Sensex holds 19,000 in choppy trade

The key benchmark indices ended a choppy trading session lower as investors digested a number of third quarter corporate results, prominent being that of ITC, Bharat Heavy Electricals and Punjab National Bank. Firm European stocks helped Indian stocks recoup intraday losses in late trade. Reliance Industries (RIL) edged higher ahead of Q3 results, which hit the market after trading hours. Net profit jumped 28% on the back of improved refining margins.



Index heavyweight ICICI Bank, too, edged higher. Metal, FMCG and IT stocks declined. Wipro slumped more than 4% after the company surprised markets with the resignations of the joint-CEOs of its information technology business at the time of announcing the third quarter results today, 21 January 2011. ONGC slumped more than 2% after detecting oil leak off the Mumbai coast. The market breadth was positive. Mid and small-cap indices on BSE were in green.

The BSE 30-share Sensex was down 39.01 points or 0.2%, off close to 60 points from the day's high and up close to 75 points from the day's low. The Sensex closed above the psychological 19,000 mark, after moving above and below that level in intraday trade. The 50-unit S&P CNX Nifty settled below 5,700.

Intraday volatility was high as traders rolled positions in the derivatives segment from January 2011 series to February 2011 series ahead of the expiry of the near-month January 2011 contracts next week. The market recovered after a weak start. The market weakened once again amid a bout of volatility in morning trade. The market cut looses after hitting fresh intraday low in mid-morning trade. The market slipped into the red after reversing losses to hit fresh intraday high in early afternoon trade. The market held negative zone in afternoon trade. Volatility was at the forefront as the key benchmark indices cut losses after tumbling to fresh intraday low in mid-afternoon trade. The market once again trimmed losses in late trade.

Foreign institutional investors (FIIs) sold shares worth a net Rs 834.30 crore on Thursday, 20 January 2011, which was substantially higher than an outflow of Rs 208.10 crore on Wednesday, 19 January 2011. FII outflow in January 2011 totaled Rs 3484.20 crore (till 20 January 2011). FIIs had bought equities worth Rs 2049.60 crore in December 2010.

The results announced so far showed the combined net profit of 253 companies rose 23.3% to Rs 24155 crore on 26.6% rise in sales to Rs 174109 crore in Q3 December 2010 over Q3 December 2009.

Reserve Bank of India chief Duvvuri Subbarao said on Friday he discussed the country's macroeconomic situation with Finance Minister Pranab Mukherjee, as they met for a customary meeting ahead of a policy review.

High food prices have raised fears of further hike in policy rates by the central bank. As per a poll by Capital Market, economists widely expect 25 basis points increase each in repo rate and reverse repo rate at 25 January 2011 policy review. Reserve Bank of India governor Duvvuri Subbarao said on Monday, 17 January 2011, that the country is facing surging inflation and that the RBI needs to calibrate monetary policy in order to manage inflation and also support growth.

Stronger banks and oils helped European shares bounce back on Friday from losses in the past session on worries about further monetary tightening by China. The key benchmark indices in France, Germany and UK rose by between 0.5% to 1.16%.

Asian stocks slipped on worries that rising inflation may invite aggressive policy tightening and hurt growth in the world's engines like China and India. The key benchmark indices in Hong Kong, Indonesia, Japan, Singapore and South Korea fell by between 0.53% to 2.16%. Indonesian shares extended recent losses amid concerns that the central bank might aggressively raise interest rates in coming months to tackle inflation.

The key benchmark indices in China and Taiwan rose by between 0.29% to 1.43%.

US index futures reversed initial losses. Trading in US index futures indicated that the Dow could gain 15 points at the opening bell on Friday, 21 January 2011. US stocks fell on Thursday, 20 January 2011, as lackluster tech and materials sector earnings failed to live up to heightened expectations, threatening to short-circuit a seven-week run.

The latest data indicated that two weak spots in the US economy -- housing and jobs -- appear to be on the mend. US existing home sales jumped more than expected in December despite bad weather as the housing sector struggled to recover from a severe slump, according to a report from the National Association of Realtors. The Labor Department reported that US initial jobless claims posted their biggest weekly decline in nearly a year.

Back home, food inflation moderated for the second week in a row in the early part of January after spiking to nearly a two-year peak in late December, providing some more relief to both policymakers and consumers alike. Annual rate of inflation in the sensitive Food Articles space decreased in the week ended 8 January 2011, data released by the government showed on Thursday. This was the second decline in food inflation after rising for five consecutive weeks.

Inflation in the Food Articles group fell to 15.52% in the week ended 8 January 2011 from 16.91% in the week ended 1 January 2011, the Union Commerce & Industry said today. Inflation in the Primary Articles group also declined to 17.03% in the week under review from 17.58% in the preceding week. Inflation in the Fuel & Power group remained unchanged at 11.53% in the week ended 8 January, the Commerce & Industry said on Thursday.

