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Database Last Updated on 15th November 2011 Markets
MARKET VIEW – Weekly News Letter (07-11-2011 to 13-11-2011) The Key benchmark Indices edged lower on Friday
(11-11-2011) after disappointing IIP data which pull down the Nifty
below 5200 level mark. The
Banking sector was the top loser with a 3% loss as Moody’s
downgraded the Indian Banks to negative from stable on concern over
profitability, asset quality and Capital concern.
Weakening of Rupee, Rising Crude prices and Euro Zone problem
further dampened the sentiment.
The BSE Sensex lost 169.28 points or 0.97% to close at
17192.82 and the Nifty lost 52.2 points or 1% to settle at 5168.85.
The Sensex / Nifty hit an intraday high/low of
17279.23/17096.84 and 5198.6/5142.25.
The BSE midcap fell 1.13% and the small cap lost 1.57%. Both
these underperformed the Sensex. The BSE recorded a turnover of
Rs.2610 crores compared to Rs.2576.35 crores he previous day. And
the total turnover was Rs.1.3 lakh crores.
The Industrial output grew at 1.9% in September as against
4.1% in August, the lowest rate of growth in two years.
The market breadth was weak as 937 shares advanced 1912
declined and 112 unchanged. The
FII’s were sellers for Rs.83.26 Crores.
The Depreciation of Rupee was another concern as Rupee fell
to a two year low of 50.42 for dollar in the early trade.
The major losers include United Spirits 8.64%, Axis Bank
4.96%, HDIL 4.56%, ICICI Bank 4.55%, Hindalco 4.31%, Tata Steel
4.19%, SBI 3.48%, L & T 3.3%, IDBI Bank 3.34%, HDFC Bank 2.83%
& ONGC 2.01%.
For
the week ahead the markets are likely to be volatile due to global
events and the direction will be driven by Euro zone development.
Increasing crude oil prices, high inflation and rupee dollar factor
are a cause for concern. The
U.S. market closed positively on Friday after the Italian Senate’s
approval of economic reform. The Dow Jones was up 259.89 points or
2.19% and the NASDAQ ended higher by 53.60 points. The market will
keenly watch the WPI numbers for the month of October on Monday.
Things could worsen if Nifty/Sensex breaches below 5060/16825 level.
Disclaimer (The above information and opinion is compiled from sources believed to be reliable and provided in good faith. These are subject to change without notice. This note is not and should not be construed to as, an offer to sell or a solicitation of an offer to buy any securities. The author and/or the company or its associates may or may not have positions in the above-mentioned scrips and this may change from time to time. Trading and investing in stock markets involve risk of financial loss and it is recommended that you consult an investment professional for your decisions. It is strongly recommended that stop loss be followed to protect from undue risk. This report is exclusively for the clients of Venkataraman & Co. only.) Markets
Sensex dips below 17K on weak global cues The Bombay Stock Exchange benchmark Sensex dipped below the 17,000 mark after three weeks, losing 236 points on sustained selling amid concerns over weak corporate earnings and subdued global markets. The Sensex, which had lost over 450 points in the previous three sessions, fell further by 236.07 points or 1.38 per cent to 16,882.67. The gauge fell below the 17,000 level after October 24. Similarly, the broad-based NSE index Nifty slipped below the 5,100 mark, losing 79.85 points or 1.55 per cent to 5,068.50. A weak trend in the Asian region and lower opening in Europe due to lingering doubts over the euro zone debt crisis dampened the trading sentiment. Brokers said below-expectation quarterly earnings by some leading companies and fears of high inflation keeping interest rates high remained major investor issues. The decline was led by financial and interest rate sensitive