Volatility was at the forefront as the key benchmark indices slipped into the red once again after recouping all the intraday losses in late trade. World stocks fell on concerns turmoil in Egypt could spread to other Middle East countries. Banking stocks came off lows. Some capital goods stocks also rose after the parent of Siemens made an open offer to raise its stake in the Indian arm to 75% from current 55.18%. The BSE 30-share Sensex was provisionally down 68.91 points or 0.37%, up close to 290 points from the day's low and off close to 70 points from the day's high. The market breadth was weak. FMCG, IT and realty stocks declined. Index heavyweight Reliance Industries edged higher in volatile trade.
Intraday volatility was high. The market slumped to five-month low in early trade on worries turmoil in Egypt could spread to other Middle East countries. The market trimmed losses after hitting fresh five-month low in morning trade. The market further extended recovery to hit fresh intraday high in mid-morning trade. The key benchmark indices once again came off lows after sliding from the day's highs. The market hit a fresh intraday high in afternoon trade. The market weakened again in mid-afternoon trade. The market recouped all the intraday losses in late trade. The Sensex once again slipped into the red later.
The GDP growth for the 2009/10 fiscal year has been provisionally revised up to 8% from 7.4%, a government statement said. The estimates of GDP and other aggregates for the previous years have been revised on account of using the new series of wholesale price index (WPI) with base 2004-05 and also subsequent revision in index of industrial production (IIP), the Central Statistical Organisation said in a statement on Monday.
In overseas news, Moody's Investors Service downgraded Egypt's government bond ratings to Ba2 from Ba1 on Monday and changed the outlook to negative from stable. Moody's said the rating action was prompted by the recent significant rise in political event risk and concern that the policy response could undermine Egypt's already weak public finances. Protests against the government of Hosni Mubarak have rocked Egypt in recent days, with demonstrators inspired by events in Tunisia. Investors are worried about oil supply disruption from the possible closure of the Suez Canal, which Egypt controls. Crude futures were up 0.4% at $89.70 in electronic trading, with prices moving between positive and negative zone.
Closer home, foreign funds sold shares worth Rs. 706.84 crore while domestic funds bought shares worth Rs. 81.24 crore on Friday, 28 January 2011, as per provisional data. Foreign funds have dumped shares worth a net Rs. 7983.21 crore in this month, as per data from the stock exchanges, with domestic funds absorbing part of the selling. Domestic funds have bought shares worth a net Rs. 4229.02 crore this month.
The finance ministry is reportedly expected to seek cabinet approval to a proposal for giving proportionate voting rights to promoters in private sector banks so as to give confidence to corporate houses that are planning to start banks and help improve competition in the sector. Currently, the voting right of a single individual or entity is limited to 10% even if the shareholding is more.
Meanwhile, Oil Minister S. Jaipal Reddy today, 31 January 2011, said the finance ministry may approve some cash subsidies for oil refiners on Monday. State-run oil refiners had earlier deferred their quarterly earnings on the hope of getting cash subsidies.
European shares trimmed losses on Monday after initial slide triggered by worries that unrest in Egypt could spread to other parts of the Middle East. The key benchmark indices in France, Germany and UK declined by between 0.3% to 0.52%.
Asian stocks fell on Monday after riots in Egypt prompted a sell-off in risky assets on concern that the protests could spread to other Middle East countries. The key benchmark indices in Hong Kong, Indonesia, Japan, South Korea and Singapore fell by between 0.72% to 2.25%. But, China's Shanghai Composite rose 1.35%.
Industrial output in Japan and South Korea jumped more than expected in December in a sign that a draw down of inventories and a rebound in export demand will help to underpin recovery in the global economy this year.
US index futures cut losses in volatile trade. Trading in US index futures indicated that the Dow may fall 14 points at the opening bell on Monday, 31 January 2011. US stocks suffered their biggest one-day loss in nearly six months on Friday, 28 January 2011, as anti-government rioting in Egypt prompted investors to flee to less risky assets to ride out the turmoil. The latest economic data showed that the US economy grew at 3.2% rate in the fourth quarter as consumer spending accelerated.
Back home, the results announced so far showed that the combined net profit of a total of 1067 companies rose 26.2% to Rs. 62,123 crore on 20% rise in sales to Rs. 5,01,100 crore in Q3 December 2010 over Q3 December 2009.
The food price index rose 15.57% and the fuel price index climbed 10.87% in the year to 15 January 2011, government data, last week, showed. In the prior week, annual food and fuel inflation stood at 15.52% and 11.53%. The primary articles index was up 17.26% in the latest week, compared with an annual rise of 17.03% a week earlier.
To control surging inflation, the Reserve Bank of India (RBI) at its quarterly policy review on Tuesday, 25 January 2011, raised repo rate by 25 basis points to 6.5% and the reverse repo rate by 25 basis points to 5.5%. Repo rate is the rate at which the RBI lends money to banks. Reverse repo is the rate at which RBI borrows funds from banks. The central bank held the cash reserve ratio steady at 6%.
As high food inflation persists, the prospect of it spilling over to the general inflation process is rapidly becoming a reality, Reserve Bank of India (RBI) Governor Subbarao said in the policy document released on Tuesday, 25 January 2011. The RBI lifted its headline inflation projection for March 2011 to 7% from 5.5% previously. The RBI stuck with its 8.5% GDP growth forecast for the current fiscal year, but with an upside bias.
