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Monday, January 25, 2010
More cloud than silver lining
Today's major news
Gujarat NRE Coke’s Q3 net profit doubles; the stock jumps 2.60%
HCL Technologies’ Q2 net profit down at Rs296.8 crore; the stock tumbles 5.68%
LIC Housing’s bottom line grew by 14%; the stock ends the day 0.40% lower
Shree Renuka Sugars approves bonus issue; the stock surges 2.22%
J. Kumar Infraprojects bags orders; the stock shots up 4.76%
Click here for more stories
Post-market summary
Global signals
European indices were trading weak in morning trades, as energy stocks fell the most. At the time of writing this report, FTSE 100 was trading down marginal 0.24%.
All Asian indices closed lower. Nikkei hits four week closing low. SGX Nifty closed 9 points lower.
US stock futures opened higher on Friday after sharp sell-off in the last week.
Indian indices
The bears continue to hit back the market on fourth straight session. The Sensex opened 12 points lower at 16847 and continued its southward journey to touch the day’s low of 16705. However it recovered the losses in afternoon and touched the day’s high of 16877. Towards the close, lower than expected results of Mahindra & Mahindra drag the Sensex back to red zone. The Sensex ended the session 79 points lower at 16780 whereas Nifty shed 28 points to close at 5008.
Market sentiment
The market breadth was negative, with the losers outnumbering the gainers. Of the 2,913 stocks traded on the BSE, 1,747 stocks declined, 1,105 stocks advanced and 61 stocks ended unchanged.
Sectoral & stock screening
Overall, bears were in firm control. Only fast moving consumer goods (FMCG) and capital goods drew investor interest with the BSE FMCG up by 1.14% and BSE CG 0.425 higher. Realty and automobile industry were hit the most with the BSE Realty and BSE Auto down by 2.88% and 2.14% respectively. The remaining indices were down by less than 2%.
Leveraging investor interest in FMCG stocks, Hindustan Unilever moved up 2.35% and ITC advanced 2.21%, occupying No2 and No 3 slot among the 30 Sensex stocks. The top slot went to Bharti Airtel that gained 2.86% for the day. Among laggards, Mahindra & Mahindra declined 5.24%, Jaiprakash Associates tumbled 3.27%, DLF lost 2.77%, and Tata Steel plunged 2.24%.
Viewing volumes
With investors seeing high probability of government selling its stake in the public sector unit Rashtriya Chemicals and Fertilisers, over 1.06 crore shares changed hands on the BSE—the highest for any stock. This was followed by Ispat Industries (0.86 crore shares) wind turbine major Suzlon Energy (0.74 crore shares), Jai Corp (0.70 crore shares), India’s second biggest realty company Unitech (0.51 crore shares).
Sensex falls 4.87% in last five days
The key benchmark indices extended losses for the fifth straight session with weak global cues playing the spoilsport. High volatility was the hallmark of the day's trading session. However, firm US index futures cushioned steep losses. The BSE 30-share Sensex fell 79.22 points or 0.47%, up 75 points from the day's low and off 100 points from the day's high. From the recent high of 17,641.08 on 18 January 2010, Sensex fell 860.62 points or 4.87% to 16,780.46 on Monday, 25 January 2010. The market remains closed on Tuesday, 26 January 2010 on account of republic day holiday.
The undertone was cautious ahead of derivatives expiry, RBI's monetary policy and earnings from frontline companies. Weak global cues had played the spoilsport in early trade. US stocks tumbled in their worst three-day slide in 10 months on Friday, pulling Asian stocks lower today, 25 January 2010. European markets, were lower. The S&P CNX Nifty, which crashed below the psychological 5,000 mark in opening trade, regained that level in late trade. The market breadth was negative after a positive start.
Aggregate results of 670 Indian companies showed 50% advance in net profit on 20% rise in sales in quarter ended December 2009 over the quarter ended December 2008.
Core sector, which comprises six key infrastructure industries, grew 6% in December 2009, compared with 5.3% growth in November 2009. The growth, signifying a recovery in industrial manufacturing, was primarily led by an increase in the production of finished steel, cement and electricity last month. The core sector growth stood at 0.7% in December 2008, due to the economic slowdown.
The sector, which accounts for 26.7% of the index of industrial production (IIP), grew 4.8% in April-December 2009 period, against 3.2% in the corresponding period of 2008-09, the commerce and industry ministry data showed on 23 January 2010.
