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Monday, April 30, 2007
Good Evening - Apr 30 2007
Key indices opened down nearly 1% as investors booked profits following the 4.5% gain in indices in the last five sessions. Weak Asian markets also hit sentiment. Asian markets were weak today due to a slide in metal prices and on concerns over Japan's economic growth. Bank of Japan today kept its overnight call rate unchanged. Profit sales after five straight sessions of gains and weakness in Asian market dragged Sensex and Nifty nearly 1% early today. The Nifty was weighed down by Cipla shares, which fell 14% to Rs 218 after the company Thursday reported a 34% drop in Jan-Mar net profit to Rs 1.26 bn. Citigroup has reduced the stock's target price to Rs 170. At 10:36AM, Sensex was 14089.57, down 139.37 points or 0.9%. Nifty was at 4135.85, down 42.00 points or 1.0%. The two indices have gained 4.5% over the last five sessions and are now nearing record highs touched in February. Investors here also unwound positions ahead of the weekend. The CNX Midcap Index was flat and S&P CNX 500 Index down 0.6%. On the BSE, there were 725 advances and 821 declines in morning session. Reliance Industries was down on profit sales after reporting better-than-expected Jan-Mar earnings Thursday. Among Nifty gainers: Ranbaxy Lab was up 1.1% at Rs 375, Wipro rose 1.0% to Rs 569, and Tata Motors was up 0.8% at Rs 773. Ranbaxy Lab gained ahead of its Jan-Mar earnings later today. The company's net profit is seen growing 76% on year to Rs 1.2 bn. Automobile shares extended gains as concerns over high interest rates cutting into demand and profits have slightly eased after the RBI left its key rates unchanged at its policy review Tuesday. The BSE Auto Index gained 1%. Investors will eye the inflation rate for week to Apr 14 and earnings of Bharti Airtel for further cues. In the mid trading session, indices were down 2%. Profit sales, after recent gains, and weakness in Asian markets .Sentiment was not affected even as inflation for the week to Apr 14 remained unchanged at 6.09%, against expectations of a rise to 6.14%. At 1:50PM, BSE Sensex was at 13976.08, down 252.80 points, or 1.8% from Thursday. NSE Nifty was at 4100.90, down 76.95 points, or 1.8%. Ranbaxy Laboratories was down 1% after it reported Jan-Mar earnings that missed street estimate. The company's net profit for the quarter was Rs 1.15 bn, up 129% on year. The BSE Healthcare Index shed 4%. Sterlite Industries was down 3% ahead of its March quarter earnings Thursday. Hindustan Zinc, from which Sterlite derives 70% of its profit, Thursday reported fourth quarter earnings below analysts' estimates. Among the few gainers, Siemens India gained 1.3%, Satyam Computer rose 1.4%, while Maruti Udyog rose 1%. Cipla, down 15%, was worst-hit among Nifty stocks. Reliance Industries shares were down 2.5% at Rs 1,555 due to profit-booking. No. of Scrips Value (Crs.) Advances 277 1894 Declines 767 6173 Unchanged 27 81 Total 1071 8148 Bharti Airtel fell 2% to Rs 844 after the company said average revenue per user for Jan-Mar quarter declined 5% from the previous quarter to Rs 406. Key indices ended down 2.4% as investors sold shares of pharmaceutical companies and heavyweights like ONGC, and Tata Steel. Today, Nifty fell more than 2% due to heavy selling in shares of pharmaceutical companies and index heavyweights. Weakness in Asian markets and lack of buying due to caution ahead of the weekend worsened the fall. Today, Bank of Japan left its overnight call rates unchanged. The finance minister and RBI officials meet later today to discuss ECB inflows, according to reports. Sensex ended at 13908.58, down 320.30 points or 2.3%, after touching a low of 13884.53 and a high of 14219.25 intraday. Nifty ended at 4083.50, down 94.35 points or 2.3%. It moved between a low of 4074.30 and a high of 4182.00. The combined turnover on both exchanges was 120 bn. The CNX Midcap Index was down 1% and S&P CNX 500 Index was down 2%. .Pharmaceutical shares were the worst hit in the Nifty after Cipla late Thursday reported Jan-Mar earnings that missed street expectations. The company's net profit for the March quarter was 1.3 bn, down 34%. Cipla shares ended at Rs 217, down 14%, the worst hit in the Nifty. Ranbaxy Laboratories erased