Uptrend on BSE Sensex, Nifty may gain further strength: Wednesday Closing Report

Watch out for previous day’s low for a possible change in direction

The market settled higher for the sixth straight day on global support following the re-election of Barack Obama as president of the US, ending days of uncertainty. Today the Nifty managed to make a higher high and higher low for the second consecutive day and closed above the resistance of 5,750. We may now see the upmove continuing unless the index closes below the previous day’s low. The National Stock Exchange (NSE) saw a volume of 69.99 crore shares and an advance decline ratio of 1083:640.


The Indian market opened on a soft note as the world waited for the outcome of the US presidential polls. Opinion polls suggested that President Obama and challenger Governor Mitt Romney were neck-and-neck. Overnight US stocks settled higher as the world’s largest democracy went to vote to decide its next president.


The Nifty opened at 5,719, down five points, and the Sensex started off 14 points lower at 18,803. The indices soon fell to their lows with the Nifty at 5,711 and the Sensex slipping to 18,786.


The news of Barack Obama winning the US presidential elections was cheered by the Indian market, which recovered from its initial losses. The benchmarks gained strength as trade progressed with all sectoral indices, except oil & gas, trading higher.


A positive opening of the European markets also lent support to the local market. The upmove enabled the indices hit their intraday highs in noon trade with the Nifty rising to 5,777 and the Sensex scaling 18,973.


However, market came off the highs as the benchmarks pared some gains but stayed in the green in post-noon trade. The market settled in the positive on gains in realty and banking stocks. The Nifty closed trade at 5,760, up 36 points (0.62%), and the Sensex ended the day above the 18,900 level mark at 18,902—a gain of 85 points (0.45%).


Among the broader indices, the BSE Mid-cap index surged 0.79% and the BSE Small-cap index climbed 0.73%.


Barring the BSE Oil & Gas index (down 0.31%), all other sectoral gauges settled higher. The gainers were led by BSE Realty (up 2.76%); BSE Bankex (up 1.07%); BSE IT (up 0.66%); BSE Auto (up 0.62%) and BSE TECk (up 0.56%).


Twenty three of the 30 stocks on the Sensex closed in the positive. The chief gainers were HDFC (up 1.92%); State Bank of India (up 1.91%); BHEL (up 1.70%); Hindalco Industries (up 1.02%) and ICICI Bank (up 0.96%). The main losers were Tata Power (down 2.44%); Bharti Airtel, Coal India (down 0.88% each); Reliance Industries (down 0.58%) and Cipla (down 0.19%).


The top two A Group gainers on the BSE were—Apollo Hospitals Enterprise (up 7.56%) and Unitech (up 6.88%).

The top two A Group losers on the BSE were—Cadila Healthcare (down 3.10%) and Adani Ports (down 2.56%).


The top two B Group gainers on the BSE were—Clutch Auto (up 20%) and VBC Ferro Alloys (up 20%).

The top two B Group losers on the BSE were—Intec Capital (down 12.67%) and Software Technology Group International (down 9.97%).


Out of the 50 stocks listed on the Nifty, 38 stocks settled in the positive. The key gainers were Jaiprakash Associates (up 5.52%); Bank of Baroda (up 2.65%); Punjab National Bank (up2.44%); IDFC (up 2.43%) and DLF (up 2.42%). Tata Power (down 2.87%); Coal India (down 0.97%); RIL (down 0.89%); Bharti Airtel (down 0.79%) and Siemens (down 0.72%) were the main losers on the index.


Most markets across Asia settled higher on the outcome of the US presidential elections which showed that Barack Obama was re-elected president as he defeated Republican Mitt Romney.


The Hang Seng surged 0.71%; the Jakarta Composite climbed 0.84%; the Straits Times advanced 0.79%; the Seoul Composite gained 0.49% and the Taiwan Weighed settled 0.70% higher. On the other hand, the Shanghai Composite and the KLSE Composite slipped 0.01% each and the Nikkei 225 lost 0.03%.


At the time of writing, the key European indices were up between 0.55% and 0.69% and the US stock futures were trading with gains.


