Share prices move sideways but the bias is beginning to be negative: Thursday Closing Report

Nifty may now move in the range of 4,830 and 4,910

Subdued revenue forecast from Infosys and lower-than-expected numbers from HDFC dragged the market lower, brushing aside positive economic indicators.  As mentioned yesterday, the Nifty gave back some of the gains today. The index bounced back from its first level of support of 4,810: however, it ended in the negative. The benchmark may now move in the range of 4,830 and 4,910. At present the index is moving sideways with a negative bias. Today the National Stock Exchange (NSE) saw a volume of 71.44 crore shares.  
The market opened lower, ahead of a heavy day marked by quarterly numbers from IT bellwether Infosys, industrial output numbers for November and weekly food inflation data. A weak trend in the Asian region following a flat close of Wall Street overnight also weighed on the sentiment. The Nifty opened 20 points down at 4,841 and the Sensex started the day at 16,117, a cut of 59 points over its previous close.

While Infosys reported a net profit growth 33.25% at Rs2,372 crore, its disappointing dollar revenue guidance pulled the stock down 7% in morning trade. IT and technology sectors were the worst performers in today’s trade.

The market traded sideways in the negative till the late morning session after which a rebound in industrial output numbers for November pushed the indices to their day’s high with the Nifty entering the positive zone. At the intraday high, the Nifty touched 4,869 and the Sensex rose to 16,179.

However, the gains were temporary as the indices drifted lower once again. The indices fell to their intraday lows in noon trade with the Nifty falling to 4,804 and the Sensex going below its psychological level of 16,000 to 15,963.

The market was range-bound in post-noon trade as the key European indices were flat, ahead of the Spanish bond auction. Lower-than-expected quarterly results from mortgage lender HDFC in the latter part of the day added to the day’s woes resulting in the market ending lower, snapping its two-day winning streak. At the close, the Nifty fell by 30 points to 4,831 and the Sensex declined 138 points to 16,038.

The advance-decline ratio on the NSE was 972:864.

Among the broader indices, the BSE Mid-cap index closed 0.26% higher and the BSE Small-cap index rose 0.15%.

BSE Power (up 1.32%); BSE Metal, BSE Bankex (up 1.08% each); BSE Auto (up 0.84%) and BSE PSU (up 0.70%) were the top sectoral gainers. On the losing side were BSE IT (down 5.96%); BSE TECk (down 4.41%); BSE Oil & Gas (down 0.81%) and BSE Capital Goods (down 0.22%).

The top Sensex gainers were State Bank of India (up 2.03%); Hindalco Industries (up 1.81%); Tata Power (up .72%); Coal India (up 1.66%) and Tata Steel (up 1.46%). The major losers were Infosys (down 8.40%); TCS (down 3.89%); Wipro (down 2.60%); Reliance Industries (down 1.44%) and Larsen & Toubro (down 1.25%).

Sesa Goa (up 4.94%); IDFC (up 3.56%); Jaiprakash Associates (up 3.25%); Grasim (up 3.18%) and Reliance Power (up 3.14%) were the top stocks on the Nifty. Infosys (down 8.36%); TCS (down 3.58%); HCL Technologies (down 2.24%); Wipro (down 2.16%) and Larsen & Toubro (down 1.75%) languished at the bottom of the index.

Markets in Asia settled mostly in the red as concerns about the Eurozone crisis kept investor on tenterhooks. Even the easing of Chinese inflation to 401% in December, the lowest in 15 months, failed to provide any boost to the markets. Slowing of export orders pulled down the Nikkei 225.

The Shanghai Composite fell 0.47%; the Hang Seng lost 0.30%; the Jakarta Composite settled flat; the Nikkei 225 declined 0.745; the Straits Times shed 0.13% and the Taiwan Weighted was 0.02% down. Bucking the trend, the KLSE Composite gained 0.21% and the Seoul Composite surged 1.03%. At the time of writing, the top European indices were trading with gains and the US stock futures were seen higher.

Back home, foreign institutional investors were net buyers of stocks totalling Rs431.31 crore on Wednesday. On the other hand, domestic institutional investors were net sellers of equities amounting to Rs182.18 crore.

