April 2012.

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.

SpiceJet clocked highest volume of 2.83 crore shares on BSE. Kingfisher Airlines (1.21 crore shares), Cals Refineries (1.15 crore shares), Avance Technologies (73.88 lakh shares) and IVRCL (69.91 lakh shares) were the other volume toppers in that order.

Infosys clocked highest turnover of Rs 366.51 crore on BSE. SBI (Rs 148.17 crore), Sun Pharmaceutical Industries (Rs 104.63 crore), SpiceJet (Rs 88.77 crore) and JSW Steel (Rs 87.19 crore) were the other turnover toppers in that order.

India has decided in principle to allow foreign direct investment (FDI) from Pakistan, Trade Minister Anand Sharma said on Friday, in the latest sign of improving commercial ties between the nuclear-armed rivals.

The government will unveil data on inflation based on the wholesale price index (WPI) for March 2012 on Monday, 16 April 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.

The Reserve Bank of India's (RBI) monetary policy review for 2012-13 is due on 17 April 2012.

Industrial production rose by a smaller-than-expected 4.1% in February 2012, with the government also sharply revising downward the industrial production growth for January 2012 citing wrong sugar output data. Industrial production growth for January was revised downward to 1.14% from the 6.8% expansion reported earlier.

Manufacturing output, which has a 75.5% weight in the index of industrial production, rose 4% from a year earlier in February. It had risen a revised 1.4% on year in January compared with 8.5% reported earlier. Electricity production increased 8% from a year earlier in February while capital goods output rose 10.6%.

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.

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 and Ambuja Cements unveil quarterly results on 19 April 2012. Cairn India reports FY 2012 results on 20 April 2012. TCS unveils FY 2012 results on 23 April 2012. Wipro unveils Q4 results on 25 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. FMCG giant Hindustan Lever unveils FY 2012 results on 1 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Ranbaxy Laboratories unveils its Q1 March 2012 results on 9 May 2012.

European stocks edged lower on Friday after China's first-quarter growth slowed to its weakest pace in three years, fueling concerns that the world's second largest economy may not be heading for a soft landing. Key benchmark indices in UK, France and Germany were down by 0.45% to 1.22%.

Asian shares rose on Friday on better-than-expected demand for Italian sovereign debt, shrugging off a rocket launch by North Korea before the market open. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan, South Korea and Singapore rose by between 0.33% to 1.84%.

North Korea's much hyped long-range rocket apparently crashed into the sea a few minutes after launch on Friday, dealing a blow to the prestige of the reclusive state.

China's economy grew at its weakest pace in nearly three years in the first quarter, with the annual rate of expansion slowing more than expected to 8.1% from 8.9% in the previous three months, the National Bureau of Statistics said on Friday.

Singapore's gross domestic product accelerated at a faster-than-expected 9.9% in the first quarter of 2012 from the preceding three months. The seasonally-adjusted, annualized growth rate of 9.9% was driven by a sharp increase in manufacturing output, and compares with a 2.5% contraction in the October-December period.

Meanwhile, the Bank of Korea kept its key rate steady at 3.25% for the tenth straight month on Friday.

Trading in US index futures indicated that the Dow could fall 41 points at the opening bell on Friday, 13 April 2012. U.S. stocks rose on Thursday after the New York Federal Reserve's president reiterated that interest rates will likely remain low and traders took an optimistic view of global growth, shrugging off a soft domestic jobs market report. New applications for jobless benefits last week saw their biggest weekly rise in nearly a year and were higher than expected. Initial jobless claims rose by 13,000 to a seasonally adjusted 380,000, the Labor Department said. The prior week's level of claims was revised upward.

U.S. wholesale prices were unchanged in March as gasoline costs declined, the department said in a separate report. Meanwhile, the U.S. trade deficit registered its biggest contraction in nearly three years in February. The deficit in international trade of goods and services fell 12.4% to $46.03 billion, the Commerce Department said, compared with expectations of $52.2 billion. January's result was revised down slightly.