Nifty hits 3-1/2-week closing low

Key benchmark indices fell for the second straight day as weak European stocks and lower US index futures hurt sentiment. The 50-unit S&P CNX Nifty reached its lowest closing level in 3-1/2 weeks. The barometer index, BSE Sensex, hit its lowest closing level in almost 1-1/2 weeks. The Sensex shed 277.16 points or 1.6%, off close to 350 points from the day's high and up about 40 points from the day's low. The market breadth was weak. All the 13 sectoral indices on BSE were in the red. From a recent high of 17,503.71 on Thursday, 19 April 2012, the Sensex declined 407.03 points or 2.32% in two trading sessions. The Sensex has declined 307.52 points or 1.76% so far in April 2012 (till 23 April 2012). The index has surged 1,641.76 points or 10.62% in calendar 2012 so far (till 23 April 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,960.82 points or 12.95%. From a 52-week high of 19,697.49 on 25 April 2011, the Sensex has lost 2,600.81 points or 13.2%. Coming back to today's trade, metal stocks declined as global commodity prices dropped. Index heavyweight Reliance Industries (RIL) trimmed intraday gains. India's second largest software services exporter by revenue, Infosys, fell on reports that the company is under scrutiny from US authorities for likely errors in employer eligibility documents of its staff. Capital goods pivotals fell for the fourth straight day. Shares of DLF fell more than 4% after the Bombay Stock Exchange (BSE) said that pharma major Dr Reddy's Laboratories (DRL) will replace realty major DLF in the benchmark 30-share Sensex. Telecom stocks fell across the board on reports telecom regulator Telecom Regulatory Authority of India (Trai) has proposed high 2G spectrum auction base price. The market moved into the positive terrain after opening lower. The market extended initial gains to hit fresh intraday high in morning trade. A bout of volatility was witnessed as key benchmark indices moved into the positive terrain after slipping into the red for a brief period in mid-morning trade. The market reversed direction to hit fresh intraday low in early afternoon trade. Key benchmark indices hit fresh intraday lows in afternoon trade as European shares dropped in early trade. The market extended losses to hit fresh intraday low in mid-afternoon trade. The market weakened further to hit one-week low in late trade. The BSE Sensex shed 277.16 points or 1.6% to settle at 17,096.68, its lowest closing level since 13 April 2012. The index fell 317.07 points at the day's low of 17,056.77 in late trade. The index rose 70.34 points at the day's high of 17,444.18 in morning trade. The S&P CNX Nifty shed 90.25 points or 1.71% to settle at 5,200.60, its lowest closing level since 29 March 2012. The Nifty hit a low of 5,187.15 and a high of 5,310.55 in intraday trade. The BSE Mid-Cap index declined 1.67% and underperformed the Sensex. The BSE Small-Cap index fell 1.54% and outperformed the Sensex. BSE clocked turnover of Rs 2025 crore, lower than Rs 2208.98 crore on Friday, 20 April 2012. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,800 shares fell and 990 shares rose. A total of 105 shares were unchanged. The breadth was positive in early trade. From the 30-share Sensex pack, 25 fell while only five rose. Index heavyweight Reliance Industries (RIL) rose 0.64% to Rs 736.10, off the day's high of Rs 745.40. The company after market hours on Friday, 20 April 2012, reported 21.2% fall in net profit to Rs 4236 crore on 16.7% rise in turnover to Rs 87833 crore in Q4 March 2012 over Q4 March 2011. The company reported GRM (gross refining margin), the difference between the price of petroleum products and crude oil, of $7.6 per barrel in Q4 March 2012 compared with GRM of $6.8 per barrel in Q3 December 2011 and $9.2 per barrel in Q4 March 2011. Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, RIL said: "Our businesses have delivered industry leading performances. This is a reflection of the quality of our assets and growing demand for our products and services in India and internationally. We have created a strong foundation for future growth and are investing in our core upstream and petrochemical businesses in India. Response to our organized retail business has been very encouraging and we continue to expand our footprint by building more stores across verticals, formats and geographies. We remain committed towards providing world class, high speed wireless data services through the launch of our broadband access business." Cairn India fell 1.64%, with the stock reversing initial gains. The company after market hours on Friday, 20 April 2012, reported 11.04% fall in consolidated net profit to Rs 2186.23 crore on 1.37% rise in total income to Rs 3743.61 crore in Q4 March 2012 over Q4 March 2011. Rahul Dhir, managing director and chief executive officer, Cairn India said, "The ONGC-Cairn joint venture has reached a major milestone of achieving 175,000 barrels of oil per day (bopd) production from Rajasthan. Positive