Fortis Healthcare (India) today said it has completed the acquisition of Singapore-based Fortis Healthcare International Pte from a firm owned by its promoters, the Singh brothers. The company had in September 2011 announced that it will acquire Fortis Healthcare International Pte from RHC Financial Services Mauritius for $665 million (around Rs3,270 crore). Fortis Healthcare India closed at Rs98 on the NSE, up 0.05%.

Info Edge, which runs job portal, today launched a common online application form ’The Common App’ on its education portal for admission in MBA and equivalent courses. Initial partners of for this application include Nirma University, TA Pai Management Institute, Loyola Institute of Business Administration and Xavier Institute of Management and Entrepreneurship. The stock declined 3.15% to close at Rs566.50 on the NSE.

Srei Infrastructure Finance has deferred its plan to raise around $1 billion for its proposed infra fund in the current fiscal due to dollar scarcity in the global markets, sources in the company said. The Kolkata-based infrastructure financing firm is now looking at raising the money in the first half of FY12-13 as it expects global situation to improve in the next fiscal. The stock gained 1.35% to close at Rs30 on the NSE.


Growth prospects better; rate cut to depend on inflation: PMEAC

After witnessing low growth from July to September, factory output, as measured by the Index of Industrial Production (IIP), slumped 4.74% in October. The revival in IIP growth at 5.9% in November is likely to boost the industry sentiment

New Delhi: Expressing hope that industrial growth will further pick up in the coming months, the prime minister’s economic advisory panel today said rate cut by RBI will depend upon softening of inflation, reports PTI.

“I think the industrial production will pick up in the second half of the year ... The indications as thrown up by the data for November may continue into the rest of the months of the current fiscal,” the Prime Minister’s Economic Advisory Council (PMEAC) chief C Rangarajan told reporters.

After witnessing low growth from July to September, factory output, as measured by the Index of Industrial Production (IIP), slumped 4.74% in October. The revival in IIP growth at 5.9% in November is likely to boost the industry sentiment.

As regards the possibility of Reserve Bank of India (RBI) reducing rates, Mr Rangarajan said, “I would say that the action of the RBI will largely depend upon how the inflation numbers turn out to be for the month of December. Certainly, a strong action on the part of RBI in reversing the policy will be called for only if inflation shows very strong signs of decline”.

The RBI, which has adopted a tight monetary stance since March 2010, is scheduled to announce its policy review on 24th January.

Food prices fell for the second consecutive week as food inflation remained in the negative zone at (-)2.90 per cent for the week ended 31 December 2011. The figures of overall inflation for December will be announced on Monday.


HDFC posts net profit of Rs 981.25 crore for Dec quarter

The net interest margin (NIM) of the company stood at 4.3% at the end of 31 December 2011 and gross non-performing loans stood at Rs1,109 crore, or 0.82%, of total advances during the quarter

Mumbai: Mortgage lender Housing Development Finance Corporation (HDFC) today posted a net profit of Rs981.25 crore for the quarter ended December 2011, on the back of higher loan approvals and disbursements. The company had reported a net profit of Rs890.88 crore for the October-December quarter of 2010-11, reports PTI.

The company’s total income stood at Rs 4,472.51 crore during the quarter, up from Rs3,321.04 crore in the corresponding quarter last fiscal, HDFC said in a filing to the BSE.

As of 31 December 2011, the company’s loan book stood at Rs1.32 lakh crore compared to Rs1.09 lakh crore in the year-ago period, it said.

Net profit of the company during the April-December period stood at Rs2,796.48 crore compared to Rs2,393.01 crore in the previous fiscal.

Total income during the nine-month period stood at Rs12,463.25 crore, compared to Rs9,093.21 crore in the corresponding year-ago period.

The figures are not comparable as the company changed its accounting policy for Cross Currency Interest Rate Swaps.

These swaps, which were earlier recorded at fair value, are now being recorded at a higher liability by marking only the foreign currency component to spot rates and excluding the benefit of interest rate differentials, HDFC said.

“... Had the corporation followed the earlier method of accounting... net profit for the nine months ended 31 December 2011, would have been lower by Rs54 crore,” it said.

The net interest margin (NIM) of the company stood at 4.3% at the end of 31 December 2011.

Gross non-performing loans stood at Rs1,109 crore, or 0.82%, of total advances during the quarter.

Shares of the company closed 0.90% higher at Rs687.50 apiece on the BSE.


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