The combined risks from inflation, the high current account deficit (CAD) and fiscal situation contribute to an increase in uncertainty about economic stability that consumers and investors will have to deal with, RBI said. To the extent that this deters consumption and investment decisions, growth may be impacted. While slower growth may contribute to some dampening of inflation and a narrowing of the CAD, it can also have significant impact on capital inflows, asset prices and fiscal consolidation, thereby aggravating some of the risks that have already been identified, it said.
Capital flows, which so far have been broadly sufficient to finance the CAD, may be adversely affected, the RBI said. Faster than expected global recovery may enhance the attractiveness of investment opportunities in advanced economies, which may impact capital flows to India. This may increase the vulnerability of India's external sector. Hence, the composition of capital inflows needs to shift towards longer-term commitments such as foreign direct investment (FDI), the RBI said.
As per provisional figures, the BSE 30-share Sensex was down 68.91 points or 0.37% to 18,327.06. The index lost 0.88 points at the day's high of 18,395.09 in late trade. The index shed 357.49 points at the day's low of 18,038.48 in morning trade, the lowest level since 1 September 2010.
The S&P CNX Nifty was down 2.60 points or 0.05% at 5,509.55 as per provisional figures. The Nifty hit low of 5,416.65 in morning trade, its lowest level since 1 September 2010.
The BSE Mid-Cap index fell 0.21% and the BSE Small-Cap index declined 0.7%.
The market breadth, indicating the health of the market, was weak. On BSE, 1777 shares declined while 1106 shares advanced. A total of 103 shares remained unchanged.
Among the 30-member Sensex pack, 18 declined while the rest rose.
BSE clocked turnover of Rs. 3546 crore lower than Rs. 3904.41 crore on Friday, 28 January 2011.
Index heavyweight Reliance Industries (RIL) rose 0.38% to Rs. 918, in volatile trade. The stock hit high of Rs. 929 and low of Rs. 903.30. The RIL stock had fallen recently on concerns about slow ramp up in gas production from the KG-D6 field. Gross natural gas production from RIL KG-D6 block, off India's east coast, declined 5.7% to 55.8 million metric standard cubic metres per day (mmscmd) in Q3 December 2010 from Q2 September 2010, as the company continues to struggle to find solution to problems related to the reservoir.
RIL's 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. Higher refining and petrochemicals margins boosted the performance. RIL's gross refining margin (GRM) improved to $9 per barrel in Q3 December 2010 from $5.9 per barrel in Q3 December 2009. The GRM was also higher compared to $7.6 per barrel in Q2 September 2010. The result was announced after trading hours on Friday, 21 January 2011.
India's largest oil & gas exploration firm by sales ONGC rose 3,55% and was the major gainer from the Sensex pack after net profit jumped 131.96% to Rs. 7083.23 crore on 38.75% rise in total income to Rs. 21473.41 crore in Q3 December 2010 over Q3 December 2009. The result was announced after market hours on Friday, 28 January 2011.
Banking stocks came off the day's lows. India's second largest private sector bank by net profit HDFC Bank declined 0.86% to Rs. 2040.65, off the day's lows of Rs. 1997. Net profit rose 32.91% to Rs. 1087.83 crore on 28.9% rise in operating income to Rs. 6357.78 crore in Q3 December 2010 over Q3 December 2009. The result was announced after trading hours on Thursday, 27 January 2011.
India's largest private sector bank by net profit ICICI Bank declined 0.28% to Rs. 1014.20, off the day's low of Rs. 997.05. India's largest bank by net profit and branch network State Bank of India rose 0.54% to Rs. 2632.60, off the day's low of Rs. 2570.80.
Some capital goods stocks rose after the parent of Siemens made an open offer to raise its stake in the Indian arm to 75% from current 55.18%. ABB, Crompton Greaves, Thermax and Bhel rose by between 1.29% to 5.24%.
Siemens surged 17.32% to Rs. 853.50 after overseas parent -- Siemens AG, Germany announced an open offer to acquire additional 19.82% stake in the firm at Rs. 930 per share. The stock rose on heavy volume of 17.83 lakh shares on BSE. The German parent intends to raise its stake in Siemens to 75% through the open offer.
Index heavyweight Larsen & Toubro rose 2.43% to Rs. 1645, off the day's low of Rs. 1555.
Sun Pharmaceutical Industries declined 2.1% after company's consolidated net profit rose 3.3% to Rs. 350.15 crore on 56.83% rise in net sales to Rs. 1601.07 crore in Q3 December 2010 over Q3 December 2009. The company announced the Q3 results during market hours today.
Interest rate sensitive realty stocks declined for the fourth straight day on concerns higher interest and higher property prices may dent demand for residential units. Indiabulls Real Estate, Unitech and HDIL fell by between 0.08% to 6.4%. Realty major DLF rose 0.69% reversing initial losses ahead of Q3 results today.
IT stocks fell. India's second largest software services exporter Infosys shed 2%. 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 before market hours on 13 January 2011.
India's largest software services exporter TCS declined 2.42%. The stock hit a record high of Rs. 1221 on Monday, 24 January 2011. 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 17 January 2011.
India's third largest IT exporter by sales Wipro rose 0.74%, reversing initial losses. The stock battered past few days triggered by resignations of joint-CEOs of its information technology business. The resignations were announced at the time of announcing third quarter results before market hours on Friday, 21 January 2011.
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.
Some FMCG stocks fell on profit taking. Nestle India, ITC and Hindustan Unilever fell by between 0.39% to 4.92%.