Meanwhile India will get a $770 million loan from the World Bank for three projects in the southern state of Andhra Pradesh, the finance ministry said in a statement on Friday, 22 January 2010. With these new loan agreements, the multilateral agency's total ongoing commitment to India has increased to $19.38 billion, the statement added. In the current fiscal year to end-March 2010, the World Bank has committed fund assistance worth $5.5 billion to India.
As per reports, the government is considering an across-the-board increase in excise duty in Budget 2010-11, as it faces pressure to withdraw fiscal stimulus measures in the wake of a 16-year high fiscal deficit of 6.8% in the current financial year. One option being considered is an increase in Cenvat rate by 2% while leaving the service tax rate unchanged at 10%, reports citing an unnamed finance ministry official indicated. Cenvat refers to the median excise duty, tax on manufacture of goods, levied on nearly 90% of the goods made in the country.
Also more services could be brought under the tax net to allow the government to keep service tax rates unchanged. An alternative proposal is also under consideration which seeks an increase in excise rates in sectors that are doing well such as automobiles, instead of an across-the-board hike.
Equities are likely to remain volatile in a truncated week as traders roll positions in the derivative segment from January 2010 series to February 2010 series ahead of the expiry of the near-month January 2010 contracts on Thursday, 28 January 2010. The market remains closed on Tuesday, 26 January 2010, on account of Republic Day.
The Reserve Bank of India (RBI) will hold its quarterly monetary policy review on 29 January 2010 and is widely expected to increase the cash reserve ratio (CRR) requirements for banks, but economists are divided on when it will raise interest rates. CRR is the level of cash that banks must keep in deposit with the central bank.
A CRR increase would have little impact on market, as investors have mostly factored in at least a 25 basis points increase in banks' reserve requirement and steady interest rates. Increases in both the CRR and interest rates could however weigh on shares of banks as well as sectors such as auto and property on concerns loan demand may slow.
The food price index rose 16.81% in the 12 months to 9 January 2010, while the fuel index was up 6.34%, the government said on Thursday. The rise in food price index was lower than an annual rise of 17.28% in the previous week.
The annual wholesale inflation rose to 7.31% in December 2009, compared with 4.78% in November and 6.15% a year ago. Finance minister Pranab Mukherjee said on Wednesday the government was taking steps to contain inflation. The situation is constantly under review, he said. He also promised more measures to check the rise in the prices of essential commodities.
European shares were trading lower today, 25 January 2010 weighed by banking stocks. Key benchmark indices in UK, Germany were down by between 0.15% 0.34%. But France's CAC 40 rose 0.22%.
Asian stocks fell for the sixth straight day as concern mounted that a US government plan to limit risk-taking at financial companies will reduce profits and derail a global economic recovery. Key benchmark indices in China, Taiwan, Hong Kong, South Korea, Japan, Singapore were down by between 0.28% and 1.09%.
US stocks tumbled in their worst three-day slide in 10 months on Friday, 22 January 2010, on fears the White House's plan to curb bank risk-taking would cut profits and a drop in tech shares after Google Inc's disappointing results.
The Dow Jones industrial average dropped 216.90 points, or 2.09%, to 10,172.98. The Standard & Poor's 500 Index slid 24.72 points, or 2.21%, to 1,091.76. The Nasdaq Composite Index fell 60.41 points, or 2.67%, to 2,205.29.
In the three day selloff, the Dow lost 5.1%, the S&P lost 5.1% and the Nasdaq lost 5%.
Uncertainty about the Senate's confirmation of Ben Bernanke for another term as the Federal Reserve's chairman also rattled investors in a week when political squabbles helped erase stocks' gains for 2010.
Aside from worrying about how the Obama administration's proposals might hurt bank profits, investors also fretted about the likely impact of China's efforts to prevent the world's third-largest economy from overheating. Since China has led the nascent global economic recovery, any curbs it puts on lending threatens to slow demand that other economies, including the United States, had relied upon to spur their own growth.
Fears that China will get more aggressive in reducing the risk of asset bubbles sent investors bailing from China-focused stock funds for an 18th consecutive week, research firm EPFR Global said on Friday. Investors pulled $348 million from China equity funds in the week ended 20 January 2010, the biggest outflow in 18 weeks.