the session's losses to end nearly flat at Rs 371. The company reported Jan-Mar net at Rs 1.15 bn, marginally above estimates. The BSE Healthcare Index ended down 4%. Some of the biggest losers today were heavyweights ONGC, down 3.3% at Rs 926, Tata Steel, down 4.1% at Rs 537, and Reliance Industries, down 3.6% at Rs 1,539. Sterlite Industries, which derives 70% of its profits from Hindustan Zinc, fell as Hindustan Zinc Thursday reported Jan-Mar earnings below analysts' estimates. Sterlite details fourth quarter results Thursday. Among the rare gainers, ABB was up 1% at Rs 4,141, extending gains on robust March quarter earnings detailed Wednesday. Tech stocks ended in mixed trend. Infosys was down at Rs 2005.15 with volumes of Rs 330.41 crs, Satyam was up at Rs 467.85 with volumes of Rs 159.98 crs, TCS was down at Rs 1234.50 with volumes of Rs 147.62 crs, and Wipro closed up at Rs 565.75 with volumes of Rs 52.64 crs. Pharma stocks ended negative with exception. Cipla was down at Rs 217.10 with volumes of Rs 406.56 crs, Ranbaxy closed up at Rs 370.70 with volumes of Rs 65.23 crs, Dr Reddy was down at Rs 701.55 with volumes of Rs 27.86 crs, and Sun Pharma closed down at Rs 1038.05 with volumes of Rs 14.08 crs. Banking stocks showed negativity with exception. In the Public Sector banks SBI closed down at Rs 1101.65 with volumes Rs 166.40 crs & Bank Of India closed down at Rs 195.70 with volumes Rs 60.37 crs. In the private sector ICICI Bank closed down at Rs 935.15 with volume of Rs 117.07 crs & Kotak Bank closed up at Rs 521.55 with volumes of Rs 68.97 crs. Auto Stocks ended down. Tata Motors closed down at Rs 749.35 with volumes of Rs.143.63 crs & M&M closed down at Rs 762.25 with volumes of Rs 68.24 crs. While in the 2 wheeler segment stocks, Baja Auto closed down at Rs 2456.30 with volumes of Rs 62.28 crs & Hero Honda closed down at Rs 667.40 with volumes of Rs 11.43 crs. Cement Stocks witnessed negative trend. ACC closed down at Rs 822.45 with volumes of Rs 62.73 crs, India Cement closed down at Rs 176.35 with volumes of Rs 42.63 crs, GACL closed up at Rs 117.35 with volumes of Rs 28.07 crs and Shree Cement closed down at Rs 1050.05 with volumes of Rs 7.06 crs. Nifty ended at 4084 down by 94 points
Market Close: bouyancy in the air !
On the last day of month indices traded weak at the start on negative global cues and more of lack of positive triggers. ICICI equity dilution along with its unimpressive results disappointed investors. This is a holiday shortened week with markets closed for 2 dats. Investors tend to play safe in such times. However markets managed to see recovery in late trading session to end flat. Last hour recovery was largely led by Reliance communication post is 4Q numbers. RIL also led to some recovery at the end. Selective mid and small caps outperformed for the day. Some economic worries seems to be hovering global markets we really needs to wait and watch how they pan out.
Sensex closed down by 36 points at 13872.37. Weighing on the Sensex were losses in ICICI Bk (865.9,-7 percent), HLL (199.4,-5 percent), Cipla (210.85,-3 percent), ONGC (911.9,-2 percent) and Bharti Tele (812.05,-2 percent). Losses were restricted by gains in RCVL (477.1,+4 percent), TCS (1265.7,+3 percent), Hero Honda (683.6,+2 percent), TISCO (549.6,+2 percent) and Infosys (2049.3501,+2 percent).
Reliance Communication declared excellent results for Q4FY07 results. Net profits jumped 154% to Rs 1,023 crore from Rs 403 crore in same period of last financial year and revenues up by 32.5% to Rs 3,936 crore versus Rs 2,970 crore. For quarter-on-quarter, it has posted net profit of Rs 1,023 crore versus Rs 924 crore, a growth of 10.7% and revenues of Rs 3,936 crore compared to Rs 3,755 crore in previous quarters, up by 4.8%. R Com?s Q4 EBITDA stood at Rs 1,635 crore and margin at 41.5%. Wireless margins in the fourth quarter were at 39%, global business margins at 24% and enterprise business margins at 49%. For FY07, the company has reported net profit of Rs 3,163 crore and revenues of Rs 14,468 crore. The results were above market expectation. The Telecom stocks ended in strong except few stocks. R Com closed up by 3.35% while its peer Bharti and MTNL closed down by 1.36% and 1.92%. VSNL and Tata Tele closed up by 1.3% and 7.79% respectively.