results of the EOR pilot, re-evaluation of the exploration potential in Rajasthan along with the discovered resource support a basin production potential of 300,000 bopd. We continue to add value and to contribute to our nation's energy security. Last year, we have reduced oil imports by $6 billion and have contributed $2.4 billion to the national exchequer". ONGC rose 0.7% on reports the company has decided to set up a Rs 5000-crore urea fertiliser manufacturing unit in North Tripura district. The site for establishing the project has been selected at Khobal considering close proximity to the Khobal gas field from where the natural gas (hydrocarbon) would be supplied. Last year, ONGC had discovered huge gas reserves at Khobal near the Assam-Agartala National Highway (NH-44). With the commissioning of the project, the demand for urea fertiliser will be met not only for Tripura but also for the entire North-East region and a large chunk of the fertiliser could be exported to the neighbouring Bangladesh. Metal stocks declined as global commodity prices edged lower. Sterlite Industries, Bhushan Steel, Tata Steel, Sail, Hindustan Zinc and Hindalco Industries shed by between 0.31% to 4,88%. JSW Steel tumbled 5.4%. The company has denied media reports that the Supreme Court appointed Central empowered committee (CEC) has submitted its report dated 20 April, 2012 recommending extension of scope of CBI investigation against JSW Group Companies. The company said the report submitted by CEC is yet to be considered by the Supreme Court. JSW Steel said it has no captive mines. The company said it is not connected with any of the alleged mining activities. The company or any of its group companies have not obtained any benefits from the genuine expenditure incurred either towards philanthropic and social causes for which the Group is committed to or in purchase of land for corporate purposes. JSW Steel further added that it follows highest standards of corporate governance and compiles with law of the land. JSW Steel said it will file its objections at appropriate time to the CEC report before the Honorable Supreme Court and contest the recommendations of the CEC before the Court. JSW Steel further assured that it will take all necessary steps to protect the interest of all its stakeholders. Telecom stocks fell across the board on reports telecom regulator Telecom Regulatory Authority of India (Trai) has proposed a base price in the auction of 2G spectrum in the 900 mega hertz band at twice the base price set for a 3G spectrum auction in 2010. MTNL, Tata Teleservices (Maharashtra), Idea Celluar, Reliance Communications, and Bharti Airtel fell by between 1.26% to 5.51%. The regulator is due to send the government its recommendations on the rules for the auction, which is to be held after the Supreme Court ordered cancellation of all telecoms permits awarded in a scandal-tainted 2008 sale and to redistribute them through an open bidding process. IT stocks fell on weak economic data in Europe, the second largest outsourcing market for Indian IT firms after the US. India's second largest software services exporter by revenue, Infosys, fell 3.92% on reports that the company is under scrutiny from US authorities for likely errors in employer eligibility documents of its staff. The stock was the top loser from the Sensex pack. Infosys' shares saw a steep fall recently after a weaker-than-expected revenue growth outlook for the current fiscal year. India's third largest software services exporter by revenues Wipro dropped 0.57%. India's largest software services exporter by revenues Tata Consultancy Services (TCS) fell 2.77%, with the stock reversing initial gains ahead of its FY 2012 results today, 23 April 2012. Shares of DLF fell 4.21% after the Bombay Stock Exchange (BSE) said that pharma major Dr Reddy's Laboratories will replace realty major DLF in the benchmark 30-share Sensex. The change will come into effect from 11 June 2012. Among other realty stocks, HDIL, DB Realty and Unitech dropped by between 2.14% to 5.11%. Capital goods pivotals fell for the fourth straight day. India's largest power equipment maker by sales Bhel shed 4.19%, with the stock reversing initial gains. India's largest engineering and construction firm by order book L&T declined 2.88%, with the stock reversing initial gains. The company announced during market hours on Friday that the SUN Group has commissioned one of the fastest executed solar projects in India at the Gujarat Solar Park, which was inaugurated by Gujarat Chief Minister Narendra Modi in the Patan district. The 6MWp project was completed in a little over 3 months in association with L&T, who provided the Engineering, Procurement and Construction (EPC) services for the project. NTPC gained 0.3% after the company said during market hours today that the Unit-II of 500 megawatts (MW) of Indira Gandhi Super Thermal Power Station at Jhajjar of Aravali Power Company (APCPL) is declared on commercial operation from 21 April 2012. With this