Though global emerging market equity funds attracted $748 million in fresh money in the week of Jan. 20, Asia ex-Japan equity funds took in only $29 million because of the China-related outflows. Net inflows to emerging market bond funds hit the highest in eight weeks and US bond funds extended a streak of inflows to 55 weeks.
Trading in US index futures showed the Dow could rise 92 points at the opening bell on Monday, 25 January 2010.
Back home, the BSE 30-share Sensex fell 79.22 points or 0.47% to 16,780.46. The Sensex opened 11.98 points lower at 16,847.70. At the day's low of 16,705.56 the Sensex declined 154.12 points in mid-morning trade. Sensex rose 18.09 points at the day's high of 16,877.77 in mid-afternoon trade.
The S&P CNX Nifty fell 28.10 points or 0.56% to 5007.90. The Nifty crashed below the psychological 5,000 mark to hit a low of 4983.05 in opening trade.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1748 shares declined as compared with 1107 that rose. A total of 60 shares remained unchanged. Breadth was positive in morning session.
BSE clocked a turnover of Rs 4812 crore lower than Rs 6560.62 crore on Friday, 22 January 2010.
Among the 30-member Sensex pack, 17 declined while the rest gained.
The BSE Mid-Cap index fell 1.3% and the BSE Small-Cap index fell 0.9%. Both the indices underperformed Sensex.
India's largest motorbike maker by sales Hero Honda Motors fell 1.48%. The company's net profit surged 78.34% to Rs 535.77 crore in Q3 December 2009 over Q3 December 2008. The company announced the result after market hours today.
India's largest tractor maker by sales Mahindra and Mahindra (M&M) plunged 5.24% after it reported lower-than-expected earnings for the latest quarter ended December 2009. It was the top loser from the Sensex pack.
M&M's net profit surged 849% to Rs 413.70 crore on a 56.32% rise in sales to Rs 4478.70 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on Monday, 25 January 2010. Meanwhile, the company on Monday approved a 2-for-1 stock split.
India's top small car maker by sales Maruti Suzuki India rose 0.39%. The company reported higher than expected earnings in the third quarter. Its net profit surged 221.92% to Rs 687.53 crore on a 62.50% rise in sales to Rs 7372.65 crore in Q3 December 2009 over Q3 December 2008. The result was announced on Saturday, 23 January 2010.
Shares related to the infrastructure sector declined as investors continued to dump them on concerns of high valuation and poor financials. Jaiprakash Associates, IVRCL Infrastructure & Projects, Era Infra Engineering fell by between 0.44% to 5.01%.
However India's largest engineering & construction firm by sales Larsen & Toubro (L&T) rose 1.24%. The stock halted a two-day slide triggered after the company cut its revenue growth target to 10% from 15% at the time of announcing Q3 results on Thursday. L&T said profit after tax from ordinary activities rose 15% to Rs 696 crore in Q3 December 2009 over Q3 December 2008. Gross sales revenue declined 6% to Rs 8139 crore.
Rate sensitive realty shares declined ahead of the RBI's quarterly monetary policy review meet on 29 January 2010. DLF (down 2.54%), Unitech, HDIL, Indiabulls Real Estate and Parsvnath Developers fell by between 2.77% to 5.02%.
Power generation stocks declined as investors shuffled their portfolios ahead of the upcoming mega follow-on-public (FPO) offer of NPTC. Tata Power Company, Torrent Power, CESC, Reliance Power fell by between 0.5% to 1.19%.
However, India's largest power generation firm by total capacity NTPC rose 0.52%. The company FPO remains open between 3 and 5 February 2010. The pricing has not yet been announced by the company. Speaking in an interview to a news agency, the company's chairman last week said he expects an upcoming sale of its shares by the government to raise up to Rs 12,000 crore.
Metal stocks declined, extending Friday's fall on profit booking. The fall came despite LMEX, a gauge of six metals traded on the London Metal Exchange, rising 0.25% on Friday, 22 January 2010.
Tata Steel, Jindal Stainless, Sail, Sesa Goa and National Aluminum Company fell by between 0.54% to 2.24%.
Sterlite Industries fell1.19% . The company's consolidated net profit rose 42% to Rs 731 crore in Q3 December 2009 over Q3 DEcember 2008. The company announced the result after market hours today.
Hindalco Industries (down 1.46%), declined ahead of its Q3 earnings today, 25 January 2010.