The wholesale price index (WPI) rose an annual 8.43% in December 2010 on higher food prices, government data showed on Friday, 14 January 2011. The annual reading for October 2010 was revised upwards to 9.12% from 8.58%.

The BSE 30-share Sensex was down 39.01 points or 0.2% to 19007.53. The index rose 18.80 points at the day's high of 19,065.34 in early afternoon trade. The index declined 114.14 points at the day's low of 18,932.40 in mid-afternoon trade.

The S&P CNX Nifty was down 15.10 points or 0.26% at 5,696.50.

The BSE Mid-Cap index rose 0.22%. The BSE Small-Cap index gained 0.46%. Both these indices outperformed the Sensex.

Sectoral indices on BSE were mixed. The BSE Oil & Gas index (up 0.78%), banking sector index Bankex (up 0.77%), Power index (up 0.67%), Consumer Durables index (up 0.53%), PSU index (up 0.29%), Capital Goods index (up 0.17%), Auto index (up 0.12%) and Healthcare index (down 0.17), outperformed the Sensex. The BSE Realty index (down 0.5%), Metal index (down 0.73%), FMCG index (down 1.28%), and IT index (down 1.29%), underperformed the Sensex.

The market breadth, indicating the health of the market, was positive. On BSE, 1516 shares advanced while 1366 shares declined. A total of 104 shares remained unchanged. The breadth was much stronger earlier in the day.

Among the 30-member Sensex pack, 18 declined while the rest gained.

BSE clocked turnover of Rs 3023 crore, lower than Rs 3347.16 crore on Thursday, 20 January 2011.

Index heavyweight Reliance Industries (RIL) rose 1.73%. Net profit rose 28.14% to Rs 5136 crore on 5.15% rise in net turnover to Rs 59789 crore in Q3 December 2010 over Q3 December 2009.

PSU OMCs gained as worries that China's economy is overheating and a surprise increase in US oil inventories pushed oil futures below $90 a barrel level. BPCL, HPCL and Indian Oil Corporation rose by between 2,78% to 4.57%. Lower crude oil prices will reduced under-recoveries of state-run oil marketing firms on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

But, oil exploration stocks declined as lower crude oil prices would result in lower realizations from crude sales. Oil India and Cairn India declined by between 1.53% to 1.95%.

India's state-run Oil and Natural Gas Corporation (ONGC) declined 2.57% on reports that a leakage has been detected in a pipeline at its off-shore operations about 80 kilometres off Mumbai coast, which could mean a loss of about 25,000 barrels. Oil Secretary S. Sundareshan said the leakage should be plugged soon. ONGC said the leak was in its Mumbai Uran Trunk (MUT) pipeline and that oil and gas output from Mumbai High was being diverted to the ICP-Heera Uran Trunk (HUT) line. The leak was detected at around 8:45 IST and ONGC said in a statement production should be lost only for about three hours. ONGC said it was sending vessels to the site to ascertain the extent of leakage to contain it and repair the pipeline.

Interest rate sensitive banking stocks gained on expectations of strong Q3 result. India's largest bank by net profit and branch network State Bank of India (SBI) rose 2.49%, ahead of its Q3 result tomorrow, 22 January 2011.

India's largest private sector bank by market capitalisation ICICI Bank rose 1.43% to Rs 1065.85, off the day's low of Rs 1034.20. State-run Air India has given ICICI Bank the mandate to refinance loans to purchase 21 Airbus A 320 aircraft worth Rs 5500 crore.

Punjab National Bank fell 1.81%, reversing initial gains. Net profit rose 7.75% to Rs 1089.77 crore on 27.89% rise in total income to Rs 7976.35 crore in Q3 December 2010 over Q3 December 2009. The result was announced during trading hours.

India's second largest private sector bank by net profit HDFC Bank fell 0.91%.

India's largest cigarette maker by sales ITC was down 1.63% to Rs 168.95. The stock was volatile, hitting a high of Rs 172.65 and low of Rs 168.30. Net profit rose 21.41% to Rs 1389.08 crore on 18.72% increase in total income to Rs 5706.78 in Q3 December 2010 over Q3 December 2009. The result was announced during trading hours today.

Among other FMCG stocks, Marico, Nestle India and Hindustan Unilever fell by between 0.68% to 3.15%.

Metal stocks fell as LMEX, a gauge of six metals traded on the London Metal Exchange declined 1.72% on Thursday, 20 January 2011. Sterlite Industries, National Aluminum Company, Hindustan Zinc, Jindal Steel & Power, Hindalco Industries, JSW Steel and Steel Authority of India shed by between 0.03% to 2.5%.

Tata Steel declined 0.84% to Rs 629.60. The company's follow-on public offer (FPO) was subscribed 5.97 times, receiving bids for 29.06 crore shares compared with 4.86 crore shares on offer, by 17:00 IST on the last day of bidding for the issue today, data on NSE showed. The price band for the FPO has been set at Rs 594-610 a share.