Hindustan Lever has posted healthy results for the quarter ended March 07. The company posted net profits of Rs 393 cr for the March end quarter against Rs 443 cr for the quarter previous year, up 7%. Total Income for the quarter increased by 14% and stood at Rs 3275 cr against Rs 2867 cr in the same quarter previous year. The results were not comparable to the extent of amalgamation of Modern Foods (India) Ltd and its subsidiary with the Company. Consumer goods ended in mixed while HLL closed down by 4.84% and its peer P&G also closed marginally down. Competition is high and with the need of stronger advertising and promodtion costs needed to drive growth markets seem to sense tougher times ahead on increased advertising costs. All media companies saw bouyancy. HT has announced a hike in advertising rates and that indicates tough times for FMCG companies.
Wipro is planning to set up an IT park in Nagpur at a new special economic zone (SEZ) near Multi-modal International Hub Airport (Mihan). The company informed that have acquired 117 acres of land by making a 20% upfront payment to the Maharashtra Airport Development Company (MADC). Wipro is believed to start a software development centre and will further consider expanding its other businesses such as business process outsourcing (BPO), business process management and knowledge services. The company has set a target of 1.5 - 2 years for the IT Park at Mihan to get operational. Earlier, MADC allotted 100 acres each to Satyam Computer Systems and Shapoorji Pallonji & Co, and 120 acres to L&T Infocity for setting up IT parks at Mihan. Software stocks ended in strong while Wipro closed marginally up and its peer Infosys and TCS closed up by 2.5%. The reason for the strength was a weaker rupee which was up on the RBI increasing the limits for MSS (Monetory stabilisation system) resources to 110000 cr. The RBI seems to have indicated that its ready to intervene after having waited out for 3 weeks.
Technically Speaking: It was a weak session for the whole day before closing. Sensex touched intraday high of 13901 and low of 13693. The Sensex has moved into a corrective phase but we believe the downside will be capped at around 13590-13600. On the higher side Resistance lies at 14075, 14190 levels, Support lies at 13757, 13621 levels. Market turnover was pretty low at Rs 3255 cr. Overall breadth was in favor of Advances, where the Advances stood at 1426, Declines stood at 1061.
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Sensex spared a steep drop
The market staged a solid intra-day rebound in the second half, as Reliance Industries (RIL) rebounded after an initial slide. Reliance Communications (RCL) also shot back up on the back of strong Q4 results. A recovery in State Bank of India and HDFC Bank also came about in the latter of trading. IT stocks were in demand right from the onset of the trading session. But FMCG giant Hindustan Lever (HLL) came under selling pressure soon after its Q1 results hit the market in early afternoon trade.
Select side-counters were in demand due to their strong Q4 results. A few other scrips rose on expectations of good earnings.
The Sensex’s provisional closing was 13,893.66, a fall of just 14.92 points. It reverted from the lower level after having plunged as many as 214.99 points in mid-morning trade, as ICICI Bank tumbled after the bank announced a large equity issue along with a dismal financial performance in Q4 March 2007. The results were announced after trading hours on Saturday (28 April).
The BSE clocked a turnover of Rs 3255 crore.
Reliance Communications (RCL) gained 3.3% to Rs 475.50, off the session’s low of Rs 447. A strong 34.3 lakh shares changed hands in the counter on BSE. RCL today reported a consolidated net profit of Rs 1024.41 crore in Q4 March 2007. It did not give figures in the corresponding period last year. As per available data, RCL had a consolidated net profit of Rs 440 crore in Q4 March 2006.
Reliance Industries (RIL) rose 2% to Rs 1571, off an early low of Rs 1505. RIL had on Thursday reported stronger-than- expected 14% growth in net profit in Q4 March 2007.
IT firms rose as anxious market men awaited changes, if any, with respect to a proposal in the Union Budget 2007-08 for bringing employee stock options plans under the fringe benefit tax. Infosys rose 2% to Rs 2050.50, TCS added 2.5% to Rs 1265, Satyam Computer gained 1.4% to Rs 474, Wipro advanced 1.4% to Rs 574 and Tech Mahindra surged 9% to Rs 1612.90. The Union Budget 2007-08 is due to be passed by Parliament on Thursday (3 May).
Tata Steel gained 2.5% to Rs 55.10. The stock has been witnessing alternate bouts of buying and selling since unveiling a funding plan for the acquisition of Corus, which may lead to substantial equity dilution in phases.
Cement shares were in demand. ACC rose 2.2% to Rs 840 and Grasim gained 0.5% to Rs 2435.
Hindustan Lever (HLL) plunged 5% to Rs 199.05. The stock declined on high volume of over 17 lakh shares on BSE. HLL's net profit, excluding extraordinary gains, rose 13.6% to Rs 334 crore from Rs 294 crore.
