Market corrects on profit booking

The market declined last week on profit booking, triggered by the India Meteorological Department (IMD) on 24 April 2014, announcing that the country will likely get below-normal levels of monsoon rain this year. Key benchmark indices declined in all four trading sessions in the week. The stock market was shut on Thursday, 1 May 2014, on account of May Day.

The S&P BSE Sensex fell 284.18 points or 1.25% to 22,403.89. The 50-unit CNX Nifty fell 87.95 points or 1.30% to 6,694.80.

The S&P BSE Mid-Cap index fell 16.18 points or 0.22% to 7,357.46 and the S&P BSE Small-Cap index fell 64.53 points or 0.85% to 7,532.81. Both these indices outperformed the Sensex.

Foreign institutional investors (FIIs) bought shares worth a net Rs 9602.40 crore in April 2014. FIIs purchased shares worth a net Rs 20077.20 crore in March 2014. FIIs have bought shares worth a net Rs 32377.60 crore in this calendar year so far (till 30 April 2014). FIIs bought shares worth a net Rs 113135.70 crore in 2013 calendar year.

Key benchmark indices edged lower on Monday, 28 April 2014. The S&P BSE Sensex fell 56.46 points or 0.25% to 22,631.61. The CNX Nifty fell 21.50 points or 0.32% to 6,761.25.

Indian stocks fell for the third day in a row on Tuesday, 29 April 2014. The S&P BSE Sensex fell 165.42 points or 0.73% to 22,466.19. The CNX Nifty fell 46 points or 0.68% to 6,715.25.

Volatility ruled the roost on the bourses on Wednesday, 30 April 2014. Key benchmark indices settled lower after fluctuating between positive and negative terrain throughout the session. The S&P BSE Sensex fell 48.39 points or 0.22% to 22,417.80. The CNX Nifty fell 18.85 points or 0.28% to 6,696.40.

Key benchmark indices settled marginally lower amid a choppy trading session on Friday, 2 May 2014. The S&P BSE Sensex fell 13.91 points or 0.06% to 22,403.89. The CNX Nifty fell 1.60 points or 0.02% to 6,694.80.

Among the 30 Sensex shares, 23 declined and remaining shares rose.

Tata Steel was biggest Sensex loser last week. The stock fell 8.33% to Rs 390.75. The company's new Coke Oven Battery 11 was commissioned on Tuesday, 29 April 2014 by Mr Cyrus P. Mistry, Tata Group Chairman at Jamshedpur. The company made announcement after market hours on Tuesday, 29 April 2014. With the commissioning of the Coke Oven Battery 11, the company will be self-sufficient in coke requirement for stable operation of Jamshedpur Steel works. Built at a production capacity of 0.7 million tonnes per annum, the Coke Oven Battery 11 operates with 88 ovens with stamp charge technology and is the largest coke oven complex at the Jamshedpur works. The state-of-the-art facility meets all environmental norms and consists of various features to take care of the plant and human safety.

Sesa Sterlite dropped 6.57% to Rs 180.50. The company's consolidated net profit as per adjusted proforma basis fell 31.34% to Rs 1222 crore on 7.05% rise in net sales to Rs 20784 crore in Q4 March 2014 over Q3 December 2013. The result was announced during market hours Tuesday, 29 April 2014.

Sesa Sterlite's consolidated net profit as per adjusted proforma basis fell 31.34% to Rs 1222 crore on 7.05% rise in net sales to Rs 20784 crore in Q4 March 2014 over Q3 December 2013. Sesa Sterlite attributed rise in Q4 sales to higher volumes across businesses. The Sesa Sterlite merger and the Vedanta Group consolidation was completed in August 2013 and hence the actual Q3, Q4 and FY 2014 numbers are not comparable with those of the corresponding prior periods, the company said.

Sesa Sterlite's consolidated net profit as per adjusted proforma basis fell 30.98% to Rs 5005 crore on 1.12% rise in net sales to Rs 72591 crore in the year 31 March 2014 over the year ended 31 March 2013.

Sesa Sterlite said that full year actual financial numbers include results of all consolidating entities of Sesa Sterlite for the full year, except Cairn India, which is consolidated from 26 August 2013. Hence, the company has drawn an adjusted proforma account for FY 2014 to indicate the performance during the period, had the merger been effected from beginning of the period. The adjusted proforma numbers also excludes the impact of a one-time tax benefit during Q2, at the time of the merger. Similarly, the adjusted proforma numbers for FY 2013 have been prepared on the same lines, as if the restructuring and full consolidation had taken place as of 1 April 2012.

In line with the Q3 adjusted proforma numbers, Q4 adjusted proforma have been provided to reflect the goodwill amortisation on the basis of production at Lisheen mine as compared to the accelerated amortisation carried out in Q2 actuals. However, an additional amount of Rs 298 crore for goodwill of Lisheen mine has been provided in Q4 adjusted proforma to align the full year amortisation charge between actual and adjusted proforma numbers, Sesa Sterlite said.

Hindalco Industries tumbled 7.81% to Rs 132.25.

Capital goods shares witnessed selling pressure. Larsen & Toubro (down 6.49% to Rs 1263.15) and Bhel (down 5.45% to Rs 180.35), edged lower.