Private sector banking shares declined as investors turned cautious on rate sensitive stocks ahead of the Reserve Bank of India's monetary policy review meet on 29 January 2010.
India's second largest private sector bank by net profit HDFC Bank fell 1.3% following a 3.49% slide in its ADR on Friday. India's largest private sector bank by net profit ICICI Bank lost 1.08%.
However, India's largest bank by net profit and branch network State Bank of India rose 0.15%. The bank's net profit remained unchanged at Rs 2479 crore in Q3 December 2009 over Q3 December 2008. The bank announced the result after market hours today.
Telecom shares were mixed after the government has amended overseas borrowing rules allowing winners in an upcoming 3G wireless spectrum auction to pay the fee in rupees, which could be later refinanced by overseas borrowing within 12 months.The move will help telecom companies to raise funds from the domestic market for the payment upfront, and give them flexibility to refinance the fee through cheaper overseas borrowings later. The government is expected to complete the 3G auction by March 2010.India's largest cellular services provider by sales Bharti Airtel gained 2.86% and was the top gainer from the Sensex pack. On consolidated basis, the company's net profit rose 13.2% to Rs 2236.90 crore on a 6.6% increase in total income to Rs 10327.57 crore in Q3 December 2009 over Q3 December 2008. The result was announced during trading hours on 22 January 2010.
However India's second largest cellular services provider by sales Reliance Communications lost 1.57%. The company will declare its Q3 December 2009 earnings on 30 January 2010.
Select FMCG shares gained on defensive buying as investors shuffled portfolio to low beta stocks with the market fall extending to fifth-day today.
India's largest FMCG firm by sales Hindustan Unilever gained 2.35%. The company announces its Q3 December 2009 earnings on 26 January 2010.
India's largest cigarette maker by sales ITC rose 2.21% as net profit rose 26.67% to Rs 1144.17 crore in Q3 December 2009 over Q3 December 2008. The company announced Q3 result during market hours on 22 January 2010.
Diversified major Grasim Industries rose 0.42% after the company posted 80.81% spurt in net profit to Rs 595.88 crore on a 14.79% rise in sales to Rs 3051.89 crore in Q3 December 2009 over Q3 December 2008. The result was announced after market hours on Friday, 22 January 2010.
Index heavyweight Reliance Industries (RIL) fell 1.09%. The company's net profit rose 15.77% to Rs 4008 crore on 89.77% surge in total income to Rs 57364 crore in Q3 December 2009 over Q3 December 2008. RIL said the results had been reworked and restated to include figures from Reliance Petroleum, which it absorbed last year. The company announced the Q3 result during market hours on 22 January 2010.
IT stocks declined following Google Inc's disappointing results and on fears the Obama administration's bank plan will crimp outsourcing demand.
India's second largest IT exporter by sales Infosys fell 1.37%. India's third largest software services exporter Wipro lost 0.74%. India's largest IT exporter by sales Tata Consultancy Services was flat at Rs 755.75.
HCL Technologies lost 5.68% after net profit declined 15.07% to Rs 255.44 crore on 2.78% fall in total income 1259.22 crore in Q2 December 2009 over Q1 September 2009. The company declared results before trading hours today, 25 January 2010.
Cals Refineries clocked the highest volume of 1.71 crore shares on BSE. Rashtriya Chemicals & Fertilisers (1.06 crore shares), K Sera Sera (0.89 crore shares), Ispat Industries (0.86 crore shares), National Fertilizer (0.79 crore shares) were the other volume toppers in that order.
Jai Corp clocked the highest turnover of Rs 212.03 crore on BSE. Hindustan Copper (Rs 155.46 crore), Rashtriya Chemicals & Fertilisers (Rs 115.54 crore), National Fertilizer (Rs 101.92 crore) and Havells India (Rs 99.84 crore) were the other turnover toppers in that order.
Daily Latest Grey Market Premium - Jan 25 2010
| Company Name | Offer Price (Rs.) | Premium (Rs.) | Kostak (Rs. 1 Lac Application) |
| Jubilant Food Works | 135 to 145 | 20 to 21 | -- |
| Infinite Computer | 165 | 33 to 35 | -- |
| Birla Shloka | 45 to 50 | Discount | -- |
| Aqua Logistics | 220 to 230 | 12 to 13 | 2050 to 2100 |
| Syncom Healthcare | 65 to 75 | 6 to 6.50 | 1950 to 2000 |
| Thangamayil Jewellery | 70 to 75 | 3.50 to 4 | 1850 to 1900 |
| Vascon Engg. | 165 to 185 | 20 to 21 | 1900 to 1950 |
Market seen extending four-day losses on weak global cues
The market is seen extending last four days' losses on weak global cues. US stocks tumbled in their worst three-day slide in 10 months on Friday, pulling Asian stocks lower today, 25 January 2010. The S&P CNX Nifty futures for January 2010 expiry were trading 19 points lower in Singapore.