The company on Tuesday, 18 January 2011, finalised allocation of 83.25 lakh equity shares to anchor investors at Rs 610 per share, the top end of the Rs 594-610 price band for the follow-on public offer (FPO).

India's third largest IT exporter by sales Wipro declined 4.59% and was the top loser from the Sensex pack after company surprised markets with the resignations of the joint-CEOs of its information technology business, after reporting profit growth rates which lagged bigger rivals. Wipro's net profit as per International Financial Reporting Standards rose 10% to Rs 1319 crore on 12% increase in total revenue to Rs 7829 crore in Q3 December 2010 over Q3 December 2009. The results hit the market before trading hours today.

Wipro's IT services revenue in dollar terms rose 5.6% to $1.34 billion in Q3 December 2010 over Q2 September 2010. Revenue from consumer care and lighting business rose 21% and earnings before interest and taxation from this segment grew 14% in Q3 December 2010 over Q3 December 2009. Wipro added 36 new clients in the quarter. There was a net addition of 3591 employees during the quarter.

The operating margins for IT services business was flat, despite lower working days and drop in utilization, Wipro Executive Director & Chief Financial Officer Suresh Senapaty said. Wipro expects 3% to 5% growth in revenue from IT services business at between $1.38 billion to $1.41 billion in Q4 March 2011 over Q3 December 2010.

The board of Wipro has declared an interim dividend of Rs 2 per share for the year ending March 2011 (FY 2011)

Wipro surprised markets with the resignations of the joint-CEOs of its information technology (IT) business at the time of announcing the third quarter results today, 21 January 2011. Both, Girish Paranjpe and Suresh Vaswani have resigned. The company has appointed T. K. Kurien as CEO (IT Business) & executive director with effect from 1 February 2011.

TCS rose 0.06% reversing initial losses. The stock hit record high of Rs 1,219.50 on Thursday, 20 January 2011. The stock had jumped 5.48% on Tuesday, 18 January 2011, after reporting forecast-beating Q3 result. On a consolidated basis, net profit rose 9.25% to Rs 2369.83 crore on 5.35% increase in total income to Rs 9857.56 crore in Q3 December 2010 over Q2 September 2010. The result was announced after trading hours on Monday, 17 January 2011.

IT bellwether Infosys declined 1.34%. Consolidated net profit rose 2.5% to Rs 1,780 crore on 2.3% rise in revenues to Rs 7106 crore in Q3 December 2010 over Q2 September 2010 as per International Financial Reporting Standards. The result was announced on Thursday 13 January 2011.

Bhel rose 1.75% as net profit rose 30.82% to Rs 1403.23 crore on 24.63% rise in net sales to Rs 8849.27 crroe in Q3 December 2010 over Q3 December 2009. The result was announced during trading hours today.

ACC fell 1.9% after company said on Friday its board would consider on 3 February 2011 merging three units with the company. ACC, 46% owned by Swiss cement major Holcim, will also report Q4 earnings on the same day.

Telecom stocks were mixed. Reliance Communications gained 2.14%. Bharti Airtel and Idea Cellular fell 1.09% and 0.29% respectively.

Auto shares were mixed. India's largest truck maker by sales Tata Motors declined 0.63%. The company's global sales surged 21% to 90,294 units in December 2010 over December 2009. While Jaguar sales declined 10% to 4,332 units, Land Rover sales posted 4% growth to 17,021 units. Meanwhile, as per media reports, Tata Motors has bagged an order to sell 4,000 Jaguar and 36,000 Land Rover in China in 2011.

India's leading tractor maker by sales Mahindra & Mahindra gained 1.4%. The $7.1 billion Mahindra Group recently announced a new brand position -- Rise. This is the first time that Mahindra as a group, which spans from aerospace to automotive, from farm equipment to IT and logistics, will communicate with one brand voice, one face and one 'Mahindra' fore purpose, M&M said.

Bajaj Auto gained 1.14%. Net profit rose 40.40% to Rs 667.11 crore on 28.40% increase in total income to Rs 4276.54 crore in Q3 December 2010 over Q3 December 2009. The result was announced during trading hours on Wednesday, 19 January 2011.

But, India's largest carmaker by sales Maruti Suzuki India shed 0.79%. India's top bike maker by sales Hero Honda Motors fell 1.25%.

Some interest rate sensitive realty shares edged lower on worries higher interest rates could dent demand for residential and commercial properties. Unitech, DLF and Acruti City fell by between 0.46% to 1.56%.

SVC Resources clocked highest volume of 2.79 crore shares on BSE. Sanraa Media (1.49 crore shares), LIC Housing Finance (1.19 crore shares), Cals Refineries (95.64 lakh shares) and Lloyd Steel Industries (83.81 lakh shares) were the other volume toppers in that order.

LIC Housing Finance clocked highest turnover of Rs 232.45 crore on BSE. State Bank of India (Rs 175.13 crore), C Mahendra Exports (89.13 crore), Tata Coffee (Rs 82.77 crore) and Reliance Industries (Rs 79.70 crore) were the other turnover toppers in that order.