Mahindra & Mahindra (M&M) fell 1.28% to Rs 1,056.55. The company reported weak sales in April. The company's Farm Equipment Sector's (FES) domestic sales fell 10% to 19.895 units in April 2014 over April 2013. Total tractor sales (domestic + exports) dropped 11% to 20,731 units in April 2014 over April 2013. Exports declined 17% to 836 units in April 2014 over April 2013.

M&M's auto sales declined 12% to 36274 units in April 2014 over April 2013. Exports rose 42% to 2167 units in April 2014 over April 2013. Domestic sales declined 15% to 34107 units in April 2014 over April 2013. The sales figures were announced on Thursday, 1 May 2014.

Hero MotoCorp fell 0.31% to Rs 2,197. The company's total sales rose 14.4% to 571,054 units in April 2014 over April 2013. Total sales rose 14.4% to 571,054 units in April 2014 over April 2013. This is highest-ever non-festive season monthly sales for the company, surpassing the previous highest of 557,890 units sold in May 2013. The company recorded all-time high monthly sales of 625,420 units in festival month of October 2013, Hero MotoCorp said. The sales figures were announced on Thursday, 1 May 2014, when the stock market was closed on account of May Day.

Bajaj Auto fell 4.60% to Rs 1,904.65. Bajaj Auto's total sales fell 4% to 3.31 lakh units in April 2014 over April 2013. Exports rose 16% to 1.5 lakh units in April 2014 over April 2013. Commercial vehicles sales dropped 26% to 31,893 units in April 2014 over April 2013. Motorcycle sales slipped 0.39% to 2.99 lakh units in April 2014 over April 2013. The company declared sales volume data for April 2014 during market hours on Friday, 2 May 2014.

Maruti Suzuki India lost 3.61% to Rs 1,885.50. The company's total vehicle sales declined 11.4% to 86,196 units in April 2014 over April 2013. Total domestic sales fell 12.6% to 79,119 units in April 2014 over April 2013. The company's total exports rose 4.4% to 7,077 units in April 2014 over April 2013. The sales figures were announced on Thursday, 1 May 2014, when the stock market was closed on account of May Day.

Tata Motors fell 2.15% to Rs 414.70. The company said after market hours Friday, 2 May 2014, its total sales (including exports) of Tata commercial and passenger vehicles in April 2014 were 33,892 vehicles, a decline of 34% over 51,160 vehicles sold in April 2013. The company's domestic sales of Tata commercial and passenger vehicles for April 2014 were 30,670 units, 36% decline over 47,595 units sold in April last year. The company's sales of commercial vehicles in April 2014 in the domestic market were 23,229 units, a 36% decline compared to 36,025 vehicles sold in April last year. LCV sales were 14,804 units, a decline of 43% over April last year, while M&HCV sales stood at 8,425 units, a decline of 16% over April last year. Sales of passenger vehicles for April 2014 were at 7,441 units, lower by 36% over 11,570 vehicles sold in April 2013. Sales of the Nano/ Indica/ Indigo range in April 2014 were 5,653 units, lower by 37% over 8,918 vehicles sold in April 2013. The Sumo/ Safari/ Aria/ Venture range sales were 1,788 units, 33% decline over 2,652 units, sold in April last year. The company's sales from exports were 3,222 units in April 2014, registered a decline of 10% compared to 3,565 vehicles in April last year.

Bharti Airtel fell 4.50% to Rs 325.70. On a consolidated basis, the company's net profit jumped 89.07% to Rs 961.60 crore on 13.62% increase in total income to Rs 22,260.50 crore in Q4 March 2014 over Q4 March 2013. The results are as per International Financial Reporting Standards (IFRS). The company announced the results after market hours on Tuesday, 29 April 2014.

Dr.Reddy's Laboratories (up 4.25%), ONGC (up 2.41%), Cipla (up 1.84%), HDFC (up 1.76%), Wipro (up 1.51%), Infosys (up 1.43%), Sun Pharmaceutical Industries (up 1.16%) and TCS (up 0.30%), edged higher last week.

On the macro front, the country will likely get below-normal levels of monsoon rain this year, the India Meteorological Department (IMD) said on 24 April 2014. The IMD said that the rainfall during the June-September summer rainy season will likely be 95% of the long-term average for the country. India's weather department defines a normal monsoon as one with rainfall between 96% and 104% of the 50-year average, which is 89 centimeters this year. This year could be a below normal monsoon, the weather department said, as there is a 60% possibility of the emergence of the El Niño weather phenomenon—a warm weather system that starts in the southern Pacific can affect weather around the world. El Niño last affected India's monsoon in 2009 when the monsoon rainfall was 23% below normal.

Annual rains are important for India as most of its farmlands are dependent or rain for irrigation and more than half of its workforce is employed in agriculture. The monsoon rains usually arrive over the southern state of Kerala by the end of May or the first week of June, and gradually cover the entire country by July. The IMD will issue the update forecasts in June 2014 as a part of the second stage forecast. Along with the update forecast, separate forecasts for the monthly (July and August) rainfall over the country as a whole and seasonal (June-September) rainfall over the four geographical regions of India will also be issued.