State Bank of India, Sterlite Industries, Mahindra and Mahindra, Hero Honda Motors, and Hindalco Industries are among the key result announcements on Monday, 25 January 2010.
Maruti Suzuki India reported higher than expected earnings in the third quarter. Its net profit surged 221.92% to Rs 687.53 crore on a 62.50% rise in sales to Rs 7372.65 crore in Q3 December 2009 over Q3 December 2008.
Net profit of Grasim Industries rose 80.81% to Rs 595.88 crore in on a 14.79% rise in sales to Rs 3051.89 crore in Q3 December 2009 over Q3 December 2008. Aggregate results of 599 Indian companies showed 57.1% advance in net profit on 20.40% rise in sales in quarter ended December 2009 over the quarter ended December 2008.
Asian stocks fell for a sixth day today echoing fall in Wall Street on Friday. Key benchmark indices in Hong Kong, South Korea, Japan, Singapore were down by between 0.27% and 1.20%. Shanghai Composite rose 0.08% and Taiwan Weighted gained 0.06%.
US stocks tumbled in their worst three-day slide in 10 months on Friday, 22 January 2010, on fears the White House's plan to curb bank risk-taking would cut profits and a drop in tech shares after Google Inc's disappointing results.
Uncertainty about the Senate's confirmation of Ben Bernanke for another term as the Federal Reserve's chairman also rattled investors in a week when political squabbles helped erase stocks' gains for 2010.
The Dow Jones industrial average dropped 216.90 points, or 2.09%, to 10,172.98. The Standard & Poor's 500 Index slid 24.72 points, or 2.21%, to 1,091.76. The Nasdaq Composite Index fell 60.41 points, or 2.67%, to 2,205.29.
Fears that China will get more aggressive in reducing the risk of asset bubbles sent investors bailing from China-focused stock funds for an 18th consecutive week, research firm EPFR Global said on Friday. Investors pulled $348 million from China equity funds in the week ended 20 January 2010, the biggest outflow in 18 weeks.
Though global emerging market equity funds attracted $748 million in fresh money in the week of Jan. 20, Asia ex-Japan equity funds took in only $29 million because of the China-related outflows. Net inflows to emerging market bond funds hit the highest in eight weeks and US bond funds extended a streak of inflows to 55 weeks.
Back home, key benchmark indices extended their losses for the fourth straight session on Friday, 22 January 2010 after US President Barack Obama proposed limiting risk-taking at US banks. The BSE 30-share Sensex settled 191.46 points or 1.12% lower at 16,859.68, below the psychological 17,000 mark.
As per provisional figures on NSE, the foreign funds sold shares worth Rs 2415.49 crore and domestic funds bought shares worth Rs 1953.97 crore on Friday, 22 January 2010.