the total commercial capacity of Indira Gandhi Super Thermal Power Station has become 1,000 MW and that of NTPC Group at 35,354 MW. APCPL is a joint venture (JV) between NTPC, Haryana Power Generation Corporation, Govt. of Haryana and Indraprastha Power Generation Company and Govt. of Delhi Bank stocks declined across the board. India's second largest private sector bank in terms of net profit HDFC Bank fell 1.13% to Rs 544.90. The stock had struck a record high of Rs 557.70 on Friday, 20 April 2012. The bank's net profit rose 30.4% to Rs 1453.10 crore on 32.1% rise in total income to Rs 8880 crore in Q4 March 2012 over Q4 March 2011. The result was announced during market hours on 18 April 2012. India's largest bank by branch network State Bank of India shed 3.02%. The bank said during market hours today that it has decided to revise its retail term deposit rates across various tenors, with reduction ranging from 0.25% to 1% with effect from 24 April 2012. The bank may not cut lending rates in the near term as costs of deposits continue to be high, Chairman Pratip Chaudhuri told reporters on Monday, after the bank lowered its deposit rates. India's largest private sector bank in terms of net profit, ICICI Bank, shed 1.98%. The bank announced during market hours on 19 April 2012 that it has reduced base rate by 0.25% with effect from today, 23 April 2012. The revised rate will be 9.75% from 10% earlier. The bank has also announced a reduction of 0.25% in its benchmark prime lending rate and floating reference rate (FRR) for consumer loans (including home loans) from 23 April 2012. Bank of Baroda declined 2.04%. The bank announced after market hours on Friday, 20 April 2012, that in response to the Reserve Bank of India's (RBl) move to reduce the policy rate by 50 basis points (bps) in its Annual Monetary Policy unveiled on 17th April, the bank has decided to reduce its deposit rates by 25 to 50 bps in various maturities and its Base Rate and benchmark prime lending rate (BPLR) by 25 bps each with effect from 1 May 2012 to revive the sagging investment sentiment in the country. With this, the bank's Base rate will be at 10.50% and BPLR at 14.75% from 1 May 2012. IDBI Bank fell 0.99%, with the stock reversing initial gains. The bank's net profit jumped 49.3% to Rs 770.78 crore on 20.3% growth in total income to Rs 6856.42 crore in Q4 March 2012 over Q4 March 2011. IDBI Bank said the figures of the previous period include the working results of the two erstwhile wholly owned subsidiary of the bank namely IDBI Home Finance and IDBI Gilts for the period from 1 January 2011 to 31 March 2011 consequent on merging with the bank. Accordingly, the figures of the previous year are not strictly comparable, the IDBI Bank said. Figures for the previous year have been regrouped and rearranged wherever considered necessary to make them comparable with current year's figures, IDBI Bank said. Among other banking stocks, Axis Bank, Bank of India and Punjab National Bank dropped by between 2.03% to 3.75%. Shares of paper manufacturing companies bucked weak market. West Coast Paper Mills, Andhra Pradesh Paper Mills, Ballarpur Industries and Tamil Nadu Newsprint and Papers rose by between 3.56% to 16.94%. Interest rate sensitive auto stocks fell on profit taking after recent strong gains triggered after the Reserve Bank of India (RBI) cutting the repo rate by a sharper-than-expected 50 basis points in its monetary policy review on Tuesday, 17 April 2012. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. India's largest small car maker by sales Maruti Suzuki India declined 1.12%. The company said during market hours today that Shri Bhupinder Singh Hooda, Chief Minister of Haryana, inaugurated institute of Driving and Traffic Research (IDTR) managed by Maruti Suzuki India at Rohtak in Haryana. IDTR Rohtak is expected to train over 20,000 people annually in safe driving, Maruti said. India's largest tractor maker by sales Mahindra & Mahindra (M&M) declined 1.6%. The government reportedly approved the foreign direct investment (FDI) proposal worth of Rs 25.99 crore for company's radar systems. India's largest commercial vehicle maker by sales Tata Motors fell 2.19% to Rs 309.75. The stock had hit a record high of Rs 320.60 on Friday, 20 April 2012. The company recently reported 26% rise in global vehicle sales to 1.39 lakh units in March 2012 over March 2011. Global sales of all commercial vehicles were reported at 63,791 units in March 2012, a growth of 12% over March 2011. Passenger cars sales stood at 75,864 vehicles, a rise of 41% from a year previously. Sales of its Jaguar Land Rover (JLR) brands stood at 36,471 vehicles in the month, an annual rise of 51%. Tata Motors sold 12.52 lakh vehicles globally in the fiscal year ended March 2012, a 16% increase on sales in the fiscal year ended March 2011. The country's largest two-wheeler maker Hero MotoCorp dropped 1.92%. The country's second largest two-wheeler maker Bajaj Auto lost 2.61%. Pharma major, Sun Pharmaceutical Industries