Back home, foreign institutional investors were net buyers of shares totalling Rs174.62 crore on Tuesday whereas domestic institutional investors were net sellers of equities amounting to Rs221.85 crore.


Hinduja Group firm Gulf Oil Corp on Wednesday said it will acquire US-based speciality chemicals maker Houghton International Inc for $1.05 billion (about Rs5,670 crore). In the second-biggest acquisition by an Indian company this year, Gulf Oil will buy 100% stake in Houghton, whose chemicals and lubricants are used in the metalworking and automotive industries, from an unnamed US-based private equity fund. Gulf Oil declined 1.71% to settle at Rs86 on the NSE.


State-owned, Power Grid Corporation of India has decided to float an overseas arm, along the lines of energy major ONGC's overseas arm OVL. Through this initiative, the company will grab opportunities in the global market. The stock rose 0.25% to settle at Rs119.95 on the NSE.


Britannia Industries posts mediocre performance, standalone net sales up 9%

Britannia Industries, makers of cookies like Tiger, has posted average results with net sales going up by only 9% but managed to increase net profit by 20.5% due to better cost management

Britannia Industries (BIL), India’s leading food company and promoted by the Wadias, for the second quarter ending September 2012, reported an increase of 9% year-on-year (y-o-y) in its standalone revenue of Rs1,416.6 crore, with net profit of Rs45.6 crore, an increase of 20.5% y-o-y. Its profit rose despite increase in prices of commodities and higher fuel costs. It is expanding its cost cutting measures. 
A closer look into the numbers saw that despite a benign growth in net sales, BIL has reported slowest net sales growth since December 2008. However, we noticed there has not been a decline in over three years. The current quarter’s net sales growth of 12% y-o-y is more or less in tune with its three-quarter average net sales growth of 12%. Currently, BIL’s operating profit has steadily been increasing for the last seven quarters though it is below its three-quarter average growth rate of 24% due to higher commodity prices and fuel costs. Having said these, BIL commands a premium valuation, with market capitalization almost 20 times operating profit while return on net worth remains high at 38%.
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Commenting on the performance, Vinita Bali, managing director, said, “Despite a sharp and unexpected increase in commodity & fuel cost, we continue to drive profitable growth through focusing on 3 priority areas of revenue management, cost management & innovation. On a consolidated basis, the dairy & international operations are accretive and contribute positively to both revenue & profit.”
BIL has roped in Bollywood actor Salman Khan for its biscuit brand Tiger in order to beef up the brand’s visibility and recall. Also, Business Standard on 6th October reported that the company is planning to sell its 6 acre Bangalore land for approximately Rs550 crore.
Britannia stock price stood at Rs470.10, down 2.03% at end of trading session, on Bombay Stock Exchange (BSE). 
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“Obama re-election not best news for IT outsourcing”

Obama in this presidential elections campaign had criticised outsourcing of jobs to countries like India saying that US needs to create jobs locally


Bangalore: The re-election of US President Barack Obama is not the best news for IT outsourcing industry, reports PTI quoting Phaneesh Murthy, CEO of iGATE.


“Not the best news for India or the IT outsourcing industry. However, we need to understand how much of the election rhetoric continues into 2013 and that will determine the full implications to us,” Mr Murthy said.


“The concern over the deficit and jobs will continue (in the US) and in my mind, will force the sluggishness to remain in the economy,” he said.


Obama won a second term in office overcoming a stiff initial challenge from his Republican challenger Mitt Romney.


Obama in this presidential elections campaign had criticised outsourcing of jobs to countries like India saying that US needs to create jobs locally.


The US and Europe account for over 80% of revenues of the Indian IT industry.



Shadi Katyal

5 years ago

Why are we looking only for outsourcing and not moving from dot connecting to innovations.
Are the writer aware that Romany's financial company bought an outsourcing company in Europe for about $3 Billions
such negative articles donot help INDIA. His comments might sound negative but it was for election.

did tjhe writer read that it is these Indian companies who created 50,000 jobs in USA.
We must stoop our negative thinking about USA as she has her own problems too

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