stocks such as realty, auto and capital goods. Two most heaviest counters, with 20 per cent weightage on the Sensex — Reliance Industries and Infosys — fell sharply on brisk selling. RIL tumbled 1.42 per cent and Infosys by 0.57 per cent. Other losers included Bajaj Auto, DLF, HeroMotorCo, ICICI Bank, L&T, M&M, Maruti, SBI, Tata Steel and BHEL. The realty sector index suffered the most by losing 5.22 per cent to 1,671.28, followed by capital goods index by 2.77 per cent to 10,208.85. Banking index lost 2.02 per cent to 10,436.22 and auto index by 1.65 per cent to 8,808.55. Tata Power scrip plunges on weak earnings Shares of Tata Power plunged by as much as 8 per cent in the morning trade on the bourses today after the leading power utility posted a consolidated net loss of Rs 1,218.86 crore for the three months ended September. The company’s September quarter results took a beating on account of provisioning of Rs 1,461.96 crore toward impairment charges and forex losses related to its upcoming Mundra UMPP. The company had reported a consolidated net profit of Rs 672.54 crore for the second quarter last fiscal. Reacting to the numbers, the scrip opened on a weak note and then lost 7.46 per cent to an early low of Rs 93 on the BSE. Similarly, on the NSE, the scrip tanked 7.94 per cent to Rs 93.30. However, the stock made up some of the lost ground in later trade and was quoting 3.98 per cent lower at Rs 96.50 on the BSE and was down 4.69 per cent at Rs 96.60 on the NSE. Apart from provisioning related to Mundra UMPP, Tata Power said its profitability was hit by a differential cost of Rs 50.39 crore in connection to its 1,050-MW Maithon project. “The 4,000-MW Mundra UMPP and the 1,050-MW Maithon Power Project are in advanced stages of completion. We are also on track on all our other projects, which are under implementation,” Tata Power Managing Director, Mr Anil Sardana, said. Kingfisher stock recovers after opening weakShares of Kingfisher Airlines tanked by as much as 4 per cent in the morning trade on the bourses today, but made a smart recovery after the air carrier announced that its net loss more than doubled to Rs 468.66 crore in the second quarter. Kingfisher Airlines’ net loss widened to Rs 468.66 crore in the quarter ended September 30, 2011 from Rs 230.81 crore in the same period last year. Reacting to the numbers, the stock opened on a sluggish note on the BSE and then dropped by 2.81 per cent to an early low of Rs 20.75. A similar movement was witnessed on the National Stock Exchange, where the stock fell 4.20 per cent to touch an early low of Rs 20.50 after opening at Rs 21.10. However, the stock later made a smart recovery on the BSE, where it was later quoted 0.23 per cent higher at Rs 21.40, though it was still down by 0.93 cent at Rs 21.20 on the NSE. Commenting on the share movement, Ashika Stock Brokers Research Head, Mr Paras Bothra, said: “The results are bad, losses are mounting and the financial position of the company is in the doldrums. The initial jerk in the counter was a reaction to the poor Q2 results.” “The bad news already factored in the price and the market is now anticipating that some sort of restructuring work will be done and a workable solution will be carried out by the lenders and promoters,” Mr Bothra added. Bankers have made it clear that Kingfisher’s promoters will have to infuse Rs 800 crore worth of fresh equity into the company if they are to consider a second restructuring of the existing debt, even as opposition mounted to any bailout of the private carrier. Bankers have asked the troubled airline to come out with a “credible” plan. The lenders — a 13-bank consortium led by SBI which was yet to decide on ways to ease the troubled airline’s Rs 7,057.08-crore debt burden — are due to meet the Kingfisher management today.