rose 1.07% on defensive buying. Reliance Anil Dhirubhai Ambani (ADA) Group shares declined across the board. Reliance Infrastructure, Reliance Broadcast Network, Reliance Capital, Reliance MediaWorks and Reliance Power fell by between 2.82% to 5.25%. SpiceJet clocked highest volume of 92.81 lakh shares on BSE. Kingfisher Airlines (74.12 lakh shares), Cals Refineries (67.76 lakh shares), Dazzel Confindiv (66.85 lakh shares) and Acil Cotton Industries (60.49 lakh shares) were the other volume toppers in that order. SBI clocked highest turnover of Rs 142.50 crore on BSE. Infosys (Rs 91.11 crore), RIL (Rs 78.95 crore), Tata Steel (Rs 53.71 crore) and Gravita India (Rs 38.57 crore) were the other turnover toppers in that order. The market may remain volatile this week as traders roll over positions from the near-month April 2012 series to May 2012 series. The April 2012 derivatives contracts expire on Thursday, 26 April 2012. Investors are closely watching India Inc's Q4 March 2012 and year ending March 2012 (FY 2012) earnings. Focus is on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. Sesa Goa unveils Q4 results on 24 April 2012. Wipro and Sterlite Industries India unveil their Q4 results on 25 April 2012. ICICI Bank unveils FY 2012 results on 27 April 2012. Axis Bank, Jindal Steel & Power and Siemens unveil quarterly results on the same day. Maruti Suzuki India unveils FY 2012 results on 28 April 2012. FMCG giant Hindustan Unilever unveils FY 2012 results on 1 May 2012. Hero MotoCorp announces Q4 results on 2 May 2012. Housing finance major HDFC announces FY 2012 results on 7 May 2012. Hindalco unveils Q4 results on 8 May 2012. Ranbaxy Laboratories will declare its Q1 March 2012 results on 9 May 2012. Dr Reddy's Laboratories announces FY 2012 results on 11 May 2012. Bajaj Auto announces FY 2012 results on 17 May 2012. BPCL unveils FY 2012 results on 25 May 2012. The Reserve Bank of India (RBI) in its annual monetary policy for 2012-13 on 17 April 2012 cut repo rate, by a sharper-than-expected 50 basis points to give a boost to flagging economic growth. The RBI, however, warned that there is limited scope for further rate cuts. The RBI left unchanged the cash reserve ratio (CRR), the share of deposits that banks must hold with the central bank, at 4.75%, in line with expectations, after cutting it by 125 basis points since January 2012 to ease tight market liquidity. The RBI said its baseline expectation for GDP growth in the fiscal year that ends in March 2013 is 7.3%, compared with an expected 6.9% in the year ended March 2012. It expects headline inflation to end the year at 6.5%, with little deviation expected during the year. The RBI had raised rates 13 times between March 2010 and October 2011 as it struggled to contain price pressures. European stock markets tumbled on Monday after weak manufacturing data for China and Europe and as French presidential elections fueled fears of further euro-zone turmoil. Key benchmark indices in UK, France and Germany were down by between 1.58% to 2.64%. The latest data showed business activity in the euro zone contracted at a faster-than-expected pace in April. The manufacturing purchasing managers' index dropped to the lowest level in 34 months to 46 in April from a reading of 47.7 in March. A reading below 50 indicates a contraction. In France, Socialist candidate François Hollande beat President Nicolas Sarkozy in the first-round presidential election voting on Sunday. The pair will face off on May 6 in a runoff election. Hollande has already vowed to renegotiate the fiscal compact, a treaty designed to enshrine tougher budget cuts across the euro zone and the brainchild of German Chancellor Angela Merkel. Meanwhile, pressure also remained on Spain, where bond yields rose above 6%. Asian stocks edged lower amidst volatility on Monday, 23 April 2012 after a preliminary reading of China's manufacturing activity showed further contraction in April, although at a slower pace. Key benchmark indices in China, Hong Kong, Japan, Indonesia, Singapore, South Korea and Taiwan were down by between 0.10% to 1.84%. China's manufacturing activity contracted further in April, although the sector improved from levels seen in March, a preliminary reading from HSBC showed Monday. HSBC's so-called "flash" Purchasing Managers' Index rose to 49.1 in April, compared with a final reading of 48.3 in March. A reading below 50 shows contraction, while one above 50 indicates an expansion. The Group of 20 nations on Friday pledged $430 billion in new funding to the International Monetary Fund, more than doubling its lending power in a bid to protect the global economy from the euro-zone debt crisis. The promised funds from advanced and emerging economies will provide the global lender with a huge war chest should the sovereign debt problems that have engulfed three euro zone countries spread and threaten a fragile recovery. Trading in US index futures indicated that the Dow could fall 122 points at the opening bell on Monday, 23 April 2012.