Daily News Roundup - Jan 25 2010
Maruti Suzuki announced that it would invest Rs17bn in a second line at its Manesar factory; new line would start operations by April 2012. (BL)
DLF exits asset management venture with Prudential Financial. (BL)
Bharti Airtel said that it is looking at listing one of its tower units Bharti Infratel or Indus in the next fiscal. (BL)
Larsen & Toubro formed a joint venture with Malaysia-based Sapuracrest Petroleum to install pipelines and construct offshore rigs and platforms in India, the Middle East and South East Asia. (ET)
Lupin is planning to set up three new manufacturing facilities at an investment of Rs2bn. (BS)
Suzlon Energy plans not to proceed with proposed Rs5bn wind energy projects at two locations in Punjab. (ET)
LIC acquires nearly 2% stake in Essar Oil for Rs3.09bn through open market transactions. (ET)
Biocon signs MoU with Malaysia’s Biotechnology Corporation to explore collaboration and potential investment in Malaysia’s biotechnology industry. (BS)
Wockhardt sells nearly 18 acres of land at Mulund for Rs2bn to Runwal Group, and a real estate fund. (ET)
Piramal Healthcare is looking to review its plans to set up a new unit to make codeine. (ET)
DLF sells its 15-acre property in Bangalore suburb. (ET)
GMR Hyderabad to provide MRO services for Jet Airways. (BL)
JK Paper board approves Rs15bn expansion. (BL)
Usha Martin raises Rs4.7bn through QIP. (BL)
JK Tyre has decided to set up a Rs16bn automotive tyre manufacturing facility in Tamil Nadu. (BL)
Unity Infraprojects plans to develop two mixed-use housing projects with an investment of around Rs500 crore. (ET)
Karnataka Bank raises Rs1.6bn through QIP. (BL)
Tata Teleservices has overtaken BSNL to become the fifth largest mobile operator in terms of subscriber base. (BL)
Apollo Hospitals signs MoU with the Maldives government to mange the Indira Gandhi Memorial Hospital at Maldives. (BS)
Tata Steel and NMDC sign an MoU to explore possible areas of strategic alliance, including forming JVs in the fields of steel production and mining in India and oversea. (TOI)
Glenmark arm gets USFDA nod for hypertension drug. (FE)
Godrej Properties said it would invest over Rs10bn in the next fiscal on ongoing and new realty projects. (FE)
Maytas Infra’s new owner IL&FS is negotiating with lenders to convert around Rs6bn of the company’s debt into equity. (TOI
Shipping ministry is evaluating the disinvestment process in SCI and Dredging Corp of India and will take a final call on the issue early-next fiscal. (FE)
Time Technoplast is looking to acquire an industrial packaging company in Europe, preferably in France, Germany or Britain, at an investment of Rs1.15-1.3bn.
HDIL plans to launch its QIP issue next week. (BS)
4G prospects won't keep off telecom companies from bidding for 3G, says Union Minister Mr Raja. (BL)
The six ‘core' infrastructure industries have registered a 6% yoy growth during Dec’ 09 compared with 0.7% a year ago. (BL)
Foreign exchange reserves rose by US$899mn to US$285bn for the week ended January 15. (BL)
Domestic crude oil production in December rose 1.1% yoy to 2.9mn tonnes. (BL)
Petroleum Minister has written to the Finance Minister to consider setting up a fund that will aid domestic PSUs in acquiring oil and gas assets overseas. (BL)
Resilience in the midst of risk!
Investment planning is about structuring exposure to risk factors.
When the main indices come crashing down, suddenly a host of risk factors appear to gain prominence. The market will have to contend with a deluge of earnings, the F&O expiry and the RBI policy. While the Sensex saw its worst weekly loss (of ~700 points) since October 2009, there are a number of mid-caps which have been moving higher, some even hitting upper circuits.
The market will be shut on Tuesday on account of Republic Day. As far as India is concerned, the RBI is most likely to opt for a calibrated hike in policy rates even as the Government mulls partial rollback of duty cuts.
We expect a soft start for the key indices. Friday's commendable recovery in the face of a worldwide sell-off could be tested at start following yet another triple-digit loss for the Dow.
What could possibly save the bulls from further misery would be stronger than expected earnings announced from the likes of RIL, Maruti and ITC. Hopefully, other big results this week will bring in some resilience to the market.
Asian stock indices have extended last week's fall amid worries that the new Obama proposals to restrain large banks from investing in hedge funds could adversely affect global fund flows and risk appetite. Meanwhile, economists say that the ongoing recovery in the US economy can't be sustained. The same could also be said about other industrialised nations.
Among the other big worries is how the impending stimulus withdrawal by policymakers later this year will impact the economic recovery and markets. Possible overheating in China and monetary tightening by Beijing has also been causing a few jitters of late.
The fall on Friday was amid higher volumes. The combined volumes on the BSE and NSE stood at a record Rs1590bn—the highest ever; of this Rs1320bn came from the NSE's derivatives segment.
Results Today: Andhra Bank, Blue Star, Cadila Healthcare, Cummins India, DB Corp., GSK Consumer, Godrej Ind, Gujarat Alkalies, GSPL, HCL Info, HCL Tech, Hero Honda, Hindalco, Hotel Leela, India Cements, Indiabulls Fin, Indiabulls Sec, Jet Airways, KEC Intnl, LMW, LIC Housing, M&M, Pantaloon, Power Grid Cop., SBI, Shyam Tele, Sterlite, TTML, TV Today, Voltas and Wockhardt.