ICICI Bank was down 7% to Rs 867, after announcing a large equity issue along with a dismal financial performance in Q4 March 2007. The stock hit a low of Rs 844.10. A whopping 9.8 lakh shares changed hands in the counter on BSE. ICICI Bank, on Saturday, posted lower-than-expected Q4 earnings due to higher cost of funds. ICICI Bank’s net profit rose 4.45% to Rs 825.12 crore in the quarter ended March 2007, against Rs 789.93 crore during the previous quarter ended March 2006. Total income for the bank rose 54.2% at Rs 8495 crore.
Concerns of huge equity dilution also weighed on the stock. Along with Q4 results, ICICI Bank’s board approved raising additional equity capital by way of a public issue of shares and of American Depositary Shares (ADSs). The exercise is expected to generate around Rs 20000 crore. The approval of shareholders will be sought by postal ballot, the private sector bank said.
Housing finance major HDFC lost 1.8% to Rs 1655. The company unveils Q4 March 2007 results on Thursday (3 May). Oil exploration major ONGC lost 2% to Rs 910.50, extending Friday’s decline.
The market remains closed on Tuesday (1 May) and Wednesday (2 May) on account of public holidays.
European shares were mixed in early trade on Monday. London’s FTSE 100 Index was down 0.06%, whereas key benchmark indices in Germany and France were up 0.2 - 0.5%.
Chinese stocks on Monday shrugged off a central bank announcement at the weekend that it will raise bank reserve ratios to help restrain loan growth. The Shanghai Composite Index was up 2.1%.
But other Asian markets were subdued, as exporters were hit by a weak US GDP growth data. A report on Friday showed the US economy grew by just 1.3% in the first quarter.
Strong earnings helped lift the Dow to another record close above 13,000 on Friday (27 April). It rose 15.44 points, or 0.12%, to end the day at a record 13,120.94, capping off its fourth straight week of gains. The Standard & Poor's 500 Index was down just 0.18 of a point, or 0.01%, to finish at 1,494.07. The Nasdaq Composite Index was up 2.75 points, or 0.11%, to close at 2,557.21.
Brent crude oil prices hovered above $68 a barrel following sharp gains at the end of last week, with investors still on the edge over a foiled plot to attack oil facilities in top-exporter Saudi Arabia. Brent rallied over 1% on Friday after Saudi Arabia said it fended off an Al-Qaeda-linked plot to attack oil facilities, military bases and public figures, arresting Islamist militants, including some trainee pilots preparing for suicide operations.
Market overcomes early blues
The market seems to be nearing to another phase of correction. After dipping over 300 points in the last session, today the market opened on a bearish note, down 86 points to its previous close on the back of weak Asian indices. The Sensex succumbed to heavy losses as bears tightened their grip by selling heavyweights, banking and information technology stocks. By the mid morning trades the Sensex touched the intra-day low of 13694. The market witnessed selective buying at lower levels in the afternoon and the Sensex recovered 200 points from its day's low. The Sensex finally ended the session with a loss of 36 points at 13872, while the Nifty gained four points at 4088.
The broader market remained positive. Of the 2,548 stocks traded on the BSE, 1,406 stocks advanced, 1,061 stocks declined and 81 stocks ended unchanged. Most of the sectoral indices ended in positive territory. The BSE IT Index gained 2.01% at 5053, the BSE Teck advanced 1.52% at 3725 while the BSE Bankex Index dropped 2.88% at 6883 and the BSE FMCG Index shed 1.13% at 1801.
Among the blue-chips, Reliance Communication shot up by 3.69% at Rs477, TCS soared 2.53% at Rs1,266, Hero Honda surged 2.30% at Rs684, Tata Steel advanced by 2.22% at Rs550, Infosys added 2.12% at Rs2,049, ACC moved up 2.06% at Rs839, Reliance Industries scaled up 1.42% at Rs1,560 and Satyam Computer was up 1.25% at Rs473. Among the laggards ICICI Bank dropped 7.26% at Rs866 and HLL shed 4.82% at Rs199 while Cipla, ONGC, Bharti Airtel, HDFC and Hindalco closed marginally lower.
Banking stocks came under sharp selling pressure. Oriental Bank tumbled by 7.55% at Rs197, Bank of Baroda slipped 2.86% at Rs236 and Bank of India slumped 1.94% at Rs192.
Over 3.58 crore IFCI shares changed hands on the BSE followed by Tata Teliservices (1.20 crore shares), GV Films (42.26 lakh shares), Orbit Corporation (39.48 lakh shares) and Reliance Communication (34.40 lakh shares).
Value-wise Reliance Communication registered a turnover of Rs160 crore on the BSE followed by IFCI (Rs154 crore), Reliance Industries (Rs117 crore), Tech Mahindra (Rs88 crore) and ICICI Bank (Rs85 crore).
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