Nifty may be headed for a 5% move from the current levels
The market settled in the positive on better-than-expected quarterly earnings from blue chips like Larsen & Toubro, HDFC and TCS. Although the Nifty moved in the same range as of Friday, it ended in the positive, helping the index close above its 20 day moving average. We may now see the Nifty heading for a 5% move from the current levels. The National Stock Exchange (NSE) saw a volume of 51.33 crore shares and an advance decline ratio of 840:915.
The market opened in the negative tracking weak cues from the Asian markets, which were subdued in morning trade following a fall in the US markets on Friday on disappointing earnings reports from companies like General Electric and McDonald’s.
The Nifty opened at 5,668, down 16 points, and the Sensex also started off 16 points lower at 18,666. Metal, auto, fast moving consumer goods and oil & gas stocks were at the receiving end in initial trade.
The market touched its intraday low in early trade itself. The Nifty fell to 5,658 and the Sensex went back to 18,601 at their lows. However, bargain hunting at the lows pushed the benchmarks higher in subsequent trade.
The indices ventured into the green around 11.00am on buying support from blue chips like Reliance Industries, ICICI Bank, Bharti Airtel and Larsen & Toubro. The benchmarks continued to stay in the green in noon trade as optimism continued with companies like engineering giant Larsen & Toubro and mortgage lender HDFC posting in-line results.
The gains enabled the benchmarks hit their intraday highs in the last hour of trade wherein the Nifty stood at 5,722 and the Sensex climbed to 18,809.
The market settled marginally off the lows. The Nifty closed 33 points (0.58%) up at 5,717 and the Sensex finished at 18,793, up 111 points (0.59%) over its previous close.
The broader markets settled on a mixed note. The BSE Mid-cap index fell 0.10% whereas the BSE Small-cap index rose 0.31%.
The top sectoral gainers were BSE Capital Goods (up 1.30%); BSE Healthcare (up 1.07%); BSE Bankex (up 1%); BSE IT (up 0.84%) and BSE TECk (up 0.74%). The main losers were BSE Fast Moving Consumer Goods (down 0.51%); BSE Consumer Durables (down 0.46%); BSE Auto (down 0.18%); BSE Metal (down 0.08%) and BSE PSU (down 0.01%).
Twenty of the 30 stocks on the Sensex closed in the positive. The key gainers were TCS (up 2.26%); Larsen & Toubro (up 2.17%); Bharti Airtel (up 1.91%); NTPC (up 1.74%) and HDFC Bank (up 1.73%). The major losers were Jindal Steel (down 1.52%); ITC (down 1.24%); Sterlite Industries (down 1.15%); Hero MotoCorp (down 1.01%) and Tata Motors (down 0.86%).
The top two A Group gainers on the BSE were—Emami (up 6.37%) and Jaiprakash Power Ventures (up 5.64%).
The top two A Group losers on the BSE were—Exide Industries (down 3.94%) and Coromandel International (down 2.55%).
The top two B Group gainers on the BSE were—Bharat Agri Fert & Realty (up 20%) and Somany Ceramics (up 19.99%).
The top two B Group losers on the BSE were—Foundry Fuel Products (down 19.96%) and Jaihind Projects (down 13.57%).
Out of the 50 stocks listed on the Nifty, 33stocks settled in the positive. The top gainers were Jaiprakash Associates (up 2.62%); L&T (up 2.27%); TCS (up 2.26%); NTPC (up 2.10%) and Bharti Airtel (up 1.93%). Bank of Baroda (down 2.06%); Jindal Steel (down 1.99%); Hero MotoCorp (down 1.675); ITC (down 1.61%) and Ambuja Cement (down 1.43%) were the major laggards on the index.
Markets in Asia settled mixed as some benchmarks were weighed down by a 10.3% fall in Japanese exports in September and lacklustre earning reports from the US over the weekend.
The Shanghai Composite gained 0.21%; the Hang Seng climbed 0.68%; the Jakarta Composite advanced 0.23% and the Nikkei 225 rose 0.09%. On the other hand, the KLSE Composite declined 0.26%; the Straits Times shed 0.11%; the Seoul Composite fell 0.12% and the Taiwan Weighted lost 0.48%.
At the time of writing, two of the three the key European indices were in the positive and the US stock futures were trading higher.
Back home, institutional investors—both foreign and domestic—were net buyers in the equities segment on Friday. Foreign institutional investors pumped in Rs80.11 crore into stocks and domestic investors brought in Rs112.05 crore.
L&T Finance Holdings (LTFH) today said it has acquired FamilyCredit, an auto finance company, from its French parent for Rs120 crore. The acquisition will consolidate LTFH’s presence in auto financing business in India. The stock fell 0.09% to close at Rs54.10 on the NSE.
Rain CII Carbon LLC, a wholly-owned step-down subsidiary of Rain Commodities has agreed to acquire Rutgers NV, a Belgium-headquartered coal tar pitch manufacturer. The Indian company executed share purchase agreement with Triton to acquire 100% stake in Rutgers for gross enterprise value of 702 million euros. Rain Commodities tanked 6.46% to settle at Rs40.55 on the NSE.
Electrical equipment maker Havells India is eyeing generating revenues of Rs7,500 crore this fiscal. Besides expanding its distribution network, the company plans to increase exclusive outlets to over 200 by the end of this financial year, raking up revenues of Rs750 crore. The stock closed 0.45% lower at Rs647.50 on the NSE.
L&T's second quarter net profit rose 42%, while total revenues increased to Rs13,525 crore from Rs11,564 crore a year ago
Despite being the world’s third largest manufacturer of motorcycles, Bajaj Auto announced a disappointing quarter amidst stagnant economy with high inflation and lacklustre sales
Bajaj Auto, which manufacturers 'Discover', the world’s largest selling motorcycle brand, has announced rather disappointing results when it reported a 4% decline in net sales. Its net sales for the quarter ended September 2012 was Rs4,972.40 crore, down from Rs5,185.36 crore recorded for the corresponding period a year ago. While net sales declined, its operating profit increased, but just barely, by 4% and net profit was almost flat, increasing by just over 2% to Rs740.67 crore.
According to the Moneylife database, the company has been going through a difficult time, both in terms of sales and generating operating profit. The average three-month year-on-year (y-o-y) average sales growth was just 4%, underlying difficult economic climate. Likewise, its three-month y-o-y operating profit average growth rate was 13%. This quarter it showed a growth rate of only 4%, a result of spiralling costs. To minimise the impact on operating profit, the company is adopting for a variable-cost structure. The market seems to be attaching premium valuations to this company, with its market capitalisation quoting at over 13 times its operating profit, given the high return on equity of 50%.
One would have expected the company to take advantage of the momentum it had over Hero MotoCorp when its Bajaj Discover model overtook Hero Splendor as the largest selling motorcycle in the month of September. However, the company sold 10,49,208 vehicles for the second quarter ended September 2012, which was 10% less than what it sold for the same period last year. This is worse than industry decline of 9%. Despite increases in its market share from 23% to 27% in the last five months, it had not translated this to a better bottomline. The company cited higher inflation, higher input costs and higher fuel prices, forcing consumers to cut back on high priced purchases.
The share price of the company stood at Rs1,782.50, or up 0.69% on the Bombay Stock Exchange (BSE) today.