FIIs were net sellers in the cash segment on Friday at Rs24.15bn on a provisional basis. The local funds were net buyers of Rs19.54bn, according to figures published on the NSE's web site. As per the SEBI figures, FIIs were net sellers of Rs5.7bn in the cash segment on Thursday.
US stocks tumbled for a third successive session on Friday as analyst downgrades routed the technology space amid uncertainty over Ben S. Bernanke's confirmation for another term as head of the Federal Reserve.
Worries about the possible ramifications of White House's proposed new restrictions on big banks coupled with growing speculation of further monetary tightening by China continued to cast a shadow on Wall Street.
The Dow Jones Industrial Average slumped 217 points, or 2.1%, to 10,172.98. The S&P 500 index slid 25 points, or 2.2%, to 1,091.76. The Nasdaq Composite index plunged 60 points, or 2.7%, to 2,205.29.
In the three day selloff, the Dow lost 5.1%, the S&P lost 5.1% and the Nasdaq lost 5%.
For the holiday-shortened trading week, the S&P 500 was down 3.9% and the Nasdaq shed 3.6%, with both indexes seeing their biggest one-week declines since the week ended Oct. 30, 2008.
The Dow's weekly loss of 4.1% was the average's worst since the week ended March 6, 2009, when it closed at a 12- year low. That period was considered to be the bottom of the bear market. Since then, the Dow has gained 57%.
In other markets, the dollar lost ground, crude oil prices fell below US$75 per barrel and gold futures slipped.
Selling on Wall Street began on Wednesday on reports that China has asked banks to slow the pace of lending in a bid to pre-empt any spike in inflation and prevent any possible overheating. The fall picked up on Thursday with Obama's fresh offensive against banks and continued on Friday with questions about Bernanke.
US stocks were vulnerable to a pullback after surging over 3% since the start of the year, with the major indices having touched nearly 16-month highs.
Obama called for limiting the size and trading activities of financial institutions as a way to reduce risk- taking and prevent another financial crisis.
The proposals, to be added to an overhaul of regulations being considered by Congress, would prohibit banks from running proprietary trading operations solely for their own profit and sponsoring hedge funds and private equity funds.
Meredith Whitney, an influential banking analyst, said Obama’s plan will probably be approved and may dramatically reduce trading profits.
Morgan Stanley Asia Chairman Stephen Roach said Obama’s plan amounted to "bank bashing" and called on American politicians to take a more balanced approach.
Large banks such as JPMorgan Chase, Goldman Sachs and Bank of America would bear the brunt of the impact from the Obama bank regulations. shares of all three slipped on Friday. But a few of the regional banks, including Fifth Third Bancorp and SunTrust Banks bucked the trend for a second straight session.
General Electric (GE) reported weaker revenue and earnings versus a year ago that nonetheless beat analysts' estimates. GE also reported higher sales and profit versus the previous quarter, with the exception of its struggling NBC Universal unit. Looking forward, GE said it sees solid growth next year. Shares added 0.6%.
Schlumberger shares dropped 4.5% after the world’s largest oilfield-services provider said that fourth-quarter profit fell 31% after oil producers slashed spending during the global recession.
Fellow Dow component McDonald's reported higher quarterly sales and earnings that topped estimates, with strength in international markets offsetting any weakness in its US business. Shares rose 0.3%.
After the close on Thursday, American Express reported higher earnings that beat forecasts on flat revenue that also beat estimates. Nonetheless, shares of the financial services firm lost 8.5% in Friday's trading.
Shares of Google dived 5.7% despite the Internet giant's surge in fourth-quarter earnings. The company's earnings and revenue came in well above analysts' estimates, but investors were probably looking for more.
Also weighing on the technology space was Citigroup's move to cut its ratings on seven semiconductor-equipment stocks, citing the risk of a correction of perhaps 30% in the sector for the short term, though a broader bullish trend remains intact.
A report showed that December jobless rates rose in 43 states and the District of Columbia versus the previous month. The trend marked a reversal from November, when a majority of the states saw unemployment rates dip from the prior month.
Manufacturing in the Philadelphia region expanded in January for a fifth straight month, pointing to a factory rebound that is helping lead the economy out of the recession, according to a report from The Federal Reserve Bank of Philadelphia.