CORPORATE RESULTS... Sun Pharma rises over 3% on good Q2 earningsDrug-maker Sun Pharmaceutical Industries gained over 3 per cent on the bourses today after the company reported 19 per cent growth in net profit to Rs 598 crore for the quarter ended September 30. Shares of the company jumped by 3.4 per cent to Rs 521 on BSE, while on NSE, the scrip gained 3.5 per cent to Rs 522. The scrip was also the top gainer among the Sensex 30 blue-chips in morning trade. Sun Pharmaceutical Industries has reported 19 per cent growth in net profit to Rs 598 crore for the quarter ended September 30 on account of robust performance across its businesses. In the corresponding year-ago period, the company had posted a net profit of Rs 503.65 crore. On a standalone basis, Sun Pharma’s net profit increased to Rs 437.55 crore in the second quarter ended September 30 from Rs 345.72 crore in the year-ago period. Concor Q2 net down 15%Concor has registered a net profit of Rs 175.42 crore for the second quarter ended September 30, 2011, down 15 per cent against Rs 206.73 crore recorded in the same period last fiscal. This is due to provisioning of a deferred tax liability of about Rs 48 crore during the quarter under review. The container train operations company has registered a 5.3 per cent growth in income from operations at Rs 994.55 crore for the second quarter of this fiscal against Rs 944.18 crore in the same period of 2010-11. “We have provided about Rs 48 crore in the current fiscal’s second quarter as deferred tax liability of last fiscal. This was the differential between the minimum alternate tax (MAT) rate with surcharges against our average tax rate,” Mr Anil Gupta, Managing Director, Concor. Tata Coffee jumps over 3% on robust resultsTata Coffee shares surged over 3 per cent in the morning trade today after the company posted 75 per cent increase in its group consolidated net profit. For the quarter ended September 30, 2011 the group’s consolidated net profit reached Rs 17.59 crore against Rs 10.05 crore a year ago, up 75 per cent. The stock that was on a downfall for three consequent trading sessions, advanced 3.06 per cent to touch a high of Rs 901.50 on the BSE. On the National Stock Exchange, the stock witnessed a similar movement and jumped 3.02 per cent to a high of Rs 901. Tata Coffee later pared with its initial gains and was trading at Rs 888.70, up 1.6 per cent on the BSE and at Rs 887.85, up 1.52 per cent, on the NSE. Total sales of the integrated coffee plantation company rose 37 per cent to Rs 410.27 crore in the second quarter of the current fiscal against Rs 298.73 crore in the same quarter last fiscal. Kotak Mahindra Q2 net up 18.8% at Rs 432.58 crPrivate sector lender Kotak Mahindra Bank has reported an 18.8 per cent jump in net profit to Rs 432.58 crore for the second quarter ended September 30, 2011. The bank had posted a net profit of Rs 364.11 crore in the July-September quarter of 2010. Total income of the bank during the quarter fell to Rs 2,740.84 crore from Rs 2,947.21 crore, Kotak Mahindra said in a filing to the BSE. During the first six months of the current fiscal, the bank’s net profit rose by 22.68 per cent to Rs 848.68 crore from Rs 691.80 crore in the same period last fiscal, it said. The total income of the bank during the April-September period rose to Rs 5,450.48 crore from Rs 5,275.88 crore in the same period of 2010, it added. Shares of Kotak Mahindra Bank closed 5.25 per cent higher at Rs 494.85 on the BSE. Infosys Q2 profit up 11% at Rs 1,906 crIT bellwether Infosys Technologies came up with no major surprises in its second quarter results for the fiscal with its net profit posting a 10.7 per cent increase on a sequential basis to Rs 1,906 crore on revenues of Rs 8,099 crore which grew 8.2 per cent for the same period. Stating that the global macroeconomic environment was still a concern for the IT sector, Infosys Chief Executive Officer and Managing Director, Mr S.D. Shibu Lal, said clients are looking for new opportunities for growth and increased returns on investments. The Infosys stock reacted positively with the price rising by Rs 150 (6 per cent) to Rs 2,655 in the early morning trading. “Our strategic initiatives and organisation structure will enable us to build long-term partnerships with our clients and help them drive their business objectives.’’ Infosys, which gives quarterly guidance for its topline, said for the third quarter, revenues are expected to be in the range of Rs 8,826 crore and Rs 9,012 crore, which is a year-on-year growth of 24.2 per cent to 26.8 per cent. Earnings per share is expected to be in the range of Rs 38.51 and Rs 39.20 with a year-on-year growth of 23.6 per cent and 25.8 per cent. Guidance For the entire fiscal, revenues are expected to be in the range of Rs 33,501 crore and Rs 34,088 crore with YoY growth of 21.8 per cent to 24 per cent and earnings per share is expected to be in the range of Rs 143.02 and Rs 145.26 registering a year-on-year growth of 19.7 per cent and 21.6 per cent. The company said for the second quarter it added 15,352 (gross) and 8,262 (net) employees with a total employee strength of 1,41,822. It added 45 clients during the quarter. Infosys said that it will add 8,000 more employees in the next quarter. Commodities: Gold futures jumps to Rs 27,087 on global cues Gold prices gained Rs 88 to Rs 27,087 per ten grams at the futures trade today as speculators indulged in creating fresh positions on the back of a firm global trend. At the Multi Commodity Exchange, gold for February delivery gained Rs 88 or 0.33 per cent to Rs 27,087 per ten grams after touching a high of Rs 27,128 in a business turnover of 52 lots. Similarly, the metal for delivery in December edged up by Rs 85 or 0.32 per cent to Rs 26,811 per ten grams in a business volume of 2,989 lots. Analysts said fresh positions built up by speculators in tandem with a firm global trend as concerns about Europe’s debt woes and festival season demand at home spurred the demand for the precious metal, influencing gold prices at the futures trade here. Meanwhile, the yellow metal gained $2.10 or 0.13 per cent to $1,655.40 an ounce in the Asian region. Crude oil futures climbs to Rs 4,597Crude oil futures prices were up by Rs 49 to Rs 4,597 per barrel today on increased buying by speculators triggered by a firming global trend. Trading sentiment remained better after crude oil rose to the highest in almost 12 weeks in New York as investors bet that signs of economic growth indicate fuel demand will increase. At the Multi Commodity Exchange, crude oil for delivery in November month rose Rs 49 or 1.12 per cent to Rs 4,597 per barrel with a business turnover of 46,985 lots. Similarly, the oil for delivery in December moved up by Rs 45 or 0.99 per cent to Rs 4,605 per barrel with a trade volume of 4,466 lots. Traders said that the rise in crude oil futures was due to a rising global trend and increased buying by speculators. Meanwhile, crude oil gained 80 cents to $92.07 a barrel on the New York Mercantile Exchange. Mixed trend in soya oil futures marketSoyabean arrivals in State mandis declined in the past few days to 1 lakh bags from 5 lakh on expectation of higher prices. Many mandis remained closed on Monday for Dhanteras. Soyabean sold at Rs 2,080-2,150 a quintal on average in the mandis. In Indore mandis, soyabean was quoted at Rs 2,070-2,140, with about 8,000 bags being offloaded in local mandis. Mandis in Ujjain, Dewas and Barnagar remained closed ahead of Diwali. With a marginal improvement in foreign markets, soyabean futures on the National Commodity and Derivatives Exchange (NCDEX) rose, with the November contract closing Rs 4.50 higher at Rs 2,204.50 a quintal. The December contract, on the other hand, lost Rs 4 at Rs 2,231 a quintal on the exchange because of weak buying support. Plant deliveries of soyabean sold at Rs 2,180-2,220 a quintal. According to trade sources, soyabean prices are unlikely to witness a bearish sentiment in near future as there is enough ready demand. Soya de-oiled cake gained marginally on improved demand, quoting at Rs 17,300 a quintal in the Kandla port against Rs 15,800 in the local market. Soya oil rose a little on improved demand in the local market ahead of Diwali. In the ready market soya refined sodl at Rs 610-611 for 10 kg, while it fetched Rs 605-607 for 10 kg in the forward market. Soya refined for November delivery on the National Board of Trade closed Rs 1.40 up at Rs 617 for 10 kg (Rs 612-614.10). On the NCEDX, soya oil for November delivery was up Rs 1.20 at Rs 616.30, while for December declined by Rs 3.05 at Rs 614.95 on weak buying support.
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