Investors also considered reports that some congressional Democrats are growing skittish about confirming Bernanke to a second term as Fed chairman. Bernanke's term ends in a week, but the Senate lacks the 60 votes to force a confirmation vote.
A failure to confirm Bernanke would really rattle the markets as he is viewed around the world as a positive for the US economy.
The dollar fell versus the euro and the yen after rising for the last few sessions.
COMEX gold for February delivery fell US$13.50 to settle at US$1,089.70 an ounce. Gold closed at an all-time high of US$1,218.30 an ounce last month.
US light crude oil for February delivery slipped US$1.54 to settle at US$74.54 a barrel on the New York Mercantile Exchange.
Treasury prices fell, raising the yield on the 10-year note to 3.61% from 3.69% late on Thursday.
The market could sell off a little more next week, but it is most likely to find a support in the week ahead. A heavy spate of quarterly earnings reports are due next week, with 27% of the S&P 500 or 136 companies scheduled. Among the key ones include Apple, Yahoo, Microsoft, Amazon.com and Chevron.
The Chicago Board Options Exchange's Volatility Index or VIX jumped 6.2% to 23.66, its third straight daily gain, and the longest string of increases since October. The index is on track for a 32% weekly rise.
VIX was boosted by worries that Chinese authorities are a little uncomfortable with the break-neck pace of economic growth. Also, fears over new bank restrictions proposed by the Obama administration, and potential sovereign debt defaults in Europe, have unsettled investors of late.
The markets' reaction to the Obama plan was perhaps knee-jerk and the undertone may improve next week. Stock markets have gained sharply for a long period of time and the selloff was perhaps the sign of a market trying to let off steam.
Bank shares in Europe continued to slide on fears that they would also feel the heat from the Obama administration’s plans to curb excessive risk taking by financial firms. The pan-European Dow Jones Stoxx 600 index dropped 1.1% to end at 249.91, the third straight losing session for the index.
The UK FTSE 100 index declined 0.6% to end at 5,302.99, while the German DAX index settled 0.9% lower at 5,695.32, and the French CAC-40 index finished 1.1% lower at 3,820.78.
Indian markets witnessed its first weekly losses of the year on account of disappointing earnings by L&T and US President Obama’s proposal to put new limits on the size and trading practices of big banks weighed heavily on Dalal Street. Moreover, key indices had largely been consolidating after last year's stupendous rebound, so a correction was long overdue. Finally, the BSE Sensex closed the week lower by 4% and NSE Nifty lost 4.1%.
BSE Sensex hit an intra-week high of 17,712 and low of 16,608 while, NSE Nifty hit an intra-week high of 5,293 and low of 4,955.
The top gainers: The top gainers in the Sensex were Maruti Suzuki (up 2.2%), Bharti Airtel (up 1.5%), Hero Honda (up 1.5%), Hindustan Unilever (up 0.6%) and BHEL (up 0.4%).
The Top Losers: The top losers in the Sensex were L&T (down 10.9%), Ranbaxy Labs (down 9.5%), DLF (down 8.7%), Tata Power (down 8.4%) and Grasim (down 8%).
On Friday, The BSE Sensex fell 191 points to end at 16,859 after touching a high of 17,000 and a low of 16,608. The Nifty fell 58 points to end at 5,036.
Equity markets in Asia ended in the red. The Nikkei in Japan was down 2.5%, while Australia's S&P/ASX ended lower by 1.6%. The Shanghai SE Composite ended flat and Hang Seng index in Hong Kong was down 0.7%.
In Europe, stocks were trading in the red. The DAX in Germany was down 0.5% and the CAC 40 index in France was down 0.3%. The FTSE in the UK was flat.
Coming back to India, the BSE Banking index was the top loser, shedding 1.8%, followed by the Realty index that was down 1.7% and the BSE IT index was down 1.5%. The BSE Mid-Cap index slipped 1.1% while BSE Small-Cap index was down 1%.
Among the 30-components of Sensex 27 ended in the negative terrain and only ITC, HEL and HUL ended in the green. L&T, Infosys, Tata Steel, ICICI Bank and HDFC Bank were among the top losers.
Outside the frontline indices, the big losers in the broader market were REI Agro, Gujarat NRE Coke, Fin Tech, Ispat Ind and Pantaloon Retail. On the other hand, gainers included HCC, NMDC, LITL and Piramal Healthcare.
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